[00:00:22] Speaker 04:
Do we not have our Apple e-counsel today?

[00:00:27] Speaker 04:
Okay.

[00:00:28] Speaker 04:
Why don't you join us?

[00:00:35] Speaker 04:
What side have you taken, Mr. Furman?

[00:00:38] Speaker 01:
It doesn't matter, Your Honor.

[00:00:40] Speaker 01:
I'm flexible.

[00:00:41] Speaker 01:
I'm not married to a side.

[00:00:42] Speaker 04:
Okay.

[00:00:44] Speaker 04:
Other than your righteous arguments, you're married to a side.

[00:00:46] Speaker 01:
Yes, Your Honor.

[00:00:47] Speaker 01:
Okay.

[00:00:48] Speaker 01:
Good morning, Your Honors.

[00:00:49] Speaker 01:
May it please the Court?

[00:00:50] Speaker 01:
Do you want to reserve some time?

[00:00:52] Speaker 01:
Yes, I'd like to reserve four minutes.

[00:00:54] Speaker 01:
Okay.

[00:00:59] Speaker 01:
We're here on the grant of a summary judgment motion.

[00:01:03] Speaker 01:
We don't believe that a summary judgment is appropriate in this case because there are triable, legitimate, disputed issues of fact that the court needs to hear and judge the credibility of the witnesses.

[00:01:18] Speaker 01:
Unfortunately, you can't look at a piece of paper and judge the credibility.

[00:01:23] Speaker 01:
There's nothing like having a witness on the stand and looking at him in the eye and

[00:01:28] Speaker 01:
and making a determination for yourself that this is a credible witness or this is not a credible witness.

[00:01:34] Speaker 03:
My question about that is that she certainly denied having fraudulent intent.

[00:01:38] Speaker 03:
I saw that.

[00:01:40] Speaker 03:
But she didn't really have an explanation of what reason she had for making the transfers other than keeping it away from her creditors.

[00:01:48] Speaker 03:
Is there something I'm missing on the record in that respect?

[00:01:51] Speaker 01:
I think so, Your Honor.

[00:01:52] Speaker 01:
I think her declaration doesn't just say, oh, I never had any fraudulent intent and leave it at that.

[00:01:58] Speaker 01:
She tells you the history of how this property came about, that her parents created this trust and made her and her brother the beneficiaries of the trust.

[00:02:08] Speaker 01:
And then when they wanted to invest in some income producing property for the benefit of the mother whom they were taking, she and her husband were taking care of, they wanted to

[00:02:23] Speaker 01:
invest some money in some income-producing property and they went to get a loan and then they couldn't get a loan because of the title problems.

[00:02:33] Speaker 03:
What were the title problems?

[00:02:36] Speaker 01:
In 2007 her father who was a refugee from Vietnam, he was in the Vietnamese Navy, but a refugee and not overly sophisticated in financial matters made a deed

[00:02:51] Speaker 01:
and put Mary and her brother David on title.

[00:03:00] Speaker 01:
And there created a confusion with.

[00:03:03] Speaker 03:
Why was that confusing?

[00:03:04] Speaker 03:
Because he was the trustee of the trust.

[00:03:06] Speaker 03:
The father was the trustee of the trust at that point.

[00:03:08] Speaker 01:
Yes.

[00:03:09] Speaker 04:
But even beyond that point, the transaction that I think has been challenged here is the one from the two individuals to the extent they held individually tenant and common rights to a trust.

[00:03:21] Speaker 04:
That's the transaction that's being challenged.

[00:03:23] Speaker 04:
So why did Judge Clarkson make a factual error in determining and deciding which transaction was at issue here?

[00:03:31] Speaker 04:
Because I think the implication, and maybe more expressed than implication, is that as to that transfer, there didn't seem to be any basis to make that other than to avoid the creditors.

[00:03:45] Speaker 04:
So help us with that part.

[00:03:46] Speaker 01:
I think you've got to look at the transaction as a whole in that they went to a professional estate planning attorney and explained the problems to them.

[00:04:01] Speaker 01:
The estate planning attorney drafted corrective deeds, and those are what were recorded.

[00:04:08] Speaker 01:
As a matter of fact, there were two corrective deeds, and that's what was recorded in there in the record as well.

[00:04:17] Speaker 01:
how we kind of got a little sideways, but the parties have never considered this property as anything other than trust property.

[00:04:28] Speaker 01:
It was not Mary's, personally.

[00:04:31] Speaker 01:
It was not David's, personally.

[00:04:34] Speaker 01:
And I use their first names not as disrespect, but just to keep the party straight.

[00:04:42] Speaker 01:
That this property was the parents and the trust.

[00:04:45] Speaker 01:
They were going to get it.

[00:04:46] Speaker 01:
upon the death of the parents, neither of whom are deceased.

[00:04:51] Speaker 01:
And so she, as she expressed her declaration, has always believed that this property's in trust.

[00:04:57] Speaker 04:
Okay, but the, to use your phrase, the overall form of this thing is that there are transfers to the two individuals, which is theoretically what needs to be done correctively to be able to exploit the property, do whatever you want.

[00:05:14] Speaker 04:
And then there's this further transfer

[00:05:16] Speaker 04:
that Judge Clarkson believed had with it all these badges of fraud to the other trust and then to the trustee of that trust.

[00:05:25] Speaker 04:
So I guess the question is, if he's looking at that part of the transaction, where is the error in finding that it looks like that is occurring when all these other things are happening that look like they're badges of fraud?

[00:05:37] Speaker 01:
It looks like they're badges of fraud.

[00:05:38] Speaker 01:
However, the issue with badges of fraud is they're not

[00:05:42] Speaker 01:
conclusive and essentially... Well, they sure are.

[00:05:45] Speaker 04:
I mean, the whole point is that you don't have to have somebody say, yeah, I defrauded you.

[00:05:49] Speaker 01:
Well, the problem with that, Your Honor, is that there are really two sides of the same coin in that you can't prove a negative.

[00:05:58] Speaker 01:
The other side of that is very few people walk into court and say, yeah, I did it.

[00:06:04] Speaker 01:
Yeah.

[00:06:05] Speaker 01:
So they use badges of fraud, but then the

[00:06:10] Speaker 01:
defendant has the right to explain what happened, and she explained what happened.

[00:06:16] Speaker 04:
Let me pull it apart a little bit for you, then, because going where I think you're going here.

[00:06:22] Speaker 04:
To Judge Farris's point, I think you need something other than, I didn't do it, in the declaration.

[00:06:30] Speaker 04:
Because I think what we're doing, we're in danger of conflating credibility here with opposition to a motion for summary judgment.

[00:06:36] Speaker 04:
What the cases tell us is that to oppose a motion for summary judgment, the opposing party has to come up with facts that would show an opposition or a genuine issue of material fact.

[00:06:51] Speaker 04:
What the brief really seems to focus on is she was entitled to tell the trier of fact she didn't do it.

[00:06:58] Speaker 04:
I mean, credibility only comes into play when you have two different sides of a story.

[00:07:03] Speaker 04:
And what Judge Clarkson seemed to conclude here is there weren't two different sides of a story.

[00:07:07] Speaker 04:
So why was that an error?

[00:07:09] Speaker 04:
I guess I would put it that way.

[00:07:10] Speaker 01:
Well, it was an error because she explained what happened.

[00:07:14] Speaker 01:
You can't take it in a vacuum.

[00:07:17] Speaker 01:
She explained what happened.

[00:07:18] Speaker 01:
She gave you the history of

[00:07:20] Speaker 01:
where this came about and how it came about and why the transfers are made.

[00:07:27] Speaker 04:
If he concluded that as to the last two transfers, the explanation had nothing to do with the transfers, why was that error?

[00:07:34] Speaker 04:
Because that seems to be what he concluded.

[00:07:36] Speaker 01:
It seemed to be what he concluded, but he didn't look at the whole things.

[00:07:40] Speaker 01:
And also, he didn't give the inferences to the non-moving party, which is a clear requirement of summary judgment, any inferences

[00:07:49] Speaker 01:
have to be given to the non-moving party.

[00:07:53] Speaker 01:
And he didn't give those inferences.

[00:07:55] Speaker 04:
But only if they get over the hurdle of actually factual matters that would be

[00:08:00] Speaker 04:
in opposition to what's being asserted by the movement, right?

[00:08:03] Speaker 04:
So if he determined that the factual matters that you suggest your client was putting before him, if he concluded that those really weren't sufficient to oppose the motion for summary judgment, you're saying that's the mistake?

[00:08:18] Speaker 01:
That's error, Your Honor, because he didn't give all the inferences that the defendants are entitled to in this case.

[00:08:25] Speaker 01:
And I think that if he sees

[00:08:30] Speaker 01:
Mary on the stand and looks at her, and he will determine that she's a credible witness.

[00:08:36] Speaker 01:
And the standard is, could a jury, could a trier of fact, judging the credibility of the witnesses at trial, rule in Mary's favor?

[00:08:46] Speaker 04:
Clearly, they could.

[00:08:47] Speaker 04:
I'll come back to the point I was making that credibility is not an issue until you have two plausible stories.

[00:08:54] Speaker 04:
And what Judge Clarkson seems to have concluded is he didn't have two plausible stories.

[00:09:00] Speaker 01:
I think it is a plausible story.

[00:09:01] Speaker 04:
No, I understand, but that's where the issue is, I think, for what it's worth.

[00:09:05] Speaker 04:
Okay.

[00:09:05] Speaker 01:
Okay.

[00:09:05] Speaker 01:
Your Honor, but again, ties go to the non-moving party in a motion for summary judgment.

[00:09:11] Speaker 04:
Only if you find it's a tie.

[00:09:13] Speaker 01:
And that's a strong point in favor of the non-moving party is that you have to give them a chance.

[00:09:22] Speaker 01:
And the presumption is we should try cases on the merits and let people have their day in court.

[00:09:28] Speaker 01:
And that's all she's asking for here is a day in court to explain that this transfer was made in order to correct the problem and not to hide money from her creditors.

[00:09:41] Speaker 04:
Do you want to get to the second point or do you want to reserve or what would you like to do?

[00:09:45] Speaker 01:
Actually, Your Honor, I'd like to get to the second point.

[00:09:47] Speaker 01:
OK.

[00:09:48] Speaker 04:
By the way, we're going to have a very lively discussion with your worthy opponent here.

[00:09:52] Speaker 04:
So if you want to reserve more than four minutes, it's up to you.

[00:09:57] Speaker 01:
I'll just touch on the other point briefly and then reserve.

[00:10:01] Speaker 01:
David Nguyen is a necessary party to this litigation.

[00:10:08] Speaker 01:
Judge Clarkson says, well, there's no evidence.

[00:10:10] Speaker 01:
It's speculation that.

[00:10:12] Speaker 01:
the trustees going to go after this property.

[00:10:16] Speaker 01:
Well, it's speculation that the sun's going to rise in the east tomorrow, but it's a pretty good speculation.

[00:10:22] Speaker 01:
And it was clear from the beginning.

[00:10:25] Speaker 01:
The only reason to make this motion is to go after and liquidate the property, which is the duty of the trustee to liquidate assets.

[00:10:33] Speaker 01:
So that was clear from the beginning that they were going to go after this property.

[00:10:38] Speaker 02:
david should have been joined as a party to this because he's a beneficiary of that trust he's a beneficiary of the property and he had certainly had the right to get his own attorney and be heard on this matter uh... and put his but if they if they move to sell the property if they'd used to dispose of the property then he becomes a necessary party and has the right to object and oppose any kind of relief at that state but as to the setting aside the transfer from mary

[00:11:07] Speaker 02:
Why is he necessary part of that transaction?

[00:11:12] Speaker 01:
Because the two of them were both beneficiaries of the trust and the trustee, and I asked the court to take judicial notice that the trustee subsequently filed an adversary under 363H in order to sell the property shortly after the ink was dry on the judgment from the bankruptcy court.

[00:11:33] Speaker 02:
They haven't had that hearing yet.

[00:11:35] Speaker 01:
He hasn't granted that relief without David Smith.

[00:11:37] Speaker 01:
They have not, Your Honor.

[00:11:39] Speaker 01:
But it puts Mr. Wynn, David, puts him behind the eight ball when the court's already decided that we can avoid this transfer.

[00:11:50] Speaker 04:
Okay.

[00:11:50] Speaker 04:
You're just about at four.

[00:11:51] Speaker 04:
Is this a good time?

[00:11:52] Speaker 04:
I'd like to reserve the rest of my time.

[00:11:54] Speaker 04:
Thank you very much.

[00:11:54] Speaker 04:
Thank you, Your Honor.

[00:11:59] Speaker 00:
Good morning, Your Honors, and may it please the court, Nathan Smith, for the

[00:12:03] Speaker 00:
Appellee, Thomas Casey, who's the bankruptcy, Chapter 7 bankruptcy trustee of the Jiang, Dong, and Mary Wynn estate.

[00:12:13] Speaker 00:
Your Honor, appellee filed a motion for summary judgment in this case, and appellants identified four allegedly disputed facts that they contended precluded summary judgment.

[00:12:23] Speaker 00:
David Wynn is a one-half owner of the subject property.

[00:12:27] Speaker 00:
Debtors did not transfer the property with any intent to defraud anyone.

[00:12:31] Speaker 00:
Debtors only had naked legal title.

[00:12:34] Speaker 00:
At all times, the beneficial interest in the properties remained with the trust.

[00:12:39] Speaker 00:
Mary Wynn was not solvent at the time the corrective deeds were recorded in February 2021 and 2022.

[00:12:45] Speaker 00:
I believe the intent was to state that she wasn't insolvent.

[00:12:50] Speaker 00:
Your honor.

[00:12:51] Speaker 00:
Appellant's contentions failed to create any genuine issue as to any material fact because David Wynn was not a one-half owner of the Tustin property.

[00:12:59] Speaker 00:
Therefore, he was not a necessary party with regard to that property.

[00:13:03] Speaker 00:
David Winn also never held any interest in the Oklahoma properties.

[00:13:07] Speaker 00:
Zhong Dong never held any interest in the Tustin property or Oklahoma properties.

[00:13:12] Speaker 00:
Therefore, his intent was not relevant.

[00:13:14] Speaker 04:
Can I get to the robust part of this?

[00:13:16] Speaker 00:
Certainly, Your Honor.

[00:13:19] Speaker 04:
I think my panel mates will tell you what they think.

[00:13:24] Speaker 04:
I think I understand this reasonably well.

[00:13:27] Speaker 04:
to the extent that there was initially a complaint about a transfer of the Dustin property, right?

[00:13:36] Speaker 04:
Where I'm not following the logic nearly as well is what happens after that.

[00:13:43] Speaker 04:
So getting the half interest in the Tustin property back for the trustee is one thing under the fraudulent transfer statutes by 50.

[00:13:52] Speaker 04:
It's the other relief I'm struggling with.

[00:13:54] Speaker 04:
So can you tell me where in the judgment or where in the arguments that were made before Judge Clarkson we would get to the other relief that the judgment provided?

[00:14:06] Speaker 04:
which is dealing with the proceeds from the loan and dealing with two Oklahoma properties.

[00:14:11] Speaker 00:
Well, Your Honor, what transpired in connection with the Tustin property is Mary Wynn and David Datwin first transferred that property to the Williams land trust.

[00:14:20] Speaker 00:
I know that.

[00:14:21] Speaker 00:
California property management is trustee.

[00:14:23] Speaker 00:
I know that, yeah.

[00:14:25] Speaker 00:
Then they encumbered the property with an $850,000 lien.

[00:14:28] Speaker 04:
I know that, which is not a fraudulent transfer.

[00:14:32] Speaker 03:
And what's the legal basis for setting aside those subsequent transfers?

[00:14:35] Speaker 04:
Yeah, that's what we're struggling with here.

[00:14:36] Speaker 00:
Well, Your Honor, it's the fact that this would have been an asset of the bankruptcy estate had the transfer not incurred.

[00:14:42] Speaker 00:
And now it is.

[00:14:42] Speaker 04:
You get it back.

[00:14:43] Speaker 00:
And what happened is the equity in the Tustin property was sucked out.

[00:14:49] Speaker 00:
Got it.

[00:14:49] Speaker 02:
Got it.

[00:14:50] Speaker 02:
We got it.

[00:14:51] Speaker 02:
Getting the property back is not the problem.

[00:14:54] Speaker 02:
It is what it is.

[00:14:55] Speaker 02:
You either get the value or the property under the statute.

[00:14:59] Speaker 02:
How do you get the property?

[00:15:01] Speaker 02:
And or the proceeds when the statute doesn't say you get anything more than the property or its value So you could have got a judgment for the value what it would have been on the filing date Because that transfer occurred pre petition could have got on the filing date Could have established what it was and said give me a judgment for that amount or give me the property back That's what statute provides, right?

[00:15:25] Speaker 02:
How do you get to the next level and then beyond that to other properties?

[00:15:30] Speaker 00:
Well, Your Honor, the bankruptcy court did enter a monetary judgment against California property management as well.

[00:15:39] Speaker 00:
And to the extent that there's a recovery from the Oklahoma properties, it'll reduce the amount.

[00:15:43] Speaker 00:
that's owed on the judgment against California.

[00:15:46] Speaker 02:
What we're struggling with is how does he reason, what is the statutory predicates that give him and the trustee the power to require those properties to be returned to the bankruptcy estate.

[00:16:01] Speaker 02:
There doesn't seem to be anything beyond 550.

[00:16:05] Speaker 00:
Well, Your Honor, I believe because the value of the property was extracted from the property and transferred, and it can be traced to the acquisition of the Oklahoma properties through bank statements that these were actual dollars that came from the property.

[00:16:21] Speaker 04:
Can I stop you?

[00:16:22] Speaker 04:
I think I'm hearing the beginning of a theory here.

[00:16:25] Speaker 04:
That is nowhere in the judgment, as far as I can tell.

[00:16:28] Speaker 04:
And it is nowhere in anything that was argued expressly to Judge Clarkson.

[00:16:33] Speaker 04:
So we're sitting here wondering, I mean, let me be sympathetic.

[00:16:37] Speaker 04:
I think 550 is a little opaque in some ways.

[00:16:41] Speaker 04:
You can get the property back, you can get the value of the property.

[00:16:44] Speaker 04:
I'm very sympathetic that because there's usually a lag between the bad act and when somebody knows enough to go do something about it, there may be some exploitation in the meantime, there may be some extraction.

[00:16:56] Speaker 04:
I'm not suggesting that that puts you on the wrong side of equity.

[00:16:59] Speaker 04:
What I'm suggesting is we're struggling with how that fits with 550.

[00:17:03] Speaker 04:
Now, and let me say, there may be five other wonderful arguments you could make before Judge Clarkson were we to remand this, but we're just struggling that we don't think we know what they are right now.

[00:17:13] Speaker 00:
Well, Your Honor, in the motion for summary judgment itself, all that evidence was presented, the bank statements, the loan documents, Your Honor, the bank statements, the escrow statement that showed the money going into the bank accounts, and then the money coming out of the bank accounts.

[00:17:27] Speaker 03:
We see the factual basis.

[00:17:29] Speaker 03:
We understand that part.

[00:17:30] Speaker 03:
The question is more, what's the legal basis for going after the proceeds of fraudulently transferred property?

[00:17:37] Speaker 00:
Well, Your Honor, I believe the legal basis is because the court couldn't just give the trustee the property because something of value had been taken from the property.

[00:17:48] Speaker 03:
And you give a judgment for its value.

[00:17:50] Speaker 03:
Those are the two choices under 550.

[00:17:52] Speaker 03:
That's one argument anyway.

[00:17:54] Speaker 00:
Well, and that's what the court did in part, Your Honor.

[00:17:57] Speaker 00:
There is a monetary judgment against California property management in addition to the avoidance of the transfers of the Tustin

[00:18:04] Speaker 00:
properties the court just went a step farther and But that would be a determination that something the California management who's not a debtor

[00:18:14] Speaker 02:
committed some kind of a fraudulent act in allowing a loan to be made and taking the proceeds and giving the proceeds to somebody else, there was consideration for that.

[00:18:26] Speaker 02:
You didn't put any evidence in that would demonstrate that they were part of a scheme or that any of that, at least we couldn't see any of that.

[00:18:35] Speaker 02:
We understand what happened, but there was no allegations that would have supported further relief beyond 550.

[00:18:43] Speaker 00:
Well, Your Honor, I think it was the facts lead one to the conclusion that it was all part of one fraudulent scheme, because if these properties were not transferred out of Mary Wynn's name, John Dickman and Tracy Dickman were going to get a judgment against them for $2.5 million.

[00:18:57] Speaker 04:
That part we get.

[00:18:59] Speaker 04:
But I guess, can I rephrase it a little bit?

[00:19:01] Speaker 04:
I think it's exactly consistent with Judge Gans asking.

[00:19:04] Speaker 04:
If we take this as far as 550 seems to go to us, the trustee ends up with Mary's interest in the property back, having avoided the transfer of that property.

[00:19:16] Speaker 04:
At that point, he has rights as the owner of that to do various things.

[00:19:20] Speaker 04:
Maybe it's another fraudulent transfer claim.

[00:19:22] Speaker 04:
Maybe it's something else, Ray, the wrongful exploitation of the property.

[00:19:25] Speaker 04:
I don't know what it is.

[00:19:26] Speaker 04:
But at that point, he has those rights.

[00:19:28] Speaker 04:
And to the extent that those rights go no further than what Mary's interest was, he can exploit them, right?

[00:19:34] Speaker 04:
And to us, there's a missing piece here, that we don't see how you get to the ultimate remedy just because you can avoid the first transfer, which is really the only thing that looks like 550 is really going to sanction here.

[00:19:48] Speaker 04:
So that's our problem.

[00:19:51] Speaker 00:
Well, again, Your Honor, I think it was all part of one fraudulent device.

[00:19:55] Speaker 00:
I think that the court had the authority.

[00:19:58] Speaker 04:
But CPM isn't transferring the debtor's property, right?

[00:20:02] Speaker 00:
Well, no, Mary Wynn orchestrated the transfer.

[00:20:05] Speaker 04:
But the transfer you're complaining about is to CPM and then to, well, maybe just to CPM at the end of the day, because they were the trustee.

[00:20:15] Speaker 04:
But that transfer is not a transfer of the debtor's property.

[00:20:17] Speaker 04:
So 548 doesn't work there, right?

[00:20:19] Speaker 00:
In your honor, CPM was only the trustee in connection with the first transfer of the property, the Williams Land Trust.

[00:20:25] Speaker 00:
Thereafter, your honor, the property was transferred to CPM exclusively.

[00:20:29] Speaker 04:
What we're trying to figure out, I'm sympathetic that the picture you're painting may ultimately convince Judge Clarkson that we need to think more

[00:20:40] Speaker 04:
expansively about 548, but it's not clear to us that that was articulated and that there was a legal theory that would get you to the further.

[00:20:48] Speaker 04:
This is totally a remedies question, okay?

[00:20:51] Speaker 04:
That's really what this is.

[00:20:52] Speaker 04:
So that's where we're stuck.

[00:20:53] Speaker 03:
I think you hit the nail right on the head a few minutes ago and you said the court then took it a step further.

[00:20:59] Speaker 03:
I think that's exactly what happened.

[00:21:00] Speaker 03:
Yeah, that's what we're worried about.

[00:21:01] Speaker 03:
What we don't see is an ex- and there may be a perfectly good reason for doing that, but we don't see that reason articulated in what Judge Clarkson said.

[00:21:09] Speaker 00:
And I think Judge Clarkson concluded that it was all part of one fraudulent artifice.

[00:21:15] Speaker 02:
That would have been nice to have that in the judgment, wouldn't it?

[00:21:18] Speaker 02:
And some explanation of I find the following facts to support this remedy because that's not enough.

[00:21:26] Speaker 02:
It just, it seems that he finds a fraudulent transfer and then everything comes back without explanation.

[00:21:32] Speaker 02:
That's what we're struggling with.

[00:21:34] Speaker 04:
So if, for example, he would have said, look, I'm going to ignore the CPM apparent ownership here because it's all marrying, if he would have said that, that would have at least been a theory for how you could sort of collapse things in F548 work.

[00:21:47] Speaker 04:
But I'm not seeing that.

[00:21:49] Speaker 04:
And without that, what CPM does is whatever CPM does.

[00:21:52] Speaker 04:
They're not the debtor.

[00:21:54] Speaker 00:
Well, yes, your honor, but the funds that CPM used were all traceable back to the initial transfer.

[00:22:04] Speaker 04:
I think that that was an... And there's nothing necessarily wrongful about those, other than your theory that this was all done just to throw more chairs in front of the trustee or whomever.

[00:22:14] Speaker 04:
There's nothing wrongful about those transactions, right?

[00:22:17] Speaker 04:
I mean, they borrowed money, they signed, you know, they got the money.

[00:22:20] Speaker 04:
They paid money, they got, you know, they spent money acquiring other properties, they got the properties.

[00:22:24] Speaker 04:
Those transactions by themselves are not wrongful at all, are they?

[00:22:26] Speaker 00:
Well, I think to the extent that the whole purpose of those transactions, it was part of the same fraudulent device to extract all the equity from the property and transfer them to other properties that would not be reasonable.

[00:22:38] Speaker 04:
No, I hear you.

[00:22:39] Speaker 04:
I mean, it's difficult when the properties are exploited in the meantime.

[00:22:41] Speaker 04:
I get that.

[00:22:43] Speaker 04:
But I think we have to be careful about, as your worthy adversary said in a different context, inferences are inferences.

[00:22:50] Speaker 04:
You have to be careful about them.

[00:22:51] Speaker 04:
So I think what we're pausing on here is if there's a further inference that, well, it was all Mary's doing, so CPM's involvement's neither here nor there, that's not something that was articulated to us or that we're necessarily, I'm convinced we would agree with as a theory.

[00:23:06] Speaker 04:
And actually, I'm not trying to

[00:23:08] Speaker 04:
take too much time on this, but I'm not sure what we can do here other than express our confusion about the remedy piece, because to the extent we're suggesting that we're not seeing arguments in the record, I don't know that we can rule on them, or we can make any other fact.

[00:23:21] Speaker 04:
We certainly can't make any factual findings here.

[00:23:23] Speaker 04:
So we're in a place where we're considering whether there's anything to do here but remand as to the remedies question only.

[00:23:29] Speaker 00:
Well, and Your Honor, I think the facts are in the record that support

[00:23:36] Speaker 00:
the conclusion regarding that this was all part of one fraudulent artifice.

[00:23:41] Speaker 00:
I will, Your Honor, state that the appellant didn't make any of these arguments with regard to the Oklahoma properties.

[00:23:49] Speaker 00:
Therefore, it'd be my contention that these arguments are waived.

[00:23:52] Speaker 00:
They weren't argued in their opposition to the motion for summary judgment.

[00:23:56] Speaker 00:
They weren't identified in their brief.

[00:23:58] Speaker 00:
They weren't identified in the issues.

[00:24:00] Speaker 00:
In fact, all the appellant has relied on this entire time, Your Honor.

[00:24:04] Speaker 00:
is the fact that there were these corrective deeds that were executed because it will and trust attorney and informed Mary Wynn and her brother David that they needed to record these deeds and these deeds were not the deeds in question.

[00:24:17] Speaker 00:
So I think all these arguments have been waived.

[00:24:20] Speaker 00:
None of them have been explored.

[00:24:22] Speaker 00:
That relief in the motion for summary judgment wasn't even opposed.

[00:24:29] Speaker 00:
There was just arguments about transfer of the Tustin property, interest in the Tustin property.

[00:24:35] Speaker 00:
The entirety of the focus was on the Tustin property, Your Honor.

[00:24:38] Speaker 00:
And so none of this was ever explored.

[00:24:41] Speaker 00:
So to the extent that Your Honor has found the arguments in the motion for summary judgment lacking, there was... Well, it's not so much the arguments as much as

[00:24:53] Speaker 04:
certain matters simply weren't addressed.

[00:24:55] Speaker 04:
And I might be confused about something here.

[00:24:58] Speaker 04:
I think Judge Clarkson, at least to some degree, was careful to try to limit the relief to what would be attributed to the Mary interest, right?

[00:25:07] Speaker 00:
Yes.

[00:25:07] Speaker 04:
Okay.

[00:25:08] Speaker 04:
So how does the transfer back of the two Oklahoma properties work with that?

[00:25:12] Speaker 00:
Well, CPM maintains whatever interest CPM maintained.

[00:25:17] Speaker 00:
There was a division of the proceeds that I think is what the court did when it parsed out.

[00:25:22] Speaker 04:
So how do you end up with both of the Oklahoma properties if that's the case?

[00:25:25] Speaker 00:
Well, the half interest in the properties, Your Honor.

[00:25:29] Speaker 04:
OK, so that would not have exceeded her half interest in your view?

[00:25:33] Speaker 04:
Because that was not clear to me at all.

[00:25:34] Speaker 00:
No, Your Honor.

[00:25:35] Speaker 00:
I don't believe so, because she had a half interest at the time.

[00:25:39] Speaker 00:
that she and David transferred their interest in the property to CPM as trustee and then from CPM as trustee to CPM individually.

[00:25:52] Speaker 00:
In fact, CPM

[00:25:54] Speaker 00:
maintains a half interest in the Tustin property, hence why the 363H action were filed.

[00:25:59] Speaker 00:
No, I get that, yeah.

[00:26:02] Speaker 00:
And greater monetary relief was actually sought through the motion for summary judgment.

[00:26:07] Speaker 00:
And in the complaint, Judge Clarkson actually reduced it in proportion to what he believed was attributable to the interest that was actually transferred.

[00:26:16] Speaker 04:
But the theory is that even with both the Oklahoma properties, we're still within that half interest, right?

[00:26:21] Speaker 00:
That's my understanding, Your Honor.

[00:26:22] Speaker 00:
That's been how we proceeded, and that was what the relief we requested was.

[00:26:28] Speaker 02:
So the result that you would like us to do is to affirm, irrespective of the fact that we feel that—and your argument back to us is, well, since they didn't raise it, if the judge exceeded his explanation or authority,

[00:26:43] Speaker 02:
that's just the way it goes because they didn't raise the arguments and so you should write a decision that allows a bankruptcy judge to do something that might not be explained or consistent with the code as long as nobody objects to it.

[00:26:58] Speaker 00:
Your honor, not necessarily my argument.

[00:27:00] Speaker 00:
Obviously, as counsel for the appellee, I'm going to make the argument that they've waived these arguments on appeal.

[00:27:08] Speaker 00:
However, I think there's a sufficient factual basis in the record.

[00:27:12] Speaker 00:
Perhaps the findings of fact and conclusions of law could have included slightly more robust verbiage, but I think that the result that the court

[00:27:25] Speaker 00:
The eventual judgment that was entered by the court, I think, was supported, Your Honor.

[00:27:31] Speaker 00:
I think it's supported.

[00:27:33] Speaker 02:
Well, we get the idea that there's a transfer that's bad, and then what they do is hypothecate the interest in some way to devalue the property that you're going to be able to recover, so that it just becomes more difficult to get the value out for the trustee.

[00:27:48] Speaker 02:
We follow that analysis.

[00:27:50] Speaker 02:
It's just difficult when there's many other steps that aren't adequately described, other than we know the transaction, but we don't understand what the legal theory is.

[00:28:00] Speaker 02:
how you got there, what you determined, at what point it still remained hers.

[00:28:06] Speaker 02:
You ignored the corporate structure.

[00:28:09] Speaker 02:
You did this for this reason.

[00:28:10] Speaker 02:
Those kinds of things aren't in the decision anywhere that we could determine.

[00:28:15] Speaker 00:
I understand, Your Honor.

[00:28:17] Speaker 00:
I think what the court did was trace the funds.

[00:28:20] Speaker 00:
The fraudulent transfer itself continued.

[00:28:23] Speaker 00:
It was continuous and because the funds were readily traceable based on the evidence.

[00:28:29] Speaker 00:
I think it would be different, Your Honor, if these funds were commingled with other funds, it was difficult, but we could trace these funds dollar for dollar.

[00:28:36] Speaker 00:
All that evidence was in there.

[00:28:38] Speaker 04:
And if 550 sub proceeds, you'd be home free.

[00:28:41] Speaker 04:
So that's what we got to struggle with.

[00:28:42] Speaker 04:
Thank you very much.

[00:28:43] Speaker 04:
That was a very good argument.

[00:28:44] Speaker 00:
Thank you, Your Honor.

[00:28:44] Speaker 04:
Thank you.

[00:28:50] Speaker 04:
Gee, what's new?

[00:28:54] Speaker 01:
A whole bunch of stuff, Your Honor.

[00:28:56] Speaker 01:
But it seems to me that if the court has doubts about the lower court's ability to issue the award that it did, I think the court has to remand it to for further proceedings to resolve those issues.

[00:29:13] Speaker 01:
I think the court should remand it to get and

[00:29:17] Speaker 01:
have a trial on the merits and get to the bottom of whether there really is a fraudulent conveyance.

[00:29:24] Speaker 01:
I think council said it's all Mary.

[00:29:26] Speaker 01:
Well, it can't be all Mary.

[00:29:27] Speaker 01:
It's David and Mary.

[00:29:29] Speaker 01:
It's always been David and Mary.

[00:29:31] Speaker 01:
They're the beneficiaries of the trust and that hasn't changed.

[00:29:36] Speaker 01:
And so it can't be all Mary.

[00:29:37] Speaker 01:
It's David and Mary.

[00:29:39] Speaker 04:
One of the things I'll tell you that I kind of struggle with, and it was the last dialogue with your adversary, if transfers of both the Oklahoma properties, in fact, would have exceeded the Mary transfer issue, then I think you do have a rule 19 issue.

[00:29:57] Speaker 04:
not the one you identified, but that sounds like if what Judge Clarkson is doing is pulling back for the estate something that would have been allocated differently based on the interests of the parties, then I think David's all over that as far as I'm concerned.

[00:30:12] Speaker 04:
That could be a Rule 19 issue, but I'm not sure I'm understanding well enough what happened or what the rationale for it was.

[00:30:21] Speaker 04:
I'm sorry, go ahead and react to that any way you want.

[00:30:23] Speaker 01:
Yes, Your Honor.

[00:30:25] Speaker 01:
I think the initial reaction of the judge was to say, this looks like a fraudulent conveyance and we have these badges of fraud.

[00:30:37] Speaker 01:
And he glosses over Mary's explanation and doesn't really look and give the benefit of the inferences that he's required to give.

[00:30:48] Speaker 01:
So he glosses over that and gets to the end without

[00:30:52] Speaker 01:
showing us how we got there.

[00:30:55] Speaker 01:
It's like when our math professors yelled at us for getting to an answer but not showing him or her how we got there.

[00:31:05] Speaker 04:
I think that's very apt, actually.

[00:31:06] Speaker 04:
I think there's an awful lot that happens in fraudulent transfer law and bankruptcy that's kind of rough justice.

[00:31:12] Speaker 01:
It is difficult and tricky and also you've got the

[00:31:15] Speaker 01:
the perennial problem of how do you disprove a negative, which is the other side of the coin of badges of fraud, because it's very difficult to prove a negative, but by the same token, not too many people waltz into bankruptcy court and say, yeah, I committed a fraud.

[00:31:35] Speaker 01:
But I think given the policy to try cases on the merits, she should get her day in court.

[00:31:44] Speaker 01:
And she wants to sit in the witness stand and convince Judge Clarkson that she's not a bad person, that she didn't do anything wrong, that she tried to do the best she could to support her parents' trust.

[00:32:00] Speaker 01:
And that's what happened.

[00:32:02] Speaker 01:
Also, Your Honor, she wasn't looking at a judgment.

[00:32:06] Speaker 01:
She thinks she's going to prevail.

[00:32:08] Speaker 01:
We objected to their claim.

[00:32:11] Speaker 01:
Judge Clarkson combined our claims of objection with the

[00:32:19] Speaker 01:
non-discharge ability complaint that mr. dickman filed and but mr. dickman's claim and i don't think it's in the excerpts but mr. dickman's claim is for two point five million dollars even and it's three pages there's not a single addendum attachment not even the state court complainants attached to that claim so the justice just gets rougher here doesn't it

[00:32:45] Speaker 01:
I gotcha okay anyway that matters set for trial on May the 27th, okay, and But I think there are too many holes here that I think the court needs to remand this and we'd like you to remand all of it so that I

[00:33:02] Speaker 01:
We try the issue of fraudulent conveyance.

[00:33:05] Speaker 01:
Let's try it rather than go back and forth, which appellate courts abhor.

[00:33:12] Speaker 01:
Rather than we go back and forth, we try a complete case.

[00:33:15] Speaker 04:
Well, I can tell you for sure the bankruptcy court abhors it when something gets remanded.

[00:33:21] Speaker 01:
So we try a complete case.

[00:33:24] Speaker 01:
And if the court says, no, I didn't find her credible, I think you're not getting a reversal on.

[00:33:32] Speaker 01:
a court looking at a witness's credibility on the stand and saying, no, I don't believe her.

[00:33:36] Speaker 01:
Got it.

[00:33:38] Speaker 04:
Thank you very much.

[00:33:38] Speaker 04:
Thank you for your very good argument.

[00:33:40] Speaker 04:
Thank you, Your Honor.

[00:33:41] Speaker 04:
The matter's submitted.

[00:33:42] Speaker 04:
Did you?

[00:33:42] Speaker 04:
I'm sorry, did I cut you off?

[00:33:43] Speaker 04:
No, no, we're done.

[00:33:43] Speaker 04:
OK, sorry.

[00:33:44] Speaker 04:
Thank you.

[00:33:45] Speaker 04:
Thank you.

[00:33:45] Speaker 04:
I thought I was cutting off Judge Farris there for a second.

[00:33:47] Speaker 04:
Thank you both.

[00:33:48] Speaker 04:
The matter's submitted.

[00:33:49] Speaker 04:
We'll get your written decision as soon as we can.

[00:33:51] Speaker 04:
Thank you.

[00:33:52] Speaker 04:
OK, thank you.

[00:33:54] Speaker 04:
Go ahead.