[00:00:00] Speaker 03:
Thank you, Your Honors.

[00:00:02] Speaker 01:
All right.

[00:00:03] Speaker 01:
Madam Clerk, would you please call the next case?

[00:00:06] Speaker 01:
Enrae Gleick, David Winterton, appearing for appellants.

[00:00:11] Speaker 01:
James Imes, appearing for appellee.

[00:00:15] Speaker 01:
All right.

[00:00:15] Speaker 01:
Good afternoon.

[00:00:17] Speaker 01:
Mr. Winterton, would you like to reserve any time for rebuttal?

[00:00:21] Speaker 00:
Yes.

[00:00:21] Speaker 00:
I think I'll reserve seven minutes.

[00:00:24] Speaker 01:
All right.

[00:00:24] Speaker 01:
All right.

[00:00:25] Speaker 01:
Thank you.

[00:00:25] Speaker 01:
Please proceed.

[00:00:27] Speaker 00:
Thank you, Your Honor, and I appreciate your time and the opportunity to be able to address this issue.

[00:00:33] Speaker 00:
I know you've read the briefs and everything, so I'm just going to highlight a couple of things that I think is important.

[00:00:40] Speaker 00:
And I'm not going to get into the details of the factual.

[00:00:43] Speaker 00:
This is more the issue of the sanctions.

[00:00:45] Speaker 00:
for striking the answer.

[00:00:47] Speaker 00:
But in this case, you have the glitches, sold the property, put the money in a bank account, and before finding bankruptcy, purchased another house.

[00:01:00] Speaker 00:
Now, the United States trustee's office looked at this transaction and they filed a non-dischargeability action.

[00:01:08] Speaker 00:
We were able to go ahead and have all the discovery in that case.

[00:01:12] Speaker 00:
There was no issue.

[00:01:14] Speaker 00:
There was no problems.

[00:01:15] Speaker 00:
There was depositions taken in which Mr. Imes representing the trustee attended and certain parts he was out because it dealt with his issue that we weren't sure if it was appropriate that he be there.

[00:01:30] Speaker 00:
But there were no problems.

[00:01:32] Speaker 00:
Everything went smoothly.

[00:01:34] Speaker 00:
Everything went well.

[00:01:36] Speaker 00:
Then when the issue of the house, the trustee says, maybe I can get this house.

[00:01:40] Speaker 00:
So they file an action saying fraudulent conveyance and want this.

[00:01:47] Speaker 00:
Well, they've been given all the discovery from the United States trustee's office on the litigation.

[00:01:54] Speaker 00:
No problem.

[00:01:57] Speaker 00:
My clients appeared for depositions.

[00:02:00] Speaker 00:
It went smoothly.

[00:02:02] Speaker 00:
But all of a sudden now, everything seems to go wrong.

[00:02:07] Speaker 00:
Daniel, he is a son.

[00:02:10] Speaker 00:
His name is on the title of the property.

[00:02:13] Speaker 00:
He did serve his answers to his interrogatories late, but that's all he did.

[00:02:20] Speaker 00:
He has not done anything, didn't cause any delay or anything, but yet his answer is stricken.

[00:02:27] Speaker 00:
If you go over the Malone factors, yes, we're to get this done expeditiously, but he didn't cause any delay by being, I think it was 15 days that it was late.

[00:02:39] Speaker 00:
Did it affect the docket?

[00:02:41] Speaker 00:
Did the court have to move anything, change anything because of it?

[00:02:46] Speaker 00:
No.

[00:02:47] Speaker 00:
The trustee and their opposition has not identified how they have been prejudiced because of the actions of what Daniel did.

[00:02:57] Speaker 00:
Public policy says, hey, these things need to be done on the merits.

[00:03:02] Speaker 00:
And we believe that they have been denied their due process because it is not heard on the merits.

[00:03:11] Speaker 00:
He hasn't even been addressed this issue, but yet 15 days late, he gets sanctioned and his answer is stricken.

[00:03:19] Speaker 00:
We believe that's too high, too burdensome.

[00:03:24] Speaker 00:
The last thing is

[00:03:26] Speaker 00:
Did the court consider, was there any available less dramatic sanctions?

[00:03:33] Speaker 00:
They were not even addressed.

[00:03:35] Speaker 00:
I don't know, the court could have sanctioned him for being 15 days late.

[00:03:40] Speaker 00:
The court could have done, looked at was there any damages and so on.

[00:03:46] Speaker 00:
But if you look at the record, the court never really considered that.

[00:03:49] Speaker 00:
All that the court did was, no, we're gonna strike the answer and that's it.

[00:03:56] Speaker 00:
We're all in a human world, and I believe that's too much of a burden, too much of a punishment to just strike the answer for being those days late.

[00:04:10] Speaker 00:
There was no motion to compel, nothing that was filed like that, so it didn't take up any court's time, it didn't cost any more money, and so we just don't feel like it was appropriate.

[00:04:24] Speaker 00:
Now we'll get to the glitches.

[00:04:27] Speaker 00:
First off, in regards to this, when you consider this, the trustee waited five months to commence discovery on this.

[00:04:38] Speaker 00:
They had been getting all the discovery from the United States trustee's office.

[00:04:43] Speaker 00:
They got the depositions.

[00:04:45] Speaker 00:
They've got all the documents.

[00:04:47] Speaker 00:
So everything's there.

[00:04:48] Speaker 00:
I didn't need to do any discovery because we had already produced and gotten all the documents.

[00:04:54] Speaker 00:
from the cause of action by the United States trustee's office.

[00:04:58] Speaker 00:
And the trustee and Mr. Imes who was representing the trustee, they had all these documents.

[00:05:05] Speaker 00:
So it wasn't like we're delaying, hindering and so on.

[00:05:09] Speaker 00:
So now all of a sudden they wait five months and now time's starting to become a crunch towards the... Council, just to clarify, if I might.

[00:05:20] Speaker 02:
So you're referring to the fact that the complaint was filed in let's say May

[00:05:24] Speaker 02:
of 2024, and the first deposition wasn't noticed until December of 2024?

[00:05:31] Speaker 00:
Yeah, I guess it's more than five months, so you're right.

[00:05:34] Speaker 02:
And then it's clear that they did notice the deposition, and your clients, the glitches, did not appear for that deposition, right?

[00:05:45] Speaker 02:
That is correct.

[00:05:47] Speaker 02:
And it's also not disputed that you didn't before that deposition failure to appear, you didn't seek and never saw it during the course of these proceedings, a protective order.

[00:05:58] Speaker 00:
No, I did not seek a protective order.

[00:06:02] Speaker 00:
Why didn't you do that?

[00:06:03] Speaker 00:
Because when it happened is there were two reasons that caused it.

[00:06:08] Speaker 00:
Number one was the death of a family member.

[00:06:11] Speaker 00:
That one, it was just unexpected.

[00:06:16] Speaker 00:
And so I did not, I called up the trustee and he was very gracious and consented.

[00:06:22] Speaker 00:
And I appreciate that.

[00:06:24] Speaker 00:
The other thing came regarding the accident that took place.

[00:06:29] Speaker 00:
Now that one again was something that it was like, I didn't know about until shortly before the deposition.

[00:06:37] Speaker 00:
And so I was actually thinking my client was going to be calm and be able to, but I didn't know about it.

[00:06:44] Speaker 00:
So by the time the deposition came up, I didn't have time to run to the court for a protective order.

[00:06:50] Speaker 02:
And so that's why I couldn't, you couldn't seek because of the timing.

[00:06:54] Speaker 02:
You couldn't seek one before the deposition was missed, but you could have sought a protective order or done something after the deposition was missed before the motion for sanctions was filed.

[00:07:07] Speaker 00:
Actually, we were trying to get something done and there were certain dates that were set to redo it.

[00:07:15] Speaker 00:
They had suggested, but the problem was my schedule, not my clients.

[00:07:21] Speaker 00:
It was my schedule that I couldn't do those dates.

[00:07:24] Speaker 00:
And the trustee wasn't being very flexible.

[00:07:26] Speaker 00:
He said the 19th, that's it.

[00:07:29] Speaker 00:
Well, I was in another trial at that time and I couldn't.

[00:07:33] Speaker 00:
And so that's why I feel like, why should my clients be punished because of my schedule?

[00:07:40] Speaker 00:
And I could have, I guess I see what your point is.

[00:07:44] Speaker 00:
Since we were trying to work it out, but since it didn't, maybe I should have immediately run to the court.

[00:07:51] Speaker 00:
But I was surprised when he just went and asked for the sanction.

[00:07:58] Speaker 03:
Can I pull something apart a little bit counsel?

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

[00:08:02] Speaker 03:
I certainly get the overall thrust of your argument.

[00:08:06] Speaker 03:
To what extent, if any, do you think the bankruptcy court made a factual error?

[00:08:11] Speaker 03:
To what extent, if any, do you think the bankruptcy court made a legal error?

[00:08:15] Speaker 03:
Is there a finding a fact in here that's clearly erroneous?

[00:08:19] Speaker 00:
I believe yes, because they're talking about being willful and deliberate and bad faith.

[00:08:26] Speaker 00:
in trying to avoid these depositions.

[00:08:30] Speaker 00:
And factually, I just can't see it when they've been so cooperative in the first cause of action and they were trying to in this one.

[00:08:41] Speaker 00:
I think factually by saying the accident and a death, I believe the court should have looked at that instead of saying no.

[00:08:52] Speaker 03:
The court was looking at a couple of misdepositions and then

[00:08:56] Speaker 03:
from the trustees standpoint, some non-responsiveness with respect to further commitments on a matter that is of some sensitivity to your client.

[00:09:09] Speaker 03:
So on that basis, the finding was clearly erroneous?

[00:09:16] Speaker 00:
I believe so because I don't think that if the court had also looked at the

[00:09:22] Speaker 00:
the efforts that were made.

[00:09:24] Speaker 00:
I mean, what the trustee said is, you've got to do it by this deadline.

[00:09:28] Speaker 00:
And that's it.

[00:09:29] Speaker 00:
And they didn't consider what about council schedule?

[00:09:33] Speaker 00:
Because it was in there that council was not available at that time.

[00:09:38] Speaker 00:
But I think the court just ignored it and said, no, that's what needs to be done.

[00:09:44] Speaker 00:
How about a legal error?

[00:09:46] Speaker 00:
The legal error is, um, I was going over the five factors.

[00:09:52] Speaker 00:
Yeah.

[00:09:55] Speaker 00:
And you go over the first one, expeditious.

[00:09:58] Speaker 00:
There was no, um, uh, I can understand that, yes, we're trying to get it done, but, and it did delay things.

[00:10:07] Speaker 00:
I will admit that one.

[00:10:08] Speaker 00:
And I give that one to the trustee, but as for, uh, affecting the docket, we still could have gotten this done.

[00:10:15] Speaker 00:
had they, if they had worked with us, but they weren't willing to work with us anymore.

[00:10:20] Speaker 00:
The prejudice, there has been no prejudice to the trustee.

[00:10:25] Speaker 00:
In regards to public policy, again, that's strongly in my client's position.

[00:10:30] Speaker 00:
And the court, again, never looked at where I think legally they were wrong, is they should, or erred, I shouldn't say wrong,

[00:10:39] Speaker 00:
because I respect the judge in that she should have looked for other areas.

[00:10:43] Speaker 00:
There was no motion to compel other type of sanctions.

[00:10:46] Speaker 03:
And I realize we've taken you within five minutes now, so.

[00:10:50] Speaker 03:
That's fine and I'll stop there.

[00:10:52] Speaker 03:
Thank you.

[00:10:53] Speaker 00:
Thank you.

[00:10:55] Speaker 01:
All right, Mr. Imes.

[00:11:00] Speaker 04:
Good afternoon.

[00:11:01] Speaker 04:
May it please the court, Jason Imes, counsel for Troy S. Fox, Chapter 7 trustee for the bankruptcy estate.

[00:11:09] Speaker 04:
I appreciate the opportunity to discuss this with the panel this morning or this afternoon.

[00:11:14] Speaker 04:
The factual context here, I think, is particularly relevant to your decision in this matter.

[00:11:20] Speaker 02:
Do you mean the merits of the claims?

[00:11:26] Speaker 02:
Sorry, pardon me?

[00:11:27] Speaker 02:
You're not referring to the merits of the claims of the trustee.

[00:11:30] Speaker 02:
You're referring to the factual context of the order that was issued by the Bankruptcy Court.

[00:11:35] Speaker 02:
Correct.

[00:11:36] Speaker 04:
The background history that we're dealing with here.

[00:11:40] Speaker 02:
Let me ask you a question.

[00:11:43] Speaker 02:
The trustee sought to strike Daniel Gleitsch's answer and have the entry of a default judgment based upon his failure to timely answer interrogatories.

[00:11:54] Speaker 02:
Correct?

[00:11:55] Speaker 02:
Correct.

[00:11:57] Speaker 02:
Didn't the trustee receive the answers from Daniel Gleisch on February 5th, 2025, albeit unverified, before the trustee filed the motion for sanctions on February 20, 2025, and almost two months before the hearing on the motions for sanctions on April 1st, 2025?

[00:12:14] Speaker 04:
That is correct, Your Honor.

[00:12:16] Speaker 04:
The trustee did receive those responses eventually.

[00:12:20] Speaker 02:
In the motion for sanctions, the trustee asserted that the trustee had had similar issues securing the cooperation

[00:12:26] Speaker 02:
of Daniel Gleisch because the interrogatories were served on December 19th and his responses were due on January 19th, 2025.

[00:12:35] Speaker 02:
January 19th passed without response, so the trustee contacted counsel on January 27th and inquired again on January 31, and on February 1, Defendants Council indicated the responses were forthcoming, and when no responses were received by February 3rd, the trustees council emailed a request for meeting conferrer

[00:12:55] Speaker 02:
on the missing responses pursuant to Local Rule 7037 and the responses, albeit unverified, were finally delivered on February 5, 2025, citing to Exhibit 7 to the IMSS Declaration.

[00:13:09] Speaker 02:
But a review of the IMSS Declaration and the attachments to Exhibit 7 only reveal contacts by the Trustee and Council for Daniel Gleisch between

[00:13:19] Speaker 02:
or GALISH between January 27, 2025 and February 5, 2025 when the unverified responses were received by the trustee.

[00:13:28] Speaker 02:
There's no indication in the motion or in the attachments that the trustee was dissatisfied with GALISH's interrogatory responses or the trustee sought to have Daniel GALISH verify the responses prior to filing the motion for sanctions, correct?

[00:13:44] Speaker 02:
That's correct, Your Honor.

[00:13:46] Speaker 02:
Under what provision of Rule 7037 is it appropriate for the trustee to seek sanctions after having received responses to interrogatories without conducting a meet and confer to obtain Daniel Gleish's compliance verification or to satisfy the trustees remaining concerns, if any, after the responses were received?

[00:14:07] Speaker 04:
Your Honor, I think the cases show that a belated response still

[00:14:13] Speaker 04:
constitutes a basis.

[00:14:15] Speaker 02:
Rule 7037D requires that before the Bankruptcy Court strike Daniel Gleish's answer under Rule 7037B2A, the trustees required to prove that Daniel Gleish failed to serve answers, failed to file objections, failed to file written responses to the interrogatories which had been properly served

[00:14:35] Speaker 02:
under Rule 7033.

[00:14:36] Speaker 02:
Isn't that correct?

[00:14:39] Speaker 02:
That's correct, Your Honor.

[00:14:41] Speaker 02:
But in this case, the trustee moved to strike Daniel Gleish's answer under Rule 7037 D1AII, even though Daniel Gleish had provided unverified answers to the interrogatories more than two weeks before the trustee filed the motion for sanctions.

[00:14:57] Speaker 02:
And the trustee presented no evidence in the motion or at the hearing on the motion for sanctions that he sought to rectify the unverified answers

[00:15:05] Speaker 02:
met and conferred with Daniel's counsel, nor did the trustee attach Glisha's answers to the interrogatories to the motion for sanctions, correct?

[00:15:15] Speaker 02:
Correct, Your Honor.

[00:15:16] Speaker 02:
And under these circumstances, why wasn't the Bankruptcy Court's decision to strike Daniel Glisha's answer and the entry of a default judgment a clear error of law in violation of the express provisions of Rule 7037D?

[00:15:32] Speaker 04:
Your honor, I would refer to the ability of the court to enter sanctions for belated discovery responses.

[00:15:42] Speaker 04:
That last minute tender discovery responses doesn't cure prejudice or harm the other cases on the docket.

[00:15:48] Speaker 04:
I do appreciate that.

[00:15:49] Speaker 01:
What's the prejudice?

[00:15:50] Speaker 01:
What's the prejudice?

[00:15:52] Speaker 01:
The prejudice means you have to go to trial.

[00:15:54] Speaker 01:
That's not prejudice.

[00:15:57] Speaker 04:
The prejudice in this case was that the discovery responses were delayed.

[00:16:02] Speaker 04:
until a point where we were less than 30 days from the close of discovery.

[00:16:06] Speaker 04:
So the trustee lost his ability for follow-up on the responses that Daniel had provided, which raised a number of questions and things like that.

[00:16:15] Speaker 03:
I personally have never extended a discovery come up, so I know what you're talking about.

[00:16:19] Speaker 04:
Yeah, me neither.

[00:16:20] Speaker 03:
Yeah.

[00:16:23] Speaker 02:
I mean, counsel, you got to be serious here.

[00:16:26] Speaker 02:
You know, you

[00:16:30] Speaker 02:
Let's just move to the Gleises for a second.

[00:16:35] Speaker 02:
The bankruptcy court struck the Gleises answer to the adversary complaint judgment against them as a sanction for their failure to attend a previously scheduled debt position under Rule 7037 D1A small i. Correct?

[00:16:51] Speaker 02:
Correct.

[00:16:52] Speaker 02:
The bankruptcy court previously conducted a scheduling conference on August 29th, 2024, and set a discovery cutoff of January 31, 2024.

[00:17:01] Speaker 02:
But on January 10th, 2025, the party stipulated to extend the discovery deadline to February 28th, 2025, the dispositive motion deadline to March 14th, 2025, and to move the trial from June 17th to June 25th, 2025.

[00:17:14] Speaker 02:
That's the adversary dock at 2021, correct?

[00:17:18] Speaker 02:
We agreed to move the discovery deadline, not the trial date.

[00:17:21] Speaker 02:
On January 21, 2025, the trustee filed an amended notice of deposition of the Gleishas for February 5, 2025.

[00:17:28] Speaker 02:
That's adversary dockets 18 and 19, correct?

[00:17:32] Speaker 02:
Correct.

[00:17:32] Speaker 02:
Although the Gleishas did not appear for their scheduled depositions and they did not seek a protective order, they continued to communicate with the trustee.

[00:17:40] Speaker 02:
They agreed to extend the discovery deadline again without the need for the trustee to file a motion.

[00:17:45] Speaker 02:
Mr. Gleisch agreed to appear for deposition at the trustee's office on January 28th, 2025.

[00:17:52] Speaker 02:
And on March 17th, 2025, the trustee emailed counsel for the Gleisch's stating he agreed to set amended depositions for them on March 26th and March 28th, 2025.

[00:18:04] Speaker 02:
That's adversary doc at 39 at exhibit two, correct?

[00:18:08] Speaker 02:
Correct.

[00:18:09] Speaker 02:
Nevertheless, the trustee filed his motion for sanctions on February 20, 2025, and although the hearing on the motion was not conducted until April 1, 2025, the trustee never informed the Bankruptcy Court about any of his follow-up communications with Debtors' Council, about the debtor and Mr. Gleesha's attempts to cooperate in rescheduling their depositions, or the trustee's willingness to reschedule Mr. and Mrs. Gleesha's depositions to March of 2025.

[00:18:36] Speaker 02:
Instead, at the hearing and the motion for sanctions, the trustee asserted the only available remedy under the circumstances was the granting of a motion to strike and the defendant's answers and the entry of default judgment, correct?

[00:18:50] Speaker 04:
That's what we advocated for, yes.

[00:18:52] Speaker 02:
The trustee never sought the entry of an order compelling the debtor or Mr. or Mrs. Gleach to appear for deposition.

[00:18:58] Speaker 02:
The trustee never asked the court to enter an order that if they fail to appear at the next scheduled deposition without first obtaining a protective order, their answers would be stricken and the court would enter default judgment, correct?

[00:19:10] Speaker 02:
Correct, if I may address that.

[00:19:12] Speaker 02:
No, I have other questions if you don't mind.

[00:19:15] Speaker 02:
Although the bankruptcy court said that it considered the relevant factors before imposing sanctions under Rule 7037D, specifically striking the glicious answers and entering a default judgment,

[00:19:27] Speaker 02:
The bankruptcy court made no specific findings to support that decision, correct?

[00:19:32] Speaker 02:
Correct.

[00:19:33] Speaker 02:
Instead, the bankruptcy judge stated that she was not required to make specific findings.

[00:19:38] Speaker 02:
While the trial court is not required to make explicit findings, if it does not, the appellate court is entitled to review the record independently to determine whether the sanction was an abuse of discretion.

[00:19:51] Speaker 02:
That's Wanderer versus Johnson, right?

[00:19:54] Speaker 02:
And isn't that review akin to de novo review because the reviewing court independently determines if the trial court's decision to issue terminating sanctions under the circumstances was appropriate, correct?

[00:20:08] Speaker 04:
Yes, I agree with that.

[00:20:09] Speaker 02:
The reviewing court can substitute its judging for that of the trial court on the question of whether the decision to issue terminating sanctions was appropriate, correct?

[00:20:18] Speaker 02:
I agree with that, yes.

[00:20:19] Speaker 02:
All right, so a court must weigh five factors

[00:20:22] Speaker 02:
in order to determine whether it will impose sanctions under Rule 7, terminating sanctions under Rule 7037D.

[00:20:31] Speaker 02:
One is the public's interest in expeditious resolution.

[00:20:35] Speaker 02:
Two is the court's need to manage its own docket.

[00:20:38] Speaker 02:
Three is the risk of prejudice to the defendants.

[00:20:40] Speaker 02:
Four is the public policy favoring disposition of the case on the merits.

[00:20:43] Speaker 02:
And five is the availability of a less drastic sanction, correct?

[00:20:47] Speaker 02:
Correct.

[00:20:48] Speaker 02:
The first of those two factors favor the imposition of sanctions in most cases, while the fourth cuts against dismissal or default judgment.

[00:20:59] Speaker 02:
Thus, the key factors are prejudice and the availability of lesser sanctions.

[00:21:03] Speaker 02:
That's Wanderer versus Johnson, correct?

[00:21:06] Speaker 02:
Yeah, I agree, yes.

[00:21:08] Speaker 02:
The Ninth Circuit has found that the element of prejudice to be essential, stating that sanctions which interfere with a litigant's claim or defenses violate due process when they are imposed merely for punishment of an infraction that did not threaten to interfere with a rightful decision of the case.

[00:21:25] Speaker 02:
That's also Wanderer versus Johnson, where they also said that delay alone without a focus on its effects will not justify dismissal or default.

[00:21:34] Speaker 02:
Correct?

[00:21:36] Speaker 02:
Yes, I'd agree with that.

[00:21:38] Speaker 02:
What prejudice did the trustees suffer other than delay?

[00:21:43] Speaker 04:
Other than delay?

[00:21:45] Speaker 04:
I think that is, and I think that's sufficient prejudice.

[00:21:48] Speaker 02:
It's not sufficient.

[00:21:49] Speaker 02:
It's not sufficient under Wanderer v. Johnson.

[00:21:51] Speaker 02:
You're just making up an argument.

[00:21:53] Speaker 02:
Give me what prejudice, what documents, what witnesses, other than delay, what did the trustee lose in its case that it wouldn't have had available to it if the sanction hadn't been imposed?

[00:22:06] Speaker 04:
Delay.

[00:22:06] Speaker 04:
That's what the trustee was concerned.

[00:22:08] Speaker 02:
Why wasn't a less drastic sanction such as an order compelling Gleish's deposition or a warning that failure to attend the next scheduled deposition would result in an over striking their answer?

[00:22:19] Speaker 02:
A less drastic sanction that the Bank of the Court should have imposed in this case.

[00:22:24] Speaker 04:
I believe the reason is because you have a pattern of abusing the discovery process of delaying of building an obstruction and that by

[00:22:35] Speaker 04:
adding an additional relief for the appellants in this case, you're encouraging that kind of behavior to continue.

[00:22:46] Speaker 04:
You're encouraging them to keep stalling out because they know that they have at least one free go at it because if you require the court to do a lesser sanction in every situation, then you're going to have recalcitrant.

[00:23:00] Speaker 03:
Can I throw a thought in here?

[00:23:03] Speaker 03:
I'll just say it a little bit more colloquially than Judge Gann has masterfully set forth what I think is the right standard.

[00:23:11] Speaker 03:
Why do we have to go to DEFCON 1 on this?

[00:23:14] Speaker 03:
You know, you didn't bring a motion to compel.

[00:23:18] Speaker 03:
Discovery deadlines can be moved.

[00:23:20] Speaker 03:
They've already been moved.

[00:23:21] Speaker 03:
I don't know too many judges who will say, no, I'm sorry because this deposition didn't occur.

[00:23:26] Speaker 03:
We're not moving a discovery deadline.

[00:23:29] Speaker 03:
You know, I think that overall,

[00:23:32] Speaker 03:
If I can synopsize part of Judge Gann's point, even if there has been some abuse, isn't there still an independent duty to say, is there something we can do except strike an answer here?

[00:23:42] Speaker 03:
And it doesn't look like that was even considered.

[00:23:45] Speaker 03:
Am I wrong about that?

[00:23:48] Speaker 04:
Without getting into my discussions with the client, there were discussions about that.

[00:23:52] Speaker 03:
Don't do that.

[00:23:53] Speaker 04:
Yeah.

[00:23:56] Speaker 04:
In this case, and that's why we feel that laying out the factual background in this, we have a debtor who didn't disclose his interest in the garden rose property, didn't disclose $125,000 that was sitting in his account, didn't turn over that money to the trustee, didn't turn it over after Judge Cox has ordered him to turn it over.

[00:24:16] Speaker 04:
In the adversary case, we have

[00:24:20] Speaker 04:
The answer deadline came and went, so we had ended up having to file a notice of intent to take default to get the answer filed.

[00:24:26] Speaker 04:
We had to submit the discovery plan.

[00:24:28] Speaker 04:
One party discovery plan because we couldn't get that coordinated with them.

[00:24:32] Speaker 04:
It's up and then we that's before we even get into the discovery issues.

[00:24:37] Speaker 02:
So we have a council.

[00:24:38] Speaker 02:
The debtor was on one front being confronted with the 727 action trying to defend that, which is still pending and hasn't yet been determined by the court, correct?

[00:24:48] Speaker 02:
Correct.

[00:24:49] Speaker 02:
I believe it's waiting on a motion to dismiss.

[00:24:51] Speaker 02:
And you had objections to the claim of exemption, which were litigated by the debtor and ultimately successfully defended by the trustee, correct?

[00:25:02] Speaker 02:
Correct, Your Honor, yes.

[00:25:03] Speaker 02:
And you had this adversary proceeding and turnover actions that were being sought by the by the trustee and this adversary proceeding.

[00:25:11] Speaker 02:
Correct?

[00:25:12] Speaker 04:
Yes, Your Honor.

[00:25:13] Speaker 02:
So the debtor wasn't not doing anything.

[00:25:16] Speaker 02:
The debtor wasn't cooperating with the trustee, but the debtor was involved in serious litigation with the trustee over many various issues during the court's bankruptcy case, correct?

[00:25:26] Speaker 04:
Correct.

[00:25:27] Speaker 04:
To be clear, the U.S.

[00:25:28] Speaker 04:
trustee's office is handling the 727 action.

[00:25:31] Speaker 02:
It doesn't matter.

[00:25:31] Speaker 02:
The debtor still has to defend it, doesn't he?

[00:25:33] Speaker 02:
Agreed, Your Honor.

[00:25:34] Speaker 02:
Yes, sorry.

[00:25:35] Speaker 02:
Yes, you're correct.

[00:25:37] Speaker 02:
I'm not looking at it from his side, not from your side, because you're telling us what a bad actor and unresponsive person, debtor he is, not looking at the merits, because we're not getting the merits.

[00:25:50] Speaker 02:
This is not a merits determination at this point.

[00:25:53] Speaker 02:
This is a question of whether the sanction was appropriate, right?

[00:25:57] Speaker 02:
I agree with that, yes.

[00:26:01] Speaker 02:
Well, you're out of time.

[00:26:03] Speaker 02:
That's my time.

[00:26:04] Speaker 02:
And I appreciate your responses.

[00:26:09] Speaker 04:
Thank you, Your Honors.

[00:26:12] Speaker 01:
All right, debtors council, Mr. Warner-Hoyne.

[00:26:17] Speaker 00:
Based upon everything that's been said and has been done, I don't have any other comments for rebuttal.

[00:26:25] Speaker 00:
If there's any questions, I'd be happy to answer them.

[00:26:27] Speaker 00:
But I don't have anything else to add.

[00:26:31] Speaker 01:
I don't have any questions.

[00:26:33] Speaker 01:
Anyone else?

[00:26:33] Speaker 01:
All right.

[00:26:34] Speaker 00:
No, thank you very much.

[00:26:35] Speaker 01:
Thank you both.

[00:26:37] Speaker 01:
This matter is submitted.