[00:00:00] Speaker 01:
Good morning.

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

[00:00:05] Speaker 04:
Yes, Your Honor.

[00:00:06] Speaker 04:
I'd like to reserve five minutes.

[00:00:07] Speaker 01:
All right.

[00:00:08] Speaker 01:
Hopefully you can see the clock.

[00:00:09] Speaker 01:
Please begin.

[00:00:12] Speaker 04:
Good morning, Your Honors.

[00:00:13] Speaker 04:
May it please the court.

[00:00:15] Speaker 04:
I'm Adam Hoff on behalf of the appellant.

[00:00:17] Speaker 04:
This case is about the finality of court orders and their enforceability in the bankruptcy process.

[00:00:23] Speaker 04:
This appeal presents three legal issues for review.

[00:00:27] Speaker 04:
One, whether the loan was accelerated in 2009, triggering the Arizona six-year statute of limitations.

[00:00:34] Speaker 04:
Two, whether the 2010 claim disallowance order precludes re-litigation under the principles of rest judicata, and three, whether the lien is void under 11 USC 506D because the claim was filed and disallowed.

[00:00:51] Speaker 04:
We view this as each issue independently requires reversal.

[00:00:56] Speaker 04:
Together they show that the

[00:00:59] Speaker 04:
that river flow funding has no enforceable claim.

[00:01:02] Speaker 04:
I'll address acceleration first, then rescue to cotta, then lean avoidance.

[00:01:08] Speaker 04:
And so moving straight into the acceleration issue, under Arizona law, a debt is accelerated when the creditor takes an affirmative act, clearly signaling that the entire balance is due.

[00:01:22] Speaker 04:
The Arizona Court of Appeals in Baseline Financial Services versus Madison explained that examples of acceleration include demanding full payment before all installments are due, repossessing property or filing suit for the entire balance.

[00:01:34] Speaker 04:
The standard is an overt act that puts the debtor on notice in this case.

[00:01:38] Speaker 04:
We have two such overt acts first Indy mac who at the time held both the senior and junior leads in this case filed a motion for relief from stay in the debtors in the debtors 2008 bankruptcy case and was that really from stay as to the second They filed a relief

[00:01:58] Speaker 04:
As to specifically the cash in was the first boat and the relief given was as to the first It was not it was a general order.

[00:02:07] Speaker 03:
No The relief is based upon the ask and we'll get back to that and I think later part of your argument The relief was to foreclose on the first the only reference in the second was in the calculation of equity as a whole wasn't it?

[00:02:24] Speaker 04:
No, in what we look at, and this is an important element of the case, is we look at the order.

[00:02:29] Speaker 04:
And so I agree that the order should reflect the ask, but if you look at the order, the order in no uncertain terms.

[00:02:37] Speaker 03:
But the second never moved for it.

[00:02:41] Speaker 04:
They didn't need to move for it independently.

[00:02:44] Speaker 03:
I'm not sure if that... How can that be?

[00:02:49] Speaker 04:
Primarily because IndyMac held both the first and second mortgage.

[00:02:52] Speaker 03:
Great, but those are two separate debts, acknowledge the two separate debts, treat it as two second debts, right?

[00:03:00] Speaker 04:
Well, the question would be, under the order that was granted by the court in 2008, could either the first mortgage or the second mortgage move to foreclose on the property?

[00:03:12] Speaker 04:
And so my point is the debtor shouldn't have to make that determination based on the motion.

[00:03:17] Speaker 04:
It should have to make that determination based on the order.

[00:03:20] Speaker 04:
And the order has very broad language.

[00:03:23] Speaker 04:
It says vacating the state, quote, as to, quote, any and all stays against lien enforcement.

[00:03:34] Speaker 02:
You can foreclose for the failure to pay one monthly payment.

[00:03:43] Speaker 02:
So was there a foreclosure where the debt was accelerated?

[00:03:48] Speaker 02:
That didn't happen though, did it?

[00:03:50] Speaker 04:
I don't think it's necessary because it's taken, that is an overt act, but our point is that the mere existence of a stay lift motion coupled with the proof of claim is the overt act necessary to trigger acceleration.

[00:04:04] Speaker 04:
They don't actually have to foreclose because the stay itself, the order, which was very broad, said that the creditor had the right to foreclose.

[00:04:13] Speaker 02:
Okay, so that's there, but what's the evidence before the trial court or before us that

[00:04:21] Speaker 02:
as part of that foreclosure.

[00:04:23] Speaker 02:
I mean, okay, yes, they could foreclose, but they could have foreclosed just on the missing of one payment.

[00:04:29] Speaker 02:
What do we have before us to say that once they got relief from stay, they really did accelerate this?

[00:04:37] Speaker 04:
Well, we couple that.

[00:04:39] Speaker 04:
And let me answer the question.

[00:04:41] Speaker 02:
It seems to me that, you know, it's not that you're asking us to connect the dots.

[00:04:46] Speaker 02:
You're asking us to fill in a blank.

[00:04:48] Speaker 02:
I don't have that information that they did accelerate it.

[00:04:52] Speaker 02:
I don't see it in the record.

[00:04:55] Speaker 04:
What we're saying is that the stay lift itself is sufficient.

[00:05:00] Speaker 03:
I think you've got a number of other points that are more important here.

[00:05:07] Speaker 03:
Subject to Mr. and Judge Corbett, I urge you to move on.

[00:05:12] Speaker 03:
You may actually want to jump to the 506D.

[00:05:17] Speaker 04:
Okay, Your Honor.

[00:05:19] Speaker 04:
I think that, and I think 506D, when we look at, I'll move this around then.

[00:05:25] Speaker 04:
So the 506D issue is one, there is no factual dispute that the claim was disallowed.

[00:05:34] Speaker 03:
What does that mean?

[00:05:35] Speaker 03:
What does disallowed mean in this context?

[00:05:40] Speaker 04:
In this context, our whole argument is that the, well, the argument is that there was a claim that was filed by the secured creditor, specifically the second mortgage.

[00:05:50] Speaker 04:
The trustee objected to the claim.

[00:05:53] Speaker 04:
The second mortgage actually amended the claim and then the trustee objected again.

[00:05:57] Speaker 04:
And the court simply issued an order that said the claim is disallowed.

[00:06:01] Speaker 03:
Okay, so going back to our earlier discussion about the motion and the request forming the scope of the order, what was the basis for the objection?

[00:06:11] Speaker 04:
So the basis for the objection was that they should look to the collateral for collection.

[00:06:16] Speaker 03:
Why would they look for the collateral if they didn't have a claim?

[00:06:21] Speaker 04:
And I actually don't think that it matters why they... I think it does if it's actually necessarily litigated for your preclusion, right?

[00:06:32] Speaker 04:
So Siegel, and this was even mentioned in one of the earlier arguments, Siegel basically says that whether

[00:06:39] Speaker 04:
It doesn't really matter why the claim was objected to.

[00:06:42] Speaker 04:
To your point, the trustee said they should look at collateral, but the trustee could have objected based upon the claim not being sufficiently valid.

[00:06:50] Speaker 04:
They could have objected on several grounds, but those all merged into that order.

[00:06:55] Speaker 04:
And our point is finality in the order.

[00:06:58] Speaker 04:
If I'm looking at an order that says a claim is disallowed,

[00:07:02] Speaker 04:
Other than the 506D exceptions, I should not have to look at why the order was issued.

[00:07:08] Speaker 04:
I should be able to take the order on its face and see that the claim was disallowed.

[00:07:12] Speaker 04:
And I think that's one of the issues we're looking at.

[00:07:15] Speaker 04:
And Siegel goes to that idea as well, is that we have to have finality in orders.

[00:07:19] Speaker 04:
Otherwise, now we're looking at an order that on its face says the claim was disallowed.

[00:07:23] Speaker 04:
And now we're going in and arguing every single disallowed claim based upon why the motion was filed and what claims were raised or what claims weren't raised.

[00:07:31] Speaker 03:
So, as I understand your argument is, based upon our understanding by what the Trustee is submitted in, and the Chapter 7 Trustee submitted in declaration, the point was that it should go deal with it outside the bankruptcy, in effect, to collect the claim.

[00:07:49] Speaker 03:
And yet, you are now saying there is no claim because it said disallowed.

[00:07:58] Speaker 04:
Your honor and there is a specific remedy for that One is the creditor did not object to the claim to the objection to claim and neither did the neither did the debtor

[00:08:10] Speaker 03:
The debtor didn't.

[00:08:11] Speaker 03:
So you're arguing on the preclusion that's the same interest, same parties and stuff.

[00:08:15] Speaker 03:
Why isn't the debtor precluded then from objecting it?

[00:08:18] Speaker 03:
You can enforce that and say, go look, but the debtor cannot participate in this chapter 13 now because there is a prior order.

[00:08:25] Speaker 03:
Go look to your collateral.

[00:08:27] Speaker 03:
You can enforce that order, but you're asking for more.

[00:08:29] Speaker 03:
You're asking for a substantive determination that there is no debt.

[00:08:33] Speaker 02:
Yeah, I look at this.

[00:08:36] Speaker 02:
Am I missing something here?

[00:08:37] Speaker 02:
Is it OK?

[00:08:38] Speaker 02:
There might be a claim against the estate, OK?

[00:08:41] Speaker 02:
In essence, it's almost be in personam type claim against the debtor that they could pay.

[00:08:46] Speaker 02:
But then there's also a claim against the property.

[00:08:49] Speaker 02:
There's an in Rem claim here.

[00:08:51] Speaker 02:
And how is the in Rem the right to go after the property extinguished by that order?

[00:08:55] Speaker 04:
506D.

[00:08:58] Speaker 04:
So 506D only gives two exceptions.

[00:09:02] Speaker 04:
for claim disallowance orders.

[00:09:05] Speaker 04:
The primary exception, I think, that's valid here is that, one, the claim didn't have to be filed.

[00:09:12] Speaker 04:
And I agree.

[00:09:14] Speaker 04:
In rem claims, it's long established that they passed through a bankruptcy case without a claim being filed.

[00:09:20] Speaker 04:
And so the issue here is that a claim didn't need to be filed.

[00:09:23] Speaker 04:
That's one.

[00:09:24] Speaker 04:
Two, it was a disallowed order that was isolated, meaning it didn't say,

[00:09:31] Speaker 04:
This claim is disallowed to the extent that it should be that the property should be recovered outside of the bankruptcy case and any such ambiguity.

[00:09:39] Speaker 04:
I don't think the objection or the order on its face was ambiguous.

[00:09:42] Speaker 04:
It just clearly said the claim was disallowed.

[00:09:45] Speaker 04:
And so when we look at 506D, 506D really only gives an exception or 506D2

[00:09:54] Speaker 04:
due to failure to file.

[00:09:55] Speaker 04:
And so in this case, the claim was filed, the claim was disallowed.

[00:09:59] Speaker 04:
And so I don't see that there's any sort of wiggle room here arguing that the trustee, yes, the trustee said they should seek recovery outside of the case, but the trustee had several other actions that they could have brought and they didn't.

[00:10:14] Speaker 04:
And so Siegel really goes towards that finality.

[00:10:17] Speaker 04:
If no objection had been brought, the claim would have been considered a valid claim under Siegel.

[00:10:26] Speaker 04:
And then unless there's a pressing question, I'll reserve the rest of my time.

[00:10:33] Speaker 01:
Any questions?

[00:10:34] Speaker 01:
Okay, thank you.

[00:10:35] Speaker 01:
Ms.

[00:10:36] Speaker 01:
Silberstein?

[00:10:38] Speaker 00:
Thank you, Your Honors.

[00:10:39] Speaker 00:
Good morning.

[00:10:40] Speaker 00:
Chris Silberstein on behalf of Appellee Secured Creditor Riverflow Funding.

[00:10:46] Speaker 00:
As Your Honors hone in on some of the issues, I think one of the key issues is that that motion for relief filed in the Chapter 7

[00:10:55] Speaker 00:
was not filed by my client's predecessor in interest.

[00:10:58] Speaker 00:
While the lender who originated both the first and second was IndyMac, IndyMac filed that motion for relief as to the first and only to the first.

[00:11:10] Speaker 00:
And we see this in the fact that the exhibits attached to the motion for relief are only applicable as to the first.

[00:11:19] Speaker 00:
And your honor pointed out the fact that the only reference to the second

[00:11:23] Speaker 00:
was in the equity analysis.

[00:11:25] Speaker 00:
And I think that's the other factor that points out that that motion for relief was only as to the first.

[00:11:32] Speaker 00:
And yes, the order language was very broad and it did say that the relief was as to all stays, but then the remainder of that sentence indicated all stays under 362 and 524.

[00:11:46] Speaker 00:
It did not elaborate all stays as to other loans.

[00:11:53] Speaker 00:
As such, that motion for relief cannot be deemed an acceleration of my client's loan.

[00:12:01] Speaker 00:
Another issue that we have in this case is whether or not the proof of claim that was filed in the chapter seven is an acceleration.

[00:12:07] Speaker 00:
It was not an acceleration.

[00:12:10] Speaker 00:
The appellant references a number of cases that are chapter 11 based, which is distinguishable.

[00:12:17] Speaker 00:
And the fact that those were chapter 11s

[00:12:19] Speaker 00:
And the relation for the acceleration is under 11 USC 1124, which is not applicable in a seven or now in the 13 case that from which the matter is being appealed.

[00:12:36] Speaker 00:
Another issue that we have is, as Your Honors were questioning a few moments ago, 506.

[00:12:43] Speaker 00:
The trustee did not file the objection to claim based on 506.

[00:12:49] Speaker 00:
The issue was whether or not the trustee needed to pay the claim.

[00:12:54] Speaker 00:
It was an effort to reduce the administrative expenses, determine what claims did or did not need to be paid.

[00:13:02] Speaker 03:
It was not a question of- Council, the problem is that it asked that the claim be disallowed and the court ordered the claim was disallowed.

[00:13:14] Speaker 03:
So how do we take that order and apply it with 506D?

[00:13:21] Speaker 00:
Well, a claim can be disallowed without invalidating the underlying lien.

[00:13:26] Speaker 03:
And what's the authority?

[00:13:27] Speaker 00:
Your Honor's mentioned... I'm sorry?

[00:13:30] Speaker 03:
What's the authority for a secured claim?

[00:13:34] Speaker 03:
What is the authority that the lien survives?

[00:13:38] Speaker 00:
Johnson v. Homestate.

[00:13:41] Speaker 00:
That case has held since the 1800s that the lien passes through to survive the bankruptcy.

[00:13:50] Speaker 00:
The impersonal rights are extinguished with the discharge.

[00:13:55] Speaker 00:
However, the NREM rights remain.

[00:13:58] Speaker 03:
But that's the problem is that the NREM is only as long as there is a lien and 506D expressly voids the lien if it is not allowed.

[00:14:11] Speaker 03:
Because, you know, and I guess my problem with Judge Collins' decision here is he concludes that the earlier bankruptcy order put the creditor, your predecessor in interest, in the same position as if the claim had never been allowed, the claim had never been filed.

[00:14:38] Speaker 03:
But the claim was filed.

[00:14:40] Speaker 03:
So in that, I mean, your opponent is arguing a very strict literal interpretation, but the words line up.

[00:14:56] Speaker 00:
The intention is not, the disallowance was not to invalidate the underlying lien.

[00:15:05] Speaker 00:
That's the key here.

[00:15:08] Speaker 00:
That wasn't even an issue that was addressed in the chapter seven.

[00:15:14] Speaker 00:
And then with the recent default and the initiation of the foreclosure process and the subsequent chapter 13 bankruptcy, these issues come back.

[00:15:24] Speaker 00:
I think Judge Collins was correct when he noted that even if the debtor is not personally liable because of the discharge,

[00:15:34] Speaker 00:
she still has to deal with the debt because the debt survived.

[00:15:39] Speaker 00:
And it has to be treated in the plan.

[00:15:42] Speaker 00:
Otherwise, she risks a motion for relief in the current case so that my client can proceed with foreclosure.

[00:15:51] Speaker 01:
So how do we deal with the language of 506D, which doesn't give us the exception that Judge Collins used when he made your ruling?

[00:16:01] Speaker 01:
He basically said,

[00:16:03] Speaker 01:
Well, they did file a claim, but this is kind of like they didn't, and the lien just passes through.

[00:16:08] Speaker 01:
So I'm going to rule in their favor on that basis and say it satisfies the 5062 exception.

[00:16:15] Speaker 01:
But if a literal reading of the statute, you might disagree with him on that.

[00:16:22] Speaker 01:
How do we square that?

[00:16:31] Speaker 00:
I think it comes from the definition of a claim.

[00:16:37] Speaker 00:
The claim definition gets to whether or not the money is owed.

[00:16:47] Speaker 00:
And the money is owed.

[00:16:48] Speaker 00:
The lien survived the chapter seven.

[00:16:55] Speaker 01:
Are you familiar with the Blenheim or the Lane cases or anything that we can draw from those cases as a basis for supporting your position?

[00:17:09] Speaker 00:
Yes, in those cases, the facts are distinguishable from this matter.

[00:17:16] Speaker 00:
In Blenheim and Lane, you had adversaries that sought to invalidate the lien.

[00:17:25] Speaker 00:
We didn't have that in either the seven or in the current 13.

[00:17:29] Speaker 00:
The whole purpose of those was to avoid the liens.

[00:17:37] Speaker 00:
The purpose of the trustees actions in the seven was to disallow the claim and narrow the administration of the estate.

[00:17:52] Speaker 01:
Well, and in the Chapter 7 case, doesn't the trustee need an order or an amendment to the claim or something that says, I don't have to pay this one because it's a claim on the books and it's allowed until it's, you know, it's valid, prima facie valid and allowed until somebody objects.

[00:18:09] Speaker 01:
So he had to do something, right?

[00:18:14] Speaker 00:
I think the trustee needed to do something because the proof of claim was filed.

[00:18:23] Speaker 00:
Time after time, you see in chapter sevens where secured creditors file a claim in an abundance of caution and the US trustee or the chapter seven trustee objects because they're secured and they have the in rem options, which is

[00:18:41] Speaker 00:
exactly what we have in this situation.

[00:18:44] Speaker 00:
And the whole purpose is to eliminate one of the claims from the claim register such that the trustee doesn't have to include that in the administration of the estate.

[00:18:56] Speaker 00:
It does not go to the validity of the lien, excuse me, or whether or not that lender or servicer can pursue those obligations in rem.

[00:19:10] Speaker 00:
Other issues that I know with regard to blend time is that the basis of that objection was validity as opposed to trying to dispose of a claim to narrow the issues that the trustee had to deal with or the claims that the trustee had to deal with.

[00:19:31] Speaker 00:
Additionally, the court in Lane noted that

[00:19:39] Speaker 00:
The issue there was the proof of claim had been filed by a party who was not entitled to enforce the debt.

[00:19:49] Speaker 00:
So we have a little bit of a distinguishable fact there versus our current case where the predecessor in interest was entitled to enforce that debt.

[00:19:59] Speaker 00:
My client's entitled to enforce that debt.

[00:20:01] Speaker 00:
So the disposition of that matter was for a different purpose.

[00:20:07] Speaker 00:
And in determining whether or not that particular entity had the ability to file that claim from the outset Thank you, I don't have anything further unless your honors have any additional questions, let me just explore a point you were making Your predecessor did not respond in the prior bankruptcy by that

[00:20:34] Speaker 03:
lack of response allowing the objection to stand.

[00:20:38] Speaker 03:
One way to look at this, I think, and I'm interested in your view, gets to what Judge Corbett said is the lender was, the secure creditor was willing to forego its participation in the Chapter 7 estate and any in personam

[00:20:56] Speaker 03:
recovery, essentially on its under-secured claim, if you want to break it down to that part.

[00:21:02] Speaker 03:
Isn't that really what you're saying is the effect here?

[00:21:08] Speaker 00:
Correct.

[00:21:09] Speaker 00:
Their intention by not opposing was to abide by what has happened since the 1800s.

[00:21:17] Speaker 00:
The debt rides through the bankruptcy and affords them the opportunity to pursue it in Rome.

[00:21:24] Speaker 03:
Right.

[00:21:24] Speaker 03:
Under Homestead, they were looking solely to their NREM rights.

[00:21:28] Speaker 03:
And it really is a quasi-bifurcation between unsecured, impersonal Chapter 7 recovery and NREM collateral recovery.

[00:21:38] Speaker 03:
And the election was made, by not objecting, to recover only against the collateral, which is what you're seeking to do now.

[00:21:45] Speaker 03:
Is that a fair statement?

[00:21:47] Speaker 03:
Correct.

[00:21:48] Speaker 03:
OK.

[00:21:48] Speaker 03:
Thank you.

[00:21:48] Speaker 01:
Yes, Your Honor.

[00:21:52] Speaker 01:
Any other questions?

[00:21:53] Speaker 01:
All right.

[00:21:53] Speaker 01:
Thank you.

[00:21:54] Speaker 01:
Thank you.

[00:21:56] Speaker 01:
We've got about four and a half minutes.

[00:22:01] Speaker 04:
Thank you, Your Honors.

[00:22:02] Speaker 04:
I do want to then address Blenheim and Lane.

[00:22:06] Speaker 04:
I think it's important to note that 502 exists and that there is a specific exception.

[00:22:16] Speaker 03:
That's an important point, isn't it?

[00:22:19] Speaker 03:
Because the original claim objection in the first bankruptcy was never 502.

[00:22:24] Speaker 03:
It was not under any basis under 502.

[00:22:29] Speaker 03:
Well, I don't think it needs to... No, it does, because that's lame, right?

[00:22:37] Speaker 03:
I mean, you get into lame there.

[00:22:38] Speaker 03:
This is not a substantive objection.

[00:22:40] Speaker 03:
This is merely a pure procedural objection for the administration of the estate, the bankruptcy estate, the Chapter 7 estate, isn't it?

[00:22:50] Speaker 04:
Yes and no.

[00:22:51] Speaker 04:
I think that the problem I have with the inference of I'm a guy who likes to look at what's written.

[00:22:58] Speaker 04:
And so I think the court should do the same.

[00:23:01] Speaker 04:
What we have here is they're right.

[00:23:03] Speaker 04:
There's case law from the 1800s that says in rem claims flow through the case if there's no claim filed.

[00:23:14] Speaker 04:
Additionally, the

[00:23:16] Speaker 03:
There's three other circuits is also held that if it's a procedural objection, that does not affect the substantive of the claim.

[00:23:24] Speaker 03:
And therefore, if it does not fall under 502, it cannot affect the debt itself.

[00:23:33] Speaker 04:
Well, I think that what we have, though, is we have we have Segal.

[00:23:37] Speaker 04:
We have a case that essentially says if you don't object to the claim, it becomes it's a valid, secured claim.

[00:23:44] Speaker 04:
And so I always what does that mean for the chapter seven?

[00:23:48] Speaker 03:
As to Judge Brown was saying, what does that mean?

[00:23:50] Speaker 03:
OK, the trustee didn't happen.

[00:23:53] Speaker 03:
What was going to happen then?

[00:23:54] Speaker 03:
They were going to participate in the recovery, which, to your point, may have been acceleration then, correct?

[00:24:03] Speaker 04:
was going to bring that up, which is their claim, and I didn't mention this in my original argument, their claim requested the entire balance.

[00:24:10] Speaker 03:
It was no, no, no, no.

[00:24:13] Speaker 03:
Let's be fair here.

[00:24:14] Speaker 03:
The claim was saying what the debt was, right?

[00:24:19] Speaker 03:
Because the debt is defined in the bankruptcy code is any matured or un-matured obligation, correct?

[00:24:28] Speaker 04:
Correct.

[00:24:28] Speaker 04:
And so in this hypothetical, if the court or if the estate, for whatever reason, had recovered enough funds to pay that claim in full, I think the claim would have been paid in full.

[00:24:39] Speaker 04:
I think that was one of their concerns.

[00:24:41] Speaker 03:
So when they file into Chapter 13, you have to pay the full amount?

[00:24:47] Speaker 04:
Well, the claim has the secured component and unsecured components, typically.

[00:24:51] Speaker 03:
Well, no, but that's the point.

[00:24:53] Speaker 03:
It's the claim, then there's the debt to be paid, right?

[00:24:58] Speaker 03:
And that is an evolution.

[00:24:59] Speaker 03:
That's why I'm having a hard problem with your argument that by finding a claim, you have accelerated a debt.

[00:25:07] Speaker 03:
maybe if you seek to enforce it and recover, but you may also want to just cure the arrears or you may just want to, as counsel said, you know, be cautious to see what happens and then allow that objection to happen so the administration of Chapter 7 may proceed.

[00:25:25] Speaker 04:
So I point to two things.

[00:25:27] Speaker 04:
Quickly on, because I'm running out of time, quickly on the acceleration.

[00:25:31] Speaker 04:
The point that I was making is you gave several reasonable explanations as to what you can do with that proof of claim.

[00:25:38] Speaker 04:
The debtor shouldn't be expected to be a mind reader.

[00:25:40] Speaker 04:
I think that that uncertainty... The debtor didn't have to in Chapter 7.

[00:25:43] Speaker 03:
That wasn't the debtor's problem.

[00:25:45] Speaker 03:
Right.

[00:25:46] Speaker 04:
Well, the question is just whether Arizona law allows you to assume that was acceleration.

[00:25:50] Speaker 04:
I think it does.

[00:25:50] Speaker 04:
They didn't explicitly say this isn't an acceleration, and I think that's enough to get us to acceleration.

[00:25:57] Speaker 04:
But I'd like to address 506.

[00:25:58] Speaker 04:
I think that the argument that bifurcates this claim, the claim was filed.

[00:26:04] Speaker 04:
There's no argument it wasn't.

[00:26:05] Speaker 04:
The claim was disallowed.

[00:26:07] Speaker 04:
I don't think it matters why the claim was disallowed unless it goes to the 5062 was this the proper party.

[00:26:15] Speaker 04:
No one argued that.

[00:26:16] Speaker 04:
Blenheim and Lane both go to this proposition that Congress is fine with disallowed claims where you don't respond.

[00:26:23] Speaker 04:
In this case, they didn't respond.

[00:26:24] Speaker 04:
It's analogous.

[00:26:26] Speaker 04:
And so they sat on their hands.

[00:26:27] Speaker 04:
They didn't respond to the objection.

[00:26:29] Speaker 04:
They could have clarified in the order that the claim was disallowed as to only in Rem or as to only in personum, not in Rem.

[00:26:36] Speaker 04:
Have you ever seen those orders?

[00:26:39] Speaker 04:
I've seen a lot of those orders.

[00:26:42] Speaker 04:
Well, not that specify those two things, but I absolutely see that they can, I honestly, secure claims don't file, our secure creditors don't file claims in cases like this.

[00:26:51] Speaker 04:
So I don't think they want the risk.

[00:26:53] Speaker 04:
So I think that it's an important element here.

[00:26:56] Speaker 04:
I've definitely seen orders where debtors weren't clear enough in the language.

[00:27:01] Speaker 04:
And they were harmed by not being clear in the order.

[00:27:04] Speaker 04:
And I think this is the case here.

[00:27:05] Speaker 04:
They had an opportunity to object to the order, to file a motion for reconsideration to clarify the order.

[00:27:10] Speaker 04:
None of that was done before the case was closed.

[00:27:14] Speaker 01:
All right.

[00:27:14] Speaker 01:
Thank you very much for your argument.

[00:27:17] Speaker 01:
This matter is submitted.

[00:27:19] Speaker 04:
Thank you.

[00:27:19] Speaker 04:
Thank you, Your Honors.

[00:27:22] Speaker 04:
Thank you, Your Honors.

[00:27:24] Speaker 01:
All right.

[00:27:24] Speaker 01:
And that concludes the calendar.

[00:27:27] Speaker 00:
All rise.

[00:27:27] Speaker 00:
This court is in recess.