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Case number 15 to 5030, United States of America versus TDC Management Corporation, Inc.

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at L Appellants.

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Mr. Hamilton for the appellants, Mr. Valdez for the appellee.

[00:00:14] Speaker 02:
Good morning.

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May it please the court, my name is David Hamilton and I represent the appellant WDG in this case.

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There is a very narrow and incontrovertible way for this court to reverse and remand back to the district court.

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Under the Foreign Debt Collection Procedures Act, a property interest can be garnished only if it is substantial and non-exempt.

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The district court's decision can be reversed because the court's conclusion on substantial was incorrect.

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But importantly for this issue, the case can be reversed and remanded because the district court failed to make any kind of finding on the exempt issue.

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That's a critical part of the statute.

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It's a limitation on the enforcement of the Federal Debt Collections Procedures Act.

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And the court's omission, which really does require remand, is enough to send this case back.

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The record will also permit the court to reverse outright.

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The government did not prove and will never be able to prove that the decedent defendant, Conrad Montz,

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interest in property of the Garnashee was either non-exempt or substantial.

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The statute in section 3014A2B refers to tenant by the entirety interests.

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The government's first and second motion for disposition order and the government's experts affidavit may have misled the court because even after discovery, the government wrongly asserted that Montz's interest was as the sole owner of the shares of WDG.

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Indeed, the entire premise for the government's first request for a disposition order was that Montz was the sole owner of the shares of WDG, which was wrong, and the government never corrected that record before the district court.

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The court's opinion, though, correctly identified that Montz had no individual interest in shares of WDG.

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WDG shares were owned by the common law of fictional protected interest by Conrad and Barbara Montz, husband and wife as tenants by the entirety.

[00:02:13] Speaker 02:
Reference back to section 3014 should have led the court to conclude that the interest was exempt.

[00:02:19] Speaker 01:
You didn't make that argument below.

[00:02:22] Speaker 02:
Your Honor, we did make that argument below.

[00:02:23] Speaker 01:
Where?

[00:02:25] Speaker 02:
It's in our brief, and we made the argument.

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I've got your brief.

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The statute requires the court to conclude under Section 3207.

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Where in your brief did you make this argument?

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When we laid out the elements of the statute.

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Are you talking about the exempt argument, Your Honor, or the substantial argument?

[00:02:49] Speaker 01:
I'm not sure that I understand your argument, but to the extent that you're arguing that the property couldn't be garnished because it was held as tenancy by the entireties.

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I've got your brief right here, and that argument doesn't appear.

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Yes, Your Honor.

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If you look at the case that we cited, the Morrison case that talks about the interest of the tenants by the entirety, that is one example of where we discussed the issue of substantial property interest.

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The court's decision clearly addressed the substantial property interest.

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We just briefed it to say that the court was wrong.

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We also cited the Export-Import Bank case from the Second Circuit.

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In the Export-Import Bank case, the Second Circuit concluded that the interest there, which was an intermediary bank's interest in electronic funds transaction, was not substantial under the statute.

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And by analogy, this interest, Conrad Vonn's future contingent interest... That's a different argument.

[00:03:51] Speaker 01:
The argument as to whether it's substantial under the statute and its property is a different argument than whether or not it can be garnished because of the language in 3503205 a that refers you back to state law.

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And then you have to argue that state law and the District of Columbia doesn't allow it to be garnished.

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I agree with that, Your Honor.

[00:04:18] Speaker 01:
So you've got to lay all of that out, and I don't see that anywhere in your brief below, besides the fact that you waited three years to object and the court found that you forfeited your rights but went ahead and heard your arguments anyway.

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WDG did raise this issue before the district court.

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It is in the court's decision and it's in our brief, Your Honor, about whether the Foreign Debt Collection Procedures Act has a limitation by state law.

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That state law interest here for the District of Columbia is attendance by the entirety interest.

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Because that's a limitation on the Foreign Debt Collection Procedures Act,

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We believe that the district court decision was wrong on the conclusion that there was a substantial property interest.

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There is no definition of substantial, as the court knows, in the statute.

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But by analogy, the ex-court import decision concluded that that intermediary bank's interest in an electronic funds transaction was not substantial.

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This is even more attenuated than that.

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So you only get to this question of how the tenancy by the entirety operates, if I'm understanding things correctly.

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if you first get past a threshold argument that you can't even get to the tenancy by the entireities unless you pierce the corporate veil.

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And so there is that threshold question, which I just want to bracket for a second.

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Well, the government always asserted that there was a piercing the corporate veil argument, but the government never brought a separate claim to pierce the corporate veil against WDG or Conrad Montz wife, Barbara Montz.

[00:05:49] Speaker 07:
Right.

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So this is an argument for you.

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I'm just saying that

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Your argument for tenancy by the entirety says that because of the nature of a tenancy by the entirety's, even if you could pierce the corporate veil, you can't get to this property because of the way a tenancy by the entirety's worked.

[00:06:04] Speaker 07:
Correct.

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I'm just bracketing the question that there's a threshold issue about piercing the corporate veil, whether that has to come first.

[00:06:09] Speaker 07:
Now, skipping forward to tenancy by the entirety's, the language of the statute says, and I was puzzled by that.

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I don't think you quoted this in the brief.

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It says, co-owned property shall be subject to garnishment to the same extent as co-owned property is subject to garnishment under the laws of the state in which such property is located.

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Yes.

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And is that the language you're relying on?

[00:06:33] Speaker 02:
The language we're relying on, going back to the elements of the statute, includes under Section 3014, the description that tenancy by the entirety of property is exempt under the Federal Debt Collection Procedures Act.

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So if it's exempt under the Federal Debt Collection Procedures Act, it means that the property can't be attached.

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Where is the, is that language in your statutory addendum?

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It's in the statute in section 3014A to B. Is it in your addendum?

[00:07:02] Speaker 02:
Yes.

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Where is it?

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I'm sorry, Your Honor, it would take me too long to find it.

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I'd be happy to tell you that.

[00:07:17] Speaker 01:
It's not in your addendum.

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The statute is recorded in the addendum.

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The statute is briefed as well in our briefs.

[00:07:24] Speaker 07:
I guess I didn't see 34.

[00:07:25] Speaker 07:
It sounds like you're relying on 3014 and I didn't see that in the addendum.

[00:07:29] Speaker 02:
Again, the argument is that the district court is required to make a finding that the property is not non-exempt.

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Non-exempt is not defined in the statute, but in Section 3014A2B, it describes property as exempt.

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It's not defined, but it's a categorical description of property that's exempt.

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If that property is described as exempt in 3014 A to B, the district court should have concluded that it was exempt for purposes of the disposition.

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What's the language of 3014 A to B?

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I just I don't think I have the language in front of me.

[00:08:01] Speaker 07:
I don't I don't think it's in the statute.

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So can you just tell me what the language is?

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Um,

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There's a long part in A, but it says, any interest in property in which the debtor had immediately before the filing of such application, an interest as attended by the entirety or joint interest, or an interest in a community state to the extent that such interest is exempt from process under non-applicable bankruptcy law.

[00:08:29] Speaker 02:
And that takes us to the District of Columbia's state law, if you will, or the district's application of it.

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And that is a description of property that is exempt under Section 3014.

[00:08:43] Speaker 07:
And did you cite the statute in your brief?

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No.

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I believe we cited the... Nor does it appear below, nor did Judge Bates respond to it because it wasn't there.

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But Section 3205 requires a finding that there's non-exempt property.

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And the only way that you get to non-exempt here is the use of the word non-exempt in the statute.

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So the point here is that non-exempt is described in 3014.

[00:09:12] Speaker 02:
We did not brief that, correct, Your Honor?

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I agree with that.

[00:09:16] Speaker 06:
So you're relying instead on the provision of the Federal Act that refers one to state law, as opposed to the provision of the Federal Act, which would simply say, if it's a tenancy by the entirities, that's the end of the matter.

[00:09:32] Speaker 02:
Either way.

[00:09:32] Speaker 06:
Well, you would have won under the first one.

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Either way, I think there's a better chance.

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But it wasn't there.

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It didn't elicit a response from the government, and it wasn't in Judge Bates' opinion.

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And Judge Bates doesn't overlook arguments that are made to him.

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Understood, Your Honor.

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Either way, I think we find ourselves in a position where the Court's decision didn't address the non-exempt issue.

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Perhaps we didn't raise it under 3014, but the Court's required to make a finding under 3205.

[00:09:58] Speaker 01:
The Court made a finding.

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The court no footnote five of the district court opinion says the judgment debtor can elect to have certain property exempted.

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28 USC section 30 14.

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No election has been made in this case.

[00:10:13] Speaker 02:
Yes, that's a procedural mechanism, Your Honor.

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They better did not elect, um, to pursue that route.

[00:10:19] Speaker 02:
That's correct.

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But under 3207, the court is still required to make a finding that the property is not exempt.

[00:10:25] Speaker 06:
3205 or seven.

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You switched numbers here.

[00:10:31] Speaker 02:
3205 C seven is the disposition order statute.

[00:10:40] Speaker 01:
And I didn't see any place where you made this argument or cited this in your district court brief.

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Which I have right here in front.

[00:10:49] Speaker 02:
The court overlooked it in the in the opinion we did not brief it, but we're raising it as a requirement to send it back because the court did not make the finding under 3205.

[00:11:00] Speaker 02:
Shouldn't we hold it?

[00:11:01] Speaker 02:
It's forfeited.

[00:11:05] Speaker 02:
Your Honor, the court was required to make that finding.

[00:11:07] Speaker 02:
I think it's just a plain error of law.

[00:11:12] Speaker 07:
Let me ask you a different question, which is on the tendency by the entirety's argument you're making now presupposes that the way you get the way the government gets to the properties through Mr. Mons.

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Now, the judgment could have been executed against either Mr. Montz or TDC.

[00:11:31] Speaker 07:
Yes.

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Right?

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So there's an entirely separate route, which is to go through TDC.

[00:11:35] Speaker 07:
Yes.

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And whatever's left of TDC.

[00:11:37] Speaker 07:
Yes.

[00:11:38] Speaker 07:
So your argument doesn't get to that possibility.

[00:11:41] Speaker 02:
TDC dissolved in 2003.

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There are no assets.

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There's nothing to be garnished there.

[00:11:47] Speaker 07:
Well, how do we know that?

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Why weren't the assets for TDC then, as I understood it, Mr. and Mrs. Montz were a tenancy by the Entireties with respect to TDC.

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And so then whatever was supposed to go to TDC then ends up with Mrs. Montz.

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No?

[00:12:03] Speaker 02:
Yes, possibly.

[00:12:05] Speaker 02:
I don't know if there ever were any assets.

[00:12:07] Speaker 02:
We did not affect that form.

[00:12:08] Speaker 06:
If it did end up with Mrs. Montz, wasn't it still before the garnishment?

[00:12:12] Speaker 02:
What ended up with Mrs. Montz, Mr. Montz died in 2009.

[00:12:17] Speaker 02:
WDD, WDG.

[00:12:19] Speaker 06:
I'm thinking about TDC here.

[00:12:22] Speaker 02:
TDC, whatever was there, presumably passed to Mrs. Montz.

[00:12:26] Speaker 02:
The record did not include any kind of discovery or any kind of writ of garnishment on, excuse me, TDC because it was long gone by the time the government applied for writs of garnishment in 2008.

[00:12:36] Speaker 06:
That was the point I was just making or asking about you.

[00:12:38] Speaker 06:
Isn't TDC out of the picture because its dissolution precedes the garnishment?

[00:12:42] Speaker 02:
It was out of the picture, yes.

[00:12:45] Speaker 02:
I'd like to get back to one of your earlier questions, Your Honor, if I may, which is how do you get to the tenancy by the entirety question?

[00:12:52] Speaker 02:
The FDCPA clearly has to honor an obliged state law, and state law here, the District of Columbia law says that this interest is a tenant by the entirety interest is not a garnishable asset.

[00:13:03] Speaker 02:
I think that's the answer to the question that you were seeking before.

[00:13:07] Speaker 06:
You wanted to start off on substantial interest.

[00:13:10] Speaker 06:
I'm sorry.

[00:13:11] Speaker 06:
I thought you were arguing, when you started, you wanted to talk about substantial interest.

[00:13:14] Speaker 02:
Well, substantial, because of the nature of that interest, the tenancy by the entirety interest, Mr. Mons had no interest at all in WDG.

[00:13:24] Speaker 02:
WDG just had an investment interest.

[00:13:26] Speaker 06:
What do you say to the district court's statement that he had an equitable interest?

[00:13:34] Speaker 02:
Mr. Montz had no interest in WDG.

[00:13:36] Speaker 02:
That's the way that we view it.

[00:13:38] Speaker 02:
He had an interest only through that fictional interest as tenants by the entirety.

[00:13:43] Speaker 02:
The tenants by the entirety had an interest in the investment assets, not even the operational assets of WDG.

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He was not an individual shareholder.

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Remember that the fiction is that there's a husband, there's a wife, and there's a tenance by the entirety, which is a third type of ownership interest.

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He did not have any kind of direct interest as a shareholder.

[00:14:02] Speaker 02:
That's the point that I was making earlier, that the government misled the court from the beginning in its disposition order, saying that Conrad Montz was the sole shareholder of WDG.

[00:14:12] Speaker 02:
So to answer your question, Judge Ginsburg, I think the answer unsubstantial is that that kind of interest

[00:14:19] Speaker 02:
You could call it non-exempt, excuse me, exempt, but the way that the Export-Import Bank dealt with it was to look at the interest and say it's so remote, it's so contingent, it's so attenuated that it doesn't rise to the level of substantial property interest.

[00:14:34] Speaker 02:
So there are two ways to get to this, through the substantial door or through the exempt door, is the point of the argument.

[00:14:40] Speaker 07:
What's wrong with the language that I quoted earlier, which this language actually is in your addendum, although I'm not sure you quoted in your brief.

[00:14:47] Speaker 07:
But this says, co-owned property shall be subject to garnishment to the same extent as co-owned property subject to garnishment under the law of the state in which such property is located.

[00:14:56] Speaker 02:
I don't know that there's anything wrong with that, but joint tenancy by the entirety interest is a variation of co-owned property.

[00:15:02] Speaker 07:
It's one type of co-owned property.

[00:15:04] Speaker 02:
It's one type of co-owned property.

[00:15:06] Speaker 02:
And under the District of Columbia law, in the Morrison case, the court specifically addresses that a joint tenancy by the entirety interest, which might be a subset of common ownership, is not garnishable.

[00:15:19] Speaker 07:
Right.

[00:15:19] Speaker 07:
And so if it's true that under DC law,

[00:15:22] Speaker 07:
A tenancy by the entirety is not subject to garnishment.

[00:15:26] Speaker 07:
And this statute says, as a matter of federal law, we look at colon property in the way that the state in which the property is situated looks at it.

[00:15:34] Speaker 07:
Then that's a route.

[00:15:36] Speaker 07:
But I don't think you quoted that statute in your brief either.

[00:15:39] Speaker 07:
And I'm just wondering, is there a problem with that logic?

[00:15:42] Speaker 02:
No, there's no problem with the logic.

[00:15:43] Speaker 02:
The point of the arguments here are that the court has got to address substantial and non-exempt.

[00:15:50] Speaker 02:
And for non-exempt, there seems to be a clear answer, and I know Judge Wilkins, we may disagree about whether we briefed it or not, but the non-exempt is absolutely referred to in section 3014, which is a procedural mechanism that wasn't exercised here.

[00:16:04] Speaker 02:
But it's the only place where tenancy by the entirety interest is defined as non-exempt in the FDCPA.

[00:16:13] Speaker 02:
See my time is up.

[00:16:15] Speaker 02:
Okay, thank you.

[00:16:15] Speaker 02:
Thank you.

[00:16:37] Speaker 04:
Good morning.

[00:16:37] Speaker 04:
May it please the court.

[00:16:39] Speaker 04:
My name is Darrell Valdez, and I'm an Assistant United States Attorney representing the United States in this case.

[00:16:45] Speaker 04:
Your Honor, if I may, just real quick, if I want to point out, when TDC, WDG, and Conrad Montz were served with the writ of garnishment, they were specifically given a form called a request for hearing

[00:17:01] Speaker 04:
or transfer in which they are to set out if there's any exemptions that they claim.

[00:17:07] Speaker 04:
And that goes to the court.

[00:17:08] Speaker 04:
And the court then is, under the procedures, they're supposed to make their objection.

[00:17:14] Speaker 04:
They're supposed to state specifically what their objection or the exemption is.

[00:17:18] Speaker 04:
And then they have the burden of proving that under 3205C5 of the Federal Debt Collection Procedures Act, not the Foreign Debt Collection Procedure Act.

[00:17:30] Speaker 04:
So nobody filed this form.

[00:17:35] Speaker 04:
None of the three entities filed this form at all.

[00:17:39] Speaker 04:
At no time did anybody raise the exemption to the judge in the district court.

[00:17:47] Speaker 04:
And what the judge had was he had information that TDC was a joint tenant property.

[00:17:56] Speaker 04:
He knew that WDG was a joint tenant property.

[00:17:59] Speaker 04:
And if I may clear something up real quick, counsel says that the United States misled the district court about whether Montz had a, I'm sorry, whether or not it was joint property or not.

[00:18:11] Speaker 04:
That is clearly not correct.

[00:18:13] Speaker 04:
In our pleadings, throughout our pleadings, we note that both entities are joint tenant property.

[00:18:19] Speaker 04:
Under District of Columbia law, joint tenant property then incurs a debt

[00:18:25] Speaker 04:
You may then use joint property to satisfy that debt.

[00:18:31] Speaker 04:
We made it clear there was no issue about this before the district court.

[00:18:37] Speaker 04:
Nobody said, nobody said, oh, no, this is an issue and here's some distinctions here.

[00:18:41] Speaker 04:
No, it was just, oh, this is joint tenant property.

[00:18:44] Speaker 04:
Well, he knew that, and he knew that TDC was joint tenant.

[00:18:46] Speaker 01:
And Montz never appeared at all.

[00:18:49] Speaker 01:
That is correct.

[00:18:50] Speaker 01:
Before he passed away.

[00:18:51] Speaker 04:
Another thing I need to correct is TDC did not dissolve.

[00:18:53] Speaker 04:
It is not a dissolved corporation.

[00:18:55] Speaker 04:
Rather, all the assets were distributed.

[00:18:57] Speaker 04:
So the final $300,000 or so was just was sent, was paid directly to Mr. and Mrs. Montz.

[00:19:04] Speaker 04:
And then the company just sits there.

[00:19:06] Speaker 04:
It has not been formally dissolved.

[00:19:09] Speaker 04:
It's still there legally, but it's just an empty shell.

[00:19:15] Speaker 04:
Also, if I may point out, Your Honor, that the objections that, or I'm sorry, the definitions that counsel points to in section 30 of 14 of the Federal Debt Collection Procedures Act does not create the exemption.

[00:19:28] Speaker 04:
That provision applies if the responding parties can't agree, if the responding parties are husband and wife and they can't agree on what is and is not exempt property.

[00:19:38] Speaker 04:
That's, if you read the very first introduction paragraph, it talks about when responding or rejecting and setting out your exemption, this is what you need to do.

[00:19:47] Speaker 04:
And if they can't agree, then you go to the paragraph that they cite that they rely on.

[00:19:53] Speaker 04:
That does not say that it automatically exempts that property.

[00:19:56] Speaker 04:
But in this case, it wasn't an issue before the court, wasn't brought up before the court, and nobody brought it up as something that needed to be addressed.

[00:20:05] Speaker 07:
What about the language in 3205A that I was quoting earlier?

[00:20:08] Speaker 04:
That language, Your Honor, well, first of all, that language is somewhat, as you noted, a little ambiguous.

[00:20:13] Speaker 04:
Are they talking about that it's exempt or that we can't, once we get the property, we have to separate it according to the percentage that the states recognize?

[00:20:24] Speaker 04:
Some states recognize that an entity property is owned, although indivisible, it's 50-50.

[00:20:30] Speaker 04:
Some states have a contribution type analysis.

[00:20:34] Speaker 04:
And so it's confusing as to whether or not that applies to that or not.

[00:20:38] Speaker 07:
Let me ask it this way.

[00:20:40] Speaker 07:
Suppose the D.C.

[00:20:41] Speaker 07:
law establishes that the government in this situation, or creditor generally, can't go after a tenancy by the entireties in order to collect on a debt owed by one of the tenants, because of the nature of the tenancy by the entireties just doesn't permit that.

[00:21:00] Speaker 07:
Let's just suppose the D.C.

[00:21:02] Speaker 07:
law stands for that proposition.

[00:21:04] Speaker 07:
You might tell me it doesn't, but let's just suppose it does.

[00:21:06] Speaker 07:
And this statute says, colon property shall be subject to garnishment to the same extent as colon property is subject to garnishment under the law of the state in which such property is located.

[00:21:15] Speaker 07:
So it seems to me that this language doesn't seem ambiguous to me in that respect.

[00:21:19] Speaker 07:
It seems to suggest that if what I hypothesize DC law to be is what DC law is, then

[00:21:25] Speaker 07:
a creditor can't go after the property of the joint.

[00:21:30] Speaker 04:
I have two responses to that, Your Honor.

[00:21:31] Speaker 04:
First of all, in this case, it's irrelevant because D.C.

[00:21:35] Speaker 04:
law also says that joint property may be attached or otherwise used to satisfy a debt of or judgment incurred by the joint tenancy.

[00:21:44] Speaker 07:
But that's a debt.

[00:21:45] Speaker 07:
I don't know what you're reading from.

[00:21:47] Speaker 04:
I'm reading from Tretzky versus Tretzky, 450 bankruptcy, 247 debt.

[00:21:52] Speaker 04:
And that's 252.

[00:21:54] Speaker 04:
I cite stream of cases.

[00:21:56] Speaker 07:
That's a DC case.

[00:21:57] Speaker 07:
OK, maybe I don't understand that quote, because what that quote sounds like is that if the debt's owed by the joint tenancy, well, of course you can go after the joint tenancy.

[00:22:05] Speaker 07:
But the question here is that the debt's not owed by the joint tenancy.

[00:22:08] Speaker 04:
It is, Your Honor.

[00:22:08] Speaker 07:
It is TDC was the joint tenancy.

[00:22:10] Speaker 07:
Oh, OK, you're talking about going through TDC.

[00:22:13] Speaker 07:
Well, TDC, it didn't matter.

[00:22:14] Speaker 04:
They're both jointly and separately liable.

[00:22:17] Speaker 04:
So TDC.

[00:22:18] Speaker 07:
But I'm focused on the argument that the district court wasn't talking about TDC.

[00:22:21] Speaker 07:
The district court was talking about Mr. Mons.

[00:22:23] Speaker 04:
Because TDC, as an entity, is basically a shell.

[00:22:25] Speaker 04:
And it's there.

[00:22:26] Speaker 04:
And it had been drained of its assets long ago.

[00:22:29] Speaker 07:
So there was nothing to go after.

[00:22:30] Speaker 07:
But.

[00:22:31] Speaker 07:
So just bear with me for one second, if you would.

[00:22:34] Speaker 07:
So put aside TDC.

[00:22:35] Speaker 07:
OK, look, there's two ways in which the government could collect.

[00:22:39] Speaker 07:
There was Mr. Motz and there was TDC.

[00:22:41] Speaker 07:
Let's just assume away TDC for a second, because as I understood the district court's opinion, it wasn't talking about TDC.

[00:22:46] Speaker 07:
It was talking about Mr. Motz.

[00:22:48] Speaker 07:
The way it gets to Mr. Motz is through WDG.

[00:22:50] Speaker 07:
A lot of acronyms, but the way it gets to Mr. Motz through WDG.

[00:22:55] Speaker 07:
Now, as to WDG, it seems like this statute is pretty germane, because WDG also is a tenancy by the entirities.

[00:23:01] Speaker 07:
And what this statute says is,

[00:23:03] Speaker 07:
as I understand it, you can't go through a joint tenancy like this one to get to a debt owed by Mr. Motz because it's a joint tenancy.

[00:23:13] Speaker 07:
And as I've hypothesized, D.C.

[00:23:15] Speaker 07:
law says you can't get at the debt of an individual debtor through an enterprise that's a joint tenancy in which that individual debtor is one constituent.

[00:23:25] Speaker 04:
And again, I have two responses to that.

[00:23:27] Speaker 04:
First one is,

[00:23:28] Speaker 04:
That nuance was never brought up before the district court for him to even consider.

[00:23:33] Speaker 04:
What he had was point number two.

[00:23:37] Speaker 04:
TDC, you can't ignore TDC.

[00:23:40] Speaker 04:
It's there, and it is a joint property.

[00:23:43] Speaker 04:
Okay, so I am ignoring TDC.

[00:23:46] Speaker 04:
If you ignore it.

[00:23:46] Speaker 07:
Let me just say this.

[00:23:47] Speaker 07:
Just bear with me on this hypothesis.

[00:23:50] Speaker 07:
Let's just assume TDC is just not part of this.

[00:23:52] Speaker 07:
I get your argument that you can't completely ignore it, and maybe we'll bring it back in, but I'm just saying for purposes of the way the district court looked at it, which was, I think, to disregard TDC and just talk about Mr. Moss.

[00:24:04] Speaker 07:
On that axis, it seems like this statute is a complete answer.

[00:24:08] Speaker 07:
I get that you have a fallback argument that says, well, fine, we lose on that, we still can get it through TDC.

[00:24:14] Speaker 07:
I'm just trying to establish on the way that the district court looked at it, which was to disregard TDC and look at Mr. Motz, it seems like this statute tells us, well, you can't

[00:24:24] Speaker 07:
You can't get at Mr. Montz through an enterprise in which he was a tenant by the Entireties because of the nature of that animal.

[00:24:33] Speaker 07:
It's something that's indivisible.

[00:24:35] Speaker 07:
And so it may be true that one of the tenant by the Entireties owes something, but you can't get an asset of that tenancy by the Entireties in order to retire a debt owned by one of those tenants.

[00:24:45] Speaker 04:
If we ignore that, and as you say that it is just Mr. Montz, I would say that is a valid argument to make in which we would be allowed to respond to and research.

[00:24:59] Speaker 04:
However, it was never made.

[00:25:01] Speaker 04:
That wasn't made the court wasn't given that argument below.

[00:25:05] Speaker 07:
It wasn't told that that was I thought that was their whole argument as far as I can tell they never cited this statute or this language of the statute, which I'm I don't understand why not but I thought that was kind of their whole argument is there it's a tendency by the Entireties you can't get at mr. Montz through this because he's part of a tendency by the entire is much later argument below was that I

[00:25:24] Speaker 04:
since Montz died in 2009 and it was a tendency by the entirety, it all goes to Mrs. Montz and therefore there's no property left for the government to take.

[00:25:35] Speaker 04:
And so therefore there's nothing left because now this $8 million judgment and everything that's WDG is now Mrs. Montz and the U.S.

[00:25:43] Speaker 04:
can't have that.

[00:25:45] Speaker 04:
And our argument back was, no, no, no, the garnishment survives the death of Mr. Mons because it was served, it was executed and perfected before his death, and therefore it attaches to the property and not to the defendants.

[00:26:00] Speaker 04:
And therefore the question is the status of the property in which then somebody needs to step in and claim that property.

[00:26:08] Speaker 04:
The only people that stepped in and claimed that property was WDG here.

[00:26:12] Speaker 04:
and just saying it's a corporate asset of ours, and it belongs to Mrs. Maast.

[00:26:17] Speaker 04:
That was their argument below.

[00:26:19] Speaker 04:
It was not, they did not make that nuance of, if you're only going through Mr. Maast, you can't have, because, and again, because it was understood, TDC is a joint, is a joint tenancy, therefore you can grab joint tenant property to pay that debt.

[00:26:35] Speaker 07:
Can I ask this other type of question, because it's also looming in the case, although we didn't get into it much earlier,

[00:26:41] Speaker 07:
As I understand the district court's logic, and it's the argument that you presented to the district court, the way you get at this asset that's owed to WDG, which is a corporation, is that Mr. Montz has an equitable interest in the corporation's assets because he's a shareholder.

[00:26:59] Speaker 07:
And DC law treats that as an equitable interest.

[00:27:02] Speaker 07:
And therefore, the fact that the property is owed to the corporation doesn't matter.

[00:27:07] Speaker 07:
We look through and we look directly to Mr. Montz because he's a shareholder in that corporation.

[00:27:11] Speaker 07:
He has an equitable interest in that asset.

[00:27:13] Speaker 07:
And therefore, the debt owed to the government by Mr. Montz is something that they collected on through an asset owned by WDG.

[00:27:20] Speaker 07:
That just seems to me, doesn't that just fly in the face of just the most basic principle of corporate law, which is that we don't treat an asset of the corporation as if it was an asset of the shareholder?

[00:27:30] Speaker 04:
Well, it's not that how that is.

[00:27:33] Speaker 04:
In fact, we cite, too, DC corporate law that says that a shareholder has a future interest.

[00:27:39] Speaker 04:
It's not a present interest.

[00:27:41] Speaker 04:
They have a future interest, so they hold the stock.

[00:27:43] Speaker 04:
And if and when the company dissolves or falls,

[00:27:47] Speaker 04:
Any assets remaining after paying the debts is paid out to its shareholders.

[00:27:53] Speaker 07:
So let me ask you, a future interest is part of it, but let's suppose that I owe a debt to the government.

[00:28:01] Speaker 07:
I'm a shareholder.

[00:28:02] Speaker 07:
I own Walmart shares.

[00:28:05] Speaker 07:
Walmart has a payment coming to it from some other commercial dispute.

[00:28:09] Speaker 07:
Can the government get its hands on that payment, on the theory that I owe the government money?

[00:28:14] Speaker 07:
I'm a shareholder in Walmart.

[00:28:15] Speaker 07:
I have a future interest in Walmart equity.

[00:28:17] Speaker 07:
Therefore, the government has access to Walmarts.

[00:28:21] Speaker 04:
You're missing the second part of the test, Your Honor.

[00:28:24] Speaker 04:
That's the substantial interest.

[00:28:26] Speaker 07:
So you think that this all goes to substantial... It's because I'm only one shareholder in Walmart and there's all kinds of other shareholders.

[00:28:31] Speaker 07:
That's where this all comes down.

[00:28:32] Speaker 04:
No, no, you're not.

[00:28:33] Speaker 04:
I'm not saying that.

[00:28:34] Speaker 04:
I'm not saying that.

[00:28:35] Speaker 04:
Well, I'm saying this.

[00:28:35] Speaker 04:
It comes down to substantial.

[00:28:36] Speaker 04:
It doesn't come down to the fact that you're a shareholder.

[00:28:38] Speaker 04:
And first of all, there is evidence in the record, their own expert witness admits that Mr. Montz was a shareholder, first of all, because he says that he wasn't.

[00:28:47] Speaker 04:
He was.

[00:28:47] Speaker 04:
He was a shareholder.

[00:28:48] Speaker 04:
But secondly, with his wife.

[00:28:50] Speaker 04:
I mean, they were joint tenants.

[00:28:52] Speaker 04:
All right.

[00:28:53] Speaker 04:
The D.C.

[00:28:54] Speaker 04:
law, and the cases we cite, and the statutes we cite... Wait, wait, wait.

[00:28:58] Speaker 06:
You seem to be contradicting yourself.

[00:29:00] Speaker 06:
You said he was a shareholder.

[00:29:02] Speaker 06:
He was.

[00:29:02] Speaker 06:
But then you said, with his wife for the joint tenancy... They were both shareholders?

[00:29:06] Speaker 06:
Or was the joint tenancy the sole shareholder?

[00:29:08] Speaker 04:
No, it was not, Your Honor.

[00:29:10] Speaker 04:
Well, that's the thing is, he was given stock by the corporation, or by the company.

[00:29:14] Speaker 04:
Mrs. Montz was given stock by the company, and the stock was given to them as joint tenants.

[00:29:20] Speaker 06:
In each case.

[00:29:21] Speaker 06:
Correct.

[00:29:21] Speaker 06:
So neither of them had stock.

[00:29:23] Speaker 06:
I'm sorry?

[00:29:23] Speaker 06:
So neither of them had stock.

[00:29:25] Speaker 06:
They had an interest in the joint tenancy.

[00:29:28] Speaker 06:
They were joint tenants in all of the stock.

[00:29:30] Speaker 04:
Well, they had stock, correct.

[00:29:31] Speaker 04:
But as a joint tenancy.

[00:29:33] Speaker 04:
Under the law, they have joint tenancy, right.

[00:29:36] Speaker 04:
In this case, Your Honor, they had stock, so they had a future interest.

[00:29:41] Speaker 04:
in the corporation.

[00:29:43] Speaker 04:
Okay, that's fine.

[00:29:44] Speaker 04:
And the court said they have a future interest.

[00:29:46] Speaker 04:
It's contingent, but that satisfies the wording of the statute.

[00:29:49] Speaker 04:
Now the question is, is it substantial?

[00:29:52] Speaker 04:
And I'm sorry, in this case, this is a subchapter S corporation.

[00:29:57] Speaker 04:
Mr. Montz was using the money or any losses, and there were losses throughout the year, as the government expert showed, and he was using those losses to offset his income every year, his and Mrs. Montz's income every year.

[00:30:10] Speaker 04:
And so, therefore, he actually was using their income.

[00:30:15] Speaker 06:
I'm sorry?

[00:30:17] Speaker 06:
What if he was taking that money from WDG

[00:30:23] Speaker 06:
As Hirsch found, he was making transfers to himself and to related corporations, correct?

[00:30:29] Speaker 06:
Correct.

[00:30:30] Speaker 06:
But is it the fact that he was doing that that counts, or does it count only if that was authorized under D.C.

[00:30:40] Speaker 06:
law?

[00:30:41] Speaker 04:
No, just the fact he was doing that.

[00:30:43] Speaker 04:
If he was doing that and there was no oversight, as in this case, no corporate oversight by the board or anybody... There was a board of three at the time.

[00:30:49] Speaker 06:
I'm sorry?

[00:30:50] Speaker 06:
There was a board, correct, of three persons.

[00:30:53] Speaker 06:
Well, they only met rarely, but they followed the legal requirements, at least to the extent of having a board.

[00:31:00] Speaker 04:
Correct.

[00:31:00] Speaker 04:
But the board never reviewed these loans.

[00:31:03] Speaker 04:
These loans were directed by Mr. Montz.

[00:31:05] Speaker 04:
He said, this money goes here, this money goes there, and there was no... Suppose that was authorized by the board.

[00:31:09] Speaker 06:
Was that?

[00:31:10] Speaker 06:
What if that was authorized by the board?

[00:31:12] Speaker 06:
In that case, not loan by loan, but a delegation to him as president to make transfers to

[00:31:18] Speaker 04:
Well, again, Your Honor, that at will shows, and if he's also a shareholder, falls within the wording of dry versus U.S., and that is the power to channel an asset in the hands of another warrants the conclusion that the power... All right, so again, does that power mean the lawful power to do so or the actual power which may not have been authorized by law?

[00:31:39] Speaker 04:
We're not saying that his transfer of these loans was unlawful.

[00:31:43] Speaker 04:
We're not saying that.

[00:31:43] Speaker 04:
That was never said.

[00:31:44] Speaker 04:
And in fact, that was their response, wasn't it?

[00:31:46] Speaker 06:
That's part of what they needed to do.

[00:31:47] Speaker 06:
You wouldn't be saying, if you were arguing a piercing alternative, you would be saying they were unauthorized, they disregarded the corporate formalities, all of the things you always say about piercing.

[00:31:57] Speaker 04:
I didn't.

[00:31:57] Speaker 04:
We never said they were unauthorized, John.

[00:31:59] Speaker 04:
We never said unauthorized.

[00:32:00] Speaker 06:
We said they were unrequited by the board.

[00:32:03] Speaker 04:
That doesn't mean unauthorized.

[00:32:05] Speaker 06:
So they might have been authorized by the board.

[00:32:07] Speaker 04:
They might have been, but that doesn't make it that he wouldn't have control.

[00:32:10] Speaker 06:
That would be a factual question you'd have to tease out in the piercing context.

[00:32:14] Speaker 04:
In the piercing context, well, first of all, the court never reached it, and I don't think it's a problem.

[00:32:17] Speaker 04:
Exactly.

[00:32:17] Speaker 04:
I understand.

[00:32:18] Speaker 04:
That's why you may have another shot at this.

[00:32:20] Speaker 04:
In this case, Your Honor, you can't say it was authorized when there was absolutely nothing from the board minutes or anything that showed that the board reviewed it.

[00:32:28] Speaker 06:
All right, so all we know is he moved this money around seemingly at will.

[00:32:32] Speaker 06:
Correct.

[00:32:33] Speaker 06:
To related parties and to himself.

[00:32:35] Speaker 06:
Correct.

[00:32:36] Speaker 06:
And that, you say, shows that he had a substantial interest in whatever money was remaining there.

[00:32:42] Speaker 04:
It shows that he had the power to channel assets under dry.

[00:32:46] Speaker 04:
And that makes it substantial.

[00:32:47] Speaker 04:
He had the power.

[00:32:49] Speaker 06:
Yes.

[00:32:49] Speaker 06:
And dry was that power, one that would be?

[00:32:53] Speaker 06:
necessarily an ordinarily incident to just it being a corporation and his being a corporate officer.

[00:32:58] Speaker 04:
Well, in July, it was this guy's own personal inheritance.

[00:33:02] Speaker 04:
Exactly.

[00:33:04] Speaker 06:
It doesn't tell us anything about whether the ability to move money at will

[00:33:11] Speaker 06:
is determinative or even relevant to substantiality when it's a corporate asset.

[00:33:18] Speaker 04:
Well considering since the fact that showing that the property is exempt is on them, I mean I think it would be incumbent upon WDG to show they had given him the authority.

[00:33:30] Speaker 07:
I guess what drives this entire line of questioning it just seems to me is that your argument that you made at the district court and that the district court accepted

[00:33:36] Speaker 07:
was that you don't need to pierce the corporate veil in order to get at an asset of the corporation when the debt is owed by somebody who's assumed to be a shareholder of the corporation.

[00:33:46] Speaker 07:
There's a question of whether the person's a shareholder to begin with, because maybe it was just a joint tenancy.

[00:33:50] Speaker 07:
But let's assume the person who owes the debt is a shareholder in the corporation.

[00:33:53] Speaker 07:
The argument that the district court accepted at your urging was that, well, even though the asset is owned by the corporation,

[00:34:02] Speaker 07:
and the debt is owned by a shareholder of the corporation, we can get at that asset to retire the debt of the shareholder.

[00:34:09] Speaker 07:
And it just seems like that's the entire reason for having corporate law is that that can't happen.

[00:34:15] Speaker 07:
Because the entire reason for having corporate law is that there's a difference between what's owned by a shareholder and what's owned by a corporation, unless you pierce the corporate bail.

[00:34:25] Speaker 04:
Well, no, Your Honor, and in fact, that is where Dry, Bess, and Kraft- But Dry wasn't a corporation case.

[00:34:31] Speaker 04:
No, but a Kraft comes along that says, look at- Kraft wasn't a corporation case either?

[00:34:35] Speaker 07:
No, it wasn't, Your Honor, but what they say is that- Is there any case that involves a corporation that says even though the asset is owned by the corporation, the creditor can get at that asset to retire a debt owed by a shareholder of the corporation?

[00:34:49] Speaker 04:
Your Honor, give me a second.

[00:34:51] Speaker 04:
I think that, well, we have the, let me see what the Second Circuit case was.

[00:34:55] Speaker 04:
Give me a second.

[00:34:57] Speaker 04:
But if I may, Your Honor.

[00:34:59] Speaker 07:
Because that just seems like there's a case called the United States v. Best Foods Supreme Court case, which basically says we don't ordinarily construe federal law to overturn settled principles of state corporation law.

[00:35:12] Speaker 07:
And the most settled principle of state corporation law is that there's a difference between

[00:35:16] Speaker 07:
an asset owned by a shareholder and an asset owned by the corporation itself.

[00:35:21] Speaker 07:
So you don't just commingle them and pretend they're the same thing.

[00:35:25] Speaker 04:
If I may, Your Honor, and Kraft says that once you find out is this a bundle of sticks that we call property, and in this case there's a future interest, there's a bundle of sticks called property,

[00:35:35] Speaker 04:
We then ignore any state limitations upon that bundle of sticks.

[00:35:41] Speaker 04:
In applying a federal collection procedure act or a federal collection statute, we ignore that.

[00:35:46] Speaker 05:
It was the tax statute.

[00:35:48] Speaker 04:
I'm sorry?

[00:35:48] Speaker 05:
Wasn't it the tax statute?

[00:35:50] Speaker 04:
Correct, it was.

[00:35:51] Speaker 04:
But their language was very broad when they said we're looking at collection statutes.

[00:35:57] Speaker 04:
And the procedures they set out is also broad and makes sense even in this respect.

[00:36:03] Speaker 04:
as to how it's applied and how we determine if something is property and if there's a substantial interest.

[00:36:08] Speaker 04:
When we look at the substantial interest, we do not look at the limitations upon corporate law unless that is written in the federal statute.

[00:36:16] Speaker 04:
And there is none here.

[00:36:17] Speaker 04:
None was argued.

[00:36:18] Speaker 04:
The only limitation that was argued here that they're arguing now is the joint tenancy.

[00:36:23] Speaker 04:
And if I may, Your Honor, when we're talking about the control of that money and who used that money and who had direct access to it,

[00:36:31] Speaker 04:
the money or the losses were used by both Mr. and Mrs. Montz to offset their income.

[00:36:38] Speaker 04:
So therefore, if you're saying, well, we're trying to use just Mr. Montz to show that he had control over this joint property, no, no, the joint family, the joint tenancy had that control over the joint property and was using it to their benefit.

[00:36:54] Speaker 04:
it is an S corporation, correct?

[00:36:56] Speaker 06:
So they could... It's not surprising that they were flowing through the tax.

[00:36:59] Speaker 04:
And that's the thing, is that's kind of what makes it more substantial under the federal statute, as well as the fact that he was moving money around willy-nilly, but also the fact that he was able to take it and take immediate benefit of both of the families.

[00:37:13] Speaker 07:
So then your position ultimately sounds like is that although corporate formalities can be honored in many instances in the context of a S corporation,

[00:37:22] Speaker 07:
The particularity of VEST corporations means that there's always a substantial interest held by a shareholder.

[00:37:27] Speaker 04:
And I think it means that you run that risk, correct.

[00:37:31] Speaker 07:
OK, thanks.

[00:37:32] Speaker 04:
And again, just because the Federal Debt Collection Procedures Act was meant to make it easier for the United States to collect.

[00:37:39] Speaker 04:
And so we don't have to run into all these barriers that private debtors run into.

[00:37:44] Speaker 04:
And in fact, that was the distinction with the other cases where the private debtors were trying to use it.

[00:37:48] Speaker 04:
And the court said, no, no, no.

[00:37:49] Speaker 04:
Congress can give the federal government the power to supersede the state protections.

[00:37:55] Speaker 06:
But insofar as you're arguing that the interest here is substantial because Montz could move it at will, and he could move it at will and take advantage of the location, for instance, of the authority tax laws, which applies to all those corporations, it seems to me that you're substituting federal tax law for DC corporate law.

[00:38:17] Speaker 06:
in determining whether there's a substantial interest.

[00:38:19] Speaker 03:
And the answer is, yes, that's what Kraft says.

[00:38:23] Speaker 03:
We do.

[00:38:24] Speaker 03:
That's how we do it.

[00:38:26] Speaker 06:
Federal laws supplant state limits.

[00:38:29] Speaker 06:
The tax statute.

[00:38:31] Speaker 06:
And so it's not that surprising that it turns on the tax law.

[00:38:35] Speaker 06:
This is not a tax statute.

[00:38:37] Speaker 06:
It's a procedural statute that says go by DC corporate law.

[00:38:40] Speaker 04:
And the reasoning in Kraft has been adopted in the Federal Debt Collection Procedures Act by the 11th Circuit and the 2nd Circuit.

[00:38:51] Speaker 04:
And they say that it does apply because it is so general that in the procedure it fits hand in glove with the Federal Debt Collection Procedures Act.

[00:39:01] Speaker 01:
I think the problem with your position is that the Federal Debt Collection Procedures Act has language in it that's not in the statute, the IRS statute that was at issue in Kraft, namely this language in 3205A that says that the garnishment is still subject to whatever the state law says the power is to garnish property.

[00:39:28] Speaker 01:
I mean, that language is nowhere in the statute that was at issue in Kraft, right?

[00:39:34] Speaker 04:
I'm sorry.

[00:39:35] Speaker 04:
32058, you said?

[00:39:38] Speaker 07:
It's the sentence that we were talking about for a while.

[00:39:40] Speaker 07:
Co-owned property, I think.

[00:39:41] Speaker 07:
Is that what you're talking about?

[00:39:42] Speaker 04:
Yes.

[00:39:42] Speaker 04:
Right.

[00:39:42] Speaker 04:
But again, that's co-owned.

[00:39:44] Speaker 04:
That's not corporate.

[00:39:45] Speaker 04:
And in this case, there was co-owned property.

[00:39:48] Speaker 04:
And TDC was co-owned property.

[00:39:50] Speaker 04:
The joint tenancy was receiving the benefit and was using the assets of WDG to offset its income.

[00:39:57] Speaker 04:
It's still all fit.

[00:39:59] Speaker 04:
I mean, it fits in with DC law that says joint tenant property may be used to satisfy the debt created by the joint tenancy.

[00:40:07] Speaker 06:
OK.

[00:40:07] Speaker 06:
Well, it sounds like you're at least accomplishing by indirection what you would accomplish by direction if you could pierce the bed.

[00:40:18] Speaker 04:
Possibly yes, but I think that if you read the district court's opinion,

[00:40:26] Speaker 04:
trying to butter up the judge in that case.

[00:40:29] Speaker 04:
It is a... That would be unprecedented.

[00:40:31] Speaker 04:
Right.

[00:40:32] Speaker 04:
But it is devious in its simplicity and its directness.

[00:40:35] Speaker 04:
And it is the direct application of the statute.

[00:40:39] Speaker 04:
He took the statute and he went step by step through that statute and how it applied to this situation.

[00:40:46] Speaker 04:
And he said, this is property.

[00:40:49] Speaker 04:
This is property subject to garnishment.

[00:40:51] Speaker 04:
The government, yes.

[00:40:52] Speaker 06:
What he said was, it's substantial because of the future interest, right, and because of a state case saying that a shareholder has an equitable interest.

[00:41:02] Speaker 04:
No, Your Honor, he said it's property because of that.

[00:41:04] Speaker 04:
It's substantial because of the additional information with respect to the usage of that property.

[00:41:10] Speaker 06:
And that was the factual tissue taken from the Hearst Declaration about how Montz moved money around.

[00:41:18] Speaker 04:
Correct, which they admit that he moved money around.

[00:41:21] Speaker 04:
They only had problems with the semantics.

[00:41:23] Speaker 04:
We said it was loans.

[00:41:24] Speaker 04:
He said it was transfers.

[00:41:26] Speaker 04:
We noted that they were writing off bad debts.

[00:41:29] Speaker 04:
He said, oh, no, those were losses.

[00:41:32] Speaker 04:
So the facts were uncontroverted.

[00:41:34] Speaker 04:
The only thing that was disputed was the adjective.

[00:41:38] Speaker 06:
The admissibility of the declaration.

[00:41:39] Speaker 04:
Well, and the court, I think, accurately says, look, first of all, I disagree on the representation that the expert is saying in the opinion.

[00:41:47] Speaker 04:
He says, I think the evidence may support this, and here's why, in his opinion.

[00:41:52] Speaker 04:
But as the judge says, he can parse through that, and the case law supports him on that.

[00:41:57] Speaker 07:
Thank you.

[00:41:58] Speaker 07:
Thank you.

[00:42:00] Speaker 07:
Mr. Hamilton, we'll give you two minutes for a vote.

[00:42:11] Speaker 02:
Make four points very quickly.

[00:42:12] Speaker 02:
The Kraft case has been limited in so many ways that it just doesn't apply here.

[00:42:16] Speaker 02:
Export-Import, Sinreich, Schlossberg.

[00:42:20] Speaker 02:
Another, at the risk of citing cases not in a break, but trying to get it right, there's a case by Judge Easterbrook in the Seventh Circuit called United States versus Rogan.

[00:42:30] Speaker 02:
And there's a Fifth Circuit case from 2015 called Alashi, E-L-A-S-H-I.

[00:42:36] Speaker 02:
In Alashi, the court made a distinction between the Federal Debt Collection Procedures Act and the Multiple Victim Restitution Act and told the applicant, if you get down the path of the Federal Debt Collection Procedures Act, you're not going to be able to recover this interest through garnishment because of joint tenants by the entirety.

[00:42:54] Speaker 02:
But you're able to recover it under the Multiple Victim Restitution Act, MVRA, because it's a substantial statute with substantive rights allowing you to make that collection.

[00:43:04] Speaker 02:
And that's the difference between CRAFT and what we have here.

[00:43:07] Speaker 02:
This is a procedural statute with no substantive rights created improperly.

[00:43:11] Speaker 02:
As to the issue about ownership, I'd point the court to the Office of People's Counsel case, which is a District of Columbia case.

[00:43:18] Speaker 02:
That's also addressed in the Rogan case.

[00:43:20] Speaker 02:
Rogan finds that there's no property interest, because I think it was Judge Ginsburg pointed out that the interest in the corporation, or Your Honor did too, the interest in the corporation is different than the interest in the investment asset.

[00:43:33] Speaker 02:
The Office of People's Counsel case makes that distinction.

[00:43:36] Speaker 02:
I think the district court effectively engaged in a veil piercing argument against those standards, um, to adopt the affidavit of their expert and hold it up as, um, I think the district court effectively engaged in a veil piercing argument against those standards.

[00:43:54] Speaker 02:
the benchmark for having conclusions that the WDG or Mons did something wrong is effectively a veil piercing conclusion.

[00:44:03] Speaker 02:
I would point out at Appendix 612 that the affidavit from our expert concluded that the majority of the assets belong to Mr. Monson.

[00:44:12] Speaker 02:
um, were jointly owned property that was owned with his wife.

[00:44:16] Speaker 02:
That was, um, tenants by the entire conclusion that pervaded through the, um, that affidavit.

[00:44:22] Speaker 02:
That affidavit also established that these were ordinary corporate transfers of property, paying of intercompany loans.

[00:44:29] Speaker 02:
This is a management company with development projects underneath it.

[00:44:32] Speaker 02:
This is common practice in this industry, and that's what our expert concluded and the court ignored that.

[00:44:38] Speaker 02:
Last, I'll point out that this business about TDC being part of this is perplexing.

[00:44:44] Speaker 02:
At A136, in the application for a writ of garnishment, it's an application for a writ of garnishment upon property that was held by WDG for the Debtor-Conrad Mons.

[00:44:55] Speaker 02:
I have yet to figure out how the T. D. C. Gets into this argument.

[00:45:00] Speaker 02:
Um, and I don't know that it's correct to say that T. D. C. Was owned as tends by the entirety by Mr and Mrs Montz.

[00:45:06] Speaker 02:
We never really had discovery on that.

[00:45:08] Speaker 02:
That was a late emerging issue.

[00:45:11] Speaker 02:
Thank you, Your Honor.

[00:45:11] Speaker 02:
Thank you.

[00:45:12] Speaker 02:
Case submitted.