[00:00:00] Speaker 03:
For the court is 181926 Callaway Manor Apartments versus the United States, an appeal from the decision of the Court of Federal Claims.

[00:00:14] Speaker 03:
Mr. Biondo, you want five minutes for rebuttal?

[00:00:18] Speaker 04:
Yes, Your Honor.

[00:00:19] Speaker ?:
OK.

[00:00:20] Speaker 03:
You can wait till you're ready.

[00:00:22] Speaker 03:
Are you ready?

[00:00:22] Speaker 04:
Yes, Your Honor.

[00:00:23] Speaker 03:
OK.

[00:00:24] Speaker 03:
I didn't mean to rush you.

[00:00:25] Speaker 03:
I was just trying to figure out.

[00:00:26] Speaker 03:
Not at all.

[00:00:26] Speaker 03:
All right.

[00:00:27] Speaker 03:
You may begin.

[00:00:29] Speaker 04:
May it please the court, my name is Mark Blando from Eklund and Blando.

[00:00:33] Speaker 04:
With me is co-counsel Bill Roberts from Fagery Baker Daniels, and also my client Lindsay Rubb is here today.

[00:00:40] Speaker 04:
The issue before the court today is whether the four partnerships who are the appellants in this matter forfeited or released their accrued claims for breach of contract when they conveyed their properties to the government.

[00:00:52] Speaker 03:
Do you agree that the three contemporaneously signed documents should be read together?

[00:00:58] Speaker 04:
Not at all, Your Honor.

[00:00:59] Speaker 03:
I mean, I understand why you argue that the offer to convey should be separately construed, but you're saying the other three shouldn't even though they were simultaneously?

[00:01:10] Speaker 04:
No, the rule that the lower court and the government relies on basically says if you have a group of documents, they can be read together as far as let's say there's a similar term that's used in all three.

[00:01:20] Speaker 04:
That term should have the same meaning in all of them.

[00:01:22] Speaker 04:
But here they're trying to flip that rule on its head and basically say when you refer to one document, you're necessarily referring to all of the related documents.

[00:01:32] Speaker 04:
That just can't be the right rule of contract interpretation.

[00:01:36] Speaker 04:
How else could a party refer to only one contract when that's their intention?

[00:01:41] Speaker 04:
The parties chose to refer only to the mortgage, which is the security instrument.

[00:01:44] Speaker 03:
But weren't they collectively defined as the loan obligations?

[00:01:48] Speaker 04:
Yes, and that's the term that the parties could have used in this standard form contract, but they didn't.

[00:01:53] Speaker 04:
They did not use the term loan obligations.

[00:01:55] Speaker 04:
They used the term security instrument.

[00:01:57] Speaker 04:
And we have to give meaning to the words that the parties chose.

[00:02:01] Speaker 04:
There's a reason that the offer to convey here refers only to the mortgage, because that is the document that covered the property that was being conveyed.

[00:02:11] Speaker 04:
Again, if they wanted to convey or refer to all three of those documents, all they had to do was refer to all three of them.

[00:02:18] Speaker 04:
I mean, if you look at the loan agreement itself, it's got a very helpful guide up front that talks about the three different instruments.

[00:02:25] Speaker 04:
That's at appendix 32.

[00:02:27] Speaker 04:
Also, if you look at the regulations, the definition section, they talk about all three of these documents separately.

[00:02:33] Speaker 04:
The agency knows what each of these three documents are.

[00:02:36] Speaker 04:
They're all defined and delineated very separately.

[00:02:39] Speaker 04:
And so if they meant to refer to all three, that's the terminology they would have and should have used.

[00:02:44] Speaker 04:
So we have to give, of course, the basic rule of contract interpretation, give meaning to the words the parties use.

[00:02:50] Speaker 04:
The parties use the word security instrument, which there's no dispute refers only to the mortgage.

[00:02:56] Speaker 04:
And so we have to enforce that intent.

[00:03:00] Speaker 02:
The offer to convey security uses the language security instruments.

[00:03:06] Speaker 02:
as described in security instruments.

[00:03:09] Speaker 02:
What are the security instruments?

[00:03:12] Speaker 04:
There's no dispute that the security instruments- There's only one.

[00:03:15] Speaker 04:
There's only one.

[00:03:16] Speaker 04:
Right.

[00:03:16] Speaker 04:
In some cases, there's more than one mortgage.

[00:03:18] Speaker 04:
In some states, it's a mortgage.

[00:03:19] Speaker 04:
Other states, it's a deed of trust.

[00:03:21] Speaker 04:
That's also clear from the 3560 regulations that define all of these terms.

[00:03:27] Speaker 04:
But there's no dispute here that security instrument means mortgage.

[00:03:31] Speaker 04:
So you can read that word as mortgage.

[00:03:33] Speaker 04:
So to be specific, what the offer to convey is conveying is all of the rights, title, and interest in the contract rights that are described in the mortgage.

[00:03:46] Speaker 04:
So really the question is what contract rights are we talking about that are described in the mortgage?

[00:03:51] Speaker 05:
Where are you reading from when you say all contract rights in the mortgage?

[00:03:55] Speaker 04:
That's in the offer to convey security, Appendix 90, the key clause at issue.

[00:04:00] Speaker 04:
I'm using the word mortgage for security instrument for the court's convenience because... Right, so you're substituting in the word mortgage, not... Correct.

[00:04:08] Speaker 05:
It's not in the document.

[00:04:09] Speaker 04:
Correct, yes, because that is the security instrument.

[00:04:13] Speaker 04:
Again, there's no debate between the parties or with the court below that security instrument, and again, consistent with the regulation, the Black's Law Dictionary of Security Instrument.

[00:04:24] Speaker 04:
I mean, you can look right in the agency's definitions at 3560 that talk about the mortgage or deed of trust as a security instrument.

[00:04:33] Speaker 05:
Didn't the mortgage expressly incorporate the loan agreement?

[00:04:37] Speaker 04:
The mortgage did incorporate the loan agreement, but not the mortgage.

[00:04:44] Speaker 04:
I mean, not the promissory note, let alone the prepayment right.

[00:04:48] Speaker 04:
that was included in that note, let alone any claim that may have come along with that three-maven right.

[00:04:55] Speaker 04:
So you can see there's several layers of remoteness that you have to go through.

[00:04:58] Speaker 04:
If you're Mr. Rupp, as a reasonable person, signing this document and looking at, OK, what are my rights in my contract rights that are described in the mortgage, it wouldn't be reasonable for him to conclude.

[00:05:11] Speaker 04:
You certainly wouldn't be on notice that he's giving up that right.

[00:05:15] Speaker 04:
Another important point in that regard is under the restatement

[00:05:17] Speaker 03:
contemporaneous circumstances that surround the offer to convey security.

[00:05:22] Speaker 03:
I mean, you satisfied all the statutory requirements, but you still opted not to prepay the loans.

[00:05:29] Speaker 04:
That's not necessarily true, Your Honor.

[00:05:30] Speaker 04:
A number of issues there.

[00:05:32] Speaker 04:
First of all, we requested to prepay in 2008, and the record is clear that the partnerships did want to get out.

[00:05:38] Speaker 04:
They did want to exercise that right to tap into the market value of their properties and bring them to market.

[00:05:45] Speaker 04:
And they made the request in 2008.

[00:05:47] Speaker 04:
By the time they got to the end of the process, it was about three years later.

[00:05:51] Speaker 05:
And a lot happened in that interim, including the fact that Mr. Rupp was diagnosed with and later... Sure, but when you asked to prepay and the government refused to let you, that was a breach.

[00:06:05] Speaker 04:
It was a breach.

[00:06:05] Speaker 05:
At that time, you had the right to file a breach action.

[00:06:08] Speaker 04:
And we did file a breach action, Your Honor.

[00:06:09] Speaker 04:
That's why we're here today.

[00:06:10] Speaker 04:
And we filed that breach action promptly, certainly within the six-year statute of limitations.

[00:06:15] Speaker 04:
We also filed the suit.

[00:06:16] Speaker 05:
You didn't file it right after the breach.

[00:06:18] Speaker 04:
No, we had a six-year statute of limitations.

[00:06:20] Speaker 04:
And we used it.

[00:06:21] Speaker 04:
Again, a lot happened in that interim, including Easter ups.

[00:06:23] Speaker 05:
In the interim, you negotiated with the government to get out of the mortgage and the promissory loan and all of that by just turning over this property rather than them foreclosing on you.

[00:06:36] Speaker 04:
Yes, they threatened foreclosure so that the partnerships did not have a lot of other choices, but that doesn't mean that they gave up their right to sue.

[00:06:42] Speaker 04:
They enforced their right to sue by bringing this very lawsuit, and they did so within a couple years.

[00:06:48] Speaker 05:
Let me ask you this.

[00:06:49] Speaker 05:
Hypothetically, if we disagree with you on your view that the promissory loan, the mortgage agreement, and

[00:06:58] Speaker 05:
the what's the other the promissory note yes all three of these if we think these are all part and parcel of the same contractual obligations between you and the government on this case why then doesn't the really broad reference to

[00:07:17] Speaker 05:
in the assignment to all our rights, title, and interests in all contract rights, as well as a whole host of other things, particularly given this context where the property was in trouble, you were at risk of foreclosure, and you just wanted to turn it all over to the government suggests that you were releasing everything to the government in exchange for forgiving your debt.

[00:07:38] Speaker 05:
Why isn't that the best rating of that assignment clause?

[00:07:40] Speaker 04:
For several reasons, Your Honor.

[00:07:43] Speaker 04:
First of all, because there is no reference to the claim.

[00:07:45] Speaker 04:
And under Ginsburg, you do need at least some kind of express or implied designation of a claim.

[00:07:50] Speaker 05:
So is Ginsburg your best case?

[00:07:54] Speaker 04:
It's Ginsburg and the common law principle that it espouses.

[00:07:57] Speaker 05:
Ginsburg is not such an all-encompassing, all-inclusive release.

[00:08:01] Speaker 05:
Ginsburg is an assignment from one private party to the other, turning over leases and the right to get rent going forward.

[00:08:10] Speaker 05:
But it doesn't say anything.

[00:08:11] Speaker 05:
It doesn't have this all-inclusive clause that you have in your assignment.

[00:08:16] Speaker 05:
And it's a different situation also, because you're turning your property over to the government.

[00:08:21] Speaker 05:
They're turning their property over to another private company.

[00:08:25] Speaker 05:
Those clauses to me, I don't see how the clause in Ginsburg helps you at all.

[00:08:30] Speaker 05:
I mean, even beyond that, Ginsburg has a time limitation.

[00:08:35] Speaker 05:
that the clause, the lease is turned over as of this date here up, which suggests that you're not turning over your right to rent previously.

[00:08:42] Speaker 05:
There's no such time limitation in this assignment that, that assigns all of your rights, title and interest in all contract rates.

[00:08:52] Speaker 04:
Your Honor, the language is actually strikingly similar.

[00:08:55] Speaker 04:
And if anything, the language is more broad in Ginsburg.

[00:08:58] Speaker 04:
In Ginsburg, they are assigning all of its right title and interests in the tenant leases, which is the contract being assigned from and after the date here.

[00:09:09] Speaker 04:
Sure, there's a time limit, but the question is for that within the... There's a time limit in yours.

[00:09:13] Speaker 04:
We don't need a time limit, Your Honor.

[00:09:14] Speaker 05:
The question is whether the claim... If this is a completely broad release, and we read this as releasing everything, and what you're trying to say is, well, this only applies to obligations or rights that arose after this assignment, then you need some kind of time limitation.

[00:09:34] Speaker 04:
Well, we're only looking at an assignment of the question of whether the already accrued claim had been assigned.

[00:09:40] Speaker 04:
So as far as the time limit, we're only talking about the already accrued claim.

[00:09:44] Speaker 05:
And the accrued claim you're talking about is a breach of contract claim, right?

[00:09:48] Speaker 04:
Yes.

[00:09:48] Speaker 05:
So that's a contract, right?

[00:09:49] Speaker 05:
That's based upon a contract, right?

[00:09:52] Speaker 04:
Well, it is one of the rights in a contract, as the restatement said, but that's one of the most basic rules of the restatement, that if you're a party to a contract, you have the right to enforce it if the other side doesn't perform.

[00:10:03] Speaker 05:
But the separate question is whether that right is... If you agree in an assignment to turn over all rights related to that contract without any time limitation, why doesn't that on its plain language include a breach of contract claim?

[00:10:18] Speaker 05:
Because under Ginsburg...

[00:10:19] Speaker 05:
No, but Ginsburg is a time-limited case.

[00:10:24] Speaker 05:
It has a time limitation that goes from the date of the transfer.

[00:10:29] Speaker 05:
Yours doesn't.

[00:10:29] Speaker 05:
I don't find Ginsburg useful.

[00:10:31] Speaker 05:
If you want to keep relying on it, it's fine.

[00:10:32] Speaker 05:
But answer my question.

[00:10:34] Speaker 05:
This says all.

[00:10:35] Speaker 05:
It doesn't qualify it.

[00:10:36] Speaker 05:
It doesn't set aside anything else.

[00:10:39] Speaker 05:
It says all contract rights.

[00:10:42] Speaker 05:
Why doesn't that release to the government the breach of contract claim?

[00:10:47] Speaker 04:
Because under Dominion and Ginsburg, you need at least an implied designation of the claim.

[00:10:52] Speaker 04:
That's the principle that both Ginsburg and Dominion recognize under the common law that in order to, because a claim is different.

[00:10:59] Speaker 04:
It's a chosen action.

[00:11:00] Speaker 04:
You need some kind of express or implied designation of the claim.

[00:11:04] Speaker 05:
A claim is different from all other kind of assets you might be turning over?

[00:11:06] Speaker 05:
It is different.

[00:11:08] Speaker 05:
Why?

[00:11:08] Speaker 04:
Because it's a chosen action.

[00:11:10] Speaker 04:
It's it's more of a kin to a personal right and that's what if you read the sprint case from the US Supreme Court It has a long history about that But the bottom line is dominion in applying Ginsburg recognizes that you do at least need that implied designation and again back to the language of

[00:11:25] Speaker 04:
Both Ginsburg and Arkay's talk about all rights, title, and interest, except that Ginsburg, again, is actually broader because it's all rights, title, and interest in the underlying contract, whereas ours is all rights, title, and interest in certain contracts that are described.

[00:11:40] Speaker 04:
And one thing I definitely want to, as I go into my rebuttal time, point out in terms of what contract rights are described in the mortgage, I think it's very helpful to compare the offer to convey

[00:11:52] Speaker 05:
This is going back to your argument that these three documents should be read separately and that we should confine ourselves to the mortgage, right?

[00:12:03] Speaker 04:
No, I mean, certainly that point still remains.

[00:12:05] Speaker 04:
You have to give meaning to, I don't know how else a party can refer only to the security instrument if their intent is to refer only to the security instrument.

[00:12:13] Speaker 04:
That's the language that they use.

[00:12:14] Speaker 04:
But what I wanted to point out is if you compare the contract rights that are described in that section four of the offer to convey to the mortgage document itself, which is the reference security agreement, that there's all of the interests lined up.

[00:12:28] Speaker 04:
The government, let's remember what the purpose of this agreement is.

[00:12:31] Speaker 04:
The government is acquiring

[00:12:33] Speaker 04:
the property, so they want to make sure that they get everything that goes along with the property, including any attachments to the contracts to the property, any improvements, as well as any income or any contract related rights stemming from that property.

[00:12:50] Speaker 04:
Does it apply to accrued income?

[00:12:52] Speaker 05:
Sorry, Your Honor.

[00:12:52] Speaker 05:
Does it apply to accrued income?

[00:12:56] Speaker 05:
Like Ginsburg.

[00:12:58] Speaker 05:
Sure.

[00:12:59] Speaker 04:
It's whatever claims that assigner has.

[00:13:02] Speaker 05:
Well, how do we know that you assigned past due rent rather than just future due rent?

[00:13:07] Speaker 04:
We assigned everything we had related to the property at the time of the assignment, but we did not assign the accrued claim because there's simply no language designating that claim.

[00:13:16] Speaker 05:
I also want to briefly mention if we're talking about that's only if we read these documents separately, if we read them all as part and parcel of the same

[00:13:24] Speaker 05:
contractual obligation, and you assigned all contract rights, then you assigned it.

[00:13:29] Speaker 04:
No, Your Honor, because you still need something that tells the parties there's a claim.

[00:13:32] Speaker 04:
I think one thing that distinguishes Dominion and all these other cases is there was no dispute that the parties to the assignment intended to assign the contract right.

[00:13:41] Speaker 04:
And under the restatement, I believe it's section 246, it's the insiders

[00:13:47] Speaker 04:
intention that matters.

[00:13:48] Speaker 04:
The question is, did the assignor intend to assign that right?

[00:13:52] Speaker 04:
And there's absolutely nothing here to indicate that Mr. Rupp intended to assign that right.

[00:13:57] Speaker 04:
Just very briefly on the facts, I want to point out, if we're talking about the facts at all, the government points to the circumstances only because I think they realize there's nothing in the language that actually points to the claims.

[00:14:08] Speaker 04:
But if we're talking about the facts, we have to remember that we have a very incomplete factual records.

[00:14:12] Speaker 04:
This motion was brought in the infancy of discovery,

[00:14:16] Speaker 04:
And if there is any facts that matter, then we're talking about parole evidence, and that would mean that there's an ambiguity if there's two reasonable interpretations.

[00:14:25] Speaker 04:
At a minimum, our interpretation is certainly a reasonable one.

[00:14:29] Speaker 04:
So if the government's interpretation that they somehow acquired a right to sue itself, and that's really what they're talking about here, that they somehow acquired the claim, meaning a right to sue themselves.

[00:14:40] Speaker 04:
If that's a reasonable interpretation somehow, then we have two reasonable interpretations at a minimum.

[00:14:45] Speaker 04:
which would mean a latent ambiguity and, in turn, application of the rule of contraproferendum.

[00:14:52] Speaker 04:
Thank you.

[00:14:53] Speaker 03:
I'll give you two minutes for rebuttal, even though you pretty much used it all up.

[00:14:57] Speaker 03:
Thank you.

[00:15:15] Speaker 00:
May I please the Court?

[00:15:15] Speaker 00:
There's no ambiguity here.

[00:15:17] Speaker 00:
This is a broad release, and it's offered to convey to security, and it encompasses all contract rights held by partnerships.

[00:15:25] Speaker 01:
Well, there is no statement of release.

[00:15:28] Speaker 01:
The word release appears nowhere.

[00:15:30] Speaker 01:
There's no waiver.

[00:15:32] Speaker 01:
There's nothing of that sort.

[00:15:35] Speaker 00:
That's correct, Your Honor.

[00:15:37] Speaker 00:
consistent with what the parties were attempting to accomplish here, which was moving everything about these properties from partnerships back to the government.

[00:15:45] Speaker 03:
But if intent is relevant, why are we deciding this on a motion to dismiss?

[00:15:50] Speaker 03:
Why aren't we sending this back for determinations with respect to intent?

[00:15:55] Speaker 00:
Well, I apologize, Joan.

[00:15:57] Speaker 00:
The trial court concluded correctly that

[00:16:01] Speaker 00:
This is a plain language situation.

[00:16:03] Speaker 00:
They're not necessarily going to the intent of the parties.

[00:16:06] Speaker 00:
Intent is always relevant to contractual intermination.

[00:16:08] Speaker 03:
You argued that the circumstances say that they impliedly did this.

[00:16:14] Speaker 03:
So clearly, and the court referenced that.

[00:16:17] Speaker 03:
So clearly, you didn't think this was a plain language case.

[00:16:21] Speaker 00:
No.

[00:16:21] Speaker 00:
I apologize if that's the impression that's been given, but I don't think that's true, Your Honor.

[00:16:26] Speaker 00:
I think that the language of the offer to convey is clear.

[00:16:31] Speaker 00:
and that it says all contract rights.

[00:16:33] Speaker 00:
And that means all contract rights.

[00:16:34] Speaker 02:
Well, it says all contract rights in security instruments.

[00:16:38] Speaker 02:
And there's only one security instrument here.

[00:16:41] Speaker 00:
Correct.

[00:16:41] Speaker 00:
But that security instrument, as we argue in our briefs, is part of a larger total contract among the parties that encompasses the loan agreement, the promissory note, and the mortgage.

[00:16:52] Speaker 00:
And so the- Why didn't you just draft it that way?

[00:16:57] Speaker 00:
It could have been drafted that way, Your Honor.

[00:16:58] Speaker 00:
It's true, but it was not necessary because it here is clear.

[00:17:03] Speaker 00:
It doesn't come as everything.

[00:17:04] Speaker 02:
All of the documents that relate to, that were signed on or about the time of the offer to convey security, they all have to do with either conveying the property or extinguishing the loan.

[00:17:20] Speaker 02:
There's nothing that I saw that suggested that there was any interest, concern, waiver, release, or anything of that sort with respect to any sort of an accrued cause of action.

[00:17:35] Speaker 00:
No, I don't think that the record shows that there's any discussion of the accrued cause of action.

[00:17:40] Speaker 02:
I mean, I see nothing that suggests or implies that anybody was even thinking about conveying an implied cause of action.

[00:17:51] Speaker 00:
I think that that's probably correct.

[00:17:53] Speaker 00:
At least the record doesn't show that.

[00:17:54] Speaker 00:
But the point is that there was an intent to, it's not necessary that, and this is Dominion Resources, it's not necessary that there be a specific reference to the accrued clause of action for it to be signed over.

[00:18:06] Speaker 00:
Rather, the point is that all contract rights were intended to be moved.

[00:18:10] Speaker 00:
And that's clear from the language of the conveyance.

[00:18:12] Speaker 00:
And that encompasses any accrued claim for breach.

[00:18:16] Speaker 00:
It's true that it could have been dealt with specifically.

[00:18:20] Speaker 00:
disagree with that point, but it wasn't.

[00:18:22] Speaker 00:
Everything was moved over, and that's, as we said, part of the plain language interpretation by the court, and it's backed up by the contemporary circumstances, which, as I've pointed out and you've noted,

[00:18:33] Speaker 00:
demonstrate the partnership's interest in moving these properties out of their hands.

[00:18:39] Speaker 00:
And so the larger umbrella of all contract rights is sufficient to include any accrued claim for breach.

[00:18:49] Speaker 00:
And that's demonstrated, I think, in part by the foundational documents, the note, the loan agreement, and the mortgage, which

[00:18:59] Speaker 00:
are referential to each other.

[00:19:01] Speaker 00:
Obviously, as the court pointed out, the mortgage express incorporates the loan agreement.

[00:19:08] Speaker 00:
The promissory note describes itself as part of a total contract of the parties.

[00:19:13] Speaker 03:
But clearly, you have to concede, because there was no express transfer of their crude rights, then you're relying on a theory of implied transfer.

[00:19:26] Speaker 03:
I mean, because even Dominion

[00:19:28] Speaker 03:
says it's gotta either be expressed or implied.

[00:19:36] Speaker 00:
I suppose that's right, Your Honor.

[00:19:37] Speaker 00:
I mean, I guess it depends on what's implied.

[00:19:39] Speaker 00:
I don't think Dominion or Ginsburg or the other cases I'm familiar with really parse out what expressed or implied would mean in this context.

[00:19:46] Speaker 00:
The point is that the argument we're making, which I think is consistent.

[00:19:49] Speaker 05:
I thought your argument was that all contract rights is expressed, that it means everything to do with these three documents and the property

[00:19:59] Speaker 05:
at issue here, and they wanted to get rid of it and get rid of all their obligations, so they gave it over to you.

[00:20:04] Speaker 00:
Precisely, Your Honor.

[00:20:05] Speaker 00:
Yes.

[00:20:06] Speaker 00:
That is express, and that's sufficient.

[00:20:09] Speaker 00:
One thing I wanted to point out with respect to Ginsburg, which I mentioned a moment ago, that that case is very different for reasons of the contractual language, I think, has already been covered.

[00:20:19] Speaker 00:
Also, I point out that on the facts in that case, the S-ignore had already filed a certified claim with the government the day before it signed its assignment.

[00:20:28] Speaker 00:
That emphasizes the importance of the temporal scope of the assignment in that case.

[00:20:33] Speaker 00:
That makes it very different from this case.

[00:20:35] Speaker 03:
But again, you're talking about parole evidence as opposed to the documents on their face.

[00:20:39] Speaker 03:
And the document, as Judge Lind pointed out, the documents on his face only refer to the contract rights in the security instrument.

[00:20:46] Speaker 03:
They don't even mention the mortgage, right?

[00:20:51] Speaker 00:
they do mention the mortgage.

[00:20:53] Speaker 00:
I'm sorry, the offer to convey does specifically references the security instrument, and our argument is that security instrument is part of a larger loan obligation.

[00:21:01] Speaker 03:
Right, but the offer to convey only references, on its face, only references the security instrument, right?

[00:21:09] Speaker 00:
Yes, because, well, it does because more generally, if you read the entire agreement, it talks about conveying over the

[00:21:16] Speaker 00:
property and the loan being forgiven.

[00:21:20] Speaker 00:
So that's demonstrated by different foundational, of the foundational documents.

[00:21:24] Speaker 00:
I mean the loan is not set forth in the, the amount of the loan is not set forth in the mortgage.

[00:21:30] Speaker 00:
It's the promissory note is referenced in the mortgage which then promissory note sets forth the terms of the loan and contains a prepayment right.

[00:21:39] Speaker 00:
So I think it is true that there's a

[00:21:42] Speaker 00:
you do need to read them together as we contend the trial court correctly did to understand the total relationship of the parties that was seeking to be terminated.

[00:21:54] Speaker 02:
Let me ask the same question I asked your adversary.

[00:21:57] Speaker 02:
In the offer to convey security, the language is

[00:22:00] Speaker 02:
uh... convey all right title and interest in the contract rights described in security instruments what documents do you believe are referred to by security instruments but i think i i agree with my friend the security instruments in this instance is the mortgage just the mortgage not the loan agreement not the promissory note correct i would say and i think this is consistent with his argument that the

[00:22:26] Speaker 00:
Loan agreement is the initiating document.

[00:22:29] Speaker 00:
They were all executed on the same date, but for conceptual purposes.

[00:22:33] Speaker 00:
Loan agreement is an initiating document.

[00:22:35] Speaker 00:
It contains an agreement that the partnerships will, one, sign a promissory note in exchange for receiving a loan, and two, will sign a mortgage that secures that loan.

[00:22:46] Speaker 02:
But even if all three of those documents that were executed at the same time to start this whole transaction are deemed to be

[00:22:55] Speaker 02:
interrelated and part of one transaction.

[00:23:00] Speaker 02:
That doesn't necessarily mean that the document here in question called offer to convey security, which refers specifically only to one of those documents, conveys expressly an accrued cause of action relating to a different document.

[00:23:24] Speaker 00:
I think I would disagree slightly, Your Honor, with the formulation, which is to say, it's not that they form a single transaction.

[00:23:30] Speaker 00:
I think that's a little bit different from what we're saying.

[00:23:32] Speaker 00:
It forms a single contract.

[00:23:34] Speaker 00:
It is a single contractual relationship.

[00:23:36] Speaker 02:
And so, obviously- But you just told me a minute ago that the offer to convey security only referred to one of the three documents in what you're now referring to as a single contract.

[00:23:54] Speaker 00:
In that clause, it only refers to the security as described in the security interest held or insured by the agency.

[00:24:01] Speaker 00:
That's right.

[00:24:02] Speaker 00:
I agree with that.

[00:24:03] Speaker 00:
And obviously, that's what I've just said.

[00:24:05] Speaker 00:
But it also then, well, first of all, as a formal matter, the promissory note is listed in the mortgage itself.

[00:24:13] Speaker 00:
So it connects in that sense.

[00:24:15] Speaker 00:
And then if you look at the loan agreement and the other documents, it's not possible to disentangle them because of the interlocking rights that the three documents create.

[00:24:24] Speaker 05:
Can I ask you this, if your friend's theory is right, that all that was conveyed was the stuff with the mortgage and not the rights associated with the promissory note, wouldn't they still have the right to prepay?

[00:24:39] Speaker 05:
Isn't that in the promissory note?

[00:24:40] Speaker 05:
Yes.

[00:24:41] Speaker 00:
Yes.

[00:24:42] Speaker 00:
And if it didn't extinguish the promissory note, well, yes, they would in theory still have the right to repay.

[00:24:48] Speaker 05:
They're turning over the property.

[00:24:51] Speaker 00:
Right.

[00:24:51] Speaker 00:
And so that's in full satisfaction of debt.

[00:24:53] Speaker 00:
So that extinguishes the promissory note, which then has the effect of releasing the mortgage.

[00:24:58] Speaker 00:
So I think that answers your question by pointing out that one purpose of it, even though it is described as a security instrument in subpart four,

[00:25:09] Speaker 00:
The effect of this overall offer to convey and the acceptance is to extinguish the promissory note and thereby release the security on the mortgage, which is the mortgage.

[00:25:21] Speaker 02:
But that still leaves us neither here nor there with respect to whatever accrued cause of action there might have been for the alleged breach that occurred prior to this offer to convey.

[00:25:39] Speaker 00:
Well, no, Your Honor.

[00:25:41] Speaker 00:
That accrued claim is subsumed within the larger assignment.

[00:25:47] Speaker 00:
As you read the language.

[00:25:49] Speaker 00:
Yes.

[00:25:50] Speaker 00:
That is our interpretation of the language, is that all contract rights means all contract rights.

[00:25:54] Speaker 00:
And as Dominion Resources says, one of the rights of a part of your contract is the right to sue for breach.

[00:26:00] Speaker 00:
And Dominion also

[00:26:04] Speaker 00:
I think makes the point that there's a distinction between the assignment of a contract itself and the assignment of contract rights.

[00:26:10] Speaker 00:
And the Court of Dominion does that for purposes of distinguishing the Assignment of Claims Act from the Assignment of Contract Act.

[00:26:15] Speaker 00:
So it's a little bit different.

[00:26:16] Speaker 00:
I freely concede.

[00:26:17] Speaker 00:
But there's a difference there, and there's an importance to this term, all contract rights.

[00:26:23] Speaker 00:
It means something more than just going forward.

[00:26:26] Speaker 00:
It means that it's all the rights that the party had under the contract are now extinguished.

[00:26:32] Speaker 03:
All right, before you sit down, I want to talk about the takings claim, because I don't understand how your argument is consistent with our decision in Chancellor Manner's argument in Sienga IV.

[00:26:48] Speaker 03:
The fact that there may have been a contract right does not take away the Fifth Amendment right, does it?

[00:26:58] Speaker 03:
Chancellor Manner was pretty specific on that.

[00:27:00] Speaker 00:
Well, I think as we read Pizell and obviously as we discuss in our brief, the point there is that if the party retains the rights of super breach of contract, then a contract claim is the appropriate vehicle.

[00:27:13] Speaker 00:
And that's our reading of Pizell.

[00:27:16] Speaker 00:
I'm sorry, say it again?

[00:27:17] Speaker 00:
I'm sorry.

[00:27:19] Speaker 03:
That case was predated that Chancellor Manor and

[00:27:27] Speaker 03:
I think Chancellor Manor made it clear that a regulatory takings claim could still be asserted based on the value of the rights in the property itself, severed and apart from anything that was contracted for with the government.

[00:27:44] Speaker 00:
The issue here, though, Your Honor, is that all of plaintiff's damages, alleged damages, spring from their contract.

[00:27:50] Speaker 00:
So they did not articulate below and haven't articulated in the briefs here.

[00:27:55] Speaker 00:
any damages that are separate from this alleged breach of the prepayment right.

[00:27:59] Speaker 00:
Now, they call out their right of use of the properties, but they've never distinguished how that right of use is any different from the prepayment right.

[00:28:10] Speaker 00:
What they allege, their whole point in the breach claim is that they were denied the ability to prepay and put these properties on the market.

[00:28:18] Speaker 03:
The ability to prepay is a contractual right, and that's... Right, but we said in Chancellor Manor that where

[00:28:23] Speaker 03:
The appellant's claim is based on the fact that they agreed to be subject to a temporary moratorium on their right to exclusive possession, and then we have a statute that takes that right away.

[00:28:33] Speaker 03:
That just because there was a separate contractual agreement with respect to a loan obligation doesn't take away the takings claim.

[00:28:47] Speaker 00:
Well, Your Honor, I mean, I fall back on Pazell in the language there, and I understand what you're saying.

[00:28:53] Speaker 03:
Okay.

[00:28:56] Speaker 00:
No further questions?

[00:29:07] Speaker 04:
Just a few follow-up points in rebuttal, Your Honors.

[00:29:10] Speaker 04:
Regarding the contract language, what I was trying to describe really, I just want to clarify.

[00:29:14] Speaker 04:
When we're trying to figure out what are rights in contract rights described in the mortgage, it really is an odd phrase, but there are actually rights, contract rights, described in the mortgage rights contracts with

[00:29:28] Speaker 04:
third parties and what I'm referring to there is if you look at Appendix 36, right under the property description, there is a long list of rights and interests including rights and contracts that go along with the mortgage, i.e.

[00:29:43] Speaker 04:
the security instrument.

[00:29:45] Speaker 04:
And it very closely mirrors the different, the long list of the 11 types of interests that are being referred to in the offer to convey security.

[00:29:54] Speaker 04:
So that's clearly what they're talking about there, not other rights in other contracts that may have been signed at the same time.

[00:30:02] Speaker 04:
But we're separate agreements not being referred to.

[00:30:05] Speaker 04:
There's also I think it's worthy of noting there's a reference to insurance claims in part for one of the offer to compete security.

[00:30:12] Speaker 04:
So the parties did know how to refer to a claim if that's what they were trying to get because there is a reference to insurance claims.

[00:30:19] Speaker 04:
As far as the facts go, you know, the government clearly does rely on the facts.

[00:30:23] Speaker 04:
That shows it's not, in their view, simply a plain language case.

[00:30:29] Speaker 04:
And therefore, if there is a dispute as to the facts at a minimum, we need to finish discovery in this case.

[00:30:35] Speaker 04:
There's a lot left to do.

[00:30:39] Speaker 04:
Yes, finally, Your Honor.

[00:30:41] Speaker 04:
Regarding the case law, I think the important thing to remember from all of these cases that in every case where an assignment of a claim was found to have occurred, the parties, the assignor and the assignee, agreed there was no dispute that they were assigning that claim.

[00:31:00] Speaker 04:
Here there is simply no evidence that Mr. Rupp intended to give up this valuable claim.

[00:31:05] Speaker 04:
Thank you, Your Honors.

[00:31:06] Speaker 03:
So your request really would be that we would remand for purposes of further development of the record?

[00:31:12] Speaker 04:
That would be an alternative argument.

[00:31:14] Speaker 04:
We do think the language of the agreement is clear, that there's simply no reference to claims.

[00:31:18] Speaker 04:
You need some kind of a designation of claims.

[00:31:21] Speaker 04:
It's clearly not there.

[00:31:22] Speaker 04:
So we would reverse on that ground.

[00:31:25] Speaker 04:
Alternatively, if the court does agree with the government that the facts matter, then we need to find out what the facts are.

[00:31:31] Speaker 04:
So that would be an alternative position.

[00:31:33] Speaker 03:
All right.

[00:31:33] Speaker 04:
Thank you.

[00:31:34] Speaker 03:
Thank you.