brought against individuals and companies owned by these individuals for a long standing scheme to defraud investors across united states and  overseas the loans at issue here mr rosenschein had invested in the underlying court found in applied merrill lynch to state that the rico injury the date at which the statue limitations would begin to run started at the time of investment in this case judge that is and that is for unsecured creditors this court in first nationwide and motorola have established a different direct this court to the i respectfully direct this court's attention to a second circuit case and the c h i s v oxford health plans and its four twenty one f third ninety six in that case it says that the courts can consider facts in addition to documents that are next to the complaint if you consider being secured is that it gives you an i right to contractual  legal remedies that go beyond that of an investor generally it appears that the participation servicing agreement that you rely on for evidence of the investments being secured pertains only to the twenty fourth street investment not any of the others and that even as to the twenty fourth street investment the document expressly states that the lead lender which is not your client retains the exclusive right to pursue remedies in the event of a default so it seems your client just has no legal or contractual remedies  second five forty nine which says that when their country contradicting documents that are next to a complaint and they're at odds with the complaint that the documents are controlling there are several other cases and i could submit on that but tell me what's what's judge i will get t the document first of all pertains only to the twenty fourth street instrument do you agree with app judge there are various other documents various others servicing agreements that reflect in the same fashion what is in the twenty fourth street but judge twenty fourth street itself only when you pointed us to the twelve judges there the other agreements and i believe it states in my brief that they are very much similar in the says and i emphasize just the portion that i need to lead lender here by cells to participant in participant here by purchases from lead lender participants pro rata share in the loan and i emphasize inclusive of the a documents the title policy and all other security documents in interests related to this loan further down it says we were are you what paragraph letter did number three a which is what you were reading from concludes with the language that lead lender never nonetheless shall hold such documents and then later on i'm looking for it the language abou lender having the exclusive remedy rights there with me they're with me   think that's an a three thirty two yes but where in the paragraph is it halfway through three quarters i'm just trying to find the language because the first part deals with the dissolution or terminations of the late lander and that's not what you're talking about it says here and it's two three part about seven lines and it starts with law the different the beginnings of  investors do have an unfettered right to remove lead lender who is not really a lead lender they were servicers they were there were investors and servicers in these these the let me ask was mr rosen chinese do you hold one hundred percent interest he did if the other participation servicing agreements or servicing agreements works were the same or not the same but conceptually right he didn't have the authority to come in and he had to participate with other people in dealing with the collateral if there were a two if the lead lender failed i mean this is there were a lot of events that had to happen including him potentially having to work out with other program to shareholders in order for him to have any rights to foreclose on the property at all intact on the security and the dominant frame of the stock minister tragedy's pointed out is that the lead lender had the exclusive right to act on the security well i that right i but i disagree in that there was another investor who was i think it's essence a capital who did have a share in the who was able to get his name on to the security dock and so on to the loan documents and he so he would have been able to foreclose on his car his interest in and of itself was on a ten percent interest i mean because you don't have the relative seniority of the program or share participants established in these documents well i agree with that your honor i don't i don't know them the only way by which you would do what i do know that the documents would afford them the right to do the language of these although there is some conflicting language in here was was conferring upon mr rosen trying the right to assume his rights and to discharge them as servicers of the loan because a and i think the m s a could you point us to language establishing security interest in those agreements so i understood that this to apply to the twenty fourth street loan only i believe that the participation servicing agreement there were three different categories of agreements that were that were used in this in this matter and i am unsure whether the twenty four st loan was a service in remote parts relations or saying we only use for twenty four speed loan  there is a breakdown of which and i believe it's mr michel's declaration where he sets forth which loans coincide with which agreements i don't have that he believes there's a similar clause in each of i do believe i do believe that there's a similar clause which allows mr rosen trying to retain his interest undivided interest and to discharge the lead lender so to speak as servicers of the loan they were merely servicers of this loan they repeated and to take over the i mean to have the right t there was and as your honour's know there is thirteen volumes i do not have that on me if i could submit burton on this appeal i understand and i in reading your brief the only document i saw you cited was the twenty fourth street agreement you should look at this while we hear from your adversary if you have anything else you can to point us may i go on to the store mornings aspect because i think that that's very important even if it's counsel we've given you but you're well past your time well i and i understand but this was at a time where the corps points out that there was a two thousand and eight financial crisis collapse of the real estate market you can't look at or mornings in a bubble and here the issue becomes whether a reasonably imprudent investor would have relied upon the market as a whole in saying you know what borrower default is at an all time high and these these loans are defaulting because of the of the circumstance economic circumstances not because of the probability theory  r having an issue with defaulting i think that there's there's an issue a borrower defaults that doesn't necessarily mean that he's not going to be overly secured it means that a borrower has defaulted and that that is where the judge said triggered the duty to inquire but in a scenario like of two thousand and nine and the nine foreclosures by the end of that same year with the defendants offering the sort of its excuses for being able to on being unable to sell property and that was it odds with their initial predictions that these were easy sale properties yes just so all the judge found was that those circumstances even in the context of the financial crisis would have put people on notice to make furthering work and i would just note on that on that one issue judges that they did that the judge misapprehended the defaulting of these of these matters on the boards three michelle's declaration and you said it against the chart it isn't that the judge misapprehended the facts of that issue in fact only only a couple of these had foreclosures been instituted at that time you argue that the mess in your br would like to direct the court's attention to two findings by judge coat and three paragraphs of the amended complaint that i submit are completely dispositive of this issue on page four of her disarm her opinion an order at eight twenty eight thirty judge code said as described by rosenschein his arrangement with the defendants was that he had no control over his funds over how his funds would be utilized and obtain no security interest or collateral in any of the mortgage properties that's a quote from the judge's opinion in order the judge also said in a footnote on pages thirteen and fourteen of our opinion in order that the record eight twenty eight thirty nine to twenty eight forty that rosen assigns quote purported injury was not speculative at the time of investment because he alleges that he lost all control over the funds invested with vengeance and that he had no security interest in the collateral for the loans now i'd like to direct it court's attention to three paragraphs of the amended pleading this is an amended pleadingly it's  two fifty seven to eight to fifty eight in paragraph seventy four it is alleged in fact the defendant structured their agreement so that the plaintiff and other investors were not permitted to participate in any of the decisions relating to the loans and the defendants would maintain complete and unfair to control over the funds provided by plaintiff and other participating investors paragraph seventy five right under that plaintiff obtained fractional interest in the loan with  majority of the recorded mortgage interest in the names of the various corporate and l l c defendants who were then intrusted to lend the money is invested by plaintiff and others to specific projects in their capacity as quote lead lender close quote and finally on paper and paragraph seventy nine which goes over to the next page in effect the agreements entered into between playing different defendants provided the plaintiff and other participating investors make significant investments in the subject loans and pursuit of the various agreements waive complete control over the loan and the monies lent by plaintiff for either of the plaintiff and other participating inventors would have no recorded collateral or security interest in any mortgage property and as this court has palace already noted the interest that mr rosenschein had in these loans was usually about five percent i think it was never more than ten percent i think sometimes it was one percent two percent i saw a number of five percent he was a minority investor in a loan project they were all participants in these low if the district courts analysis is right and merrill lynch controls here because this was an unsecured interest in the injury accrued at the time of the investment well as the clear and definite measure of damages if he had sued a month later saying you know i got a bad feeling about this i think the collateral is really worth what i've been told  d you know what it would have been able to recover what measure damages disease well the damages would have to be determined during the course of the litigation there's no question that everyone who was an investor and what point would you look at that the day the money  was handed over for the investment would you take into account the collateral that what they're at what they'd of trial i think you would have to take into account what the collateral that was then remaining was worth yes your honor and then it would have to be divided up between the various invest depending upon the date of how that of the litigation went there would be very measure of absolutely not have to wait for any foreclosure to have occurred no i don't think so so at the end at the time that the entry became ripe into it was could proceed you have to be somewhat speculative about what and that i think you would your own i don't disagree with you think that meets that week a clear and definite measure test i think it does your honor because the injury occurred when they made the investment and the amount of damages is contingent to some extent upon what is recovered from the lenders remember the defaults were defaults by the lenders and that was not a predicate act in the rico claim the that was just one of the storm warnings of the damages that had occurred as the injury in the first instance their surrender of their own money to this investment and then what the actual damages might be would be a function of whether anything could be recouped for them that's our argument i think you understand a judge thank you thank you if you're going to take some time to argue as well good morning my name's david  burg council for more quiet men my main goal is initially to make sure that marc whiteman doesn't get lost in the wash he's barely mentioned in the complaint he's barely mentioned in the opinion and there are investments in september of two thousand and seven the complaint actually references the wrong year it says two thousand and eight but nonetheless starting in september two thousand and seven and this is set forth in mr certification as well starting nine years before he was named as a defendant mr gleitman left the premises he had no further involvement with his with the other defendants he had no further involvement with the loans all whiteman is barely mentioned he's not mentioned at all in the original complaint at all he's not a party and in the first amended complaint he's barely mentioned he complained fails to a wedge that mr  well he stated that he was a principal of mercury credit and mercury capital the only other reference to quite mr kleiman in this amended complaint is that a true sixty one where it stated that there was quote a serious the amended complaint repeatedly a wedges representations that the laws were safe conservative short term and had little risk a few citations or a two fifty eight to sixty five to sixty seven to seventy four to seventy five to eighty two to name just a few these loans were short term the bet for a loan was originated and in two thousand and three it was a twelve month term it defaulted in two thousand and eight foreclosure seventy three this year bond loan originated in march two thousand and seven twelve month term defaulted by may two thousand and nine that's eighty two eighty two eighty three by two thousand and nine almost all the loans i think ten of eleven weren't a fault that's eight hundred sixty one how could any investor not know when he's not getting a monthly distribution of interest because the loan is not performing can any investor not recognize that he didn't receive he or she did not receive repayment of principal twelve months after the long was issued the appellant had to recognize that i say at the latest two thousand and nine that these investments were not safe as represented were not conservative as represented involved a lot of risk and certainly were not short term i so i submit that the allegations that the evidence in the amended complaint that the storm warnings were overwhelming were and were in fact overwhelming as set forth in the amended complaint finally i want to know a public policy of the of the position think when you look at a calculation of damages you look at what it was worth and how it was represented and how it was impacted you could also project what the outcome of a foreclosure can be by getting an appraisal looking at the costs of three with respect to the nine a particularities standard i believe it's worth in my reply brief it starting at age thirteen i don't think that the who what where when why how required by this court i think a short it to reconcile with the late short plain statement of the participation would be sufficient we do more than that the complaint is more than fifty page fifteen sixteen of the complaint  just as illustration demonstrates that what part of the allegations with respect to mr quite well the audi the allegations with respect to mr klayman judge they are not they're not specific allegations they talk about individual defendants participated in this being that he was an owner of these companies with the other three individuals but to get back to your honor's question there are and this is my notes i don't have the full fifteen volumes but it five sixty to eighty five sixty two  this and it's talking about the purchase of the mortgage loan there's also a citation here that i have a four ninety five reading from i or i do not have that volume but i do have a five six two it is a nother servic eighteen i do believe that in reading those carefully reading those you will your honour's will see and agree that there is a interest in there that mr rosenschein has he has the discretion to discharge these lead lenders who are really security interest of his interest sorry and that's for ninety five it's engage the rest is that the rest is me is me not and that he may terminate them at any time with or without c e and that's it for ninety six so we can it seems here and michelle himself states and i think this is important that the investors took ownership of the properties one of the properties and that's that a free ninety nine paragraph eighty four what would happen here is the investors when there would be a default the investors would get back to properties in another l l c or p l c and they would get an undivided interest in this p l l see that's what occurred with these transactions when the when the when the loans were foreclose their participation interest with them be converted into interest in these l l c s and that's in the record and so again in comporting with motorola and comporting with first nationwide when they get this interest back there's still no definite injury until this is sold to a third party and if so then they go and sell these to as third party and then they figure out what their deficiencies are and then michel's that the ration he discusses realize losses he makes reference to realize losses after the collateral was sold after the properties were sold in general with fraud parties deemed insured when he turns over his money based on a false representation now the precedent that talks about you being secured is that a security interest then gives you further rights with respect to  the interest you acquire and so those those interests can be the product of further injury but i'm not sure i understand that just because there is the ability to terminate a service or that your pro rata share of that and they get k once so and they become they get an interest in these companies so the what the mesh nations of these various of after default what occurs they do in fact together security interest subsequent to that