i don't know if we need to keep making a record on that we do that said that's good fair enough this is a interesting issue with respect to the j d c a agreement which baker and host mr loomis were escrow holders if you will not really dominated as such but that's the legal effect there were two versions of this the original of course was just we discussed signed in june and then august there was an amendment if i could invite your attention to the amendment it's a both of them first of all say the undersigned client members meaning of g two in connections with the obligations of g two and then it goes on to say who does what in the amendment it does to the capital options membership in g two is not a prerequisite to the disbursement of funds have me ask you this just so that just to kind of get my head on straight sure if we determined that capitals claims against g two are barred let's say you lose on the case that we just talked about right i know you're not conceding that but i'm saying hypothetically it's claims against lewis and baker will also fail right now or how about the best argument that it may be the fiduciary mess contact but it it seems that most of capitals claims against limits in banker are premised on capital having an equity interest in cheated right that is true as far as the original j d c a your honor that does require a finding of membership the amendment however does not it's it calls them client members for the purpose of this g d c a and it says these client members shall cause she to disperse the funds from the two clients cusumano an atlas three right are you drawing a distinction council between the turnover of records and the state funds which to me does the pend a win in the prior case that we have and then the five you share a misconduct claim may not be pan quite as much documents they don't have to be a member to have standing like that because the funds were supposed to have been disbursed they were they were not held in escrow they were a pay it looks like given to goldsmith and then  say well it's goldsmith fall go after him well according to the amended j d ca it says they're supposed to be held by baker and hostetler until there's either a joint agreement from everybody or there's a court order we could go ahead and do whatever we felt like with your money that's not the case in the state bar because baker hostetler is a licensed a law firm as is mr lewis have certain obligations under the state bar rules maybe they don't arise under this agreement but the state bar says thou shalt not steal basically and so that that's another reason to keep this case going as far as baker hostetler goes whether or not capitol office is found to be a not there is from now idea of this order and if i understand correctly when the lower court capital options conceded that it could not prevail in the proceeding and less it could show that there district court indicated if you could go up bags according to you if you go up to show your magic and and find something but as of now that was left open is without prejudice only for that reason now what your magic well he might as well get a record so the banks the judge can read exactly what the magic is as they also gave me a lot more weight on that than i think it should have the membership is a prerequisite to determining what happens under the original j d ca your honor that was not made clear in the record it just said if the limitations issue we lose on goldsmith then the j d ca issue was out the door as well but that's the original one not the amendment and i was not as clear as i should have been the amendment it doesn't require any magic at all to figure out those funds or are dispersible whether there's a finding of membership or not and that's what the parties agreed to that was the bargain for exchange now if that was  ended the bank that was never presented as an argument to the bankruptcy court was i don't believe that specific part was it was addressed i think the main thing was the banks the judge would have found because i was a point you arguing so why isn't that issue wave before us well i believe it was implicit in our argument below your honor that the the amendment that was not being waived it was where where membership is required the only place it's required it's the measure is directly before you by the bankruptcy judge and it seems to me is to come in and counsel to help out this is a huge huge issue and it is in the banks you do it is right on point and says period  you want us to go back and talk about things that you didn't talk to the banks the judge about in order to save your case i find some difficulty with that i'll i understand your honor and it should have been made clear because we did have the two j d c this was not if the panel has no further questions and i'll reserve the balance my time ok thank you morning morning may please the court my name is steve jerome i have the privilege of representing both baker and hostetler mr dennis loomis this morning i'd like to follow up on judge waltzes colloquy with counsel and i think that's the exact issue that the baps out this argument pertaining to the amended j c was not played in the complaint kapil options did not ask for leave to amend at any time to inject this issue into the complaint or it was not an issue that he ever asked to for leave to amend a new rule fifteen to plead and at all times and our position is even if he tried to do so which he hasn't it would be futile because the provision that he's relying upon  poses duties on mr stapleton's clients not my clients the paragraph could not be more clear it says the client members shall cause g to distribute all settlement funds received it has in it goes up the  so just so that i understand just capitols argument on this capital's claiming that loomis file it at the agreements by diverting all of the collected g to phones including those required by the  amended to be dispersed upon receipt i think it's the atlas free cusumano funds directly to goldsmith is that what they're claiming that is the argument here that it's the argument here and i'm sure countering by get my summarizing you are very close i would add the component of the there is there was a complaint for missing the funds generically there was no allegation of a breach of this reference to and its position was it was a member of g two and therefore it was in title to all of g two sons our position on that point is they have not been able to establish that and that's a condition preceding to be able to recover from baker hostile or assuming they can establish all the other facts but for our purposes we just assume without concession that they could the other point i'd like to point out to mr horner just miss states his own record with respect to the  with the funds and in fact it's actually in the goldsmith the prior case the fifty two case excerpts of record at page one thousand paragraph fourteen that is the state court complaint filed by capital options to dissolve and seek point of a receiver in that complaint capital options it mit's that it had received the dominic cusumano funds so he's now up here complaining about suing baker hostetler for funds his client has already admitted it received and that again would be a pleading problem for him if this court would could reverse you know there's no magic there is no magic yes or absolutely and then i would like to turn briefly to the issue of because overwhelming majority of the funds at issue are dependent admitted late on a determination of membership in g two and i think as mr stapleton pointed out in the prior case the issue really comes around statue limitations and i break that argument down into two components three fifty one under the california code and all the other arguments and as mr stapleton very articulately went through all that most of those other arguments were timely raised and therefore waive but even if you start looking at the timing it doesn't matter because bankruptcy tolling under one away gives you the longer of the period at state law or two years from the petitioning so you can't want to wait will not if the petition if the statue limitations was somehow still live on the petition day one away does not get you there because this complaint was filed a complaint against capital option papel options against g two and goldsmith was filed too late and if they can't prove that they were a member they can never prove damages against me and that is the fundamental problem that was our position was actually our complaint we suggest it was not yet ripe the court didn't agree with that but then once it went from not being right to move once capital options lost that issue the three fifty one argument i think is more problematic for capital options than they would like to admit this court in the abramson decision noted and i quote the california tolling statute is therefore unconstitutional on page three ninety there was no ambiguity in that statement saying it's unconstitutional as applied to the facts of this case there was a determination of what that the statute was unconstitutional what mr what capital option seems to be arguing is that the prior california supreme court supersedes the ninth circuit wall on issues of federal circuit rulings on issues of federal constitutionality i don't think so and that's why the subsequent california cases that mr staple relies on and we also note in our brief those lower california courts recognize this court's decision and neighbors them and say ok now we have to deal with this issue because it does impact interstate commerce and the record is rep references to interstate commerce you have people moving you have the allegation by camp options is that mister goldsmith went to montana and essentially continued to gie to business throughout the country he sued which this the fifty two adversary proceeding actually started out as a case against an idaho lawyer for the same argument as that applies to baker hostetler turn over money turn over records and it was amended to add allegations to see if there is an independent for you sherry claim here that could survive dismissal your honor i think the answer is really quite simple there is nothing no pled facts that the fund the atlas free or cusumano funds were actually ever in baker's possession for us to be holding for to be accused of misappropriating funds there would have to be an analogous factual allegation that we had actually received the funds amendment not on having educationally recognized interest and ok and so if that's the case why doesn't it survive there are other crimes that we were talking about that that and i think judge when touched on that that are dependent on a judicially recognized interest in detail so but this one doesn't seem to be so and i think the answer to that is because then read it and i'm sick and read is what you're arguing the reads to them that reads too thin and the documents attached to it impose no such duty with respect to the funds at issue those funds are to be distributed by the client members not by bigger hospital baker hostetler had no obligations under the amended j t ca with respect to those funds well if they were off but he did they have an opportunity to amend or what is and that goes to the point that i brought up earlier with respect to that as the bat noted no such request for amend was rever requested by capital options to flush out this issue if that was truly the issue this is a issue that's now being created after the dismissal after i heard you say something like the  so i don't think that if he would have filed a motion for leave to amend to flesh this issue out before the bankruptcy court whether or not he could have pled sufficient facts in light of the agreement imposing no duties with respect to those specific funds upon my client that was an issue that was never presented to the bankruptcy court so would you concede that it's possible that it that that the breach of  it's possible that there could be facts that are not dependent on that but you're saying they aren't here it is not pled and i think the expressive language of the amended g c a which does imposes obligation on other parties with respect to those specific funds would make it impossible to allege such facts because that right and i say no stand your argument counsel it's that there's some vague reference it appears to me reading the complaint the paragraphs i referenced twelve thirteen fourteen around the reading that nice elation appears and there may be some one in the end if i do sherry claimed there but you're saying that the attached j d c a agreement and the amendment would contradict those made allegations right is that your argument you help me out by by referencing the specific provision in the j b c a amendment that you same poses no obligations that i can read that together with the complaint language so absolutely so let's start with the amended g c a which appears in the record at twenty two that's the amount paragraph one c specifically states the client members shall cause g two to distribute all settlement funds received from dominic  free including greg levinson directly or indirectly within two days of receipt of such settlement funds by g two fifty percent to george have henry goldsmith fifty percent capital options with no deduction for terms you cross that is the paragraph the capital and the actual original j d ca disclaimed any fiduciary obligation so therefore you have that it that legal issue which then judge nielsen agreed with and that was not an issue that was raised on appeal so i think that issue has been waived as well unless the court has additional questions i don't want to continue and i think we are in overtime but if any of the court members have question we all right thank you thank you very much for your argument looking at that that there or is that just you know you can't say well i think it could be there well but it's either got to be there or it's not there it's it's not there what there is also is not there is any evidence that capital options received these cusumano funds ever and that's a surprise to me i just heard that today for the first time so the issue is does this agreement  is independent of court finding of judicial i'm sorry of the g two membership it does on its face that's exactly what it says it says that the baker hostetler will hold the money and they did