yes your honour's please the court this is ray bowen again for us well professionals i very much appreciated you sending the case of high sierra versus mitchell i noted that you asked for us to  comment on whether it applies or not and i found it very informative of course it was not opposed to unions and we didn't get it in our brief but there are some striking similarities between high sierra and the case that we're arguing at present of course mitchell argued that he was not a signatory to the contract in our case of course during davis acknowledges he is not a signatory to the contract he signed on behalf of t o nine and it represented capacity but that's it it was not signing as a signatory to the contract we then have mitchell arguing that he was entitled to attorney's fees because of an alter ego issue that had been pled in the  i guess i spent to say and how well it was going so well we'll start again so don't worry about it ok yes i know it can be a little bit unnerving that well we'll get through it gaze and i was going through some of the facts that i think are common to both cases and i begin by saying that mitchell acknowledges that he was not a signatory to the on track whereas in our there's a whole bunch of other cases in the california state court that talks about the arbitration provision and so high sierra does stand out as being a little different i know that there was  these these individuals and entities were creating shell companies that had nothing in them they were simply taking money and then they admitted that we set them up this way for my bloody purposes so that when all is said and done there's nothing left but a shell and the court found that and so the inequity would have been on the part of as well professionals to say that they sue somebody and find out that it's nothing but a hollow shell and here we have mr what we think the california law is and so we have some conflict here we have the option to certify for the california supreme court i'm a former california judge that i i just don't think this could be a very very litigation but not fifteen years into this case the lawsuit was filed in two thousand and five that is true and we have been pursuing other than lots of appeals taken by both sides and we are here today because of the bankruptcy filings by mr work to be done and now we're fifteen years later and i i don't stipulate the attorneys we have well wondering if there's something going on that i'm not missing that i'm missing because generally when people are in business and it's initially a two hundred thousand dollar debt and you've gotten a two hundred thousand dollars back to right  appeal in the underlying appeal said that it's unfair for asphalt professionals just because of the money involved here to walk away from a valid claim and they also said that the reason the attorneys these are what they are is because of the gamesmanship played by the various defendants we had fifteen defendants at one point and they were playing games of four years forcing us to file discovery motion after discovery motion appeal after appeal and the court said the reason the attorneys fees are so high is because of the defendant's improper conduct it was an estimate that let me ask you this if now that the bankruptcy court determined that  that you were attempting to keep davis from just charging the debt based on fraud and the bankruptcy court waited sad waited for the state courts and finally phase three didn't happen and so the bankruptcy court went ahead and sad i'm i'm just citing this and i don't think it was fraudulent i and so i'm going to allow the debt to be discharged how does that ruling affect the money that you've already collected as any effect on it not not at all because we didn't collect any money against mr davis that's that's one of the issues on appeal is if you know your claim that's the other appeal in our claim did we try to get paid twice and the answer is absolutely and didn't come into the case until two thousand and nine and to barrow in his declaration which judge kaufman relies on that i've been attorney of record since day one i want to ask you another hypothetical question i mean we haven't conferenced on this case so i have no idea what you know we read everything we come in here we have an oral argument and we talk about it with the judge so i just i want hypothetically all right you have two appeals here right hypothetically you were to do and  affirmed how in your mind the fat effect phase three it doesn't impact phase three because these appeals pertain to mr davis and they would not be because then they claim that they can claim of but not successfully i believe because the standard for bankruptcy is very different than the fraud standard in the state court judge noted that he said in her courtroom it's a much higher because davis was ordered attorneys face as part of that if what i'm saying hypothetically i'm not saying this is going to happen but hypothetically if that were to happen would then in face to raise could they claim that you're f y pursuing that since it's already they've already gotten attorneys fees on that well they can claim it been raised three has never been decided it's never been tried we know where the murders are concerned regardless of what we do you're going forward with phase three well we've never had a jury trial we asked for a jury trial from day one and judge readers said i'm going to carve out the jury and i'm going to decide how do you just answer the question as far as you're concerned to you make our merger argument here for the st time on appeal why should we entertain that if this is been going on all that time and now why haven't you waived it well we haven't waited because merger is automatic it happens whether or not but we didn't just decide to do it now we've argued it for some time it wasn't argued in the beginning because we expected we were going to when we thought we're going to prevail so some point we said well wait a minute the contract provisions especially provisions have merged in the judgments we obtained in the state th once we obtained those judgments all of those rights all the rights for attorneys fees merged into the judgments we had tamed as the prevailing party after those rights merge it was done not by some motion it was done automatically because it's a jurisdictional issue that automatically merges when and i mean if we litigated for another january as and somebody gen years are now said wait a minute all of those issues merged in the initial judgment i submit that they'd be right that dr merger says whatever happens after the initial judgment on that contract there is no more contract the contract disappears the contract did not exist with asserted that davis is no is not supported by the law i didn't see any citations to anything there can you tell me why the judicial stoppel argument what i didn't see any citations standing a lot for me start but up until the point we get a judgment on those issues there is no stopping because we were simply pleading in the alternative they were request relief we don't know where we were in the beginning of this case we have been having four amended complaints for an award of greece will turn these fees to the prevailing party should further action be required to compel the performance why doesn't that entitle mr davis to attorney's fees in this case given that as part of the  five point three action you were seeking fees from the phase one and phase two of the state court litigation thank you very much we have actually read that we have discussed it and in that case we settlement script relation did not include mr davis mr davis was in bankruptcy at that time we carved out i carved out all of the attorney's fees that provided for any recovery against mr davis one dollar can imagine that if we had less demand and if we actually paid attorney's fees for work that mr davis had to get with the book he would now have a plane in bankruptcy as would his trust be for preferential treatment that would have been a preference we couldn't go after mr davis at that point he was in bankruptcy i drafted this give you lay ssion that was drafted is not the world's best ablation but i am the only attorney who has been in this case from day one mr de there has not and that goes back to his declaration where he says i have been involved in this case since day one we submitted evidence showing that's just not true he was involved until two thousand and nine and that stipulation i carved out myself and there's been no evidence to the contrary i carved out every hour that applied to mr davis because i knew he was in bankruptcy at the time we were in litigation in the bankruptcy court and that stipulation if we had left him in and got paid money for mr davis we would have had to just ok thank you it you've already heard from mr bowen that mitchell was not found to be the alter ego and that he only argued his entitled to fees because he was alleged to be an alter ego an agent here mr davis was found to be the alter ego and responsible for all amounts to one of some sub contract nd mitchell was only alleged to be an alter ego so the high sierra courts analysis did not concern whether a party found to be the alter ego can enforce an agreement i know the court discussed the riddle in the vacuum in cases but that was in the context of a party that was that was alleged disagree with the high sierra court's assertion that row in the dryer courts allowed a non signatory alter ego to be a party to an arbitration agreement because of the public policy failure favori arbitration row and dryer are not about public policy of enforcing arbitrary sugar in that's they are cases about equity alter ego is also about equity schreier the california supreme court stated the suit non signatory is or alleged to have been acting as agents for the rams so quote they are entitled to the benefit of  acting as agents of the rand and they're entitled to the arbitration provisions roe essentially paula dreier the dryer decision this means that it would be unfair to allow a plaintiff to attempt to this is judge when here i know you can't see me so it's hard to hear a disembodied voice and figure out who's asking you the questions but you know we recognize that in mitchell there is that factual distinction in that there that there was never a finding that th arbitration context that would be in your favor yes we can start with the california with the u s supreme court which stated in the arthur andersen vs carlyle case i can give you the cite if you want it but here let me tell you what they quoted traditional principles of state law allow a contract to be enforced by or against non parties to the contract and through assumption piercing the corporate veil alter ego except so i know this case it can turn the employers ability of an arbitration provision but there was nothing there was no limitation on the general principle that in non signatory all to rio can force a contract so that the us supreme court we also have a california court of appeal case that found a non signatory alter ego corporation to be in that case the state court said the alter ego corporation was bound this is quote bound by the agreement in the same manner as though it were expressly included a signatory there to and quote so affirmed the judgment from the state court that required the non signatory alter ego poor patients to be considered a party to the agreement to the same extent as the dominant corporation so what we can gather from that is that a non signatory alter ego can be is a party to the agreement and alter ego can dent enforce it so he in that case you couldn't just have him be a part of the agreement and not be able to enforce that particular their side of the agreement as well so they are just a part of the agreement we also like them a colossal in court there is also a california federal district court case which this case that relied on federal alter ego alter ego is thus obligated to the agreement and i also have another there's a decision before this th circuit court of appeals the sheet metal workers international versus arizona mechanical or single employer doctrines that's a californian federal court took an agreement essentially that a non signatory alter ego is a party to agreement and i would also like to point to the court one other thing that an alter ego is deemed to be a party to a contract and why because to proceed under one hundred and eighty seven dollars alter ego must have had control of the defense of the breach of the contract a cause of action so if you're in control of the defense you have to be entitled to all of the terms of that contract to be able to use the defense is that contract and your defense so to me this means that all three is a part of the contract because then it can use the terms for the yes well my view again is it's not something it's not i didn't see any cites anywhere that it's an issue that could be brought up on appeal if it was not raised below and even if the court could look at it really a p i is doing two different things they're saying it's they're arguing it's a merger merger but for example and the other people here that regard in the proof of claim it's still asserting that it's monies under the agreement it's  for invoices it's money for attorney's fees so on one hit saying oh there's a judgment there's a merger you can go in there on the other hand it's still arguing there is no judgment and i'm still entitle to more saying that davis is a part of contract davis a part of the contract the state court find that davis is the alter ego in my view as part of the contract and then the bankruptcy court relying on that judgment the state court  find that davis is a part of the contract and under the altered alter ego theory and that it's relied on that all the way along and that should not be able to now waiver from that and say that davis is not a part of the contract and also it recovered all those what does that do to the court reaction your honor mr davis is no longer a party to the state court action because he got his discharge in my view so i'm not represented by my view that the defendants in state court for that we do have this question if it is a pure question of law and there is no prejudice i think it is a legal issue as to whether the contract judgments but what prejudice you suffer so for example so the other thing i wanted to mention the court if we look at phrases in the case of the alter ego cases i mean we could have the courts kind of say ok you're the alter ego and that means you're liable for this amount of money but none of the cases say that they always is always there's always an implication there's something more something more for example a non signatory alter ego defendant stands in the shoes of a party to a contract and alter egos one who effectively is the corporation and allowing all three o courts you ignore the corporate entity courts ignore the corporate entity and deem the corporations act to be those of the persons or organizations actually controlling the corporation so if you don't have a corporation or you or your that what you have left well here in this case you have davis you've got to have a contract with somebody and you don't have a contract with a corporation because you've ignored it how about this one we disregard the corporate entity and treat the corporations acts as if they were done by persons controlling the corporation again when you disregard the corporation the only thing left you're left with is the alter ego which in this case is there and it is so he has a right to enforce the sub contractor agreement here so but the look at the cases and go over and over again you'll see all these were these phrases that said to give something more to an alter ego all than just that you're liable for a contract and that's what a p i is trying to do here just saying that davis is just liable to contract but there's so much more to it he's entitled to enforce that contract i have nothing more unless you're owners are would doctrine applies instantaneously it applies and it's something the court can review dunno it's an issue of law it's not something that that is you forgot it gotcha sort of argument you don't get to argue that now it can come up at any point in time if there has been a judgment and there have been attorneys fees awards that have resulted in attorneys fees based upon the original judgment otherwise the case never end it does go on and on and on and on unless there is something out of the we were the prevailing party in that case for mr horsley to suggest that we're trying to double dip here is just not true we filed our claim against mr davis because that's all we could do we couldn't go after him in the state court that was an automatic stay stopping us from doing that why in the world should we just have to stop and not even file a claim in his case this is a man who hid one million dollars worth of assets that we cause the trustee to go after and has liquidated for the benefit of creditors there is money in this estate why should we be precluded from participating in that money just because mr davis filed bankruptcy during our state court litigation the state court litigation will go on it will go on not as to mr davis but as to the other defendants who don't get the benefit of mr davis bankruptcy filing they don't get it and they also don't get the higher standard in bankruptcy of forcing us to meet standards against mr davis that simply are not available in the state court we have the right to get the lower standard of fraud in the state court which a sense the court of appeal has said we've already proven that if they didn't agree with us they would be sanctioning a fraud so for mr ford's lead to say that our claim should be disallowed that's just not true our claim was for over five dollars to two thousand and ten no one else knows about that claim except me and no one has produced any evidence to show that any of those monies were paid at any other time and as i said previously i hate to use my time i have to make this boy the stipulation that i prepared i carved out all the monies owed to mr davis we're not saying merger on one hand and on the other hand we still had to sue on the contract of this not final when we filed the claim we didn't have all of the the history that we have in the state court but the state court stopped us to mr davis so here we are entitled i believe to receive the award that we would be participating in with the other creditors because there's been no legitimate defense to our claim