good morning may it please the court my name is alex kleinberg and i represent the appellant in this case for citizens bank interest company and like to reserve three minutes for rebuttal this appeal arises from chapter seven debtor deborah wilson's failure disclose in her bankruptcy schedules the only two transfers of real property she made within two years of filing for bankruptcy petition she was asked about this at the creditors meeting was and that's correct your honor the tristan shimmered we did ask her about that and she answer to thank you these two transfers that issue they concerned attended commercial property in kennewick washington and a rental home the debtor had in everett washington these are the only two transfers of property real property the debtor made within two years of filing the case the question of course is whether these transfers were outside the ordinary course of the debtors business or financial affairs it is required by the statement of financial affairs any non ordinary course transactions of course must be disclosed and really the meaning of the word ordinary i believe has particular significance in this case as the court seen from our brief ordinaries been defined as a reputable dictionary as meaning regular customary usual or normal and the banks admits there's nothing regular customer usual or normal about these two transfers is a whole lot coast to marry or a usual about the real estate business in no way mind was there perhaps not your honor but importantly one issue that we take take one point we took issue with the district court on is that there's nothing in the bankruptcy code there's nothing in a political bankruptcy case law that requires the bankruptcy court to look at the particular economics situation at the time the transfers were made and so it was on the grounds of summary judgment in the district court concluded that the bankruptcy trial court  that indeed your honors the district court's position and what's wrong with that we submit that the standard of proof you of course is not of beyond a reasonable doubt this is not a criminal case and we submit that while the debtor's entitled to justifiable inferences on s judgment she's not entitled to inferences that are not justifiable and in this case for the better to prevail she had to meet both the horizontal dimension test and the vertical dimension test that i believe has been thoroughly briefed here and she's not done that the bankruptcy court was right to realise for instance there's no evidence of similar transactions in the record record there's no evidence for instance that the debtor hid in the past and gauged in a ten thirty one iris tax exchange with her attorney this is the only time apparently that was ever done there's also no evidence on the record to the effect that the debtor ever transferred a tentative commercial property by way of a deed in lieu of foreclosure to a friend of hers and the debtors testified at least to some extent that she didn't get any contemporaneous money or value in exchange for these transfers what about that there was one statement the bankruptcy court made basically to the effect of that she had a pretty good argument that these were in the ordinary course that to me sort of flags of the summary judgment proceeding i remember it well and it's our reading of the transcript it's not that the bankruptcy court implied that that made that implication it was that it framed the issue i believe it began with bill whether or not the debtors got a pretty good argument is an issue i'll consider at trial so it didn't look to us like the bankruptcy court was implying anything here one thing that i when the that's an issue and you'd considerate trial sounds antithetical your honor even even if that point is correct we do believe the bankruptcy court at the end of the day reached the proper result here which is it different of course as a matter of law that neither this horizontal dimension test had been had been met nor had the vertical dimension test  been met as well i have a question sort of it intriguing me since i read this case you're both are bankruptcy lawyers that's correct it's your regular practice yes this goes back is it a jury trial i don't believe so your honor i wan can not i want to say can only be a jury trial if both parties consent i think that's the current state of the last august potentially it could be potentially why would new consent to a jury trial if that's the law i'm not sure the bank would or would not your honor i don't believe we've had those discussions we haven't got to that point yet how long you've been practicing bankruptcy about fourteen years around or you know you assume your opponent a little longer just a bit if you ever seen a jury trial in bankruptcy court no i haven't court so it's interesting sorry to interrupt you not a problem is a bankruptcy practitioner one one point i want to take a moment just to emphasize is that the full complete and accurate disclosure in bankruptcy of one's assets and recent transfers of property it's extremely important the system cannot operate the way it's supposed to operate without full and fair disclosure by the debtor and the bankruptcy code specifically requires debtors in bankruptcy to do a number of things they have a number of affirmative obligations like being honest and forthright in their bankruptcy schedules like cooperating with the trustee in the event the trustees appointed to supervise the case like in some cases completing a certificate of credit counseling in order to get their discharge in bankruptcy and these are serious obligations complete disclosure to creditors to bankruptcy trustees to the office of the united states trustee it's extremely important it's necessary for the complete and fair administration of bankruptcy cases and debtors failure a failure to fully and completely lose their assets and pre bankruptcy transfers  some dealings with debtors companies but not in her personal individual capacity ok so that's the distinction you're making said she had done it in the past but just not with her individually that there is evidence of the record that she had done that in the past but that's correct it was not  individual capacity so it's kind of never been a part so it's kind of never i believe that's correct yes importantly from our point of view the district court ert in this case also by not specifically addressing the issue of whether a hypothetical creditor not actual creditor like my client the bank whether a hypothetical creditor would be on notice that the debtor would be transferring her only two pieces of investment property within two years of filing of th case and that's important because that bears on this vertical dimension test and the bankruptcy court judge mark recchi here in seattle we believe correctly noted that a hypothetical creditor or even an actual creditor like the bank would not be on notice of these two transfers which in our view again shows they're not ordinary course transfers transfers and they should have been disclosed in the first place and i ask you a question about that now after the initial denial during the creditors meeting in the knowledge meant that there had been these two transfers she then amended or schedules correct yes that's correct and provided in discovery information about each of the transactions yes that's correct how do you propose to prove that she acted with the intent to tender delay or defraud a creditor well from our point of view the fact that these transfers were not originally disclosed in the debtors got able an experienced bankruptcy counsel here says something it says something about her intent and they were not initially disclosed at the meeting of creditors where she testified essentially these are all the transfers that are in the schedules here i have nothing more to add oh but the banks attorneys here now the banks attorneys saying there's these other transfers now all admit to them you're not that's that's what i would call the reasonable inference that i'm just drawing from the facts of the case and when we cannot draw you understand we cannot draw that inference our law requires witness to take all inferences in favor of the nonmoving party the end of the day after these transfers are brought to our attention the debtor amended her schedules to disclose them that's not the way it works if not free of vigilance sophisticated creditor like my client that sort approximately seven point six million dollars here that hired my firm and me to come in to represent its interests in this case those transfers were not been disclosed where the only active creditor in this case the trustee so let me try to get the legal import of that though that was bad of her not to disclose them but then she did disclose them so how does that answer the question of whether they were there is no factual question about whether these were in the ordinary course of your pardon how does that answer the question of whether these are in the ordinary course i mean the fact that she didn't disclose and then she did disclose this it really has been to give two different issues she was required to disclose the transfers in the first place sure and she didn't correct then she did but i realize she your view is of course but for you they would have been on the table but that doesn't really answer the ultimate question does it it just sort of collars our view of her in some way but it doesn't answer the ultimate question i think that's correct i think i'm looking at two different issues  entirely regardless of when she disclosed what she disclosed we have to look at the nature of the transfers and selves that's really what's at issue here and even if the court ultimately concludes one or both of the transfers should have been disclosed and even if the court  reinstates the bankruptcy court summary judgment ruling to some extent that's hardly the end of it we still have to go to trial and prove intent is the court's  i also want to mention too there is some evidence on the record to the effect that after the debtor conveyed this kind of what property that tended commercial property and what washington to or friend by way of a deed in lieu of foreclosure she testified in the companion case filed by the u s trustees office that she later sold the property for three hundred sixty thousand dollars after she tendered a deed in lieu of foreclosure to it and this fact shows up also in her sworn deposition testimony and her two thousand and twelve federal income tax return this is part of the record specifically at year one fifty nine and a are three or four so one more reason we think this kenwick transfer was out of the ordinary course is that on the one hand the debtor is testifying she gave a deed in lieu of foreclosure to the property so title passed at that time but then she's testifying under oath that will she actually sold the property and gone again and that's spelled out in federal income tax return as well so i'm not sure what exactly happened here but if nothing else this reflects th when he said there's just really no genuine issue of material fact here and that the debtor did not is required by ninth circuit law submit significant and probative evidence in response to the bank's motion for summary judgment i believe it's the intel case that holds that's the threshold evidentiary threshold that's needed to overcome summary judgment and we submit judge brecker got it right in that she didn't do that here i also want to conclude for now by noting that one more reason we believe this court should reinstate the bankruptcy court ruling is that because of the timing of the two transfers and we submit that's highly suspicious because the debtor did not start transferring these properties away until after the bank filed a lawsuit against her ultimately to lawsuits for the recovery of about seven point six million dollars and given that the debtors testified she transferred these properties to her friend her attorney for no direct consideration in exchange and she did that after the bank started pursuing her for all this money it suggests to us that she wanted to protect the money that the property by transfer it to her friend and her attorney friends and confidantes and so we do believe this court can and should rightly take the timing of these transfers into account as well let the court has any further questions for me i think i'd like to reserve my remaining time down in this building which is nicely remodeled am also glad the on the fact this is a summary judgment motion in other words are there any contested material issues of fact  that require a trial in this matter judge cohen our said literally there were seven declarations filed by the debtor the debtors banker mr rogers the debtors real estate broker advisor mr green hall miss will soon developer broker mr meek and judge cohen our said any one of those standing alone which were uncontested and rebutted creates material issues of fact he didn't know why it wasn't resolved just any pick one and and they created a material issue of fact and as is the court just pointed out a minute ago and summary judge if there isn't a material issue of fact in the court has to look at all these declarations as though they were true and uncontested and they are they are been rebutted you know sometimes summary judgment can backfire if you're saying to the court there are no material issues of fact and we have to take all these declarations as true  and miss wilson look at the facts ms will say in with a real estate broker developer investor for over thirty years she invested in over thirty million dollars in various projects two where one party moves for summary judgment but the other party doesn't but responds to rule in favor of the opposing party he did not do that here you know i know but what i'm pointing out is that the facts that are then uncontested create the issue that you know i think one of the cases that was cited is the widget manufacturer isn't in the business of selling a rental home but miss wilson and was trying to point out is wilson is in that business so she was an investor and a developer and she and she did do tens of millions of dollars in projects and she you know as the court said you know i look at this and i have all these disputed issues of fact and i ruled this way so i'm not quite sure why again why you're arguing well it can backfire etc the evidence will be what it is at trial right yeah and one way or the  that will be what will be will dine on when testimony is take care and and the court you know the views the witnesses and the credibility the witnesses and you know all the no more inferences at that signing and on the normal opposing counsel correct that a jury trial in bankruptcy court would require the consent of both parties so i just don't know the answer to that that's he seems to know what he's talking about the question is is is kno determination of whether the debtor should be granted the discharge in this case or not it's a it's an all or nothing case and history court if you want to jury trial you have to file a separate pleading early debt in other words if the ban you mean then you might have a right to judge him by twenty three and said miss wilson obtained this ten million dollars loan by friday i'm sorry to have diverted learned counsel ok the issue that intrigues than nine minutes and forty seconds talking about horizontal test in the vertical test and this test and that test i think they're well briefed by everybody we briefed him they briefed him on horner then why argue for that pardon then why argue further well that's i was getting to the point i was going to ask the court if the court had anything that it had questions on because sitting here for nine minutes and fourteen seconds now talking about vertical test and horizontal test to first just comment briefly on these declarations that the debtor submitted in support of her position in the bankruptcy court and in my experience oftentimes practitioners think there's automatically safety in numbers one comes down to submitting multiple declarations an affidavit in support of their position this is not a case where that's true though judge brecker rightly honed in on the fact that despite these numerous declarations there is no evidence that the debtor herself had ever dated a property in lieu of foreclosure or that she was in the business of i r s ten thirty one exchanges let alone iris ten thirty one exchanges with her attorney who apparently was representing her at the time of the transfer there's also no evidence in the record to the effect that the debtor herself or  attorney mr mckinney engaged in i r s ten thirty one exchanges with similarly situated parties prior to the mckinney transfer of the everich rental home again i'd like to just briefly emphasize because i do believe it's important there are only two transfers of investment properties within two years of filing the case that of course equates to one per year there's nothing ordinary customary or usual about these transfers for many reasons but one is because of the timing of them it's like this is a monthly sort of thing for instance a quarterly thing lastly as we ask this court to reverse the district court reinstate the entry of summary judgment a bankruptcy court will state again as i think this panel's well aware is that that doesn't in that case the debtor still gets her day in court whether it's in front of a jury or the judge and this case one way or the other will culminate in a trial we submit that this this court can and should narrow the scope of issues for trial by reinstating judge brack as ruling thank thank you thank both counsel for your argument this morning the case just argued first citizen versus wilson is submitted and margarine for the morning