c i represent charles and associates the opponent at issue are the declarant rights that govern the operation and maintenance of my client's high end shopping center as well as the vacant property held by respond to our yes two judges face these issues already judge riegel twenty five years experience on the bankruptcy court ruled in favor of my client and summary judgment judge due who was recently appointed as the district judge took it on appeal reviewed the same case and ruled the other way directing summary judgment in favor of the respondents and that's why you're here that's why i'm ok but one judge do did that she made several serious mistakes as did i a moment ago because i meant to say i would like to reserve five minutes of my time i'll try to help you but if you can watch the clock i will last certainly will you first thing the district court improperly dismissed the un contradicted uncontroverted affidavit of jeffrey track of it seventeen page long affidavit supported by one hundred thirty pages of exhibits explaining what had happened mr track of it is an officer of the entity that runs charleston nonetheless the district court looking at that affidavit said and i'm quoting here charleston has not provided any evidence to demonstrate that it transferred the declarant rights to any other entities before the bank's foreclosure mr drek of atures affidavit went into great detail about the transfers that took place in two thousand and two two thousand and four he explained about the millions of dollars that were spent by those other entities performing the functions of the declare he testified to all that was done but she said we haven't presented any evidence and then she went on to say in the very next paragraph about that same affidavit she said it's disregarded if the transfer was not recorded actually it does not the if i understand the question correctly you could jump ahead to that part part of the argument certainly and say ok let's assume well if you don't want to jump there that's fine with me proceed let me put it this way the the affidavit goes into great detail about explaining the transfer of the declared rights the judge says ok i'm not going to accept that i'm going to ultimately conclude that those declared rights stayed with charleston because i don't think the transfer was proper she says look at me i can ask the question this way does your planned on us a green that the declarant rights were personal property rights as opposed to real estate yes that is one the my position exists even if there are real estate even if those were an interest in real property they still didn't get transferred they did not get transfer not get transferred and i think if you don't let me jump ahead and explain why that's so under the deed of trust which is the foundation of what we're fighting about you mean did not get transferred right here that's not right yes give me please what i'm saying is they did not get transferred at the foreclosure sale on time and they did not get transferred at the foreclosure sale because the deed of trust the foundation of their case defines two sets of collateral the property capital p defined term it's the dirt second category trust the state capital t capital e a defined term trust estate means the dirt and all the other collateral assuming for a moment that the claimant rights were pledged soon that they're part of the trust estate what happens next the bank issues a notice of foreclosure sale and they clearly describe the sale of the property capital p why is that significant because under the d trust that section ten point three point five in the bank's deed of trust it says we may sell the property we may sell the personal property separately or we can sell them together how how are we to know which they choose unless we look to the notice of sale which says clearly the capital p property that's what they noticed let's go ahead now going into with the capital p it cetera so i'm trying to understand if you look at section one point five and eleven point eight they talk about a transfer of the entire property and they those sections talk about all or steps tangibly all of your interest in the shopping center and then when you go to see what the shopping center is it's all of the real property but here we don't have all the real property we have six or eight acres of forty one acres so would you help me unscramble why you think sections one point five and eleven point eight are not controlling well for a couple of reasons first neither of them say the word only neither of them say this is the only way you can transfer something they simply say under these circumstances take a living point for as an example if you do the following used transfer most of your property all of your property and you have an assumption of the obligations and you have a release of liabilities those three steps then you can transfer the declare of rights it doesn't say that's the only way this sort of this f ambiguity i'm suggesting that that is one way to transport but not the only way ok so if outlets sense of the contract that's sort of an unusual way to read it and say you're saying ok that's not the exclusive way it's a way yes so where do i find the other way is laid out in the contract you find it this way ok this is a commercial shopping center we sell and we leas depending parcels of land we can sell a parcel we can sell five parcels we could sell ten persons we could keep one we could keep the declarant rights and not keep any property there's nothing in these documents that requires us to be a land owner to be the declarant because when you're a developer frequently you're going to be selling persons just as the record shows we sold the great indoor parcel as an example those persons get sold out we retain the declared rights so you can see that we could be selling one to three ninety percent of the persons ninety five percent of the persons declarant rights don't go ok having a little bit of a an issue so help me out sure i can understand that you could argue it's not exclusive but it does seem that declare our rights are a fixed bundle of rights under the contract and you're saying well course we could sell this or that and that's true i mean that's developers do they don't necessarily so buy and sell everything in a bundle or in a you know forty one acre tract but where does it say that you can do what you are talking about and retain the declarant right how do you get there what well are the contract i put together isn't a part of the contract that says they were conveyed back in two thousand to with the property it's been suggested by my colleagues that declared rights run with the land that were so why didn't they run of the land in two thousand and eight when we conveyed to our  well the fact is we conveyed them back in two thousand and two so when we came to the deed of trust and the deed of trust in that long list of eighteen items of collateral that boilerplate verse for the declarant rights it only says that what the claimant writes you may have we had none at that point we didn't have any to pledge when it came time for the sale the bank didn't notice the sale of declared rights didn't notice the sale of the trust estates noticed only the sale of the property the dirt these were forms and documents prepared by the bank with the exception of the settlement agreement that was negotiate but these other documents including the trustees deed were prepared by the bank or its agent title company they chose to tell us that they were selling the property under section ten point three point five of the trust deed that's it something that they were entitled to do sell just not a lot of law in either the ninth circuit or nevada specifically on declaring rights but there is this and i ran across this just this past week and looking in nevada there is a statute that says to transfer declare rights it must be in writing and it must be recorded if if you are a residential condominium under chapter one sixteen of nevada statutes or if you are commercial development that has elected to come under chapter one sixteen which you can do what chapter of the in the batteries that revised statutes are you quoting from chapter one sixteen but that is a specific area of transferred in writing and recorded if that's what they chose to do for that particular type of thing they thought was to do it for that particular instance but they did not chose to choose to extend that requirement beyond that particular regime and if we were to look at the old statutory pardon my latin expression six cheeriness having chosen to legislate in that area they're telling us that they deliberately know i i can't look into the minds of the legislature in nevada when you talk about section two point one on the settlement agreement sure because that's another one document that we need to interpret it's an it's a very significant document of course because this is the one that was negotiated and talks about foreclosure if we look at the settlement agreement starting with page two when it defines the deed of trust and it says what is concerned about is quoting here collectively the deed of trust covering certain real property located in clark county nevada the quote capital p property as more fully described in exhibit eight to the settlement agreement which is the legal description of the dirt that's how they reference the deed of trust then they come to two point one a where they say the lender shall without opposition foreclose or cause the occurrence of a deed of trust sale with respect to the d trust in accordance with applicable state law was for second applicable state law in this case is a little confusing because the deed of trust is governed by california law i guess i don't know why that same paragraph then goes on to nothing more than the capital p property section two point two conditions to the agreement reference is the capital p property over and over and over again what happens to all the other rights there unlike run the other vegas loadout are they did not foreclose on any of the collateral and they extinguished the debt so that collateral is no longer in cumbered to the extent there is any now for example that collateral includes carpets dishwashers elevators things that don't exist done on raw land because of it's a form presentation but nonetheless that collateral is all discharged of the debt because pursuant to the settlement agreement and the trustee sale when the hammer came down the debt was extinguished as they did the full amount of the debt so what's happened is the property passed but the remainder of the trust estate which was never noticed did not pass did not pass as a matter of law did not pass as a matter of fact though you're saying that in the settlement agreement effect there's this bifurcation between the land capital p property trust yes consistent with the deed of trust which split them into two piles and they only notice the sale of the one pile the dollar the settlement agreement doesn't say any of that this summit agreement uses the same capitalized terms and just like the deed of trust it defined the property with the attachment to this on the ground as the dirt there is not one reference in this settlement agreement to the and the declarant rights but you're not arguing ambiguity in mind i'm i'm trying to understand how you get to where you want to get to without using the word ambiguity well i'm not trying to run away from the word ambiguity please don't  what i'm saying is that rather than being terribly ambiguous to me it's rather clear that the district court acting as a appellate court erred in several significant ways not the least of which was weighing these evidentiary issues which i don't think is that i'm summary judgment is something either a trial court judge or certainly the district court judge acting as an appellant should do and i see you've completely run out of your time but that's because we have a lot of questions for you so i'm going to give you some rebuttal time but i'll add a little time to them if the bank needs it as well thank you good morning and marshal wallace i represent are a southeast which is the owner of this twenty three acres of undeveloped property that really is what in large measure this is about  glanced you're rich represent city national bank we're going to try to more or less divide our time equally i'm going to focus upon the first of the two arguments that charleston makes here but let's step back if if i may and make sure we all understand what is really at stake here this is that this case is about who owns these development rights and what are these development rights they are the rights that give control and discretion over how the property is developed and most specifically the undeveloped property that my client are a southeast bones they if you look at section three point six of the excuse me three point eight of the supreme court easement agreement it says all initial construction of improvements within the shopping center shall be subject to the prior approval of the declarant and also equally critically sections nine point one and nine point two of the same document give the discretion to the declar over permits permitted uses of property and exclusive uses of the property so that's really what we're talking about and what's the setting here what where does this really matter it doesn't matter  where the eighteen acres that's already built and know my charleston where it really matters is on the undeveloped land who is going to have the right to determine in the first instance how that land is developed and of course that is my client's land that's what we're here for what is the situation that comes to this court it is that these the undeveloped property in a very trust is pledged by charleston city national bank to foreclosure a person city national takes the land and then sells it to my client who paid very good money for it and what do we hear from charleston we are two things the two bases for its appeal number one that it secretly in an undocumented unrecorded and undisclosed transaction conveniently earlier gave those declarant rights to its affiliate that's mostly what i'm want to focus upon here the second argument that charleston makes is that when the after they defaulted and there was a notice of default recorded then they have negotiations their settlement agreement and somehow this very broad settlement agreement without any mention excludes those vital development rights that control the undeveloped property that is being taken in the foreclosure because it was secret so the first part of the  training they wouldn't come up during the settlement discussions right that's since it would be secret anymore so that whether it's face or not i don't think they would they would argue that if it's split somehow so could you address that because much of their argument is predicated on this notion that as he puts it the dart versus these other rights jordan and there's all kinds of authority in the briefs that we've given to you to indicate that these sorts of development rights these declarant rights are so intertwined with the development the building the determination of what will be put on to this undeveloped land and how it can be used and how it may not be used there are so tangled up together that they must run with the land let's show our strongest case under nevada law to support that proposition and you know that's a very good question and nevada law is you can say fairly bereft of any case like dealing with the clarence writes per say well i thought you said there was the plant the route of authority to support that position that's why i asked the question let's just strong case you know i did say that the most comparable case that is before this court is not in nevada case it's the in re arcadia case and that that case is essentially on all force it's from massachusetts and in fact this case is easier than arcadia it's cited in our briefs both city nationals and  se and essentially what happens there is there is a development and not only does the developer record declarant rights such as these but it goes out to the local city jurisdiction and gets glad i mean i'd only thing i'd say is ok but then if we have to go outside in nevada or possibly california depending on which document you're looking at then they cite colorado and a couple other places that whether their personal rights is is an issue that's a separate from whether or not they're personal property and must be memorialized in writing under the statute of fraud and i guess lately maybe i should have been more precise whether they run with the land is in terms of whether they're intertwined and run with the land which i think is your argument so that's one of our arguments  to be clear stepping back our argument is that first you cannot have this prior unrecorded undisclosed oral transfer of these things not just because they run with the land but because the nevada statute of frauds and in the case in the vatican recording statutes require that these this kind of a transfer to but that my ex the question as to whether or not they room with the man because the statute of frauds would only be triggered if they are deemed interested in realty well not not white because first of all there's a distinction between whether or not they're run with the land or our personal rights the rights and whether they are subject to the statute of frauds and what would render them septic to the statute of frauds if they are not wrong with them and are not real property interests so i think that's that's a i think a very straightforward question a very straightforward response let me just read to you the nevada statute of frauds it says no interest in lands ok that sounds like real estate what we're talking about or power over or concerning lands or in any manner related there to shall be assigned surrendered or declared unless by act or operation of law or by deed or conveyance in writing subscribed is declaring the same so that that part is very straightforward charleston would like that to be about whether these run with the land and whether their personal real property it's all a matter of whether they fall within that very end all and bracing you're saying that it is you don't have to make that categorization if in fact they fall under some umbrella of concerning the land you know i'm sorry your honor i just didn't hear your question i don't want to answer it your argument then is that the cat rization doesn't matter so long as they fall under an umbrella of quote concerning so so for the statute for the statute of frauds you just look at the statute and say do these fall within it how  argument affected by opposing counsel citation and reliance upon in r s one sixteen which talks about which he represents gives a specific instance where the nevada legislature had feared declarant rights must be recorded and our argument is entirely consistent with that and this is a new argument that we've heard but i'm familiar with the statute and it does apply to condominiums to simplify things what was implied was that there are some other statutory regime that nevada has and acted for declarant rights that apply to shopping centers or commercial property and that it doesn't say there is no such thing so he applied in a different context these statutes would have been acted to say so that's what i thought his argument was so i think that would be you reading way too much into the fact that there's a specific statute dealing w that five extra minutes already it and to me that one sixteen says you know here is the basic rule same thing as the restatements very clear you've got a rap i'm writing you have to record them so that supports our position that the same should be true for commercial property and you reset the clock please to nine minutes thank you may please the court lance jurist of loba globe on behalf city national bank judge davis you asked mr human ask you a good question are you contending that the settlement agreement is ambiguous and i'm not sure we got an answer there and i think the reason for that is is that charleston has waived that argument charleston took the position and this is in the record when it filed evidentiary objections to city national banks evidence in connection with the summary judgment motion before judge regal and e r six eighty two charleston says mr vick there try to introduce evidence of mr mckenna in an attempt to vary its terms the terms of the settlement agreement despite the fact that the instrument is valid  think it is he argument as i understood it is that sense the settlement agreement uses a capital p for a property that that means only real property so if that seems to me to be the heart of his argument on that would you give us your view yes your honor i started with a waiver that i think they've waive that argument to contend that it's ambiguous because they moved for summary judgment objected to evidence to explain that but i can't i mean it's hard to for me to understand their interpretation of the settlement agreement when it says that the lender can foreclose on with respect to its deed of trust a point i'm sorry two point one a is the hopper language there and i don't know where in this document it says but you can't foreclose on the trust estate and so i i'm having a hard time really we didn't limit what we were going to foreclose on and you would think if there was a secret piece of collateral that was supposed to be carved out of the settlement agreement it would be specified that would be a pretty material term so  i can't see how you could how anyone could read the settlement agreement to say collateral was being left behind your client certainly would not have proceeded with the supplement that been put on the table absolutely not no lender no rational actor would have proceeded correct it's so i'm trying to understand how how in the real world such a scenario could ever be accepted by a court your honor that that's where we come out as well when a lender and my my client loaned thirty million dollars on a vacant hunk of real land in the middle of vegas and took security and everything everything i don't think we could have been broader than our gary thing and the deed of trust is that deed of trust is the whole document right with all that's part of the definition of capital p property doesn't matter in the end under the settlement agreement whether you characterize the clarence rights as a personal property running with the land running separate from the land or some other way now your honor i had that the deed of trust pledges the entire bundle of rights the trust or the bar or pledges to the trustee that the title company that holds the entire the entire bundle of sticks holds those bundles of stacks as i promised to repay you the thirty million dollars if you don't pay me back the thirty billion dollars the sticks are going to the lender and one important stick is the right for a developer to build on its property so is the bottom line here that one or two sticks are held out and then and then the they get to sell those separately to the to the subsequent developer is that what's going on basically that's exactly is the it's a it's got economic value right we are making arguments here that we hold on to those right and if you want to proceed with the development you're going to dance with us right in the form of a big check correctly and that became clear judge do is obvious yet how these development agreements work is the developer thinks that it's going to develop the whole property and when you have a residential subdivision or shopping centers you don't always build a thousand houses that once you build ten houses at a mosque sell them ten more in a model sell those or in this shopping center you build the great american site and build the existing center and there's of a consent or and the r e a covers those types of situations and the  says and this what judge mckeown focused in on the r t a itself says those rights at the end of the day flow wendy the sale of the center occurs the shopping center there last interest in the center that's the vacant land almost always because the developer has built out everything else what's left the vacant land what do you need to build on the vacant land that declare rights so i under the or kiddie a case in that case i think it's even better for as we had a pledge of the declare rights in arcadia the lender didn't have a pledge of those rights and the court in arcadia said irrespective of that with a real estate foreclosure and those were personal rights in arcadia their personal contract rights even with a pure real estate foreclosure those rights were so enter grohl to the operation of the property that those rights went to the lender that of course that's a massachusetts case correct your honor correct your honor and and i think what can't be lost on the court here is the r t a is essentially the constitution it's there's no declare right that exists in nature it's it's a question of a contract and if you look at section seven of the are you a drafted by charleston they say they say that this provision says all all of the provisions of the are you a shelby covenants running with the land and equitable servitude pursuant to applicable law now one of the rights in the area is a declare right it's a covenant running by running with the land under the definition t charleston put in its own r t a what can you say about the case is the same the go the other way there are very fact specific and it's hard to get a general rule for as a person that represents ba the general rule that i notice from all those cases is when the bank forecloses on the developer the bank gets those rights that by charleston's a little bit they  don't necessarily say that it's not a personal property right they say the rights are personal to the developer so if we foreclosed on the developers interest charleston's interest we get those rights  concrete my concern or question is why does that matter i mean they cited some good cases and i want to read illinois i think colorado you have arcadia if you have this contract why does it matter it doesn't i think i mean that's what i'm just trying to make sure i'm not missing something you're not missing anything i really think that it ripped all of those cases and there's really not a lot of cases either way now all of the cases relate look to the agreement and that's why i'm saying if we look to the agreement and interpret this contract what is this contract say all provisions all provisions of this declarations shall be covenants running with the land i think that ends the o charleston so if you add two minutes for rebuttal thank you i'm going to cover several points just as fast as i can for excuse me if i speak real quick judge davis the bank wouldn't take these rights because they come with considerable obligations as you saw millions of dollars a year are spent but you also have to make some very critical decisions from time to time for example are they going to tell me when i can have a tenant in my existing shopping center revises building and are they going to tell me when i can change the requirements that apply to exclusively provision to allow for a second liquor store these are the kinds of decisions that a bank doesn't particularly want to take on if they don't have to and for one year after the foreclosure sale when they bought just the dirt they did never purported to exercise them it only became an issue when they chose to sell the property to our us and our us said oh i'd like to have the declarant rights in the bank then went back and said whoops that's where there's a rule that's where this came from statute of frauds was raised statute of frauds applies as a defense between the two people to an oral agreement if they dispute it it doesn't it's not a defense for somebody five years later application here we talk about section two point one and what's being foreclosed upon please remember when you look at that settlement agreement it starts out defining the deed of trust as relating to the property and then  there's no confusion they attach the legal description so you know it's the property when we come back to the point about the property and versus the trust estates imagine if you would that the collateral was something simple i pledge as collateral my boat and my ford truck i go into default you exercise your power of sale and you say i'm going to sell the ford you're stuck with that that's what you sold that's what the trustee stood at the auction and said i have for sale the following and they bid and the hammer came down and my truck got sold but my boat unfortunately i still have my bo