three two and i know that we i think previously before we start the clock and i think we have it set that it was six greed that i mean he would have three minutes is that correct ok so when you get all right right so we have the clock at twelve here and so i'm a key as i had indicated previously i'll give you three minutes so if he's take looks like he's taking more that's because we have questions family law and i've always said that the intersection between family law and bankruptcy is a train wreck this is times just simply don't play well together and there's a reason for that or multiple reasons for the the first is that the family law system is and community property in particular isn't even based upon english common law it's based upon spanish law and it's designed with a particular motivation this was pointed out by the bankruptcy appellate panel and their decision in my brief and that is to weigh and balance the respective rights of the spouses in that dissolution proceeding and that's primarily the focus of family law as a result there are certain presumptions that we will be discussing seven sixty as well as twenty five valerie did not reject application of the record title perception intercede section six six two and bankruptcy proceedings how can we find as you argue that valley does not apply to bankrupt  bankruptcy proceedings where it rejected the holding of a case and re summers and that was all about bankruptcy your it's not a it is bankruptcy but it's there it's the rights of third parties versus the rights of spouse advocates a bankruptcy case in the valley case there were two very important distinctions first of all they were dealing with personal property and as a result the other denture e presumption of sixty two of the evidence code which only applies to how title to real property is taken was not under consideration that they were talking about personal property secondly they were talking about property which had been taken by one spouse as their sole and separate property and whether or not the other spouse was entitle to an interest in that in connection with the dissolution proceeding and as a result the protection of the innocent spouse which is the substantial basis for seven sixteen the presumption of community property is to protect the innocent spouse from overreaching by the by the debtor spouse by the non title holding spouse case because they were dealing with personal property and six sixty two only the presumption six is going to only applies to title taken to real property they didn't address sixty sixty two and they say they didn't address sixty six six sixty two  in a concurring opinion they go so far as to say we don't address the situation of the rights of third parties to that marital property act all right i've been a concurring  i've written concurring opinions and when i would check on it it wasn't the majority holding so how do i you arguing that what was said in the concurrent position is there for the majority holding no your honor i'm saying that and the answer is valley silent on that issue value didn't have to address that specifically did not address that and in fact it was inapplicable to the facts invalid because we were talking about a life insurance policy not title to real property additionally as i've indicated we're dealing with joint tenancy property they were not dealing with joint tenancy property and joint tenancy property is a very specific has very specific characteristics to it in state law which go beyond any dissolution proceedings and the rights of the spouses between that there's a case which i did not cite  because i was not i didn't find it until recently called peter versus smith one o four callup fourth six forty five the two thousand and two case and in that case it talks about the distinction between joint tenancy property and the rights of creditors against joint tenancy property as opposed to the rights of creditors against a tenant in common pop and it's held us tenants in common and specifically the holding on that case says that if there's a judgment lien against one spouse who is a joint tenant on property that lien only attaches to that spouse's interest in that joint tenancy property further when that  spouse dies that lien disappears it goes away because it only attached to one spouse's interest in that their fifty percent interest because it was held in joint tenancy if the court points out it had it is held as tenants in common then you don't have the same result in that case the lien continues to hold on to it will although the bankruptcy pullup panel said that we need clear rules of the road by extending valid outside the circumstances of the facts in the case and that is personal property and right that's correct your honor but they did they'd like this court and most courts of appeals limit their decision to the facts involved in the case they felt it was essential to criticize this court's ruling in red in re summers summers summers went on to say and transmitted taishan provisions of section eight fifty two are satisfied by the manner in which title is taken it was that provision of the summer's decision which they were critical our act criticized summers your argument would have to be stronger i mean criticise summers than we've got to decide what are they saying there and whether the two can be reconciled and whether invision summers as a house they drove a bulldozer right through the middle of it some of it was taken out explicitly and expressively but what was left was so fragile that it fell of its own accord and that's basically what the bankruptcy appellate panel held and i think what judge callahan was just asking you know when they criticized it they kind of took the brunt the wind on that brought the the rest of summers down  you're arguing well not really not not at all your honor they were very specific in their in their criticism and it says we question the decision in re summers based upon summers finding that the provisions of the transmutation statute eight fifty two did not apply in cases where in there's a does not apply in cases where in there is a  they found that summers did not apply because some are said in cases where entitle is taken from a third party the transmutation statute does not apply well they did more than the distinguished they criticized it i think that in looking at it looking at the summer's decision have remembered now the federal court in article three federal court whether it be a district court trying to opine what the ninth circuit might rule in an area where the ninth circuit has ruled or the ninth circuit attempting to apply and what the california supreme court or some other state supreme court might rule when the actual court whatever it might be whether it be the ninth circuit or the district court situation or  state court makes a ruling and then criticizes the ruling that that's not good because it is that is the best we can do is guess we make the best guess or your honor and that's and that's in essence what the court did in summers it might be and it was called upon in the summers court because it was called upon to rule on an issue of state law based upon state law that had not previously been ruled upon  belief from and counsel and and in essence what my argument some substance of my argument is is that it's now this court is now being asked to support the bankruptcy court in the bankruptcy courts decision took valley and opened the door to it in essence both into bankruptcy into as i pointed out my brief into the effect of in probate proceedings the rights of creditors all the other conditions where in salvo property in the end whether or not is determined to be joint tenancy property or community property where in all the rights of the of the parties third party to that are at issue now if we open that up and extend that out can be reconciled with valley and here's why summers applies in bankruptcy and valley applies in family court the problem is when you try to switch them around they make no sense in each other's courts the family code cannot be picked apart it has to be read holistically well as actually it was a family law case yes exactly but we still have to ascertain what is california law in this case he talks about summers and summers was a bankruptcy case exactly where and i understand now that it's unfortunate it would be easier if there was not some intersection but look what happened in valley of the valley court had at its disposal the entire family code and in the family code there are provisions that counterbalance each other so for example there's spousal support there's credits there's  those things and if you look at what the disposition of valley was it went back to the appellate court to decide whether or not the spouse who is now descent titled was entitled to spousal support because she should have been the beneficiary on the insurance policy but in bankruptcy court there is no such option you can't just take one presumption out of the family code and put it into the bankruptcy court and say that decides the issue and now we're done because if you do that is going to look at this person this lawyer hopefully not me and say counsel this isn't a family court and nobody's getting a divorce there is no pending feel the court case what are you talking about you can't do that we're just deciding  court can speak to title and all of that in cases other than family law absolutely wonderful of course the can and but that's why i said the issue precisely before them in this case however they recognized that there was that the ninth circuit did have an intersection in this area and they talked about how we didn't get it exactly right what they talked about your honor of was in california law yes and what they talked about was that the way the ninth circuit decided summers was to talk about the fact that the transmutation statute did not apply in the contest of title being acquired as joint tenancy that was what they took issue with and that in the family court context is the right decision it's in the bankruptcy court context it's a whole different kettle of fish because in the bankruptcy court context there's all these other things that come with the family court presumption that don't go anywhere in bankruptcy court so the spouse that has now lost the separate property character has no remedy ok well you're already over your time  wrap it up in a minute well you are split just i want to make the point that a bankruptcy court is a very different place than the family court and in the bankruptcy court in this particular case there was no dispute between the spouses there was no reason to say we have to protect the spouse we have to apply all those principles of the family code we have to make sure there's no undue influence which was very important to the value court none of those principles apply and so this decision actually does injustice to both the policies the underlying the family code and the bankruptcy code because the bankers hoard is concerned with the rights of debtors and creditors and the right to a fresh start and so this debtor is now confronted if this quarter in certain with certain weight designated in the title in a way so that they can avoid the state having access to it absolutely your honor and you know there could be people that do that and your honor there are specific code sections in the bankruptcy code to address that and those code sections have statutes of limitations and so what happened in brace is that they got to that issue years after they should have been able to because what you're talking about or avoidance powers so if there's a fraudulent transfer issue section five forty it if it's a preference section five forty seven you can even go under the california uniform board of transfer act and five forty four but there are statutes limitations for all of those this issue gives the trustee in bankruptcy no statute of limitations i can simply say as trustee you know i think that property i think it's community property we're to have to get into all these other issues we're going to have to see if there's under influence we're going to have to decide all sorts of questions that are unique to the family code when really it comes in as it comes in and that's why in the bankruptcy code says that the bankruptcy estate property includes all the interest of the debtor and property as of the petition date and the bankruptcy code also specifically includes community property that has not yet been divided and the chapter and essence becomes the representative of the bankruptcy estate and stands in the debtors shoes so the question about whether something is an estate asset are not depends upon what the debtors rights are in that property and the trustee stands in those shoes to make that determination so in this case the debtor had fraudulently transferred title to three pieces of real property and the bankruptcy court concluded that after a trial and there was no form of title presumption as of the petition date the debtor had long since fraudulent only conveyed that property so the bankruptcy trustee avoids the transfer as fraudulent and then the question becomes what is the character of this property is it community property and therefore subject to the payment of community claims which is what the family code section nine ten says i guess i get excused because like i want to be sure that i understand this my understanding is that it's undisputed that the specific requirements for transmutation of the property were not met that there was nothing in writing which is i mean that basically they said they transmitted the property orally and that doesn't your requirements is that right that is correct your honor however there is a distinction and a footnote i'd like to point out and that is that these properties were acquired prior to one nine hundred eighty five which is when california amended family code section eight fifty two to require the witnesses and found both mr and mrs bray's who each had their day in court as defendants in this action and as an appellant in this proceeding and the trial court did not believe a trance mutation had ever took place that issue and that conclusion is not being challenged  says all property acquired during marriage just presumptively community unless the transmutation statutes apply valli specifically says as between spouses we're not sure six six two of the evidence code ever comes into play but it certainly does not when it conflicts with the transmutation requirements so what appellants would have this court do is write an exception to the clear bright line rule established in valley that you don't need a  you're relying upon the evidence code section presumption that somehow that how would that go with fraud know if if they if it if they take it in joint tenancy then they don't have to do their asking to not have to deal with transportation but what if they took it but what if they were doing it for only a void is that find that acquisition but the form of title upon acquisition was controlling without compliance with the transmutation statutes and valley makes clear that that is not the long california well certainly also acknowledge those specifically that in re summers is a bankruptcy case so how do you deal with the fact that the court's opinion and valley recognize that they are contacts is a marital dissolution case which has different policy interests and different considerations and that some or so while they did criticize the broad statement in summers concerning transportation they specifically recognized that that was in the bankruptcy context and that given the fact that value was dealing with merit of dissolution they're not going to reach the question of evidence code section six six two but this presents a different situation because here we're squarely in bankruptcy to him but we're squarely in bankruptcy land but it's the trustee standing in the debtors shoes here thirty probably would be extended to bankruptcy cases absolutely i mean which is valley doesn't completely answer the question so you're asking for more you're asking for us to say this is what california this is what they would have said had they had this exact issue that is correct your honor and the reason it's a good kind of just have to make it there's a difference between something leaves no wiggle room and something if you're asking us to interpret it in a way and i understand your point ron and i agree with your point we have to extend the valley slightly but not very far because the bankruptcy trustee is standing in the shoes of the debtor spouse but i think both judge win and judge helen hit the nail on the head basically what we're being asked to do by both parties is although with with different perspectives obviously is to do exactly what the summer's court did and that is to make an educated i hate to use the term guess although that's the term that's used in the law as to what the california supreme court would do under the circumstances think i agree absolutely that's that's what both sides are asking the court to do now that we have valley what do we do with the valley in a bankruptcy case what about certifying it to the california supreme court a certainly that could be done i know it was recently done in the reynolds case with regard to whether an interest in a spendthrift trust was property of the bankruptcy estate or not and the supreme court accepted the certified question so that is always going to be an option for you but i don't think it's a very big leap are much of an extension to say that the bankruptcy trustee is standing in the debtor spouse's shoes and whatever the debtor spouse's property rights are are assets of the bankruptcy  valley in any way address the situation of which presumption should trump when the husband and wife interests are aligned because normally in marital dissolution proceedings you're talking about a clash of spouse aligned against the bankruptcy trustee so dismantle the address that in any way and where in the opinion can i look to for guidance on what the california supreme court would say about that the valley opinion does not specifically address that your honor however what the valley opinion says is that evidence code section six six two does not apply to determining the character of marital property when the transmutation statutes have not been satisfied no it says evidence code section six accused form of title presumption we need not decide whether it applies in marital dissolution proceedings so it doesn't address what happens if you take it out of the marital dissolution proceedings and all the implications involved in marriage we salute this solution proceedings and you're putting it in the bankruptcy context but to go back to your question also about where the interests of the spouses are aligned in knotting conflict both spouses had their day in court to present their testimony and to try to prove the character of this property and the bankruptcy court found that they did not prove that this was separate property interests the bankruptcy court specifically said that they did not do that their evidence was not credible and that they had failed and they did not get the six hundred two presumption i don't have to figure that out well and again to the extent that the court is concerned the valley doesn't go far enough and you're wanting to look at the six hundred two presumption i again think it's important to keep in mind that property rights are determined as of a petition date and bankruptcy and as of the petition date in bankruptcy this property wasn't held in joint tenancy i don't think six six two applies at all this property h entered the debtor fraudulent he transferred the his ownership interest in these properties to his spouse so when he then later has a default judgment entered and then files bankruptcy there is no six six to presumption to apply with respect to joint tenancy property that had already long since been transferred out of joint tenancy the bankruptcy trustee then avoids and recovers the transfer that leaves the bankruptcy court with the challenge of determining the character of this property which is not in joint tenancy because the debtor had transferred it out in the bankruptcy court then looking at all of the evidence looking at what valley says looking at valleys criticism of summers that it's unpersuasive with respect to the only evidence that this is somehow separate property not community property was the form of title by which the spouses acquired the properties way back in the beginning and that under those circumstances the bankruptcy court did not find that to be credible evidence and with or without a six hundred two presumption the court found this was not community separate property and that this was community property what about the argument council that we were to honor the law has not changed at all and would not change at all with respect to community property being subject to payment of community claims which are claims that arose before during marriage separate property of the non debtor spouse is not liable for the claims of the community when that particular spouse that owns a separate property is not also liable on the debt none of that has changed the only thing that would potentially change is the holding in summers and that is when you're determining the character of the property in order to figure out does it go into the bucket of property that is subject to payment a creditor claims or does it go in the other bucket that's not how do you do that but the ultimate law has not changed at all so in this case the supreme court in valley has made very very clear a very bright line rule a very easy for all to follow that if it's acquired during marriage it's community unless you comply with the transmutation statutes in the form of title upon acquisition does not control and is not dispositive so if you have spouses that own title is joint tenancy and they thought oh i wanted this to be separate property interests they have a very easy fix that go comply with the transportation statutes and the law in california is very clear the transmutation statutes don't require anything fancy it requires there to be some granting language where you clearly are conveying your interest away and so parties can do that no one page agreement parties can record some new deed that takes it from joint tenancy to something more descriptive in the title we're transferring our interest as community property to husband wife who are taking who are married parties taking title is their sole and separate property very easy for people to comply with the transmutation statutes and get a result that the a miki and that the debtors are arguing here but what the debtors are wanting to do is get the benefit of a rule that has no more basis in law that there's some exception to property acquired during marriage is not community in the absence of complying with transportation statutes there's simply no such exception in the family quote code nor should there be because it leads to mischief it leads to spouses coming up and saying things and retroactively changing their story if somebody wants property to be transmitted comply with the transportation statutes very easy to do you can get the result that he wants to go after it is fraudulent wrecked and then there's there's actually california and circuit level decisions that say marital settlement agreements are subject to avoidance is fraudulent transfers court decisions dividing property are not subject fraudulent transfers but agreement between the spouses are so if a spouse had title as community property or even joint tenancy and did some kind of a transmutation to change the character and make it the separate property of the spouse who doesn't have the creditor problems now you've invoked the fraudulent transfer statutes and now the statutes of limitations might come into play as counsel suggested but unless or until you get to the transmutation statutes and comply with those requirements it's all thank you ana two points first of all with respect to the character the property as joint can and see in but in terms of this case the effect of the fraudulent conveyance decision was to reverse the transfer from j tenancy into the trust and bring it back to where it was probably ante which is joint tenancy so what's good for the goose is good for the gander they won the fraudulent conveyance action which took it out of these trusts but what it did is it returned it to its position pro ante which is joint tenancy and that's what the court found that's what the bankruptcy appellate panel upheld the key really is the difference between the two courts the two purposes one is the rights of the parties in domestic action between themselves that's valley the other is rights of third parties which is the whole panoply what the court indicated is my horrendous reasoning and how it would affect the administration of trust in the states if we were to apply the presumptions in family court outside it opens up the pen doors box in terms of what creditors can seek to do as i've indicated and the impact on to the unsuspecting community which has taken title and it's taken title hundreds of thousands of times in california joint tenancy believing that they were preserving each other's respective rights against the other person's creditors now this would throw that out the window as well and you would have creditors coming in seeking to impose a judgement on joint tenancy property as to the entirety of the property arguing valley and brace and saying it applies those presumptions apply to third party disputes and box that i'm concerned about if you if in the absence of fraud if there's fraud all bets are off correct and he should be the way correct but in the absence of fraud all these people have to do to avoid all the consequences that you're talking about is follow california's statute with regard to transportation then they protect their assets the absence of fraud in the absence of fraud in the beginning and in the  fraud now because if they did it now first of all you're asking hundreds of thousands of unsuspecting couples who are holding property as joint tenancy with the expectations which have been in place throughout california case law i've gone through california case law at no time has the joint tenancy property of a non debtor spouse been subject to the debts of the debtor spouse and a solid rule in california that goes back into the one nine hundred thirty s it was it's picked up in the summers case it is law on joint tenancy and the rights of third parties you're pending that now what do we do put out a notice in in the newspapers and say everybody who holds that go down and change it and do a transmutation of your