very lucky to have her with us and we are especially grateful that you're willing to fit on the search for work glad to be here all right we will hear the cases in the order that they appear on the calendar and the st case has been submitted on the briefs so we'll move directly to the nd case which is barnes versus chase home finance and of counsel for that case ready to  proceed thank you your honor may have please the court my name is elizabeth weinstein of yarmouth l l p appear on behalf of mr barnes and i'd like to reserve three minutes for a bottle thank you mr bryant has lived in his home for almost thirty home and with the contingency that he take out a loan that court termed it a refinance loan to take his ex wife's name off the mortgage deed and to pay his ex wife a property division judgment that loan is the subject of this appeal because the district court erred in finding that that was a residential mortgage transaction not afforded a right of rescission by teela the reason for the district court's error was that they failed to take account of the oregon state law that provides that at the time of a marriage dissolution property is considered jointly owned because of that joint ownership mr barnes was an owner of the home he the loan was to fund his buyout of his ex wife's interest in that the organ supreme court specifically contemplated such ideas as one party to a marriage taking title of a piece of property and then and what would happen at the time of property division that those sorts of of and the purpose of tula to as we all know it's a consumer protection law and yet congress excuse me understood that certain certain borrowers are vulnerable to predatory lending practices and others may not be so a residential mortgage transaction is a carve out for the sorts of borrowers who are not vulnerable to predatory lending practices the language of the statute is it affects or it applies to borrowers who are acquiring or taking out a loan to initial for the initial construction of a home those are not thought to be vulnerable and the fact and in fact the statute puts the word initial in front of the construction part that's not in front of the of the part about the l itself right that's correct and any case this court is not considered this issue per se but the case that i cited in the briefing out of the eastern district of pennsylvania goes into the legislative history and makes clear that congress contemplated certain types of loans such as a home repair loan being the sort of a loan where predatory practices are prevalent and that sort of a borrower is vulnerable here if we look to mr barnes it's clear which camp he falls into he was not a buyer  was shopping for a new home who went to a bank to take out a mortgage to buy a new home at his leisure at his discretion he is a kin to a borrower for a home repair loan in which a bad thing circumstances happen to a home and  moment you know he had title he quit claimed it to his wife and now he's getting it back to so he's going from you know having no ownership interest to acquiring an interest what why isn't that an acquisition i would argue your honor th acquisition implies the initial purchase even though that term initial is not part of it he the statute seems to mean a buyer who has the liberty air has an interest in buying a new home goes out to take out a of this case and imagine i have thought of all where you know he has a house and independence oregon gets offered a job in new york city and so he sells his house and goes to new york and then you know ten years later he says you know i really miss oregon i want to go back home  and luckily his old house just happens to be on the market so he buys it and comes back is the loan that he takes out when he buys the house the nd time is that a residential  i i think that's a harder case to make i understand your honour's proposition that in both cases he had been a prior owner and now he is not an owner the difference between the two circumstances is this notion of dress the  the it's outside of his control whether he was taking out the stone in order to keep his home that he had lived in that he had consistently lived in during the period and so i know that is a harder case i don't know if that is here it seems clear that the language  should apply to him that he is the sort of person that is trying to protect the congress was contemplating someone like him and i'll add that the in effect the proof is in the putting he does claim that he was subject to predatory practices he didn't have a lot of options at this moment in his life and he was let me ask you when you're dealing with title on land we usually have somebody have title but they don't have title you're not suggesting that this would depend on the factual circumstances as to whether the tourists or predatory practices that that would in fact change whether the person own land or didn't go online no your honor i'm not suggesting that and i'm trying to make a point as to what the purpose of t l i is and why this is a vulnerable buyer who is within the definition or actually in this case without outside of the definition of a residential markets transaction again i know the panel's not interested in the oregon law the oregon law i'm very interested in oregon so once you're done with this our book for you to the oregon law does make clear what the how title you know whether or not title creates ownership interest during the time of marriage at the time of dissolution we have on the books is to is to minimize the effect of title during during the property division process and that that's from the engle case in the navy verses department of human services case the court goes on to say the purpose is to to prevent adverse legal effects at the time property division thank you at the time of property division in that case there was an adverse tax in fact due to one of the parties to the marriage dissolution taking ownership of the property at the time of the dissolution here this same theory applies  protected by this oregon law as the oregon state legislature intended and he's protected by having a right to rescission but the fact that he's a joint owner at the time of that property division regardless of any quick claiming that took place during the marriage  pelleas proposed that it would be too onerous for state law to be applied in this federal statutory context and i point this court as i did in the briefing to the specific reference of the application of state law to undefined terms it's not too onerous and with respect to other state property laws being applied in federal statutory context that happens all the time in bankruptcy context and tax cont t so it is in no way too onerous to be applying the state law very clear state law into this into this provision and with respect to the police argument that there might be some burden on the lenders themselves to have to look into state laws i would propose that standard due diligence process would take this into account necessarily and in fact in this case the pelleas of the documents at the closing of the closing documents show that  paragraph the following definitions upon him so it seems the most natural reading of that seems to me that that's structure that governs you know how the divorce court is divide up property and it's not shouldn't be applied to determine the rights of rd parties what's your answer to my answer to that your honor is that even the supreme court oregon supreme court cases cited show that there is an intention for this law to be applied outside of strictly the dissolution process i'd also make an aside this is a dissolution process so we're right there where in marriage is a solution but this notion that that the tax there is a tax burden on one of the parties in the neighbor says department of human services case takes that statute right out of marriage dissolution and into tax law that's just what we're doing here we're taking it and applying it to just the same way you do happen to know this one of those organs supreme court cases i think you cited basically offered a hopeful prediction that for federal tax purposes this statute would kind of solve the problem and so that whichever spouse is going to take the hit would otherwise take the hit is not going to do you know is that how the federal government has treated that good morning may please the court kevin koe no four defendants trace home financing chase bank usa i feel it does not draw the distinctions that point of counsel is arguing with respect to residential mortgage transactions the distinction draws is between financing the acquisition of a property via title or not financing the acquisition via title title is the key of this case is about a borrower who st to teach it reasons have divested himself of all right title an interest in the property years before this transaction he then he took out this loan and borrowed money from chase to finance the acquisition of title there is no right to rescission under under these circumstances here mr barnes took out a loan to finance a one hundred one thousand dollars payment to acquire a statutory warranty deed giving him title to the property that's not a refinance because he started without title and he ended with with title that's a residential mortgage transaction that is exempt from rescission requirements that of course assumes that this oregon statute doesn't have any play in this context and i guess i'm i'm not sure why would we assume that well st of all the oregon  doesn't talk about title at all and we look at the staff interpretation of the meaning of acquisition it focuses on the idea of title or not so st the oregon statute doesn't address title nd and if you want to step back and kind of walk through the whole statutory scheme it's important to remember that oregon is a separate property state not a community property state so and that's important because if we're going we're a community property state then what well i think there are cases out there that t about the spouse having an existing interest and i don't know the law of other states and community property and how that impacts title if that community property right rises to the level of some sort of title interest then that might be important i bet that's  state because i view this statute as a sensually conferring on the non title holding spouse the same kind of community property interest that would exist in a community property state as of the date that the vision for dissolution is filed it seems to me that's exactly the intent of the statute and so if if i think you're wrong in the community property context you try to say well this is a separate property state but i think unfortunately for you this statute actually kind of converts whatever the marital assets are regardless of whose name title might be held in into the assets of the marital community so i don't think it quite does that and i think the neighbors department of human services case from the oregon supreme court is very helpful to explain more specifically how this statute works so it starts with the proposition that oregon is a separate property state not a community property state so before dissolution proceeding there is no spouse holds no right in property titled in the other spouse's name then it walks through and it looks at the application of this species of co ownership interest and it explains as counsel alluded to the purpose of it is actually very specific and both nay and the angle case talk about this and it is simply to respond to and this is set forth more fully in the angle case to respond to event existing court of appeals opinion that had tax consequences in so the legislature added this species of co ownership language for the very specific purpose of making the transfer hopefully a nontaxable transfer under federal law but the nakedness walks through and talks about when this species of co ownership concept arises and it only arises if the court chooses to make a particular disposition in its dissolution judgement we're talking about a statute here that is about what can go in the dissolution judgement and then making a property division that is just improper under all the circumstances and what  property acquired during the marriage is held in one spouse's name and the presumption of equal contribution is not rebutted and if the trial court awards that property to the other spouse then the property is treated as being held in a species of co ownership and the award is considered a division of jointly owned but that's what happened here that is what happened here so how does that help you well because the focus is on title ok that's that's how you how you acquire property is through title  there's not a single case that the plaintiff has pointed this court to in which there was a rescission right that residential mortgage transaction case that didn't involve the question of title do you know what the rule is in community property state i don't know what the role is in other states because we're dealing with oregon as a separate property state right but ok well i'm just i'm quite skeptical that you're correct that this formal whole you know who's who in whose name is title held as controlling for two a purpose i doubt that's true and community well i can tell you that the plaintiff has appointed you to any authority that supports that position you have a point that's why i'm just surprised that you don't have authority that says you know in this other context maybe it's different but here this is why it's so critical that's that this is a separate problem right well because we focused on the very specific and unique body of law for oregon and marital dissolution proceedings and i think the name is one case that shows that it's really intended to have a much narrower purpose and there is no case that you know counsel said that the oregon supreme court has said that these concepts apply outside of dissolution proceedings and there is no such case then i think tax the tax consequences it's a rd party just like the just like you guys are isn't it creates a concept of division of property and that is within the statutory proceeding and then the federal government will do what it does with respect to taxes on that so you know what the federal government does i don't i don't know the answer to that question either i think our argument is look acquisition depends on title because there is no other way to tell who has title to the property and it gets to that your question is how do you judge who holds an interest in or again if it's not title how how is all you're being asked to do is and it will remind me that i'm not as familiar with the statute as you are but it's not burden on you if you just make the assumption that you know both of these people are deemed too onerous it's not that onerous as well and here the notice of right to counsel was given in the staff and so i mean you made the argument in your brief and i think it's a good argument that well my goodness if you recognize this sort of unrecorded interest in property how in the world are we going to know all these other and i guess to my my what i was thinking when i read that is that that's true but here what you would do i assume is just say ok look we're in oregon just like if we were in california as a community property state we're just going to assume that both spouses or have some kind of an ownership interest right which is there on the side of caution and you just give the notice that can be done for purposes of giving a notice but it doesn't create a statutory right where none exists and you know i know where you are what we're trying to figure out is whether that right exists part of your argument is that please don't recognize it because it will be so onerous be such an onerous burden on the us as lenders and i just think their response is no just err on the side of caution like you did here it's not going to break the bank so to speak write if you have to do that i'm that that isn't that the response that this isn't good enough when we can have it gone on lenders nationwide if we recognize wealth interest but then we may end up in a circumstance like this where there is no underlying right the notice was given an abundance of caution and now we're in litigation years later over the existence of you know and i'm not i'm not i'm certainly you're right that just because you gave the notice doesn't control i recognize that i'm just saying that it seems to me we could hold here that  notice just like if you can i bet if you talk here folks who do deal with this in california i bet they say don't focus on who holds title just assume that both spouses have a fifty percent interest in the property so just like in transaction even though there is no right to rescind that lender should be giving all of these disclosures in the notice of right to cancel on the possibility that some dissolution proceeding has been been filed that would that would change the whole fabric of  residential mortgage transaction lending in oregon it would it would create this notion in borrowers minds that they have rights that they don't have that would arguably create contractual rights when you give a notice of right to  cancel when there is no right that exists under the statute you're i was pretty clear that you have the better of the argument on that point just because you've given us or notice doesn't somehow and maybe i'm misunderstanding your what you're postulating here is the idea that lenders should just give these disclosures no matter what the possibility that there's a dissolution proceeding that's been filed in my response is yes that would then require a lender in every transaction to give a notice of right to resen right and so if that's the case then you're imposing on lenders other obligations not only just to make the disclosures but you're creating in the borrowers an argument that they have some contractual right to rescind three days after the loan consummation because they've been given this document that says you have a right to resend within three days even though it doesn't exist and so that rule seems to me to impose an incredible burden on the on the lender could you solve that problem just by asking the the prospective  transaction is it's when you take out a loan to finance the acquisition of the property and again the staff interpretation is entitled to great deference and it doesn't give any inkling that the notion of these  potential co ownership rights would fall within the scope of acquisition it talks about full legal title that that's that's the reference to ownership interests in the staff interpretation that we cited or you're referring to  it your position would be even if there is a species of co ownership that wasn't something that he purchased that's correct it's has to be both purchased and acquired and again that's in the staff interpretation that's in title to deference and so that's another point that we made in the is this co ownership interest is not purchased and we cited cases that apply that staff interpretation to say it's a residential it doesn't take it out of residential mortgage transaction even if you have an interest if it's not both purchased and acquired and so this marital asset interest is co under schip interest still falls outside of that exception because it wasn't it wasn't purchased it arises by operation of the statute if it arises at all and more specifically it arises under the statute and only if the court makes a particular property division so again under that regulation it's it falls outside the scope of the exception  alleged violations began in october of two thousand and ten october rd two thousand and ten is the latest date that you can provide for a notice of intent to rescind and fannie mae was not added to this litigation until hasn't been addressed no court has seized on this because obviously if we don't get to a violation we don't get to the discussion of damages and so to the extent that i think that's also been suggested in the in the reply is that this is already been discussed and it hasn't because we haven't got to damages but but i thought her response was that you all did try to get out of this case i couldn't remember if it was on this ground or a different ground and our court kind of in a footnote sort of you guys down well what the court with the court was focused on was was there was a confusion as far as the identity of house a terrorist and fannie mae related and how the ownership and creditor i don't believe that from my reading the court did not get to the specific issue of whether or not any damage claim was i don't think it can get there in theory until or it didn't feel the need to get there until it determined whether or not there actually had been a violation and my point today is to say it doesn't matter whether there's been a violation because even if there has been there 's no damage claim that can survive the strict reading of six hundred and forty dollars eat with respect to sit terrorists they're not a creditor they are a loan servicer they're not covered under this provision so again damages against a party that is not defined as one against whom damages can be sought wouldn't be appropriate or girdles of how the discussion of the rescission comes off ok thank you thank you sorry  just i forgot that this was the case for the so you've got two minutes and forty four seconds here to address my colleague's point regarding the statue limitations another excuse me and another date to consider is that is that mr burns was not notified of the assignment of this loan until january of two thousand and eleven so this notion and in fact although the took ownership of the loan and when mr barnes was notified of that he couldn't of be couldn't have added them to the lawsuit intil he knew that they were involved one additional point with respect to the conversation judge miller was having regarding the statutory language about purchasing and acquiring the that that regulation regulatory language the regulation notes had previous had previously purchased an it pretty clear what they mean is purchased an acquired a can still had some interest not purchased and acquired at some point and then totally gave it away by quickly i'm not sure that the cases make that distinction and i'm not sure why i needs to make that distinction with respect to a person in this situation where he's involved in a dissolution of a marriage and has resided in the property and has has contributed to the property the entire time i understand there was a quit claim and i understand that that has a legal effect and of course we have the whole other argument of the oregon law and the time of the property division but even notwithstanding that law here he behaved as an owner of the entire time how do we know that how do we know that means she got the property he quit claimed it to her but it was that's correct your honor it was their marital home he lived in it continuously every aspect of their  of of his you know of his living in that home was was the same as it had been prior to the quick lame and there's reason to i don't and i don't see a reason to read into this extra textual requirement of continuous ownership throughout the time period in a circumstance like this where a borrower has has lived in the property the entire time thank you thank you very much kids just argue