may please the court counsel my name is john brocky and i represent the appellant steven and karen mccormack in this appeal the procedural history of this matter is somewhat complicated however the essence of the posture is as follows my client's the mccormick's file a chapter eleven bankruptcy case in september of two thousand and thirteen the appellee stari and financial was one of their secured creditors stari sought to include as part of its secured claim in this case the attorneys fees and costs that it incurred during the course of the bankruptcy case the mccormick's objected the bankruptcy court allowed star in sfi claim only in part the central issue in this appeal is one of law the standard is noble review the question is given the uncontested facts can star in claim a right to attorney's fees under eleven approximately two million dollars less than the debt owed to star you however prior to the debtors filing of their bankruptcy case styrene obtained a two money judgments against the betters when those judgments were docket under north dakota state law they became liens and certain real property of the debtors and when the bell you of the property subject to the judgment liens is added to the ballet you of the consensual security held by star and starry and becomes an over secured creditor now under the language of eleven u s c section five zero six b starring can include its attorneys fees as part of its secured claim if the right to those fees is either provided for in the agreement or statute under which they allowed secured claim arose now as far as statute nobody disputes that north dakota's judgment lien statute does not provide a right for the judgment creditor to recover attorney's fees and with respect to starr ins argument that there is an agreement in place again it is uncontested that it's over secured status arises only by right of its judgment lien and every court addressing the matter want to jump to the what made them over security and why isn't the proper agreement to look at the initial loan agreement where they did agree to pay it or anything that is exactly star eons argument stari and is asking this court to say don't concern yourself with the documentation or the statute that creates your secured position concern yourself only with the documents the create the debt and that's why star in its brief to this court cites twelve separate loan documents that all provide for recovery of attorneys fees but when you look at the language of eleven u s c section five zero six b it doesn't talk about the agreement or statute that creates the debt it talks about the agreements or statute that create the secured status of the debt and let me give you a hypothetical let's assume in this case we were confronted with a situation or debt instrument its promissary notes allowed for recovery of attorneys fees but its security documents made only principal and interest collateralized did not extend to attorney's fees if that take the hypothetical one step further let's assume as in this case we have a series of ones but we have separate collateral and on some of those loans both the debt and security documents allow recovery of attorneys fees but on other of those loans the debt and security documents do not allow recovery of attorneys fees again i suggest that no one would dispute under that hypothetical that not be in over secured creditor under eleven u s c section five zero six b when you look at the proof of claimed and the does reference the guarantee of mccormick's which then transformed into the confession of judgment that then landed into the judgment lien does that does that bring those in and if not why  i look at the gar and t is a separate contract apart from the promissory note that's an instrument of debt and so the governor and t are debt instrument that provides for recovery of attorneys fees but there is no security provided in the guarnteed so that's what we want to fall of the language of five zero six b but let's take it further the governor and t s morph into the confessions of judgment the confessions of judgment than a result in the judgments there's nothing in the judgments that provide for recovery of attorney's fees no star in could have negotiated that had they chosen but they did not and we all know that under the rule of merger once judgment is entered everything behind that judgment merges into the judgment and so everything in the garden tease the confession that sutter emerged into the judgment again starring could have negotiated a right to attorney's fees as part of the judgment it shows not two but even more fundamental is the problem that the judgment those doesn't include attorneys fees but the judgment again does not create secured status it's only by virtue of docketing that judgment by virtue the statute that creates a lien in the debtors real property when that judgment is docket that all of a sudden star in a choir secured status and there's nothing in the north dakota judgment means statute that gives the judgment creditor the right to recover its attorney's fees that this is not in this case we don't have a situation fundamentally different than the hypotheticals i gave this court again we essentially have to separate groups of debt instruments the one secured by consensual mortgages allows recovery of attorneys fees but everybody agrees it's two million dollars short of given stari and over secured status only by virtue of the other river of dept the garden t's the judgment and the statutory lien to starry and become over secure but again everybody agrees that there is nothing in those agreements or that statute that you give a starry and a right to include attorneys fees as part of its cloying the judgment and means aren't in agreement i'm sure you are the judgment in the lean that creates the over secure and it is not in agreement is it well that's of course that's one problem all the courts that have looked at the issue and five zero six b says you either have to have a right for attorney's fees in the agreement or in the statute every single court that's looked at this issue says the judgment and the lien it creates cannot be an agreement that it it's that we should be looking into whether there's any provision for attorney's fees in the judgment in lien that creates the over security that's correct and that's my point those aren't an agreement  guarantee of guarantors in the loan documents right but those agreements don't create security status there's nothing in the guarnteed there's nothing in the confessional judgment that but what five or six pieces to the extent you're over secured if there's something if there is an agreement for attorney's fees you can collect that is the fundamental issue of statutory construction and take a look at five o six b it's interesting it disting between interest which is just a matter of looking at what the value of your collateral is not the nature of the agreement the creates the collateral interest and then it goes the final clause to attorney's fees and it talks about whether it's provided for the right to attorney's fees in the agreement or statute that creates the over secured status not the debt but it creates the over secured status and that's where we have the problem with starry and situation in this case there is simply nothing in the agreement the judgment or the statute that creates the judgment l that provides first aryans right to recover attorney's fees and that's where it can't bring itself under the provisions of eleven u s c section five zero six b now i believe that the fundamental purpose of five zero six b was to protect the benefit of a bargain so what the creditor negotiated a situation where it's consensual security had a value greater than the debt it's reasonable expectation was to be allowed to add attorney's fees to its claim and that's what the bankruptcy code protects but in this situation where the over secured status six b doesn't say that you had to have acquired over secured status consensually well acted as if your over secured five o six b before it was amended talk about only the agreement and the courts have uniformly interpreted that be consensual agreement judgment lien simply doesn't qualify so congress amended five o six b and said agreement or statute so then the question is is there anything in statutes that created this over secured statute status that allow it to recover attorney's fees and starring admits there is nothing in the statute that gave it security that allows for recovery attorney's fees so you look at the legislative history and you look at how the case law is interpreted the case law is absolutely clear that under the context of agreement which was the only provision of five or six to be originally a judgment lien doesn't qualify negotiates consentual security position that over secures it then it has a right to recover attorney's fees but here where the record over secured status is for to us the creditor won the race of the court house does not benefit that creditor to the detriment of other creditors that improperly skews the priority among creditors and that's not something that five zero six b is going to protect we are the bankruptcy of th respect to the over secured status i don't think there's any dispute that if the property that the judge really attached to is considered story and is definitely over secured so the issue comes down to what is the effect of those judgments and going back to the agreements of the parties to agree with judge burton or the judgment is not an agreement but in this case there were sixteen separate agreements that provided for attorneys fees fourteen low fourteen loan documents in that six notes for mortgages one loan agreement three year and t s fan following that there was a workout agreement all of those were pre positioned but most importantly there was an addendum to the second amended plan that was post petition which also provided for attorneys fees and mr brucie's argument that story and could have negotiated the payment of attorney's fees that shows that in fact did negotiate that in all of the loan documents that were preposition but also in the a dent into the plan of payment of attorney's fees was negotiated here at that point the debtors knew that part of part of th aryans was was secured by the judgments one important point as far as those judgments are concerned is that its clearance by statute in north dakota also by case law that all agreements if they relate to the same thing must be read together and so the loan documents to guarantee is the work out agreement all of those things must be read to gather the work out agreement did i don't think it does because the the basis for the attorney's fees is in the agreement but looking at the lone star and would not have been able to recover because there's a state law north dakota that prohibits collection of attorneys  instruments the guarantees though don't identify any dollar amount when you've already got a dollar amount right in the judgment lien and it's not listed in the proof of claim does that determined but i don't think it does matter because the statute is the basis for the attorneys fees let me let me ask maybe i'm looking for a little bit different as to whether it's part of the secured claim the statute really links it to the secured claim and so does the fact that the judgment liens have already been filed but the time you submit this and they're not mentioned does that affect whether they're included in that secured claim i don't believe that it does why not it's a good question  because again the judgments came arose from the agreement of the parties which it started with that with that i work out agreement will independent of that sort of i  guess the question is is it part of the secured claim and i think you're saying you think it is but you're not sure how to explain why that's that would be  so and i guess one of the things that that's important to look to look at is the definition of claim and under section one hundred one five the bankruptcy code claim is defined as a right to  right to an equitable remedy for breach of performance if the breach gives rise to a right to payment and whether or not reduced to a judgment liquidated on a liquidated fixed contingent richard on mature disputed undisputed legal it's based on the agreements of the parties when you say claim are you talking about the secured claim the security in the in the statute yes you could you say that what what did you win that and allowed secured claim what are you including in  what are you what was your definition there in this particular case that's relevant well the definition of claim and the for the statute which does not  because again all of those those doubts under the notes under the guarantees were secured by by mortgages or by the  judgments one of the other points that that has been raised is the issue of merger and again i would like to point out as i did in my my brief that the language of the guarantees actually h wording that waived the defense of merger race judicata specifically in in the guarantees and merger is an equitable remedy and has its limits the purpose is to promote justice and supposed to be extended only as necessary to further its purpose and would not be applied when to do so would create contest or in a quotable result to ignore the sixteen separate agreements that are issued here between the parties that provide for payment of attorneys fees would be unjust and inequitable especially when there's actually an agreement that was entered into post petition that provides for attorney's fees this is where the ba panel twice ruled that that story on should prevail and was entitle to its attorney's fees but they referred to the debtors playing a game of gotcha with the language that they used in denying the  the agreement under which such claims rose what particular agreement or do you base your argument on for attorneys in this particular case to get those judgment leans into the mix which agreement the work out agreement the guarantees the confession of judgment and the judgment all have to be combined together so you're saying that these the the separate agreements in your mind for statutory purposes or one unified agreement correct plan further says that if the parties can't come to an agreement or resolution the matter shall be determined by the bankruptcy court upon notice and hearing there was an issue first of all the issue of time of the  not raised in the lower courts wasn't addressed at all until the second back appeal and based on that it's our position that the that if you cannot be raised for the first time on appeal and should be disregarded but even if it were considered there is no facts to support any finding that time would be of the essence if that were the case and the reason for that is the plan requires submission of the claim for attorney's fees ten days before the plan but then there is an open ended time period after that for the debtors to determine whether or not that's acceptable whether or not the parties can come to an agreement and then if they can't then it goes to the bankruptcy court a determination after notice and hearing and again that is an open ended time period there is nothing set in stone as to when those steps have to occur so why would it be of the essence to have the claim submitted ten days before the play on but yet have open ended time periods afterwards that kind of defeats that argument that there is time of the based on i still have some time left but i really don't have anything else and if there are any other questions i would be happy to try answer those seeing hearing  the planet in the news is relevant because it allows recovery of attorneys fees only to the extent provided for under eleven u s c section five zero six the concept of looking at all agreements together is novel but it has never been applied where there is also statute and that brings us to the fundamental issue again we look at all the case law that has dealt with five o six b every single court has said we simply don't care about the documents that create the claim what we care about is what creates the secured status and for example the court in d w g k restaurants eighty four b r six forty eight said that the terms of the underlying agreement which did provide for recovery of attorneys fees are in material because the security arose only out of a judgment lien and because at that time under five zero six you could only have an agreement a judgment lien can't be an agreement and here even with amendment five zero six be a statute it still has to provide for recovery of attorney's fees and that is the ians position and the defect in the court's allowance of attorney's fees istari and again nobody contests the fact that star ian is over secured only by virtue fortuity of recording its judgment liens and taking our judgments and taking liens by virtue of those judgments there is nothing in the judgments there is nothing in the statute that allows starring in to recover its attorney's fees and that is the end of the analysis i respectively submit under five o six b again we ask this court to reverse the bankruptcy courts determination and nice story in all attorney's fees thank