morning good morning america please the court d my name is kevin gleason which is spelled g l e s o n i'm with florida bankruptcy group and we represent kevin harris who is the debtor below the defendant in an out of research shooting and the appellant here in this court has noted that courts must avoid searching through the records for possible claims because and i quote judges are not like pigs hunting for truffles close quote the standard is established the stop will bite judgment requires a determination of the issues actually litigated and decided in prior litigation it has been suggested that this court has incorrectly applied the law case seems to be relatively simple because the state court playing that was five was relatively specifically with regard to the alleged securit because that statute section is in the disjunctive the war that there are many grounds for one to have a judgment found against one in that under that statute and it is not required that the court find fraud you know but not like a should but this was a default judgment case and it followed judgement case florida like many other jurisdictions i think except still probably pleaded factual allegations of the complaint and the complaint here allege that mr harris had issued worthless stock certificates and had basically take it mr jail's money and use it for his own personal benefit why is that not enough time to claim securities or stock fraud in count nine because the florida supreme court has held that and does not make allegations in the declaration or complaint evidence in an action on a different plane so this is the same but it's a position the judge mark who stands alone at the back of secret level jobs marke position well it was admitted in the complaint by default so therefore i'm going to assume that fact in and the subsequent case when the st people are said you cannot do that because someone makes an allegation in a prior case does not make it a fact in a subsequent and so we're still left with the with the judges being asked to pigs for truffles you have to look through and try to figure out what was actually litigated and what was essential to the to the judge which are whether whether the state court got it right or wrong the state court had to apply that the complaint as alleged stated a claim for securities fraud or else court could not have granted default judgment because the allegations would not have substantiated a claim of securities fraud right the state court has to satisfy itself that the allegations  so why didn't the state court do that here if you aren't back to what the statute provides statute does not require a finding of fraud and and the bankruptcy court obligated to interpret narrowly exceptions from discharge so to narrowly interpret does not permit one the license to go back and imagine what was going through the mind of a prior judge who made no findings of fact who simply entered a fall judgment as a punishment and i go back to five hundred and seventeen thousand and fifty one that has been the disjunctive to engage in any transaction practice or course of business which operates or would operate as a fraud or deceit there's a distinction between fraud or to see so many can be deceptive without being fraudulent and so it's not possible to look at the law and the the allegations is present patients that were made on if the florida supreme court ever whole that the element one of the elements was a finding that your shoe was a critical parties as upon a different claim or demand the judgment in the par auction operates as unstoppable only as to those matters in issue or points controverted upon the determination of which the finding or verdict was rendered that's a same way decided in the prior case and how could something be actually let me get in decided which was not essential to the judgment and i'm sorry i can't put mobile all that quickly but it may have been a race judicata case and unfortunately we've gotten away from using dead language to to to discuss to identify concepts which are un changing over time and now  the concept is called issue preclusion which james together collateral stop one ratio cut which are different  conclusively establishes that when the parties so far as subsequent proceedings on a different cause of action are concerned the truth of all material allegations in the complaint in the st action and every again he did not appeal the final judgment but rather chose to file bankruptcy as the himself admitted in the in the court the trial transcript  case we certainly appreciate it and i know the parties do as well whenever you're ready thank you your honor and may please the court good morning my role today is to argue in support of the proposition that under florida is reclusion law can be traced back whether they're from the th circuit or the intermediate appellate courts in florida all of them can be traced back if you take their citation histories all the way back to misstatements of either mobile oil or b j m most of the cases trace back case that said there's not a a lot of daylight between the two most critical and necessary maybe sort of subsumed within that actually litigated prong i think pretty flawed judgments it really doesn't matter and that's the latter point in law that is the representation mr gleason is made i believe as i read the statute it's a statute that sounds in fraud and i think the can point to a light fraud there is a different count there are other counts for negligence but  proof or whether the standards are the same and if you look at the bankruptcy court cases cited in our brief for example the courts the bankruptcy courts are afraid to we are supposed to examine the original causes of action and allegations and then the bankruptcy statute and ensure that they match up so you know that's something that it was incumbent upon the bankruptcy court to do in this case i think if i recall the opinion correctly it or it's been have done that but that is something that every i right as reclusive a fact that this charge received that's correct your honor that would be my position i will say that candidly it is difficult to find a a florida state court case that addresses specifically the interplay between the critical necessary prong and default judgment i think the reason for that is because of the doubt about whether there d even is such a  the rd district and they both say the same thing they say and this is a quote the fault judgment conclusively establishes tween the parties so far as subsequent proceedings on a different cause of action are concerned and this is the critical part  truth of all material allegations contained in the complaint in the st action and every fact necessary to hold the default judgment so those are two different court of appeals cases from the sixty's and seventy's which have never been questions never been  overruled by the florida supreme court or any other district court of appeal and in florida district courts of appeals are often the courts of last propose their pronouncements are good law unless and until they're overruled by the florida supreme court so i think that is when you actually trace all these well two things going on you you can see in in my brief for example i fight i cite for florida bankruptcy court cases in which they go this way and  say you know there's some confusion about critical necessary then we have other bankruptcy cases that say well there is a critic on this problem and it's dispositive so i think it would be helpful for this court to just bring some certainty to that and say at least in the th circuit as we read florida law to the party who is who is getting the benefit of the fall judgment they would if the other party were litigating litigate all those issues and possibly get a judgment that gives them an issue because of the fact if the party refusing to litigate which may cut against the principle of law i don't see it in the two d ca cases you just refer to us and i'm wondering if you're familiar enough with blanchard to be able to say anything about it or or not given  precise nature of the issue or asked your honor i'm just looking at my notes i tried to take a note of all of the cases that mr gleason briefs i'm not seeing it so i  apologize i'm just not familiar with offhand i will say my general sense of most of those cases where you get a contrary rule is my same answer to to judge ginsburg which is they often state the general rule but when you actually dig down and look at the rule for default judgments it's somewhat different and there are good reasons for that and the only other thing i'll say is i you know i mentioned baum and perez which are district court appeal cases but i do think there are four florida supreme court cases that decree from being conclusive and binding between the parties as to matters litigated now that was a claim preclusion case not an issue of who's in case but it states a general proposition about the fall of judgments and then we have three later case those cases the florida supreme court gives default judgment specifically issue proposed of a fact and not just for the matter that was obvious on the face of the default judgment but it applied that  nd prong of the paris test where paris says every fact necessary to uphold the judgment what the court said there is the affirmative defenses that could have been raised in the st case and are now being raised as claims in the nd case were necessarily decided even though they were on the face of the default so we have the four supreme court twice applying that principle and and lastly i would just point the court to the tops case from two thousand and four now tops is a little bit different it's not actually applying spell out every issue those judgments can be issued for clues of so i think that some hint at least that the florida supreme court does not think that summary dispositions in certain circumstances can be precluded of  all of the issues of sumit within them and that is in fact the rule not find that mobil d or oil eliminated elements that were enunciated in prior cases the the quote from mobil oil starts in general terms and then goes on to talk about the test period in all cases therefore where it is sought to apply the stop of a judgment rendered the pun one cause of action to matters arising in a suit upon a different cause of action the inquiry must always be asked to the point or question actually litigated and determine in the original action not what might have been might have been thus they get it and determine only upon such matters it's a judgment conclusive in another option that's the language that was adopted by the florida supreme court and hindsight should have been disclosed but that section does not say anything about intent reasonable reliance damages separate says obtained money or property by means of untrue statements of material fact or missions of  with the allegations made at the top of the complaint in general allegations the claim is that mr harris providing worthless security and  in order for him to clearly allege fraud and we're going to rewrite the judgment and add a finding of fact that in a statute that has alternative bases for finding for a finding liability to not including no fraud that we're going to rewrite all that and now and collaterally a stop and different type of action based upon allegations that don't carry from one case to the other corporation seventy seven is used again by the florida supreme or any number of occasions in the argument of health and rehabilitation versus the g m in  marketplace knowledge ing the cases that preceded mobile but i don't see that that there's any light between these two tests how could something have been actually decided upon which a determination ace as a matter of law it really doesn't matter whether we we fuck are critical and necessary or not whether we say it's in the law florida it's not in the law it's implicit or otherwise either all right thank you all very much we really do appreciate the help