thank you good morning your honour's my name is howard meyers and i represent the appellant first national bank of arizona would like to at this time reserve five minutes ok let's let's try to help you try and please keep track here on times  prior to the time of a june twenty first two thousand two instruction letter that the bank that the court miss relied upon and in concluding that in the court his satisfaction or curd just to give your honour's a oil company and they had a franchise program under the name am pm and they had provided some financing to the l l c as well so what we have is two competing creditors record by john hancock that it's covered by securities was unscrews was have an exemption for insurance products v spewed got set up when the bank made a demand for the entire annuity account on april twenty ninth of two thousand and two the elevons attorney wrote to john hancock and said you not honor this the claim we claim that the guarantee only extends to one hundred nine thousand not to the entire balance account we also claim that there are some marital community issues underwear as a law because mrs lavender not joined that's the letter that the banks that evidence that according satisfaction had been affected on june twenty first two thousand and two and so i said that one more time that is the letter that the court said created a dispute that letter and i read up and maybe i didn't read the right letter it's in the record but it's probably not as an a first letter you know it's it's it's april twenty ninth your honor oh i see ok and that's where the bank the court seized on that letter however on june twelfth the controversy was settled they agreed that the entire account could go to the bank the matter has been settled send us all the money that enclose with that letter all of the money yes play date with that june twelfth on june twelfth ok it's actually simultaneously with the reaching of the settlement agreement on that's not on that on that same date right bank as the attorney in fact for the lavin is with reference to the john hancock account but more importantly it specifically stated that we withdraw our letter of april twenty ninth two thousand and two raising this controversy and it is of no further force in effect and yet in ruling power the summary judgment the court ignored both the settlement agreement no reference was made to sort of agreement ignored that let the bank letters to john hancock i'm sorry the john hancock responds well i won't turn the entire amount over because i've got this worry that here i am a stakeholder and i mail some of this money to  june twenty first here comes the letter that says leak and especially still some amount of money yes pursuant to the settlement that we won't whose terms we will not disclose because it's confidential and if you disperse this amount of money not to worry that leaves enough money upon which the bank life first was prepared in the first instance by counsel for the lab and secondly it states on its face this letter is to confirm prior instructions it's just ancillary to the larger settlement and it has a limited purpose it further stated that what mr levin wanted to have happen is for one hundred sixty five thousand dollars to be sent by his account by john hancock to the bank it has john hancock we had no negotiation with b p arco and we had no intent to waive our claim nobody one of the classic elements of a court and satisfaction if somebody says hey you want to check you agreed upon and when when you're saying that the settlement terms of confidential and the agreements confidential no one expects to see the agreement because it's confidential so that creates a problem in terms of deciding what the terms are your honor the role of john hancock was nothing more than they were a debtor of the lab and they recount set up money it's deposited in it in the lab and has a right to withdraw and it's just like a bank there are some more than a debtor credit relationship and there is no standing on the part of a banker and or insurance company in this situation to do anything more than say hey you know here's your money in the facts that bar there was never any controversy whatsoever about the hundred sixty five thousand dollars there's nothing in the record where there was any kind of conflict raised by either john hancock or arkell with regards to a controversy concerning one hundred sixty five thousand dollars i talk about two tiers and i just need to tear the hundred sixty five thousand i disputed here about one hundred seventy five thousand and the issue with regard to and satisfaction is this you have to have a meeting of the minds there's nothing in the record to indicate a meeting of the minds with the exception of the settlement between the lab and in the bank in that meeting in the minds was that the bank would have the bank sends a letter to john hancock and says send us all the money in the entity or count the bank actually john hancock understandably concerned that they've got a potential problem coming at them from the b p arco side says no where the stakeholder and we don't wan pay money out that they think we owe them because we may get put on the hook to later then on the twenty first nine days after the settlement agreement and the first letter we got a second letter signed by lavin and the bank not by b p arco that says well at least send us the money that b p article doesn't have a claim to we have settled as between the two of us it's confidential you don't need to know that the terms are are not in from on this letter but you can send us that amount of money the district court said was that the reason the just court found that was a settlement was because it ignored the june twelfth settlement it ignored the consent saying we withdraw the april twenty ninth letter it said the settlement was a resolution of a contested claim the bank is only has a claim for one hundred nine thousand they got one hundred sixty five thousand that's fifty five thousand more innocent that's the court in satisfaction that just a quirk and that was not the court and satisfaction between the parties and how do that was correct but there was also a security agreement and it's not denominated to security agreements done nominated account deposit agreement but it has all the elements of the security agreement and there was also a recorded u c c one financing statement and that was the bank's motion for summary judgment that we've recorded a u c c one financing statement b p arco did we prevail in that uniform commercial code that the court the courts determination that this was in  then then the insurance companies that you are entitled to but less than you think you are entitled to that's why the court found in a court and satisfaction your honor it was really not the place of the insurance company but i'm asking is that what the court found problems is that you have to be under arizona law you have to get something to which you're not entitled for there to be in accordance to have a special you have to have a disputed one week with a claim and there was no dispute with regards to one hundred sixty five litigation was started and so there was no record and satisfaction even though the court found there was because you did not have the meeting of the minds you did not have consideration no the c priority dispute who has a perfect right in these funds and nothing more and there's no basis under the political law in the state few shifting statute you award fees we're a party as this court knows arizona like most jurisdictions favor compromise and settlement there's reasons for that there's to make sure that there's an agreement that that resolves disputes prevents further litigation and insurers continuity of commercial transactions in this case that the courts are obviously very well versed with the the facts of the underlying matter so i'd like to kind of dispel some of the things that mr meyer said about these agreements first of all as the court knows there is a contract john hancock had a nudie contract with mr latham under the paragraph nineteen of it talks about the obligations for signed ments in this particular case john hancock agreed to a collateral simon with b p arco that's a written document and they do have a relationship with b p arco on rights and responsibilities flow from that  this case the bank mr myers talks about this other deposit account assignment and that that's something the bank did with the labs that was never presented pursuant to the terms of the nudie contract to john hancock what happened in this case of competency some other things my wife wasn't there as community property you can't give it to him what mr myers focuses on is this june twelfth letter that purportedly the lavender and the bank make peace i mean letter you mean some things labeled the greenland correct correct but i'm signed by both parties signed by both parties but that what happens and the bank is made the attorney in fact for four lads the problem is if you're sitting in john hancock the bank has never relinquished its argument it's entitle to the entire sum right then cut to the chase and yes i think this is kind of the change as i understand it with the district court did was to do this letter sent to gen john hancock not only by the lavender and signed by the bank on june the twenty first settling not merely in a dispute between the lambs on the bank but also settling  collateral assigned of based upon the allegations they've made prior to that point in time the understand the difference and i'm not sure i'm ok again it from our perspective your honor the bank is speaking to three hundred fifty seven thousand dollars and at one point the lab is basically opposed to it and they got on board with their mr mars argument is well gee whiz we could have got the one hundred nine thousand five hundred dollars without question which is true they think they could've got that where their argument fails is the is the additional mount they say well mr ladley could have withdrawn that in any point because it's his money that's untrue because at that point time to think is already making a claim for an amount in excess of the one hundred nine thousand so here we and i'm looking at the letter sent by the lamb and the bank to john hancock on the twenty first yes is that letter sent on the twenty first in any way inconsistent with the agreement entered into on the twelfth well i'm not sure if it's inconsistent but it's a separate agreement that the because when i first off i want to guess if it's inconsistent i don't think it's inconsistent in the sense that it was what the june twelfth agreement had in however is is the banks entitle to whatever sums are there however if there's any if the bank and i know you're representing john hancock you know but the but that agreement also says if if the bank isn't entitled to the whole sum it actually still asserting a right to the entire proceeds it's no different than if the lab and attempted to say i want my entire account for me i want the entire account from the bank john hancock could not do that because of the time of by b p arco and as such when they send this letter after again these these negotiations where john can has been accused by both of them a breach of duties and and things of that nature which end up in the again in the in the total amount it says please turn this amount now we've reached a settlement the terms of which we're not going to tell you correctly in but your honor in this case if you look at first of all if you look at flegel which is an arizona case we started to page fourteen of our br i mean why why does that put you in a worse position well because of the allegations in the first of many complaint where their claim was still breached duties to both well to the bank based upon contractual basis and that's the whole point the impairment of the collateral absolutely so that's that's a different that's a different deal than ok well so so there is again you're our insurance companies love to be innocent stakeholders this case we weren't you know you think you are but there's an argument we started from the night started talking about you can look at the facts and circumstances surrounding the court and satisfaction you don't need payment in full you don't need the precise magic words in order to still facilitate kaurna satisfaction especially when you've got sophisticated account parties such as a bank an insurance company an oil company even though they were part of the green that it's represented by counsel if you look to your honor if that at the june twenty first letter what you also see is just look at the language with mr meyers hand type wri we would submit to you or your honor sniffed the that agreement by virtue of some of the wording there but more importantly the actions that occurred prior to that instance were both of those parties or are claiming  actual letter that was written by mr lavender counsel also used the word agreement but if you take their argument at its face arguably they say he should just write a letter said please send me one hundred sixty five thousand dollars and good morning i'm much jeffrey wolf appearing on behalf of b p west coast products l l c will be referred to throughout my comments as as b p primarily or  grounds and what was the consequence of summary judgment for you what do you get we get we get the the right to recover the one hundred seventy five thousand dollars that's in the account and you got it as a result of the district's reading of his june twenty first letter correct as a third party beneficiary of this district court saw as a contract correct the district court saw it as a as an a court and satisfaction alternatively we argued that it was a compromise and settlement which the district court honor we believe as i said that either as a matter of law the letter amounts to in accordance satisfaction or compromise and settlement but even if it's neither of those things the the the june twenty first letter we believe operates as an effective modification of the june twelfth agreement between the bank and the leavens and there was a question from your honor regarding the whether there was an inconsistency between those two agreements and i would submit to the court that there was no inconsistency between those two agreements the the june twelfth agreement between the bank and eleven's set forth a very specific schedule under which the balance of the unity whatever that amount turned out to be would be distributed to the bank the the agreement i believe it was  and paragraph six of the agreement refers to the first one hundred forty thousand dollars in the account to be used to cure the elevons the faults that were there at that existed at that paragraph three and going through paragraph five it states that the first hundred forty eight thousand dollars of the account balance would be used to cure the borrowers the false paragraph or fully consistent and a moment ok but the next one thirty to be used for a savings account that to be in which the bank would have a security interest the next eighty thousand dollars would be used for significantly in paragraph six of that agreement on page five there is a recognition by the parties that there may not be enough to satisfy all these things it specifically refers to the possibility of there being a lesser cash value being realized ok subsequent to so it's all fine and good that the lavenders were willing to turn over their entire new t account to the bank to satisfy their indebtedness on a one hundred nine thousand five hundred dollar collateral assignment but but there's a real significant piece of the puzzle that's being overlooked here at least that it hasn't really been focused on so far in the two presentations and that is that following june twelfth the bank made a demand on the basis of this letter of this agreement made a  which john hancock this honored that was a significant intervening event that changed the landscape of things and how to change the landscape there's a we've got an agreement between the lab and the bank john hancock when faced with a demand hancock saying wait a minute i don't know i'm not comfortable yet because i need to know what happened to bianco well as a result of john hancock dishonoring the demand in there it's undisputed in the record that there was a telephone call between how the banks council and john hancock it was followed by a letter from the bank's counsel on june eighteenth again threatening what occasion you have what resulted and a new agreement on june twenty first the sole distribute the money from the account and the fact that there is a reference to cough it a little raymond what it is is the june twenty first letter that you characterize as an agreement it references an agreement it references the june twelfth agreement and it's a letter jointly signed by the lavenders on the bank that says hand over the amount that's not in dispute there's a disputed amount as to arco and don't worry we're leaving that disputed amount and so at least let's get started and hand over the mouth is not disputed but it doesn't say at least let's get started it sole purpose of the june twenty first letter is to effect a distribution of the only of the contents of this account and but it but we do know based on the june twelfth agreement that the lavenders have agreed to pay if the amount if the amount of the account are sufficient to satisfy somewhere north of three hundred fifty thousand dollars they have their own there on the hook to do that anybody count is able to satisfy this letter on june twenty first as well least pay off hundred sixty five thousand dollars because there is no arco claim to that amount well i think that that there there's a factual inconsistency in and how the court just described that the third language of the june twenty first letter doesn't say that the language of the of the letter says this or latin has agreed to distribute from the from the above reference annuity account the sum of one hundred sixty five thousand dollars right and then it goes on to say specifically that should leave right balance of approximately one hundred seventy five thousand dollars in the account sufficient to secure the arkle in why else would that be in there if the parties all all three of them that signed this agreement didn't agree that the money  i guess right why why else with that statement being there that it was well i just i just gave you a reason a just a sage to reassure john hancock that if it make this disk requester disbursement there's enough money left over to satisfy arco if it turns out  in between the lines like i fully understand there but that's what seems to me a perfectly rational explanation of this letter when you say why else would they do it that's a reason why else they might have done it one with john hancock did that if it left them on the hook for more money then is yourself open to money that would come from somewhere else other than the account would come from john hancock's pockets or from john hancock itself that would not make sense to me that john hancock would say ok we're going to give  hundred sixty five thousand dollars the other amount isn't convert and we'll give you more later that doesn't make sense to me right well it's and i think that's that's right i think that's the way that john hancock had to have looked at it and i can't speak for what had john hancock was thinking but obviously john hancock recognized that out of this pot of money they they were only going to release the on encumbered portion or the portion that that leaving a portion of ala ball to satisfy a potential lien from marco but if you look at the the face of this document this june twenty first document it meets the elements of according satisfaction under arizona law it meets the elements of a compromise and settlement because it's an agreement between two or more parties it was it was signed to avoid a lawsuit or the threat of a lawsuit and is based on terms  that amicably resolved differences over the distribution of the money there's only one account ok one account and this is the way they divide it up and we believe very strongly that that that the bank unequivocal you can't just imply a court in satisfaction you have to put somebody on notice hey buster we're going to give you this money but when you get this money that's all you're getting there is not one element in this set of that john hancock will send one hundred sixty five thousand dollars only on the condition that it be accepted by the bank in full satisfaction all know what the discussions were because they weren't there were telephone calls and we don't know you know there is not this essential meeting of the minds element there was not the central communication that the money would only be tendered it was accepted in full satisfaction and that's all i have your honor first national bank of arizona versus beef u s because product is now seven for decision we will take it read recess and then immediately upon reconvening we'll hear the last case on