judgments totaling over seventy two million dollars now with interest they were ended based on us a single summary judgment motion brought by one of the food bank creditors city national bank what's interesting about this case and makes it rare including in the absence of a political case law is the fact that this summary judgment motion was served on the foods while they were incarcerated indigent and pro se ok but you got time and you got to respond to th so you got all of that right that doesn't the fact that we were able to at the eleventh hour cobble together the best response that we could doesn't absolve the sophisticated creditor plaintiff from its own rule violations such as for example the violation of their requirement under local bankruptcy will seven zero two six to serve with the summons and complaint rule twenty six notice advising that the dead a defendant of their discovery  short notice to what in this effect financial death sentence vote motion if the food had been given proper notice under with the summons in the complaint under rule twenty six as it was required if they were given the rand notice which was also not given to them ok if this motion had been served on them in their proper address which the sophisticated plaintiff could have found just by checking the bureau of prisons inmate  it was sort of the address and they had laws right and we argue that this court is a court of equity and justice should rule that in the case of an incarcerated indigent produce a defendant that is insufficient for they haven't paid off and so i pick up the phone who should i call say well that address they've given me is probably not good i wonder why i think that a sophisticated it's not that it's that of there but it is that and that's what i'd like you to tell me what about foods being broke and being in proper and being in jail tells city national the first notice in the record that i just was incorrect as when the food was mrs food so much as my papers were returned that's the that's the one item in the record that we know for sure put cities national bank on what we're advocating for is a new affirmative duty we think that it a that the failure of an incarcerated indigent pro state defendant update their address should be liberally excused extension by what you just said as opposed to what the existing law requires ime the existing law requires that in cases of prostate defendants in civil cases that procedural errors are to be liberally excused that is a well established specific law ok i think that should also apply to the case where civil defendant incarcerated pro se feels to update their answer there's one thing you said that caught my ear and it was a return of mail halfway house so the mr for never got the papers and she had been moved from aliceville in alabama to victor bell then you saying that the service mrs fu since she had been moved had been return i believe it was the it was responded to them yes i think they got it back before because they then retry to reserve it was returned again and they finally got the correct address so would you still use it until it was finally served to where she was i'm going beyond that i'm saying your honor that that that the new law is not just an application of existing law of leniency for procedural errors for inmate inmates the new application should be that in the case of a plaintiff suing seeking ruinous not responding a drastically short notice to a room to summary judgment motion ok and it's not immaterial and it's not irrelevant and it's not harmless error because if they've been given more time remember they're indigent they're in jail they have to seek third party funding to hire me i wasn't retained previously ok so they have communication difficulties with the outside world they have to arrange funding and the fact that they're finally able to arrange funding to hire me to do an opposition in ten days ok when i have no ability to meet with her we have to do the rule fifty six motion for discovery on my own i don't even have time to get a declaration from the defendant puts it puts impossible pressure on an incarcerated civil defendant to adequately respond in time it sets a bad precedent for the future wondering how you get past the fact that both of them entered a plea you know an admitted fraudulent behavior and there was a date and so it would seem to me that that judgments strictly fall within that that maybe your best argument would be that on on i think it was the a b a facility that maybe the october eighth didn't cover right that's correct and i mean it seems that there are you know if if the october twenty twenty two thousand eight covers the other two then how do you show whatever you would have discovered at you know how could the result have been different the reason the case is not shut the gavel doesn't come down even though judgments number one and two c five two three it is not dispositive as to the liquidation of the amount of the obligation ok so if the food had been entitled to conduct discovery which we requested showing what happened to the fully one hundred percent secured loans in the collateral that they backed them up the amount of the loan and the the amount that the secured creditor actually obtained in there for was owed and there their duty to mitigate obligation on article nine of the commercial code would have come into play and then and we raise those arguments and preserve them on appeal with respect to the may two thousand and eight one hundred thirty million dollars a  facility that falls outside the scope of the temporal of the temporal scope of the plea agreement now that's another air here with the bankruptcy court did it with the imprimatur of the district court is they said because the plea agreement says on a date uncertain but at least since october two thousand and eight that's what it says on a date again and date unknown but it least since october two thousand and eight that's the operative language what the bankruptcy court did with the blessing of the district court on the interim but peel and judgment number one and two said that that strongly suggestive of prior period fraud that ruling that ruling violates two cardinal principles ok one of the principles is that a plea agreement is a contract and the rule of counter proof renton applies so if there's any ambiguity it should have been applied in favor of the foods and against the drafters ok the second rule is that a plea agreement was accurately reflect the totality of the defendant's misconduct here the fact that the the temporal language could be interpreted in favor of the food it could have been because it could have meant that commit some time in october on a date uncertain october first why is that interpretation not imposible or entitled to deference by this court because if the fraud had commenced earlier the amount of the fraud ok a four point seven million would have been substantially higher it's critical because if it had been higher that would have impacted the foo sentencing and their restitution obligation instead they were given a sentence that reflected the relatively minor in terms of the bank's total loss amount of their of their overstatements and overdrawn four point seven million and it was reflected in their sentencing well it seems to it seems to me you're asked you're asking us to do the same that you're saying that they can't do i mean at vast you it seems to me i don't know what that means what happened before october of two thousand and eight but you're arguing your best argument to me is that you say that example the court disregarded mrs foo's corroborating testimony c n be claims the apple e claims that was based on a sham declaration funny but no such sham declaration finding was ever made the inconsistency for the sham doctrine to apply has a because this waffling on the timing of whether it start at the beginning of october or sooner and then secondly there was no discovery permitted and allowed for me to  subpoena and depose either the prior accountants who verified the the goose a gallery usa financial statements that the what the the bank examiners that did comprehensive inventory audits and field audits that showed that the there was adequate capital in the form of inventory in accounts receivable to secure these loans and in the pricewaterhouse coopers validation of the income improper application of the standards for the interpretation of a plea agreement together with the denial of our opportunity to conduct any discovery concerning the finances of accuracy of the finances of the company prior to october two thousand and eight in additional discovery or parties didn't change a thing the few foods procured money under old three because they lied about their inventory and accounts receivable well ok i guess just sort of jumping right to it and i'm only speaking for myself we haven't conferenced on this so i'm not sure it seems to me that the strongest argument that they make goes to the last contention under a p l in terms of i think in fan at as stale versus international game technology we need to disregard an affidavit for contradicting a prior statement inconsistency must be clear and an ambiguous misfit play agreement did not state that the fraud began before october two thousand and eight nor did it state that it began as early as may two thousand and eight how does your statement in her declaration that the fraud began in october two thousand and eight create a clear and unambiguous inconsistency with the player agreement and there isn't a finding of a sham affidavit so that's the one that i'm saying and how do you get around that one i mean other than that the court looked at it and sad ok it clearly conversely other to this dog don't hand let's just get rid of the whole thing and you know and made the assumption well mr began before them actually the answer to that question i believe is relatively simple which is that mrs foods declaration doesn't show any issue of material fact at all when the fraud started whether was may of two thousand and eight or october two thousand and eight first of all from a fundamental baseline it doesn't matter the so you agreed that it wasn't there is no finding that it was a sham affidavit i agree there is no finding there is a sham but there doesn't need to be and if i can explain for two reasons i'd like to try and do that the may two thousand and eight loan is actually the ones the food has pled guilty to and said if the banks had known what was going on they wouldn't have given us the money and that's because of the interesting nature of the may two thousand and eight loan as opposed to the other ones your honor is exactly correct the other two are covered the ma and i would use the numbers from the get go the appeal is confusing because there are two separate appeals that bates numbers from are these are not exhibits to plea agreement we have just like inventory in france and they do that every month and each month they submit that that determines how much they can borrow at that month they he submitting them every month and they admit in the plea agreement as well as  in their papers before this court they lied about it in october november december two thousand and eight all the way through june two thousand and nine and on the basis of those repeated lies every month they got the banks  well but there there's a knowledgeable to bank fraud started in october two thousand and eight so if your claim is that they were false and i will show you that the at the inception of the loans we do have the evidence in the record that it is fals however i do want to make the point that since it's a revolving they can lie after major thousand and eight and still cause our losses on them because we know for a fact of life or at least nine months on that revolving alone they also lied to get the other two loans and that is your position  main loan the consideration by the lender was not all made in may but it was made later on yes that's the nature of a bubble which is on the basis of the base borrowing certificates th  i'm not sure that is in the record i'm happy to submit something after this well by following up on judge callahan's question if there's no evidence in the plea agreement that the representations for the may two thousand and eight mo were fraudulent and admitted to be fraudulent the money that was forwarded by the may two thousand made loan until october two thousand and eight would not be confess this record police record to make such a finding because i don't find it is not required for judge albert or judge carney the district court or the bankruptcy to make a sham declaration finding in order to find that the summary judgment needle hasn't been moved what mr albert did with judge alex was to say here i am i'm looking at a new declaration one from mrs food that says contrary to what the plea agreement says which says at least since october two thousand and eight and now it remembers oh it is october one two thousand and eight what can i what can i do to go against all this evidence that the borrowing base are difficult to never change like the laws of nature or economics would command if a huge scale fraud which was admitted in  ten to twenty times or one hundred times the inventory in collateral if that started in october two thousand and eight the numbers reported to the banks must have changed as a matter of physics and i believe that the us supreme court indicated that such implausible testimony unbelievable testimony contrary to the undisputed facts in the record does not prevent summary judgment in andersen the supreme court said documents are objective evidence may contradict the witness story or the story itself may be so internally inconsistent or implausible on its face that a reasonable fact finder would not credit it and the phrase the reasonable fact finder goes back to anderson vs liberty lobby which says yes you have to be able to show that a reasonable jury would buy your story and the supreme court said again in scott versus harris when opposing parties tell two different stories one of which is blatantly contradicted by the record so that no reasonable jury would believe it a court should not adopt that version of facts for purposes of ruling on a motion of summary judgment there's found its version of events there is so utterly discredited by the record that no reasonable jury could have believed and the court also said that in the cleveland public but you seem to be arguing that the admitted fraud from october two thousand and eight forward was so our greed use no reasonable person would think th credit that is based on fraud that isn't discharged in bankruptcy we don't let the debtors discharge that debt each month that loan was renewed the may two thousand and one on the same basis of the same numbers the same fraudulent same statement that i have one hundred thousand which is your there's a moment made in may so that you have the same statement that happens to be admitted in september but it's the same statement that was made in may and there's not any evers that would have shown  things had changed much at the hundred thousand which has disappeared between may and october i could not have said it better myself your honor it's they keep repeating the same lie and keep getting money for the same lie under the revolving loan is there anything different about the facility the a b l facility it stands for asset based lending so it's different because the other two were more standard loans asset based lending the money comes in through the borrowing base are you they the foos report that their company has me ok the court said we'll give mrs fu the benefit of the doubt because we have this may to october two thousand and eight time period all right so we will hold that's the reason he held open judgment on this may two thousand and eight this is food you have the duty to come in and show me that the fraud was not on going during this period and he said just coming in and saying you deny it won't be enough because under rule fifty sixty and the family home factors which recently from by this court in the midtown flower bowl case you have to show that the facts exist and that they matter not use the word sham in his opinion that's correct but under scott versus harrison or anderson he didn't have to because under the liberty lobby standard for rule fifty six summary judgment just coming in and saying something doesn't mean that a reasonable jury is going to believe it and nonmoving for summary justice has the benefit for all unreasonable now crisis let me ask you this this is on a different that sort of where we started on the other side you argue that c n d summary judgment papers were timely served on the face of counsel but their counsel did not formally appear as counsel in the c m p d action tell after receiving the motion how is that service timely improper the service is timely and proper because mr albert had appeared at a status conference in this adversary proceeding in august he had in september excuse me  mr anchor not did you say mr albert it's the same last name so the judge's name gets confusing somehow so i asked her and her albert almost rancor albert ok all right so now we're not talking the judge we're talking that and so he did appear in this adversary proceeding which is a subset of the foos bankruptcy he did appear to says he also appeared as counsel of record in the u s trustee discharge ability proceeding and this is another reason why we know that the foods knew that rule fifty six was a big deal because before the city national bank ever served their adversary proceeding mr albert was representing the food in the other rule fifty six non discharge ability motion brought by the u s trustee that won the food last despite mr albert's advocacy because mrs fu had lied to the court and perjury is also a basis for finding a debt not d israel so we served the food at their last known address and we served mr albert and we served mr smiley who had been able to obtain two extensions of time to answer c from so mrs fu is still alive but mr fay passed that's my understanding yes ok and i don't know if your honor wants me to explain any more but we served the foods at the addresses that we had and it worked for all our previous status reports and it worked for for everything else we served mr albert mr albert and his rule fifty sixty declaration indicated he did not pass on the material to the food because he presumed that they had been served wherever they were he did not tell us that they had moved and now it sounds like mr albert is introducing a new federal rule of civil procedure where rule five doesn't apply and that in locator website which even he admits in his rule fifty six declaration may or may not be up to date is now a new requirement for serving folks in prison  and that the rule of bankruptcy procedure saying the debtors after us must be based on our own research and we sent it there contrary to what's in the briefs and what what i heard today mr food service copy was never returned there was no there was no return on that after serving the new prison that we found out about that and the prison had some regulations that we should follow to write the outside of the package certain things about to be opened in additional writings november fourth the original service on the food mr albert and mr smiley was october twenty third the response was nov thirteenth as mr albert says in his declaration seen because counsel offered to give mr albert another week he declined because there was no guarantee that judge albert would move the hearing date was no sham declaration fine by the court notwithstanding the fact that the purported inconsistency is not clear and unambiguous with respect to the timing of the fraud in relation to the play agreement that the bankruptcy court was still  was corroborated by independent third party evidence that the bankruptcy court did not permit me to explore that went over previously with you previously namely that they audited financial statements that audited by a licensed  lie about the hundred thousand widgets at the end maybe you were lying about the hundred thousand widgets at the beginning but here the inventory and as the inventory both landed and in transit because some is in a warehouse and some was on a ship and the accounts receivable work stencil the audited in it's in the record including affirmed by c and b s own declarant and that a comprehensive feel out it had been done at the time but before the may two thousand and eight a b l facility was approved in other words they went in and approved based on their comprehensive examinations that there was sufficient inventory in a our accounts receivable to justify the issuance of this hundred thirty million dollar loan and these are sophisticated banks and hired sophisticated  specialist to conduct the inventory and accounts receivables and it's a long answer to are there some assets yeah there were that's were saying was a fully hundred percent collateralized loan that was verified by independent audits conducted by the banks now but i mean if the fish have no money i hope we're there's very little chance that the banks will be collecting on this are saying why are they fighting so hard that's something you have to address to mr fanner so my point on the food decoration is that the implausibility argument as a justification for just regarding the declaration even though there's no sham decoration finding in the requirements which are funny were not met is does not hold water because of corroborating third party evidence and the substance of her testimony as well then with respect to the service issue the fact i did not appear in the c and b action there was a there was a status conference in the us trustee action ok which i had attended that day and right afterward c n d came up when i was at the podium judge roberts said would i be appearing as counsel for c for the the foods in the c and b action and i told him i had not been retained yet and if you look at the tentative ruling that was adopted as a final opinion on for judge number one and two he says service on the soon to be retained counsel which is a refutation the service on me at that time was as a matter of law consistent with being served as counsel of record now i represent many corporations over the years and i represent vigils representation in one matter does that mean you're representing them in all the others ok and i was not represent and had not represented her and was not retained until ten days before the motion response was due and that is to stop then with respect to service on the food stand counsel made clear before this court today that even when they tried to be serve it it was sent back because they hadn't of prison service requirements for legal documents you have to see to be open in attorney's eyes only said or they didn't do it they didn't do it the first time served it either right so even the first time they served him if they got the address wrong with forty days  forty two days before the hearing was set which is the shortest notice possible it would have been incorrect because they didn't fall of your of prison guidelines so we believe that an injustice was done here and there was a rush to judgment the bankruptcy court had made a finding that mrs food lied to him when there was an underlying charge in the underlying bankruptcy case with respect to their involuntary bankruptcy was supposed to go to trial she presented a trial declaration she basically denied i mean committed fraud and the u s trustee came in and i know eleven u s c seven to seven action got a not just charge ability determination for this hearing before the summer job was open where but j was a rush to judgment and we hope the sport will read justice for argument that this matter