you i would like to reserve if i could approximately five minutes in rebuttal to the issue that we're here today on is whether or not the district court should have allowed appellant the opportunity to file an amended complaint and the standards for that especially when we have is here where there was no oral argument allowed for the initial complaint there was never an amendment in the first instance this was a one and done on the motion to dismiss is whether or not under any theory based on the allegations that the economic ship we i guess if you're sane if that's the issue then should we not waste any time whether you actually stated any claims and just concede that part and say can you i believe so i believe so i mean i think that there were claims stated in the original complaint but based on the issues that have come up and input of new counsel myself i believe that it would be the intent of helen's to file an amended complaint with the district court so i think you can my question was are you conceding that there wasn't there weren't any claims stated and so let's just go to whether you can state any claims  the ok so you know i can see that it's ok i believe there were claims stated i believe that those claims could have been stated better ok and that therefore given the opportunity manda to the district court it would be the intent of appellants to file an amended complaint all right are there any complaints that you think you can do better on well i think that the fundamental issue here is the issue of the ownership of the funds that were in escrow since the time of filing they the matters in the district court and sense at least the time of filing my initial brief or appellants initial brief in this matter we have a case they came down which mirrors the facts here about this close as you can mirror any facts as i see it in this case which is a tried back a case i couldn't really see how it was closed because it was tobacco the case of tobacco following cases like todd vs vester mark and lovers is why i held that whoever place is the money into escrow until escrow actually closes retains ownership  c s and p entered into film financing agreement and then who wired or who put the money into the escrow account third party investors arranged by stereo that c s m p was not the deposit or yes i am ok so your complaint was eroni is factually that is correct ok the facts and evidence with respect to most  understanding you so the six investors who entered into the agreement with c s m p gave their money to mr karzai an attorney correct and the attorney on behalf of the investors put it into the l c m escrow account wrecked and so did the investors the investors and contact the escrow holder correct the investors individually did not the communications were on may thirtieth may thirtieth and they said freeze the funds that they say they were acting as the agents of the six investors in those words i don't believe so but they did say the funds belong to the investors please freeze them while the issues are being determined we have a separate agreement the preliminary agreement which gave all rights with respect to the funds deposited into escrow solely in stereoscope issued directions and so as in try back to you have a third party sending money and tried back and there was no correspondence with it and in fact they the court talks about the fact that it came from a third party and the wire information would show that here we have wire information showing that it came from richard there's really during the course of the escrow you have communications in both try back and in this case where the  informed that the funds belong to a third party and that those funds should not be released we have again been tried beca the escrow accepted that that and went back and looked at the source of the wire and gave the money back to the third party because it's fairly basic in escrow that until you have close of escrow which did not happen in try back and which did not happen here the ownership of the funds deposited in escrow remain in the party who deposited them and therefore sense that investors deposited the money into escrow and there was no close of escrow those funds remained in the investor and when u s bank released those funds and again i think it's important they didn't release the funds to a party to the escrow they released them to tread a nonparty to the escrow in the same vein that they're trying to argue stereoscope was a third party but the but the ownership of the funds is and always was in the investors and they had the escrow had no with the worry to release them to became aware of coach stereoscopes contractual relationships at the very latest by the time the arbitrator issued the t r o employment here in junction you also allege that stereoscopes contractual relationship with trade began to deteriorate and may of twenty twelve if we accept both of those allegations is true how have you adequately pled in the present complaint card station on your claim for intentional interference with contractual relations if they first learned after the arbitration i would agree with you but the facts show they knew as of may thirtieth complaints about i don't free for interference with contract to the extent that the complaint doesn't allege that they were aware of the contracts before then then no but the complaint does set forth that the money belonged to the investors and so the discussion that we've been having with respect to try baca i believe was adequately described in the complaint and the court's ruling on the motion to dismiss on that issue was wrong we have these california love versus white go there and what it says is you don't have an obligation to third parties they don't have a direct interest in the funds and the way try back to distinguish those cases is holding that the funds is in transmitted i think the analogy that is best suited here is if the two of us were involved in an escrow to purchased a piece of property you were going to sell i was going to buy and i arrange for a lender to transfer money into that escrow can you and i then decide we're not going to go forward with the escrow escrow holder just give us the money from the bank without getting the bank it's notable it's deed of trust clearly the answer to that is no i mother if she said in a letter saying i want my money back that's the question that we're facing here right but the question here is the money was put in by the investors at least that's the allegation that we will make and i think the money back and that's the facts that we have here because it's clear that the money did go in from the investors through mr very silly and all of the agreements gave the investor money to or the control of the investor money discretion in denying leave time and where is here the appellant's own judicial admissions and the exhibits attached to their complaint establish that there's no amendment that could potentially rectify their deficient claim go ahead let me just start with fair and and us bank instead of giving the money back or freezing the funds which is what most of us were holders do as soon as there's any question they always freeze the funds smuggles the money out and gives it to some third party trigg so why doesn't that claim of negligence at the least or maybe under tribeca there's a suggestion that there's a requirement for escrow holder to protect the funds that are owned by third party so i'd like i'm psyched there's something fish here sure that's that and so now whether they've alleged it in the original complaint but if they can allege more if they can show that there was something sort of fishy going on or that they weren't you know that they were on some sort of notice that you know it said i guess u s banks found the transaction quote unquote weird and new that claimed an interest in the escrow account and had requested that u s bank freeze the account when the court be encouraging willful blindness to anyone else we're going to be imposing conflicting duties on the escrow parties that's the case even where that alleged point the plaintiff here has an alleged interest in the escrow funds and that was the exact scenario that the california supreme court and some in financial holdings the seminal case on this issue was dealing with the plaintiff in that case was the assignee of the funds that were in escrow up and the escrow agent was sued by the plaintiff for dispersing those funds to talking about they might be able to allege some sort of due for negligence or maybe fraudulent film and your honor i don't think they can allege any duty because there's no case law which imposes a duty on an escrow agent to a nonparty they also can't allege that u s bank have general california law the be a concept actors and the like and california law is pretty consistent that everyone owes a duty to everyone else now you've got these cases that say in general the escrow holder only owes a duty to its clients but in a case which looks pretty extreme where there was knowledge that the funds were being  by the individuals who wired them in i don't see that there's any per se rule that the at the core of a california court would find escrow boulder to be negligent or perhaps complicit in something that was the california supreme court in some it went on ad nauseum about how it was improper for the trial court in that case to impose agency obligations and duties and import them into an escrow account relationship and here we're not dealing with a situation where there was knowledge of something fishy beforehand but i that's that's an allegation in the complaint your honor but if the plaintiffs did want to restrain this account there's a process and procedure in place for them to do so which protects the due process rights of everyone they approached us bank to freeze these funds u immediately told them on that same day according to their own judicial admission that u s bank can't do it because they're not in escrow party if they wanted to freeze the funds they could have gone in for a t r one hundred of attachment if anyone walks into an escrow agent's office whether it be a title insurance company depository institution bank and says i think there's a something fishy going on with account x if we impose a duty on the escrow agent to then freeze that account the escrow agent is going to be subject to dual responsibilities and liabilities on the one hand you're go impose a duty on him that's great to follow the instructions of a complete stranger and on the other hand the escrow agent under current existing case law is required to quote strictly follow the instructions of the escrow parties which is what u s bank did here u s bank immediately rather the tribeca decision absolved an escrow agent from claims by an escrow party for dispersing funds which in that case were not even yet subject to the escrow account in the first place the chair back a decision dealt with a very unique set of circumstances where you had a one party escort agreement which is not what we have here and a third party deposit or deposited money with the first american which would become subject to the escrow upon the fulfillment of a condition proceeding which was never fulfilled it's not as  have framed it that the escrow had to close there for the deposit or own funds that's not the situation that tribeca was faced with tribeca was faced with a situation where the funds had not even yet become subject to the us program and in our case not only does the liberty city movie escrow agreement say that the funds were subject to the escrow agreement and only liberty city movie had dominion over them on behalf of anyone from liberty city movie side stereoscope or the investors are not in the picture but the appellant's own agreements with their business partners which are attached to their complaint and incorporated there and by reference acknowledge the fact that only liberty city movie had dominion and control over those funds once deposited in escrow was th that the funds once deposited would be gone by the escrow agreement that's confirmed by their own agreement as you are one fifty six which is a copy of their own polyphony agreement among themselves and their actual business partners the reserve entertainment group and the escrow party affiliate liberty city movie and specifically s e r one fifty six paragraph seven the last sentence is an agreement between them and a third party which their life upon ad in their complaint despite the fact that us bank is not a party to that agreement which agreement specifically acknowledges that these funds are being raised by stereoscope from various investors to be handled by cutting edge stereoscope motion pictures l l c which is not a were invested not by a c s m p but by liberty city movie itself it's clearly the intent that these funds are going to be governed by this escrow agreement and i don't think they can allege any duty on us back that conflicts with its duty to its actual escrow parties in addition to not having any duty there's just no reliance here the appellant's relationship with their business partners was falling apart before they contacted us bank as soon as they contacted us back they were told look we can't comply with your instructions you're not in escrow party and now they're claiming that w the court denied that claim by the sky group it's called the sky pacific group was the claim it on that issue and the court denied that claim citing sun that as the basis for not imposing a duty on an escrow agent to a non party not only destroyed that cannot impose the duty that with the duties that an escrow agent owed it's impossible for them to amend to allege any kind of reliance or cause a sion whereas here they've admitted that the relationship their business partners was already falling apart  this is what what is a procedural we removed it to federal court we filed a motion to dismiss the motion to dismiss was granted without leave to amend which is appropriate if it's obvious that they can't if it would be futile if it would be futile and in just get that in the mail and they don't even get to make an offer a proof as to what they would know how they could change your honor multiple judges have looked at their alleged claims against us bank and all have said that they lack merit a state this action was previously in or pleaded the funds that are the subject of the complaint in state court and they threaten claims against us bank in that action and the judge assigned to that case says i don't see how there's any duty i don't see how you can have any claim against us bank they decided not to add us make that case later after they recovered a judgment against the actual business against their actual business partners for all of the sums that they're now claiming against us bank now they're coming after us bank for those same sums claiming that u s bank was somehow a participant in the fraud that was committed upon them by their escrow parties their their complain admits that the fraud committed upon them was their business partner shared one set of escrow instructions with them but provided us make with an alternative set of xcode instructions so how us bank could have participated in that fraud which the arbitrator educated was the fraud committed upon them is beyond me but it would delight logic to allow claims against an escrow agent who's earning a de minimus fee for and impose an obligation on the escrow agent to follow the instructions of anyone who walks in and complains that they have a dispute with one of the escrow parties it's clearly what the opponents are trying to do by importing agency law principles into escrow relationship situation which the california supreme court in some warned against doing because it creates a not the situation that they have alleged here what they're alleging is that they told the escrow agent they have a dispute with one of the escrow parties and the escrow agent didn't freeze the funds so now they can sue the escrow agent i can't go around suing people for not complying with agreements asco agent said to the bank you know i just really i there's things have come to my attention that i'm just not really sure who this money belongs to and ate and then which you say and that supreme court including in the summit financial holdings decision that we discussed specifically says that the escrow agent does not have an obligation to police the affairs of the escrow parties and i haven't seen any case opponents haven't cited one word that type of fraud is sufficient to impose a duty on an escrow agent california case law as well settled the supreme court has said we must quote strictly comply with the escrow party's instructions which is what we did here and to impose a duty that conflicts with obligation would put escrow agents in a very precarious situation obviously you wouldn't want it to be too broad but you're not saying that strict liability and that they ask any time you ask to the party  cannot there can never be any cause of action it as long as the escrow agent is complying with the escrow party instructions i haven't seen any case that imposes liability or subjects an escrow agent to claims by someone who is not a party to the escrow agreement and it would be especially unfair to do so in this situation where they weren't relying upon us to protect their interest in these third party funds if they wanted to freeze the funds there's a remedy for that they could go get a t r o but they failed to do that  there's there's already a remedy replacer get down on your time structure after that short so in conclusion they've judicially admitted that us bank was not the but for proximate cause and the deterioration in their relationship with their business partners not only do they judicial admit that here they've admitted that in their arbitration claims against their actual business partners in which they allege that their actual business partners with the or the but for proximate cause of their losses they have an award on those claims that rule in their favor that their business partners what the were the but for cause and the proximate cause losses that awards been commemorated in the judgment there's no set of amendments that they can offer to now in consistently state that u s bank was the proximate or but for a cause of any losses in connection with their interference claims and with respect to fraud negligence and fraudulent concealment they can amend their pleading to say there were an escrow party if they were owed no duty here and not only were they not owed there's no causational who wants and without love vs white tribe backa all hold that it's the depositor of the money is owed he attempts to make to use summit to distinguish into a broad claim that escrow never owes a duty to any third party in s it summit was not the owner of the funds the funds belong to the party in the escrow and those parties got to the stock had who got paid their money the debt was assigned to some it but it never owned the funds at any point in time it was not the deposit or it was not the owner of the funds and the fact that the parties the escrow decided not to pay that debt from escrow funds that's an entirely different situation than try back to and here  counsel says we could have instead of just making the demand have asked the are gone and gotten an injunction which to me acknowledges that we have an interest in those funds if he's saying we should have gone to court in the first instance it's an acknowledgement that we have it right compared to wrap up ok or never i believe my client should have had the opportunity to and their complaint to deal with the district court concerns to deal with the issues raised in this appeal and to do so without oral argument and without leave to amend the even in the first instance was abusive abuse of discretion and should be overturned so this matter should be remanded to the district court thank you