thank you just let your good morning my name is todd so working i'm with alston and bird out of atlanta georgia representing the appellant roy alliance associates a broker dealer appreciate the opportunity to appear before you light my hope and dream is to reserve five minutes but we'll see what happens judge anderson's orders denying royals player injunction motion and then granting the claimants the pallies i'll call them claims if you don't mind the claimants motion to compel arbitration were wrong both of those issues on appeal are subject to the novo review by this court the motion capello patrician issue is a question of law the interpretation of the asset purchase agreement between royle and united securities not these claimants by the way that interpretation whether it's ambiguous is a question of law as well of an arbitration agreement with royal alliance by the preponderance of the evidence the problem with the judge anderson's orders are there is no evidence in the record that supports their position the only evidence the record is undisputed in our favor court looked at is the agreements that act closing the buyer will have all customer accounts and the argument is or the claim is that all customer accounts include the mooney and the other account your client's accounts and so a closing as a matter of contract law the buyer becomes a legal owner of those customer accounts so so the court decided just as a matter of contract law judges just emerson's conclusion that that contract provision the contract itself was unambiguous is the problem in order to reach that conclusion he had to exclude consideration of the rest of the contract take that no provision out of context he fell to consider how the contract the whole transaction was set up and closed and the mechanism and how the mechanisms for addressing the transfer of accounts from one firm to the other hand so i understand there's other language in the contract that you point to that would make it in your view make the contract ambiguous that suggests that only the customer accounts of specific representatives this transfer represent a transfer represent those specific representatives that they chose only those would be purchased let's say for a moment that those are not part of the contract that's all we have is this language about all customer accounts if that was all that was in the contract wouldn't the court be correct that at the point when the transaction closed the buyer would be the owner of all customer accounts including your clients that's an entirely different contract remember what accounts so if that was the only sentence in the contract would buy or own those accounts a close i think it is don't dispute that there was a close there is there was a closing if the contract said only that then you are right the court is entitled to consider parole evidence and that is the evidence outside of the contract that informs what the parties intent work that parole evidence includes the precursor the plea contract letter of intent which a little more clear over much more clear actually about the limited number of accounts of women category of the council were going to be transferred number two we had the evidence through declaration of our officers who went through the process of evaluating which representatives they would select to come over and then following that we had the parties course performance is is there any evidence from the seller as to what the  intended there is no direct testimonial or positive evidence from the seller about what was meant but i note that the seller and certain of the seller's officers are respondents in the claimant's finner operation that is currently pending and they were trying to get out so and they have never succeeded they have never raised any cross claim or argument that we are responsible for their claims  this nature would have some value so somebody would have that account i mean is there any evidence on the record as to where that account is and am i wrong that account would would be evidence of some value or have some value is yes and the way these independent contractor broker dealers work is a little bit different than what you may be familiar with what we call the wire houses like the merrill lynch is a morgan stanleys unlike while houses independent contractor firms have their registered representatives in relation in a independent contractor relationship it's the the red the reps business we don't do anything to service the accounts we allow the reps to control those accounts of when a rep goes from one firm to another he is permitted an expected to take those accounts with them that is why we went through that process of selecting which representatives we wanted to join our firm and told in the contract as you saw that you must terminate your registration with those folks prior to closing to give those folks the opportunity to take their accounts to another firm which is what mr tweed did he went to camp west and he discovery on that issue because we didn't think we need to given our record but i will tell you though there is no evidence that they that it didn't and remember claimants bear the burden of proof so he goes to c interest in keeping control of the accounts that he generated in the collaborative said he has i think you would be surprised if we had him in here for us all and have concluded that the accounts that he was responsible for customer relationship he generated were no longer his because of something his former broker dealer agreed to with us that's just not the way it works they're his accounts he took them with them presumably they haven't proven otherwise  they otherwise payments have absolutely no evidence of any customer relationship with us they have no account with us they never heard from us their declaration say so they didn't even know existed until the claim is attorney came up with this this  we say novel theory so they have not shown any and there was no services provided by us no goods offered no advice provided those are the end dishes of a customer relationship aside from a an actual parties to the agreement usa and roy alliance they never contemplated that we would be responsible for all accounts the two judges in the in virginia and colorado who consider the very same issue the very same contract we put in front of them because they were non customers seeking to compel arbitration against us they did not consider this novel theory either i've never been in the case where  parties agree as to the meaning of the contract they carried out through the course performance and then some stranger and a judge reaches a different interpretation if that's not the basis for a conclusion of ambiguity i don't know what  else but that's a great example of a case where they analyze a third then a third party beneficiary standing and goodwin in which you agree found that the hurdle is very high that intent has to be clear we that all the parties agree to what this contract means but i thought you said that the that the parties do the agreement with you that you submitted no evidence concerning their intent or their statement about the nt sued in the arbitration my point was that nobody has ever said in that proceeding or otherwise that somehow roy elias became responsible for all accounts even for those with non transferred representatives  connection with this transaction i'll stop and save a few minutes thank you may have please the court all began with the g c c case in the g c c case it was recognized that there could be situations where the intent of the contract would give of rights to enforcement of the purchase agreement with chase such as as was cited by the ninth circuit here the situation of deposit or couse i suggest to you that we can apply the same rationale here because the the purchase agreement and its call purchase agreement deliberately in the in the opening brief and the reply brief because they want to dodge the critical distinction that is present in this agreement it's called the transfer of rights agreement and the transfer of rights agreement makes clear that it is transferring all of a certain category of assets and in the recycles it describes that category of assets includes d p p accounts which are accounts held at sponsoring entities and they're not traded accounts such as what do you do with all the evidence that shows that mr tweeds accounts never were transferred drawing alliance maybe they did also from the question that maybe the contract requires they be transferred but it's pretty obvious they never were well i wouldn't go that well i wouldn't adopt that view for two reasons first of all mr tweed is not a broker dealer mr tweed could only operate on behalf of a broker dealer there's the evidence the record evidence it is that evidence at all that he ever operated as a broker  no no he operated as a registered reppert representative for united he left united in february one month before the the closing of the royal purchase of united therefore therefore therefore the accounts of the claimants were playing to the defendants below claimants in the arbitration of the accounts of the claimants remained assets of united as a direct deal with the whole d p p accounts accounts with sponsors tweeds left yes he left before the transfer closed there's no record evidence on what of tweed taking accounts anywhere to a new broker dealer accounts must be held by sponsored by a broker dealer that much is clear from the transfer agreement here the transfer agreement expressly recognizes that the sole owner of the accounts at issue is united no tweed not any of the other representatives who left united because they were not wanted or for whatever reason they did not transferred arroyo it is a straw man for my colleague to come up here and argue that there's no evidence that tweed didn't take the accounts that was their burden they can't prove tweed took any accounts the accounts were not taken they remained at united it the fact and united and the suggest suggestion that united at no responsibility for the accounts is wrong we cited to judge anderson and it was an refuted that the enhanced the rules require that when you were you was a broker dealer to take over an account you have responsibility to review the account that is the hook that makes royal responsible royal admitted this something we can decide would have to be remanded to the district for well i would say at best it would have to be remanded for that determination was that because it was evidence that was and it is before the district court regarding whether your clients were customers or not of royal why can't we look at that evidence well because the well to begin the evidence that was submitted is limited by the nature and extent of those persons activity with respect to the transfer grid there any evidence that you're that royal has those accounts other than  the contract what other evidence was at that those accounts were transferred i think you know i think john it's clear judge henderson recognized that when royals elicited as part of the transfer agreement that that united could no longer be in accounts were transferred to royal other than the contract itself i guess is c the absence of any evidence that they had that it went anywhere else in other words so there was no affirmative evidence other than the contract itself and that would be correct and i would point out as well however that there was an absence of evidence on the other side as to whether or not as the accounts not being taken over by royal because as the mr curly's declaration parts to the evidence first curley mr curly says that we we close the agreement and we received a transfer of the accounts that's what he says in his declaration with respect to the question then of who investigates whether or not but there is some evidence that they they didn't get the accounts well life is that they don't see them as i had questions i guess perhaps my misunderstanding i would think the accounts would have a value and so somebody has those investments somewhere assume well the am i wrong with the you're not wrong the count's do have value that's correct and that is the value that royal sought to acquire when it acquired the united accounts was that it recognized them as own the house is owned by united not t direct private placement accounts d p p accounts so they're held with the sponsor but the broker dealers responsible for the supervision of that account a review of that account including reviews not less than every three years under the n a s d rule you know where their money is they just don't know somebody else is overseeing it and then there's a question about who's overseeing and that's that's correct is the question about oversight of the of the d p p account correctly and i think i'm having a hard time understanding why we care about the two thousand and seven purchase agreement if you and i have an agreement near agreed a transfer of five cows to me you transfer four you negligently let one cow get out of a gate and gets on a highway and somebody hits and has injured why should that why should i i care or will we need to worry about being responsible for that cow that you never gave me b requires the purchaser and transferee of accounts such as customer accounts to be responsible to the customers for those accounts it's different than the analogy that you're drawing it it does in the case of a broker dealer it's agrees to be bound by the rules of the n t s b the n a s d rules require them to shepherd in custody the accounts the fact that that the cow got lost or killed it remains that united was no longer in the cow business and that was part of what royalty go she added that united would be out of the cow business and royal would take all of its couse now if well then fails to properly supervise the receipt of all cows in your example are all accounts observed discussing how the accounts would be transferred if it's there's no ambiguity that what was to be transferred and that's all of the accounts were to be transferred that's what he cut through the argument about some mechanical aspect of transferred red registered representatives for asus others i'm having trouble understanding the fair amount of this as you talk you say that mr tweed leaves united before you transfer to royal correct correct what does mr tweed to with him when he lose anything he takes it might he take nothing with him when he leaves i i take some customer information but he does not take customer accounts because the customer accounts was my point are owned and remain as the agreement recites lester tweed goes over to cap west he starts all over again with no customers well he may be able to get cap west to accept the transfer of the cows that were at united or the accounts at united but he did not do so  we know that when we know that because of the absence of evidence because because the because well doesn't produce a transfer form of the united d p p account that it took over when it accepted the closing in march of zero seven  united would have done that not royal because he if those accounts were transferred when tweed left it would have been transferred by united and royal liberalising but but you see it would have but royal would have had there's no evidence of a transfer of t accounts before the united accounts over which tweed was the rep prior to march of zero seven there's no evidence of that the evidence is that all of the accounts transferred to roy and reasonable is just as i understand how this industry works for mr tweed to say i'm leaving i'm leaving all my accounts with you i'm going over to cap west and starting over as a complete newcomer to the industry except that tweet back that kept west may not have allowed the transfer the accounts and kept west would have had to initiate the transfer much the same as if you would transfer a four a one k or a pension account broker to broker you would have to initiate the debate but it put yourself in the position of royal assuming that i understand you're not going to concede this factual matter but as e that tweed leaves united before the transfer to royal occurs that we do now assume further that tweed takes his accounts with him when he goes to camp west and they now become the accounts of camp west if that happens you're asking now royal to say well i have evidence that didn't happen well when all royal yes the information once it gets transferred from united is going to get it's going to you see nothing about that because that that was all finished before the transfer of the royal the point i make is that royal took all of the records of united it would be able to prove that united transferred your point is and i understand your point is to suggest that there might be record evidence which was not produced and we did it when we do not concede exists that a transfer of the claimant's d p p accounts moved before the royal closing that at your point whatever but you bear the burden of proof and you've got nothing that shows that they went to royal have that mr tweeds accounts were transferred to royal whether or not mr tweets accounts you mean united's accounts over which tweet was the rap but ok well the only evidence we have is that there is no ever know record evidence that it moved elsewhere other than to roil that's our evidence that's not much well but nothing stopped them from obtaining a declaration or anything from tweed or evidence from tweed there simply is no record stop you either except that we don't have united's accounts and united's account records there would be an account record excuse me there would be an account record at united even if the account transferred to suggest as they do that we don't have the account because the entire record of the account moved to simply wrong there would be a record of the united account which would have moved the records moved with the account according to that agreement they moved to royal the fact there would then be a transfer form in its records that had that account had moved to your actual believe without much evidence one of the other be on this contract you're asking us to believe that mr tweed leaves united months before the transaction and that the accounts that he's responsible for he didn't take with them and united then didn't transfer them just kept west you're asking us to believe that that they did that they didn't transfer to capt wes you're asking us to believe that united did not transfer to capt west this account that mr tweed had so when mr tweed goes over there the account is not transfer you're asking us to believe that that's what happened because no record evidence of that would have the transfer form that he count moved from united to some other and some other broker dealer they haven't produced that record they're in control of that record not claimants any others and this this is coming to us available prior to the ruling or none how much discovery what discovery devices neither other than the declarations there was no discovery conducted in the underlying but yet the ability to take evidence into discovery both  no records that was his testimony or his offer that the lawyers but you didn't go out you didn't file and derogatory if you didn't take depositions i mean there are people out there in the world who might know things like you might have contacted mr  tweet we did not take any discovery now the judge first this court is absolutely correct to focus on the notion that each account has value to confirm the profound ambiguity of this agreement you cannot take the one phrase all customer accounts in isolation when you look at the agreement you'll see that roy alliance paid only for revenue generated by the transfer of representatives accounts if we in fact owned and receive transfer of all the accounts you would expect reasonably and the united securities would insist on some payment for that in order to get the value that you all recognize a likewise you cannot underestimate tweens interest in taking all accounts with him wherever he decides to go so he didn't have to start all over again remember those accounts are not only owned by the broker dealer they are owned by the claim s ell they can direct where they're held who they're supervised by and who they're going to pay commissions to so i think the whole value proposition is very clear let me finish by well i don't have to finish but next point about positive evidence as to whether there are any have information about accounts at royal lines this is what mr curly in house counsel for roylance declare on may five two thousand and sixteen i that claimants were the customers of royal further that search did not reveal any evidence of any agreement between defendant and reliance therefore to the best of my knowledge information and belief defense have never been customers of royal alliance and there  no arbitration agreement between royal lines and defense claimants bear the burden of proof this is a summary proceeding in the sense that it started as a powerful in an injunction motion and then we are here by virtue of their motion to compel arbitration absolutely they had the right to take discovery they chose not to mr contender i could not stand up here and say there isn't we didn't produce evidence that the where the customer records are and say that he met his burden of proof that's not what the proponents of of evidence standard means in this context or any other as this court well knows he bore the burden of showing there was an agreement between us or that they were our customers he did neither we on the other hand perms firm really provided evidence that there was no agreement between us that we never got any customer agreement because of a relationship with these folks we never did anything for them and there was no record of them because it was a summer proceeding because we're here on the decision the legal question of motion to compel arbitration you can simply reverse and direct that judgment be entered in our favor and ask that the district court and join the