they please the court and good morning my name is mark landow of economic blando and i represent the plaintiffs and appellants in this matter we see if reversal of the decision of the court below on three separate grounds based on the three alternative grounds on which that work ruled against the plaintiffs and those issues are number one whether the material change of position doctrine still applies after the franconian decision by the supreme court number two if so whether mrs garners actions here years of that point so she she did the best she could under the situation where the government repudiated her contract took away the right to prepay basically devalued her property to the extent that it had barely any of the original value it would have under the original contract terms she sold her interest more than six months before she sold the property and completed the sale less than six years is signed and the date that the the closing actually present rethink points to the closing if you look at this purchase and sale agreement there's one hundred references to the closing if you look at the agency's regulations which we have contract each time to determine whether entry into the contract or closing would be a material change that certainly would be a factor your honor but i think the biggest thing to look at in the easiest rule to apply in this case is when did the parties performance stop so remember this is a contract that the parties the government and the original owners had been performing for twenty years up into the time when the sale occurred but that's not what the law says with the law  entrance into the contract when the contractors want for the sale of the property or when it was closed and one of the arguments that could be made for why it should be when the contract was entered into is because when the the material change occurs at that point the repudiating party could no longer rescind its repudiation right and so it seems a little under the way you're looking at the law to say that even though franconia supreme court decision is by repealing the legislation and we say absolutely the government could have retracted they could have repealed after the point that we entered into the sale agreement and you can bet if mr garner had filed suit at that point in time the government would say well why are you suing on the prepayment right we've already repealed the legislation you haven't suffered a loss and again i think the fact that the parties are still performing the contract is a key difference here there's never been in all of the material change of property they are operating at they're responsible for the management of the property the care of it the care of the tenants the submission of budgets compliance with all kinds of government regulations and the thirty five sixty rules and to your point absolutely they're responsible for paying the mortgage so at the time they signed that sale agreement they are still paying the mortgage every month the government is accepting those payments so when does the change occur only upon the closing everything points to the closing everything changes at the closing that which the property is actually transferred if you look at the agency's regs they talk about what has to happen before the transfer and that transfer that they're pointing to is the closing again before then there's environmental  reviews civil rights reviews capital needs assessment appraisals that has to be done even under the sale agreement you need every party to that sale agreement has the right to void it one way or another even on the seller's part they need approval of their limited partners before the transfer can occur of the buyer has a whole list of due diligence items they have to do and it's also object to the consent of the agency which again is where all those other requirement making an election to treat the repudiation as a breach and in terms of the material changes when you finally close the door what is the final act where is your final act i mean i think one of the straightest as you mentioned does have the word final at it but i haven't seen a whole probably both of them if there's no statute of limitations or any other fact pattern it really doesn't matter and met probably most cases which of that is the trigger i think you're absolutely right you're on i think that you're seeing in so many cases there's no question of a cruel it's just a question of through this course of conduct when you agree that you're going to sell that grain to someone else is it when you signed a contract is it when you actually deliver the grain is that when the other party accepts the green the other cases don't have to specify exactly which state along that path it is because there's no of limitations issue here so i think we have to look at what makes the most sense what's the most logical rule supported by the case like to say when that change really occurs and remember you don't actually this owner mr garner didn't suffer a loss that loss was not reali until the moment of the closing because that's when money finally changed and that's when per the closing statement she received see the cash to owners it says on the hud one statement so now she suffered a loss only now is she no longer performing under that contract with the government only now is she no longer paying the mortgage now the buyer is the owner of the property and the one who's responsible on the mortgage i mean everything in all of these regulations through out the sale agreement everything points to the closing what is the impact of the material change do i understand correctly that once there is a material change that the repudiating party can no longer be tracked it's repeated that's absolutely and that's a rule that both parties agree on for the restatement and all the other authorities and that's where you get the phrase closing the door to repentance because once you have taken that change and you know really this is about the parameters of election which franconia talked about and there are really at least two ways that you can elect to change your position one is by filing suit and the other and this is right along the lines of what was held by the trial court in franconia after th where the trial court judge said this notion of election means you could file suit where you could change position and so that's exactly what mrs karner did here by mitigating her damages and i think that's really another important point here is we don't want to discourage parties from mitigating their damages and that's exactly the course of action that the prudent course of action that mr garner took soon as she reached the twenty year in or verse three when she otherwise would have been able to prepay but for the repudiation she said i know i can't get out i've talked to people i know that filing a pre payment request is going to do me no good because i know i still can't get out that's when the laws additional say oh it's not like buying a po sorry it wasn't the by the beneficial or at the time of the contract i i don't think so your honor the that the cell agreement is just a commitment to go through a process that may or may not end up in a closing where the property is actually transferred and that's what makes real estate deals different from other contracts where you maybe you agree to sell your wine to someone else or buy someone else's oh it's when the other party  appendix page thirty nine number one government approval of the sale which neither party has any control over and that's where you get into those regulations that talk about there's fourteen different conditions on the government's approval and five different submissions and all those regulations talk about here's the process we're going to go through and if all these conditions are met only if and only if all these fourteen submissions are made then we will close on the sale and then the actual assumption of the mortgage and transfer of the property will occur i mean they actually use the terms sale or transfer and point to the closing as to as the date that that sale or transfer will occur so if that changes the sale they change of  can occur until the sale actually occurs and both the sale agreement and the regs point to the closing as the date of sale in terms of the other conditions you asked about i mentioned the government approval there's the requirement for the seller to get the consent of all the limited partners remember these are limited partnerships so that's a good example of a condition that's actually in the control of the seller who you know it's safe to say the law had changed using your height the all mrs garner would have to write to her limited partners and say the government has repealed the legislation we have the sale agreement but we should probably try to get out of it let's you know so you can approve it if you want but they'll those are all cases that discuss the change of position doctrine and they all do deal with situations like i've described where the other party repudiates and so you you buy the wind from someone else you sell those to someone else in terms of a cruel looked at those cases find problem w that none of them really turned on and they need to question percentage here of whether it's when you enter the contract or when the closing right now that i think that's correct or out of the change of position cases haven't needed to go that far but i think nonetheless given the nature of this transaction given all the contingencies in the sale agreement and really just at the fact that the performance by the parties to the original contract mr garner and the government continues until the date of the closing and you can have a change of position with respect to a contribution of your case to support that idea i think you could have a change in position while you're continuing to have performance look because if you look at every single one of the cases where there was found to be a change of position the performance either has not occurred yet or in germany he says that expressly say what you have said or is it just the facts in those cases happen to turn out that way there's no case that's ever held otherwise and that's the only workable and logical rule i mean i'll give you another example what if the sell through but if you say that the purchase agreement march the change of position and then you go through this process and everything that could go wrong one of those things goes wrong the sale falls through and now contract they warranted this as part of their mauritius that they were not going to make it prepayment request they're going to continue to to operate this their apartment complexes under this program up that you have to do when you're selling your home after you are in the contract before closing she thought they still had to carry those out so that constitute that is the type of thing that's changed position if they had not done that then  contract claim anymore so what your response to that  change their position even if the sales contract falls through that still doesn't change the fact that they've entered into a contract the reliance on the government's repudiation at that point they have six years to bring a claim for breach of contract they did so outside one day too late was you had to go to limited partners and get their approval what if they don't prove it falls through because that well that assumes they still had an obligation you know the duty of good faith and fair dealing to make an effort to obtain their approval if they just sat down and didn't even talk about this with a limited partners done nothing and then said oh well that condition isn't satisfied and so we're out of the sales contract and no harm no foul now if you could the union street the other party could still bring an action  for either money damages or specific performance on that sales contract and the other thing here that is key is if we wouldn't if treating the actually went to the agency they asked for the agency's approval of the sales contract and it was obtained they asked for approval of the assumption and transfer as it was obtained and they then got a loan for getting their that was the only separate deal separate agreement that was entered into and which the government didn't have any control they didn't form a contract they could play prove that but they were not a party to that contract and everything else the government was involved they were they they went to the table and negotiate in good faith with with the accounts here and then six years later the accounts are now saying oh by the way that deal that you and you did with us that was really a breach of contract it just doesn't make sense if this if this exception to the rule to franconia applies then the only way it could apply as the trial court be terminal is through the sales contract and that would render their sheer there is the takings claim but because that taking his claim is predicated on the breach of contract claim there's a long wind of chases from this court that says you remedies and rights flow out of the contract and so how does that impact your argument you're saying it has to be it just entry at this contract that could fall through is enough but how is that sign up its final because it's it's an action it's a separate contracts that was repudiated here once that was done that is that's it's very doesn't take much to constitute a change of position in fact if you look at the case of rome versus  seeking the service seeking that would constitute a change of position so the point being that the bar threshold to change position is very very low and that's consistent with the other statement the last and that is if you want to notify them you can place the other party in breach just by saying i'm holding you in breach and sending a letter or some kind of notification it doesn't take much constituted the change of position the that the party in that case actually did enter into services with someone else and that's a good example talking about that case analogs where it was actually when they made the decision when it was final that they took employment with someone else that it was a change of position in this case there was no change until the sale was final and so that the huckster case and the other cases involving change position fully support  in terms of the regulations i want it to be even more specific if you look at seven c f r thirty five sixty four zero six section b talks about the agency consent requirements it says that agency consent must be obtained prior to an ownership transfer or sale and that and then again and subsection c of that same part it states that all these things have to occur at least forty five days prior to the proposed the proposed ownership transfer or sale date and the regs also make clear that that sale is the closing so there's no agency consent there's no transfer allowed until that closing occurs and really that's just the nature  of these these programs that the owners choices are very much limited the whole reason for this case of the ghetto is that the government repudiated the right to prepay leaving the owner with very few options and the only way an owner like mrs garner can ritter self of these properties is to find an owner who will agree to take over the restrictions which is exactly why it was such at a fire sale she had to take such an extreme loss upon  and so the fact that she still obligated to the government only reflects the fact that she's locked into this program and therefore continuing to perform therefore not able to change her position until that new fire finally steps in and takes over those loan obligations which again hers at the closing so i really think when we look at this case we need to think about what did mr garner do wrong here you know if you think the classic case of we have a contract and you agreed to buy my harvest of oats but you did you get a contract so i find someone else i complete that sale but the i lost ten thousand dollars on that resale of course i as the victim of the repudiation have the right to go to court and seek recovery of my loss and that's no different from what mr garner get here she got rid of the property after the government's repudiation and the only way that she could step away from it by finding someone else to take over she went through the process and once that sale was completed in closed her claim at that point or crude and she did file suit within six years of that point and therefore