crone chapter seven trustee opponent ready to proceed yes your honour's would you like to reserve some time for a bottle yes i would like to reserve five minutes for a bottle and if there's any time left of the st ten minutes we'll reserve that for a bottle as well ok so we'll let you know what we liability or the amount of a claim is sufficient to qualify the creditor holding such a claim from qualify as a position creditor in of all three case and that's the huge us case the burden of proof honor the scope of the appeal this is an appeal from the denial of a motion to vacate trick your honor was brought after the time to peel all the other orders with respect to the order for relief from the summary judgment in the the entire record before the court and what i what i what i would focus on what i'd like to focus on are there are three cases that i find critical when i appear before  interests or it either in your role before the bad or as jurists as bankruptcy court judges i always look to the espinosa case the press case and the damage brokers case to me those three cases are the three critical cases that tell the bankruptcy court judge that you are the gatekeeper you are there to make sure that the integrity the bankruptcy code the rules and the system are maintain in this instance we believe the judge land as failed in his role as a gatekeeper that his role was to determine whether or not the bankruptcy code had been properly applied under section three hundred and three and we know from station that he did not because for example he says that the summary judgment was on opposed well we know that a motion to dismiss was filed on behalf of mr sa which the petition creditor said could be used as the response to the trial he said to the summary judgment so we know we know that when at the time that landis ran to summary judgment he ignored the motion to dismiss and ignore the issues that were raised in the motion dismiss well i think it's important to do is is there is a decision that has some very critical nomenclature in it especially for today and that's the calendar that's the mcdowell versus calderon decision that's actually cited in the trustees opening brief and that's one hundred and ninety seven f rd well fifty three and it why is that decision so important today because it says that it says the law  argument for the bat why because there's a contagion about ok and so how appropriate that we are sitting here today how ironic it is that we're sitting here today separated because of an infection and the  circuit in the calderon case in one thousand nine hundred and nine talked about a decision that is infected by clear error so where is the infection in this case and i think it's appropriate to look at that so the infection in this case lies in the fact that it began with an involuntary bankruptcy petition that was filed by the russell saying that we're three qualify creditors and yet they were not so there begins th contagion the contagion begins with the involuntary petition and that it was filed improperly by three unqualified creditors you do not have three creditors and the contagion spread us because then didn't judge land says that when you have an instrument payable to the summarized basically payable to one or group that's not identified separately it's one obligation and in fact when you look at the involuntary petition and the documents attached to it we know that the russells refer to themselves as the lender so they refer to themselves as one entity ask a question of whether there's that mean that all three months and their own documents say that at the payments are made to the lender so they have made a an admission that they are one lender there is an admission in the documents that they are one lender and so judge land as having been infected by the involuntary petition then makes the mistake of not applying the nevada statute properly than and he has an obligation at the time of the motion to make it that's his job his job is to make sure that the banks code is properly applied and he didn't do it but turn i'm glad you brought that up your honor because one of the one of the issues that came up in the emotion of a kate was that this preservation order denied mr sattler access to his access to his own earnings had mr a salad had access to his earnings during the course of the involuntary bankruptcy case then he could have retained counsel to the appeal we do know that the law says that  it's not an unreasonable delay and if it is there's a reason there is an excuse for the petitioning creditors the trustee and the court all imposed a restriction upon mr sattler which as a matter of law congress set congress set he has a right to his post petition earnings you can lodge in paris write to those petition arnie's they deny that right he would've been held in contempt and he couldn't hire the argument about his arms i'm sorry what did mr sadler st raise the argument about his earnings and he should have had access to some funds when did that come up to remember i believe that was the january it's  and so because that that it did compel the bankruptcy court to go through the records and notably the bankruptcy court went through the record a nd time in determined that there was no clear error the test before this court is determined whether the bankruptcy court important i think recognize that mr sadler did have counsel at the time at the preservation order hearing he did have counsel when a motion to dismiss was file and he was still represent it when the opposition and the motion for summary judgment were filed and mr southworth counsel withdrew actions that caused his counsel to withdraw importantly in connection with that the bankruptcy court continued the hearings out so that a motion to dismiss and the motion for summary judgment instead fees in that so that the argument that the preservation order precluded him from retaining counsel is just simply false additionally i don't know what their stipulation w when you look at all that when we look at the march when hearing which is the st time that mr sadler raised this argument that he couldn't afford counsel what mr souter says is he asked the trustee to give him the proceeds from the house that he sold in violation of  and in fact what the bankruptcy court also had in the record before before him was mr souter's own admission during his deposition that quote he had been using cashier's checks for gambling casino eighteen mph thirty seven dollars so again mr the argument that that mr souter to not have access to funds is simply false the fact that he chose to use those funds for gambling instead of retaining counsel is entirely within its control and that's that's that would be effective after the date of the preservation order as opposed to that's the reason why the preservation or resent that was after the preservation out her and her god yes additionally mr souter showed up with three separate fence of council about a month later so an argument that he couldn't get council because he didn't have funds is again just simply incorrect there is no evidence of manifest injustice there is no extraordinary circumstance for whatever reason mr salar chose not to get counsel he made that decision but there was nothing that precluded him from doing so with respect to the the argument of legal error  i think it's important to actually talk about the bankruptcy court before it so if we look at the motion to dismiss which is at exhibit three the argument that mr they each have an undefeated specific interest in each one of those notes additionally additionally the opposition thanks at length and provides significant evidence  were issued to each of them there are numerous communications in which mr sattler at mit that he lent money to to ms russell and mr which are so when the bankruptcy court was ruling on the motion dismiss and was ruling on the motion for summary judgment it was not the bankruptcy court simply said it's unopposed we're going to grant it the bankruptcy court looked at the evidence that was before it which with considerable evidence that counter everything mr russell acces mr sadler asserted and in fact if you look at mr sellers declaration he makes those assertions upon information and belief he doesn't even provide any documents he doesn't even affirmatively make them he simply says there on information out now though you know mr mr redmond says it's not true to say the motion was unopposed because it was deemed to be opposed by the motions of this mess so help us out with why this isn't a problem and a summary judgment car evidence it is not evidence to overcome a motion for summary judgment and all mr souter said was upon information and belief i don't believe that they are in fact  properly owed money under the nose or to that that is not credible evidence judge landis did not find that to be credible evidence and it does not amount to raising a genuine issue of material fact and that is the determination that judge landis found is that there is no excuse me there was no genuine issue of material fact to the extent that the petitioning creditors held owed money that was not disputed as to liability or to amount it's also important that the bankruptcy court numerosity was if you in the bankruptcy court correctly found that two dollars additional creditors joint so  had the undisputed acknowledgement that mr russell was ineligible petitioning creditor and then we had two additional creditors join as well so with both of those joining you know we certainly the undisputed satisfied again and i'd like to but to sort of reiterate again the contacts over we have been talking about the substance obviously what was already said you think it's important to acknowledge what was before the court but what is before this court is the  determination of whether the bankruptcy court abused its discretion in denying a motion to reconsider its order and in this instance the bankruptcy court properly properly consider the arguments properly determined that there was n and there is absolutely no abuse of discretion in determining that simply arguing clear error is not is not an effective means is not a permissible means under be one and that's a bit made very clear it's not a substitute for a think this court has pretty clearly stated that legal error cannot be brought up in a rule sixty b one motion unless it was brought within the time for bringing an appeal so that brings us to rule circumstances beyond his control that prevented him from proceeding properly this data was involved in what was going on as has already been stated so what they're really focusing on law a little harder to get your arms around you want to can you help me out with that yes your honor i found the same thing when i was drafting my brief but i did i thought that the bankruptcy appellate panel though seemed to provide a clear path to say well can you call them like certain tell him we got it right with regard to five or com the way i read that and to try to make all of these cases mesh was that legal error has to involve extraordinary circumstances and in that case the extraordinary circumstances involved an order that was entered outside the bankruptcy courts authority what does that mean and i looked at the language that case and i noted that the court was talking about how a trustee is bound by a debtor in possession of actions and orders that were entered even if they're inconsistent with the bankruptcy code so if they're inconsistent the trustee would be bound but if they're outside the bankruptcy code then they could is just argue that the judge was wrong not that the judge acted outside the bankruptcy code the judge had the authority to rule on the preservation motion and rule i under section three hundred and three based on what he was given and he did that it wasn't the situation in fiber com where he was asked to have a contract be assume that was just not simply assume a ball and there were also some procedural notice issues so your honor i don't believe and i'm sorry i can't see the clock on your about twenty five this is not summary judgment on a disputed this is not separate judgment on a contract dispute this is an involuntary bankruptcy case which congress amended in two thousand five because it's such an extreme ram it so i think you have to put this in the context in which motion was filed within twenty eight dollars days so that's a reasonable period of time and judge lantus in his decision set us very clearly we put this in our reply brief i find no airing those of the judge's own words so i think what we've done is we've made the argument that you have an extraordinary case here with an involuntary and the judge needs to look at the involuntary from a much different for the requirements of an of an involuntary of numerosity of being a qualified creditor of which not dispute it how about the other two folks who show up a little bit later how do we how do we factor that into this there's only one six you know you are right i would assume that it was made in a motion to dismiss i can't say because i was a counsel then but again it's the bankruptcy court who is who supposed to look at those things you know the protocol for claims objections so i know that case very well you know i tried something that slapped my hand for it judge smith didn't see it but the bab saw it ok and so to in this case and when they do it really does require a lot more effort of the judge to really roll up their sleeves and take a look at these things i would say many practitioners today hesitate to file an voluntaries because of the risks associated