s the judgment should be overturned because there is no evidence whatsoever in the record that satisfies either of the two theories of assumption on which the jury was instructed and the trial judge there is absolutely no evidence that that happened to the contrary the evidence with was undisputed that documents the loan documents were transferred to the rest gun would agree with instructed to that effect bothers me about this case and this is a practical question rather than a technical question is that the ownership on your side is all sterns that is to say the stearns bank owns the subsidiary that owns rest com yes so this is all stern's money one way or the other and the behavior of the stearns bank as the citrus people were trying to interact and trying to get to pay a final payout and so on was always with people who were employed by the stearns bank if they never hear about res so stearns is acting it says merely as the service are but in fact it's the stern bank whose money is it issue and they're interacting without saying oh by the way you know you don't know we're just a service or you know if you've got a fight with whether we're nice of the citrus as it is not merely as a service or but as actually as the lender because it's being asked to do things that the lender would be responding to and instead of saying oh you better talk to the lend simply responds as if it were the lender well two points stearns was the loan service there is this core pointed out in its original opinion of course and secondly  the me implied assumption yes hands on whether stern's essentially received the benefits of the contract yes well it received the benefits extension after the decree it had i'm sorry i accepted the benefit to the country i guess all right and everything went through it right yes so it and any  obligation that citrus would have had would have been to give it just to stir right to give who were they supposed to provide information to mister yes and who was supposed to get reply if they were going to repay who were they physically repay stearns i take it yes the money was to go to silence so so in so far as the relationship between stearns and  was it was obligated to get to that relationship no the evidence the undisputed evidence was that if stern if stern's had received either interest or princip can i understand them and of course there was no way to handle it because it was a single guy sitting there so he would have just put in a different bank account no no you're assuming that you know what well you're assuming that there was not it here in the corporate for melodies and you're also assuming away get all of the benefits that went along with the applications it had well as we pointed out in the briefs we could identify four major benefits that accrued under the loan documents one was in force with the guarantees and as you know from the companion case rest going through down the guarantees in its own name another was exercise a foreclosure right and then as you know from the companion case the notices of say hell were in restaurants name cases that the district court relied on where somebody buys a corporation buys another corporation and the question is whether there's an implied assumption there and in those circumstances you do look at conduct and manifestation different case we would put on experts from the f b i see about how they stay structure their their agreements in a particular way we would have emphasized the provisions of the contract that prohibited restaurants from transferring anything to it is quite clear that there is no evidence that supports either one of those two theories the trial judge didn't find that the evidence supported either one of those two theories plain i can get you misquoted that letter you quote that letters saying we have assigned this to stern's no they say we have assigned it to an lender and then they say pay money to stern's they never say that stern's on that letter never says the correct so to put a bow on and this point as to the two theories that went to the jury there's no evidence that supports either there's no argument that support either and the judge solely relied on the theory that was not part of the instructions and i believe this court cannot affirm and you know before your time runs too far you might want to get to the case where there's actually more money at stake which is to say the r where they well there was a fraud claim in the earlier case nice interest accuse both stearns and and rusk on a fraud that case went to the jury and the jury rendered verdicts in favor of both stearns and restaurants on that  well it well let me assess your hypothetical area suppose i'm right suppose that there were three possible bases here for finding unclean hands and there was  the one that the judge characterized as as the made gallant i want i want to know is is that issue preclusion yes to the one thing and since we're two other possibilities we say ok fine still stance or do we say it confused which is why i bothered to go back and see what actually happened well with respect with respect the question you're asking the district judge recognized correctly that the failure to fund with the guts of the bad faith defense he said that in order after order everybody approach the case as if that were the case and if the if the one funding issue is the subject of a preclusion then i think at the very least you have to have a new trial if you take a look at the other two aspects the wrongful the wrongful allegedly wrongful redemption price that has nothing to do with the bad faith claim as a matter of law as a matter of law the guarantee liability was created the moment the citrus defaulted the allegedly improper redemption figure took place occurred four years later so it has nothing to do with the acts that give rise to the claim and if i did interrupt for just a moment this is an essential prior question what's the standard by which we rule view the refusal of a district judge to give issue preclusion effect to a prior judgment over or is it abuse of discretion i think it's a no because you're basically saying when and what your case for that i don't have a case for that i was going to i was going to reason to that because you're basically dealing with our park lane hosiery in which the  don't well no not not as it pertains to this case because the district courts rationale was concluding that it wasn't enough that it wasn't enough to just demonstrate a qualifying relationship you also had to  demonstrate that there had been active that you had to demonstrate that the guarantors had subjective awareness of the significance of the prior case and that was the only reason why he concluded preclusion was not appropriate and that saying i'm in this person's shoes and i'm and i won't cover for anything that they're liable for and if they're not then then it's seems to me that i guess what i'm saying is today i think even the the notice requirement should be lesser under the circumstances i think the north requirement should be lesser and if you don't want to create a rule where litigate claims i mean that would be a horrible result systemically and this court in the fireman's fund case said that because its liability is merely the rivet of the interest of the guarantor and the principle something yes and one is issued yes but the others are not and you go to the jury and the jury finds and i think we're supposed to assume that they found it on on the inconsistent basis rather than on the cons basis with respect to that as to the redemption figure as i said as a matter of law and logic that has nothing to do with the bad faith defense as the jury was instructed so it doesn't have thought these people were really playing around it would be that that's part that's quite possible and as i say it's quite irrelevant to the subs and it may be hard to make a connection as to why it would matter very much rise to the claim i mean isn't there i'm part of the problem here is that the jury in the first case seemed to have been confused about the relationship between the two parties so therefore they let restaurant a you have conceded that they might have been it's rather hazardous to give issue preclusion effect to the jury verdict in the first case no i didn't i didn't concede that the jury might have been confused i was saying even on the premise with which i thoroughly disagree that they were confused there is preclusion because there is a judgment in restaurants they have or with respect to the exact same claim that's been litigated in the bad faith and the ok why don't we hear from the other side we've taken you over time but we will give you a chance to respond go to the participation agreement the rest khan is relying on that appears in our supplemental excerpts a record of page fifty i mean a page or two ninety eight it says if section four twelve that court the letter starts out welcome to stern's basic exclamation point and it says that they're going to get the job done we acquired your loans as part of a it says we are interest to meet with you about the specifics of your loan as your new lender we plan to make every effort to ensure a smooth transaction and my problem with that is the theory on which you tried this case i think you have a lot of better theories given your evidence well if you there are several theories that i mean even out of the federal law that is relied upon you tried this case on a theory of breach of contract by rescue as service having assumed rest comes obligations but it seems to me the argument that sterns as service are has stepped into the shoes of risk on by accepting the benefits i have problems seeing that the evidence supports precisely that theory that's my that's my problem with this with this case yes california civil code fifteen eighty nine and the milk your case specifically state that he party can help be held liable for preach a contract if they voluntarily assume the duties of the contract no if they assume the duties again pardon for saying that stern's voluntarily assumed the benefit accepted the benefit of being the decision making authority as to whether a drawer requests would be funded or not how is that a benefit that is a benefit because just as this court decision making authority on this case they are up and they are and so what do i get out of making a decision i get to go home well you have family more power of this case that i do your honor with all due respect and i'm trying to figure out where is the benefit that turns assumed when acting as service or if you were to apply banks paradigm this case they said that they have the power to insert stern's bank policy into the terms of the contract if they have the power to unilaterally change the contract that is a benefit they benefit within the meaning of california law which means they have implicitly assumed a sions and benefits of the country ok with regard to two of the benefits that mr harris identified he said foreclosure rates stearns did benefit as far as the enforcement of the guarantee is concerned the only way that that could have been done is if there was a foreclosure which did happen and the only way that foreclosure happened was by stern's employees undertaking in themselves the ability to act on behalf of f and d and so well it was undertaking most of the documents were signed by a fellow named mr hosier who was a vice president of stern's bank was i on behalf of f and b and  reskilling so they did it they did have the benefits under the contract they had the right to send an inspector to the property and they did send inspectors to the property my client did not have the duty to just allow anybody on to the construction site but this inspector did have the right pursuant to what stern's ordered to come on and see what's going on  if there is going to be a separate service or if there's going to be a splitting of the functions of lending and servicing by the f b i i think agreement does right that split did not occur until after the supposed assignment to rest on in other words the servicing agreement that is referenced in my opponent's briefs says that that servicing agreement was entered into soley between stearn very aspect of the case rumor and it seems pretty clear that mr statics and citrus eldorado implied we consented by virtue of sending a draw request to stern's sending draw request you had several unclean hands theory but while i think the one that may have had the most appeal to the jury was all of the things we've been talking about i e they said there was a lender and so on what actual consequences of that rest on your honor i had no idea what he was and what do you say i have not independently verified that one way or the other ok all i got to go on is what's in the second in a complaint i don't believe discovery was undertaken on that issue as far as the corporate hierarchy ok but to answer your question with regard to that was pretty good answer i never saw before i wasn't your brains did one party do things or say things which frustrated the other parties right to receive the expected benefits of that contract in this particular case the contract issue was the guarantee contract under the guarantee contract it specifically says as it doesn't basically every guarantee contract in state of california that these guarantees are being made for per for reasons for which there was there was inability or refusal on the part of rest going to endorse turns to disperse the loan proceeds and several of them came about after the two thousand and eleven truthers or there were several requests on the part of citrus eldorado say please give me a full accounting of what this twenty million dollar figure consists of that question with never answered prior to the foreclosure never in those letters and those requests occurred after the first trial meaning those are facts that were never litigated in the us the jury in the second trial was presented with that evidence so i would submit that first of all the guarantee contracts were never issue in the first must have been china for us case see that's the probably we have been having don't even know i mean no one has really bothered to tell us in any detail at all what was actually trying in the first case but there was a judgement that seems to go to the breach of contract and everybody seems to think the preacher contract was about not dispersing his money and presumably including not answering questions so p r s if there was a judgment in favor of ras con ass just some chunk of what you're claiming was the bad face judgment in nobody's favor nobody was allowed to recover costs in the first trial there was a judgment this situation shall not recover a breach of contract or fraud and there was also in that s so for rest coming now to say that we have the issue preclusion by virtue of the judgment that was issued years before many of the relevant facts came into existence graphs so which is which of the facts that that actually occurred then after the first judgment there were requests by citrus for full accounting of what this twenty million dollar redemption figure up as between citrus and rest on that nobody recovered anything you were responding to in your question from judge lester about the list of things that happened since the first their judgement there were several of loan statements that were issued after the first trial that says hey twelve million dollars to stern  chose not to therefore it was with the guarantors parties the characters were not parties in the first trial and they could not have made a counter claim they might have been able to it bring them in as additional parties but it would have been a counterclaim true but i'm speaking specifically with regard to restaurants counterclaim rest cause counterclaim and they did not bring a third party complaint either restaurants counterclaim did not include anything having to do with a guarantee contract it had to do with fail to fell the loan the second being irrelevant so the underlying issue not funding was litigated it was the key issue in the first trial i'm sure i'm on page seventy two seven sixty three that's but that's the wrong page that's the page of the stipulation in one of the pages immediately prior to that there's an instruction under theories and which the case went to the jury in one of those theories is the defendant quote fails to the civil code section twenty eight fifty six because twenty eight fifty six which is the civil code provision and hope and give you the right number twenty fifty sixty is the civil code provision that gives guarantee it towards the right to to waive their their defenses