me just start by asking you a question because it seems to me that your argument in essence is this mr kane submitted the jurisdiction of the arbitrator to determine  to the panel in other words what mr cain was saying to the arbitration panel is and these i think are the his exact words i'm not liable i'm not responsible and i'm not obligated because i didn't sign the agreements in my individual capacity and i separation he says he they never entered into any agreement not that they didn't sign anything ease your position or i mean you're not seriously arguing that mr cain actually entered into this agreement personally ar that point he could say what and by the way isn't the end of the supreme court decision and first options he's allowed to also argue in the alternative he can say you don't have jurisdiction over me and but if you're going to assert it here's my position without giving up ttempting to communicate in a reasonable way i mean it just seems to me that he's saying i didn't sign the document i'm not a party to the agreement i'm not liable on on any of this this  which i think adds up to you know you can't decide it but but your honor look at what the district court said in this case the district court and said in this case that the that those two sentences and the answer in statement upon which mr cain realize was both an effort on mr cain's part to meet the merits of whether or not he was personally liable as well as according to the district court an objection to jurisdiction so it was offered as you can do well but but but again mr construct and mr cain should have said you do not have the power to decide this issue or you don't have the authority to decide this issue in fact that's the language that the ninth circuit used in the george construction case object to t arbitration in the arbitration itself and up to the point when the panel wrote the final award nobody in this case not the litigants not the panel not mr cain the lawyers no one thought that the question of whether or not the panel had  to decide this issue was alive real issue i arbitrated that case i was the lead counsel was not an issue in the case and so what happened here is it's not a situation as in george day where the lawyer cynically waits on the sidelines doesn't raise the jurisdictional issue until he loses on the merits that's not what happened because my able colleague mr coleman came into the case of late he didn't arbitrate the case what he did when he was hired which is what every good lawyer does he scoured the record and he came up with a new argument argument that was not raised and what's what i just clarify for me when you say that everyone but i'm treated this issue what do you mean by this issue  issue of whether or not mr cain was liable under the personal guarantee i cross examined him in the arbitration at length the personal guarantee is an exhibit in the record he as as judge with jurisdiction old and if in the answering document the issue is raised and presented which which seems to me to be the case in terms of the docket at that point is it your contention that they have to continually argue jurisdiction every time they stand up and go you're on they have to have to contest jurisdiction no your honor that is not our contention i think the cases make it clear that if you stand up and you say you do not have the power to decide this issue you do not have the authority you do not have the jurisdiction or something similar then you have saved yourself and that's what george day requires but that's not what happened here in well i can see it from the record but george de you know what one of the things we have to keep in mind is that george days eleven years before first options and to the extent that george stay is not consistent with the supreme court's decision and first option first option is controls does it not it would your honor except in our view there is no contradiction between the two cases first option is reserved for the situation you're on or where someone comes in and clearly argues that there is no jurisdiction clearly argues that there is no jurisdiction and by doing that runs the risk that the court or the panel may say you submitted this issue to us for for justice process you've got to do it in a clear and convincing way but well how is this different from ralph ran dru's where he says i am personally not a party to this case which again is not saying you know you do not have ralph went out of its way to note that mr andrews was not represented by a lawyer mr killen was represented by archie robinson a well known practitioner in the bay area a very competent lawyer he knew how to raise an objection to jurisdiction if that's what he wanted to do but that was not his trial strategy that's number one and number two there is a big difference between saying i am not a party case and doing what mr cain did which was say i categorically deny any liability any responsibility or any obligation and i that i entered into in the agreement or that i entered into any agreement in other words he's asking the panel to decide as a practical matter that he didn't enter into an agreement which would which would lead to personal liability and that's the that's the theory upon which the case was arbitrated back up for a second yes i mean how this whole thing started what was the object objective when arbitration was first conceived of to arbitrate what well you can tell by looking at the briefs that the issues that were raised over whether or not mr cain's art galleries had purchased approximately six hundred thousand dollars of of art and paid for by the way mr cain had a number of claims over against the company but those are really not relevant now that well i guess they are relevant and way and secondly whether or not mr king could be personally liable for that obligation either because he signed the deal or agreement in his personal capacity or because he signed the personal guarantee you  not the way it was presented or because he signed a personal guarantee because the personal guarantee seems to have a separate arbiter ability that does your office does i'm what i'm after is how did that become part of the case was that originally pleaded if you want to use that characterization the personal guarantee or to that slide into the things sideways well it didn't i won't i will i believe that we did we filed a relatively informal claim to which mr cain filed the relatively expansive and i asked him the claim didn't relate to the personal guarantee well your honor i have to say i don't i don't know that because i don't think the claim is even in the record i don't i don't know that but i don't think it's accurate to say that it's late in sideways because it is it is the subject of discussion in the arbitration brief before the arbitration even started and if you look at justice anderson's appeal opinion let me just conclude on this because i have only a few seconds he is a retired intermediate california court of appeals justice an able man he wrote an eight page single spaced opinion he dealt with every one of mister cain's claims and he explained exhaustedly why they didn't work if he thought that he didn't have the power or that there was a question of whether he had the authority to reach th district court i would say in response that the district court judge spent a lot of time looking at this and he didn't think he did and that's what we're here to decide is whether or not the district court where its determination is reckoned they were not that issue was even properly before until after you've lost the case on the merits and that's what happened here he asked whether or not he should be liable for the personal guarantee and he lost and he got a new lawyer who scoured the record and found a new record a new a new argument just as he should have  i guess my problem is that is the problem that judge crowder is highlighted which is we talk about the arbitration which is brought in to the dealer agreement and then somehow on the side sort of around the end comes this personal guarantee question and that somehow gets in the mix as the basis for concluding that he can conceded jurisdiction under the arbitration clause of the of the dealer  personal guarantee by reference to the arbitration clause in the deal or agreement we would have lost we would have lost that's not our argument our argument is he didn't object he consented there was a ten day arbitration in which the so unless there was an assignment of his claims to his corporation and there's nothing in the record to indicate that he didn't even have standing to raise those claims but he was there arguing that he should be personally liable look at the fact the justice andersen went out of his way to exonerate morning charles coleman from holland a night for the apple e david kane i'd like to just address a couple of the points that were mentioned in the argument just concluded first of all with respect to what's in the record we believe that the thing to focus on is the record before the district judge and not things that were not before the district judge that might have been covered in the arbitration  i would note that the it's undisputed that the with respect of this back door aspect of the guarantee under the letter of extension of credit that that was not part of the arbitration demand initially and that's set out in mr king's declaration was submitted to the judge also it started out on page fifty list mr cain responsible for injecting it into the arbitration proceedings and if that were the case you know maybe he did concede the jurisdiction if he did that what do you say to that argument what i'd say is there's no evidence that i'm aware of that mr cain injected and i understand that that may have been marked at some point later on as an exhibit he certainly was not making a claim under with respect to that it was presented as i understand it by the other side in this undisputed in his declaration submitted to the district court did they add that to their case you know i understand that the arbitration demand is informal was that added to the case as the proceedings went on as part of the litigation and was that information before the district court when the district court ruled on the motion to vacate i know only the second part of that question that i wasn't present during the arbitration and the record that i'm aware of is the one for the district court i have some understanding of what was before the arbitration and my impression was that there was an exhibit sixty four court and during the course of it but i should not be speaking about what happened as i wasn't present you can sure tell what happened by looking at this and says claimant six to respondent person liable on that of mad and then they say david cain signed a personal guarantee and applying for a greater amount of credit see exhibit seventy six verified his signature on cross examination and that he now understands this obligation so it looks like the whole thing became by operation of something part and parcel of what they were arguing about that happened when the decision was made but there was no effort at any authority to to arbitrate that issue and mr king objected very clearly in his answering statement on that on that subject in this case reminds me of a law school  classroom where you posit a certain set of facts and then you take a look at the cases and becomes pretty clear that that question then you move the facts over just a little bit well that's still close enough to what you had in the first place and now here we are in another situation where the objection is is less clear than it has been in the previous cases you know with looks like we're on a slippery slope here you will agree that the words here weren't as clear as the words in the other cases well they were different than what was in the other cases i would submit respectfully that in addition to saying that he never entered into any agreement individually with claimant that seems fairly clear to us  goes on to say and this is in the well didn't it in the fact that they did enter into an agreement individual of the climate that's the personal guarantee and that's what came into the case well actually that is disputed there was an application filled out the undisputed evidence submitted to the district court was that that application for credit was never accepted so there's in fact a real question as to whether the application for credit includes within it any agreement to arbitrate but if position that the arbitration in this case was instituted under the terms and conditions of the deal or agreement that  arbitration then proceeded under the deal or agreement and that during the course of those proceedings the question of individual responsibility became injected into the case you say over your client's objections and ultimately was was resolved but over objections that your position certainly that's our position with respect to injecting the financial see very clearly in the answering statement there was an objection to any liability or duties arising under the our gallery defendants in their answering statement jacked into the arbitrators authority by asserting that quote respondent stated in tracy cain categorically deny any liability responsibility or obligation to claimants in their individual capacity because they have never entered into any agreement individually with claimant at all pertinent times they acted only in a corporate capacity as to playing claim that they're entitled to the fiduciary she'll doctrinaire and  again proceeded to argue the merits which is the proper procedure under george day is that essentially your position yes and there is not and that is that is a correct statement of what happened in this record and what is required under the law in your view yes as long as we focus on the merits that we're talking about we're not talking about the  we're talking about the but the merits of the underlying dispute and we believe that's under first options so you're one tier one under first options yes but you see i think this can easily be read as just simply a denial of the merits denial of any effect of the personal guarantee he's saying you know we don't we deny liability because we never entered into any agreement individually with the claimant well that's how the personal guarantee gets in there because apparently they did enter into some kind of personal well the answering statement was in response to the arbitration demand and it's clear on the record that the arbitration demanded to which this answering statement was responding did not make any f and reference to the personal guarantee he does not in this document were entered into any agreement individually with claimant well that's then you get into the brawl and on the basis of a of an agreement entered into that's the way the case comes out and it seems that this is not necessarily an objection as you describe it it's a statement of we're not liable because it was a corporation and we didn't sign any personal guarantees i think i mean we very briefly go back to the standards in there were set out and sort of the problem is it looks like your client's trying to have his cake and eat it too if he wins you know he's not going to say well you know the whole thing was just an empty exercise because i did agree to it well he clearly made an objection it's undisputed the personal guarantee wasn't part of the complaint he said something but it's far down the slippery slope from george day and andrews and first options and all arrest it's it's our feeling that it's not particularly given the standards of first options that other than two cases one has first options and the other one is the andrews case both of which we think are very similar to ours in which an individual objected and was then similar but different the language is different we think it's a difference that doesn't get to a slippery slope particularly if you look further on paragraph two of the answer it says response here in refers subject paragraph one of the term response refers to corpus response to there are several places not just one where they say that they acted only in a corporate capacity that they are referring to themselves only in a corporate capacity and that they didn't enter into an agreement i don't know how much more clear they could have and if well yes you do and if you handling this should have done it much differently lawyers like to say that but i don't know whether that's just in this  adequate lawyers were involved in this were they not they were and it's we think that they adequately made the made the point particularly before a body that they are going to have to be and it's so clear that here we are the night circuit arguing about was clear the judge alston and i should say finally with regard to the standard of review we would view those as being factual matters which under first options should be reviewed under a clearly erroneous standard and believes that  some deference is is due to judge else and in that regard under first options are we on tier two or tears three because it makes a difference and that's what your presumption is if we're on tear three then there has to be  i believe we're under under to or three and i need to look at my first options here i mean there's a difference where you have somebody has not signed an agreement to  straight and if there's any ambiguity or lack of clarity there's no presumption unlike the labor cases which are the only ones really cited by the other side where you already have an agreement in the quake you already have an agreement and you have  parties and that's what's happened in georgia david agreement expired and they were trying to get out of here they never signed the agreement and it's in a commercial context and not one where you have a competing labor policy that favors or it's all right thank you thank you thank you chancellor you have any response will allow you to make it come forward of affirmative defenses approximately thirteen everything from mistake of law a mistake of fact unconscionable to waive recital everything that you would expect in a case like this except lack of jurisdiction and lack of power lack of authority again mr kane was able to be represented as mr coleman my able adversary just said a moment ago ably represented in the arbitration archie robinson knew how to raise a jurisdictional issue he didn't do it in the affirmative defense and that's because mr cain wanted this issue decided on the merits thank you counsel case just argued it is ordered submitted we appreciate your input