the microphone so we can know you better yes i will thank you go ahead and proceed with your main argument you have time you can discuss the other one i had actually reserve fifteen minutes when i submitted this several months ago after reading the briefs there's only one point i would like to emphasize as to my appeal and that is the statute in question three fifty nine point five if the last line of that code section it's established is the statue of limitations defense but in the last phrase it actually states unless the bond has been otherwise modified and my position is that by i f i see entering into  agreement prior to the expiration of the statue limitations affectively modified the bond and created a waiver of the statutory defense of the statute of limitations defen so by modifying the bond with the execution of the tolling agreement three fifty nine point five therefore does not apply and the reason this is important and i don't know if i emphasize this   in my brief this tolling agreement was executed back in two thousand and eleven i f i see never said oh by the way if you're not going to sue the kings we're not going to execute this tolling agreement or they never said at the time they execute the tolling agreement if you're not going to sue the kings you have better because we're going to raise this statutory defense it's nowhere contained in the tolling agreement it was nowhere contained in any correspondence and in fact all of the written communications including discovery responses after the fact never raised this defense it was almost serendipitous that apparently mr king's counsel discovered this statute raised it and then i if i see piggybacked on that argument raising it also when for two years of litigation it had never raised of this issue and so that's my argument as to the granting of the motion for principal or surety under the bond quote unless the terms of the bond provide otherwise and quote to the of the bond saying anything about this the bond itself does not say this that's why i'm interpret ing this tolling agreement as a modification of the bond because the tolling agreement is inherently in conflict with the bond the tolling agreement obviously is inherently conflict in conflict with three fifty nine point five i'm a little slow for being from out of town quite so my from sam most of those folks are doubly slow the actual statute says which i think the judge for getting that clarification because as i understood the statute it says not unless the terms of the bond provide otherwise you started out as if it says so thing else now explain the again if you would how you think what you think it means comes with and unless the terms of the bond provide otherwise certainly we have a bond that says if the principal defaults we're going to pay whatever the principal owed in this case is three hundred five thousand dollars the bond is very clear about that the bond says nothing about you must bring this action within a particular amount of time that's defined by law in this case the c p three thirty seven and the l terms of the bond correct but by executing the tolling agreement they have essential late modified the terms of the bond by saying we are not going to rely on any sort of limitation of actions defense if you move to enforce this bond well the signatory to the towing agreement we're not the same parties as tories to the bond notably the kings are absent and they are signatories to the bond so i'm not sure how the bond itself could be deemed modified by an agreement by a couple other people it's either modified or the argument also be that therefore i f i c would be stopped from raising this claim by executing the tolling agreement and then two years later raising a statute of limitations defense well what what's what is your understanding of is that what the tolling agreement was supposed to mean or accomplish the tolling agreement was to create a status quo but tween my client and the bonding company in order to explore potential settlement what was the impact on the kings the impact on the case of the tollin agreement well in the premise of the statute the satch it appears intended to protect the kings in this case the tolling agreement doesn't include them as parties so so what happens mean the reason that the pings needed protection is under the law otherwise the kings were risk of being pursued by the bonding company of the surety had to pay out you're telling me the surety might still have to pay out because the tolling agreement extended the period of time and during which the surety could be liable under the law that would seem to suggest the kings are also still at risk and that's what the statute was aimed at preventing i  see your point and here's my response i if i see chose to enter into a tolling agreement irrespective of whatever rights it had or did not have against the kings by either some sort of equitable subrogation or in this case contractual indemnity i if i see made that decision knowing presumably if they were aware of the statute that they were going to waive this particular defense it near to the benefit of i if i see at the time and also to my client because litigation was not pursued so you're telling us in effect the tolling agreement should be read with an additional clause by the way the kings are off the hook but the surety still is liable for this extended period of time that's the decision that i f i see made and entering into the tolling agreement it could have said we will not entering enter into this tolling agreement unless the kings enter into a similar one or conversely we will not enter into a tolling agreement whatsoever you must pursue action not only against us at this time but also against the kings if their lawyer had read this statute that time wouldn't  and surely this is not the first surety case it's ever come up in the state of california you have any precedent for your position for under this particular statute no to my knowledge there has been one or two cases  citing this part now actually there's been one the seaboard surety case which came down that's the only case that's ever brought to this particular statute up and obviously that case did not involve a tolling agreement and that's what makes this different we relied on i f i see saying we are going to waive any statute limitations defense upon thirty days notice thirty days notice never occurred in this case two years later we get the summary judgment if they chose not to pursue the kings or they were aware of the statute and made a conscious decision to enter into the tolling agreement i don't know i suspect they were ignorant of this particular statute and that's why they enter into this twenty agreement that does do you want take up the attorney's fees the court didn't tell us why yet denied attorney's fees i would like to think the court accepted my argument on the reciprocity issue under good morning your honour's may please the court elise salami rod on behalf of i if i see your honour's judge practice in considered the arguments raised by the water company in this appeal and rejected them all we submit the judge progress and got it right just by way of context i think it's important to note that this defense was raised initially by the kings for exactly the reason your honor mentioned the kings argued that the statute of limitations as to them would be meaningless if it could expire as to the water company's rights against the kings but not as against the surety and then the surety could then seek indemnity from the king so what was the point of the tolling agreement if i understand correctly it was signed on the last name or the day before the last name  it now appears to be meaningless that your honor the tolling agreement served its exact purpose the intended purpose and what was that to allow the water company to sue if i see after the expiration of four years but you're telling us that it didn't because in fact you're arguing the statute prevents the tolling agreement for having an effect because the kings being protected by the statute prevents the tolling agreement from extending the limitations period i mean in the limitations period were extended what's the basis for the summary judgment the limitation period as against if i see was in fact an extended the water company sued i if i see if i see did not argue that the four year statute of limitations had expired i if i see argued in its motion for summary judgment the judge preggers and made a determination that the kings  right that three five one point five barred an action against the surety if in fact the action against the surety was barred then judge progress and ruled that the kings couldn't be liable to f i see that was the basis of the first motion for summary judgment we then filed our motion for summary judgment simply asking judge preggers and to apply the law of the case a determination to three five nine barred an action against if i see or come back to my question then is it the case under the district court's interpretation that the tolling agreement was meaningless with respect to the question that was presented and answered i believe it was an issue in what context couldn't possibly have been meaningful but it didn't bar the action at the outset your honor it ended the next day though because the limitations period expired right and so is the district court applied the statute the tolling agreement had no effect on extending the limitations period permitting the water company to sue the s skip a signature line to they they were aware the kings were not parties to that agreement i can't speak to the person their signature line for the kings on the agreement there is not so it's not like there's a missing signature that the parties to the tolling agreement knew it was between surety and the water company no other parties to the tolling agreement that's correct and you're telling me that's in effect if as the district court held and yet was still meaningful and i don't understand that what was the point of disagreement it seems to me the point of the agreement had to be what the water companies just argued which is to keep the door open for a lawsuit by the water company against the surety beyond the four years and you started out by telling me yeah that was the point only it didn't work that way because the district court decided because the kings ryssdal they are and were not parties to the agreement the tolling ring was ineffective is that your understanding that that is you also then why shouldn't the tolling agreement be interpreted as i suggested before with an extra phrase by the way the kings are off the hook because a tolling agreement is sought by a claimant who knows the time is expiring whether or not the water company should have added additional language into the tolling agreement that's on the water company i think also judged by your client think that was the case why did your client think i can't speak to what my client almost thinking did they know they were signing agreement that was ineffective and that by signing this agreement they were going to succeed in duping the water company not farming suit that day your honor i'm not sure and certainly there's no evidence in the record that my  the statute of limitations period against themselves you just started your presentation by saying that's what you thought it was intended to accomplish i believe that the the expectation was that the statute of limitations as against i if i see would be extended beyond the four year limitations period why should we enforce that expectation that's not the question presented before the court really seems to me it is the the issue is your honor respectfully whether or not the failure to obtain a tolly agreement as against the kings was fatal to the water company's case why why would it be fatal because of the your agreement with the water company in effect waive any claim had under the statute because as pointed out if the statute was in effect then the whole agreement was invalid surely you did not intend that so you must have intended to waive any claims under the statute why doesn't that work it's a protection afforded to the kings your honor the  intent of the statute is to protect the individual or the company who has an indemnity obligation and allow them to feel comfortable that upon the passage of time and if this was a suit against the kings they might be able to make that case but the kings aren't in this litigation or that they were your honor but they're not now you know that was the first motion for summary judgment eliminated the indemnity claim against the kings so they're out of it they are currently out correct the only question is between you and the water company that that is correct your honor and i would note that judge prednisone thought it was relevant that on that initial motion for summary judgment where this question was really litigated  the water company didn't oppose the motion for summary judgment the water company didn't file any brief relating to the king's motion for summary judgment the water company didn't attend the hearing on that motion for summary judgment that then became the law of the case as we presented it to judge preggers and the decision had been made the only issues raised by the water company after that was whether or not they were notified whether or not there was an affirmative defense set forth in the answer that would notify them of this potential judge practice and ruled that under the eleventh affirmative defense if i see made it clear that the liability of the kings would be little relevant to the questions presented in the case the second issue they raised was this issue of the tolling agreement and the argument was as presented before this court that the tolling agreement all it said was everybody reserves their rights defenses claims remedies what we're doing is saying we are not going to argue that by failing to file suit within four years you are not allowed to sue i if i see that's exactly what happened the tolling agreement served its purpose the kings raised a defense the judge agreed with the kings there's no way for the judge to have agreed with the kings and not granted the motion for summary judgment in favor of via if i see it would have been inconsistent sure there is why couldn't the judge say looking at this agreement which doesn't include the king's disagreement between the water company and the surety i'm going to treat that as being meant to accomplish something and what it accomplished was to permit the water company to sue the surety beyond the four year period or as you articulated to extend the limitations period against a surety doesn't affect anybody's rights against the king's they're off the hook but it does mean that these two parties could continue to try to find a resolution why couldn't the court said that your honor i think that it's because the only reason the kings were off the hook is because judge progress and decided that i see was off the hook that that was the foundation of the order granting the king's motion for summary judgment because i if i see was not liable to the water company the kings were not liable to if i see these issues were not raised at that motion the motion filed by if i see simply ask the court to adopt that rule and apply it to i if i see meaning the rule stating or the or the decision of the court that i if i see could not be liable to the water company under under three five one point five the water company is not appealing the release of the king i don't mean the water company surety is not appealing the release of the kings with the trial judge is correct that is correct your honor you could have if we believed that the court made a mistake and that there was an appealable issue certainly if i see could have but the court applied the statute the plain meaning which is spot on to the facts of this case and granted the kings the the remedy that they sought the certainly i she could have appealed that that's correct your honor i'm not sure on what grounds or basis that appeal would be presented in good faith let me change the question i asked before which is what the parties and tended by the tolling agreement ask in your view as the dust has settled in the district court has ruled what was the effect of the tolling agreement did it have any effect when the water company decided not to either sue the kings or obtain an agreement from them i think that the case ended then and there so you accept my premise that the tolling agreement was was and only was a loser ie it didn't actually accomplish anything maybe it didn't what they did is they sued beyond the four year in signed on the last day and the kings aren't parties to it and nobody's asking the kings to join into anything so it has to be understood that time things are are not parties to this agreement what the parties agreement signed said what it said and it's my understanding that you're now acknowledging the effect of that was zero that in fact although it appeared to extend the limitations period against the surety it did not accomplish not effect because the kings were not signatories you are i would submit that when we win we filed an answer to the complaint and in that answer immediately notify the water company that the liability of the kings would impact the liability of i if i see that it did in fact serve its purpose it allowed them to sue they didn't get a motion to dismiss based on the untimely filing of the lawsuit we immediately raised the affirmative defense that the kings liability if it if in fact there was a limitation on the king's liability that that could impact if i said i if i seize liability to the water company yes let me ask it a different way it seems to me that what you're saying is that for the water company to have a successful lawsuit against your client it needed t things it needed to totally agreement with your client and they needed to tell an agreement with the kings it got one of those but not the other i'd suggest that's common practice yes principle and surety and so that if they had gotten the tolly remain with the kings then the tolling agreement with your client and the water company would be very relevant to the extent the three five one point five just wouldn't apply to the chaos had they obtained a tolling agreement or simply sued the kings in a timely fashion we wouldn't be within the confines of three five one point five so it really is that the tall in agreement was the right thing to do between these two parties in court today the problem with for the water company is there was another step they should have taken that they did and that was either filing suit against the kings or having a tolling agreement with the kings that that's our position your honor that's correct the owners with respect to i if i seize appeal on the denial of the motion for attorney's fees we certainly respect that the district court could use its discretion to limit in some way the amount of attorney's fees that would be awarded to i if i see we're not certain that under california law the district court could have denied the motion in the manner that it did without any legal basis presented to the parties so that we could discuss them with this court so we've asked that the denial of the motion for a attorney she be reversed in the case be remanded to judge prager's and so that i if i see can present its application counsel just so that i can be clear on this why did the water company want the tolling agreement we were coming up on the four year statute we were still discussing with i f see ways to potentially resolve the claim the hang up was an assertion by i f i see that they were subrogated to our rights to collect five thousand dollars per lot every time a lot was sold we didn't agree with that position but there did not appear to be a fundamental disagreement that the principal amount owed under the bond was owed by i if i see due to the fault of the kings so for that reason we wanted to toll the statute to continue to discuss settlement with i have i c to try and avoid what has now become a rather costly piece of litigation authorized see i take it thought that was a good idea at the time correct otherwise they would not have as they would not have signed the tolling agreement they would have said nope sue us the two points i'd like to make in rebuttal to what was raised there was a question of the court what was mr silverstein's intent when he signed this agreement what did he know his deposition was taken in this case fortunately we did not explore those issues at his deposition because this defense had never formally been raised i would have loved to have asked mr silverstein on october seventh two thousand and eleven when you signed this tolling agreement on october eighth you're telling me now it's it's not all and void i would have loved to have explored the thinking of i if i see in the reasons for entering into this tolling agreement because from what i'm hearing from counsel for i if i see they signed it on the seventh and it was effect on october eighth those are the only points i'd like to raise in rebuttal well but you had the opportunity to ask those questions and you didn't because three five nine point five had never been raised there was never an issue raised about the the issues that were being litigated were the subrogation issues and the issues as between i if i see in the kings at no time was there ever even a hint by i if i see that all of this tolling agreement we signed several years ago it's not enforceable that was never raised at any time prior to the filing of i if i see didn't put up in the context of the subrogation argument it did not it did not it was always we we know we owe you the money but wanted to try and get it back from the homeowners each time you saw a lot our position was why would why do we have a bond the whole point of the bond is the king's default my clients get paid what with what they were owed back in was on top of things eventually but statutes there and even if it doesn't get cited very much it is there and are people presumed to know the law even if we knew the law the interpretation the tolling agreement if you read it it's any statute of limitations applicable to any action shall be told that's of the tolling agreements like i paraphrased somewhat so even if all the parties were aware of this particular statute that tolling agreement runs one hundred time this is not against public policy well but in the sense it is i mean if i would clearly be with you of the tolling agreement added my extra phrase by the way the kings are off the hook but the statute is there to protect the pay out because that claim really doesn't ripen until the surety has to pay out so the statute is stuck in there for reasons i can understand to protect parties like the kings now in protecting the parties like the kings as far as the district was concerned it protected the surety too and this could have been avoided if the tolling agreement spoke to it but it didn't so you can tell me the tolling agreement isn't against public policy but unless you add that extra phrase i proposed to the it's easy to figure out why this case came out the way that it did why should we read the extra faison of the towing greenlight that the parties themselves didn't put there the we're dealing with a bonding company we're dealing with the general counsel for the bonding company who signed the tolling agreement they are sophisticated presumably they know the law they know their rights duties and obligations as a surety company presumably they knew of this statute they didn't raise it in the tolling agreement they did not carve out any exceptions whatsoever the parties are going to be bound by this contract it certainly at this juncture doesn't benefit i f i c but that's the agreement they signed that's the agreement we relied on for years i take it your basic argument is that the statues designed to protect the kings in this one tax but not a surety with all that sophisticated lawyers who obviously know every statute can presume they do however in addition to that it is a binding agreement that governed this case for three four years thank you very much counsel for your  this case has been submitted now and will move on to the next matter