what we believe is an erroneous decision by the bankruptcy appellate panel in this case the opinion of the bankruptcy appellate panel should be reversed for several reasons first of all it misapplies holdings of this court and arizona law it's inconsistent with policies and purposes of the little miller act which is arizona's version of the federal miller act which is intended to protect those who provide labor and materials to public works projects third the bankruptcy appellate court decision ignores fundamental principles of arizona contract law that are in fact universally accepted throughout the country circuits and district courts throughout this country regarding whether payment to a subcontractor on a bonded public works project is subject to being set aside as a preference and what this was that provided that there are unpaid contract proceeds that the surety can go after th between this and your honor but it does not change the fundamental policy of figured which is number one to recognize the policies and purposes of the little miller act which is to protect people in my client's position and number two the fundamental question is whether the vetter was prejudiced by the payment to and  we still have the word contemporaneous of even if we run along with you on your new value argument we get through with that that was concerned about it not the required contemporary well your hon believe that that's true out years of established ninth circuit law and arizona law the arizona statute which is a r s thirty three one thousand eight was intended to standardize the forms that are used for the releases on both public and private construction projects in the bankruptcy appellate panel decision essentially concludes that have met the my client would have been much better off and didn't signed a conditional release however what the legislature clearly intended is to allow the parties to follow this form we submit that the bankruptcy appellate panel actually turned that statute on its head in saying that if you use that form you ignore whether there's consideration which has been required by law for many many years before the enactment of that statute and you ignore whether absence of consideration there is a basis for a stop well such as reliance we should think that little miller act which is supposed to protect parties in my client's position in fact as i indicated earlier i think that's bad public policy because as happened in this case the contractor dangles the track in front of clearly a conditional release would have been the appropriate method but if the court looks at the release which is that tab one of the record at page twenty eight it stirs in those steel received payment of one hundred ninety four thousand dollars and the date that was received and the when released was executed that was absolutely correct the question according to united metro which is  honor those are the substantive rules that are in place in arizona so so the answer is partially yes but the consideration was standing on the face of the relates  someone had relied on that release to their detriment under long established law in this circuit then the arizona statute suspect would clearly have occluded the well with all due respect your honor we don't believe that there's any evidence in this record that the arizona legislature intended to overrule years of established fundamental contract law yeah it that the only change that the legislature made was to prescribe specific forms for that practice and that see i think it goes a little deeper because we would give these releases all the time and wouldn't care  because if the check bounced we still had arlene we knew that except i guess as you point out if there had been some reliance and on our representation some or a long line of business and government we indeed could have lost a limb probably would have i never got one of those cases i think that just as then you have the arizona legislature saying hey let's put some meaning into these lean releases and it's either going to be conditional or it's going to be unconditional and so when taking it a step too far in that the legislature wanted to make the lien releases uniform and dictate what forms would be used but they didn't intend to change fundamental principles of contract law or fundamental principles under the u c c and to strip the protection of the little miller act from innocence of contractors who in hindsight might have been wise to see a lawyer before they signed the document but if you look at the face of the document in this case your honor you will see that and go steal correctly signed a document that said they were paid they received a check for this hundred ninety four thousand dollars and we have a lien release that says i'm releasing this mean because i'm being paid one hundred ninety four thousand dollars we also submit your honor given the now in fall of no liability on a bond absent consideration or detrimental reliance there is no such case to conclude that the value i'm sorry that goes to the issue of you value yes ron ok the only other issue that was before the court is whether the new remitted the second track and field would have had a claim on a bond and there is no case law to the contrary but if we look at the date of that payment the question under a long line of cases including speaker is whether you take a snapshot whether there were sufficient contract proceeds to protect the surety so that the surety exercised its equitable  the supreme court recognized in parliament the trustee is taking a position that has never been sustained in law and is not even consistent with the purposes of five forty seven me which is that no no we look at how the project ends up years later and if the surety loses money then every disbursement within the ninety days to bonded held that that was incorrect that the test is whether at the time of the transfer there were sufficient contract and that's logical because we are measuring the effect of the debtor of the transfer the effect on the debtor of the transfer what the trustee is proposing has nothing to do with that i would like to reserve balance of my time for a bottle unless the court has any other questions and your collateral start lazy because he argued the same issue in other cases absolutely ok thank you good morning thomas actual sent on behalf of joseph j janice the bankruptcy trustee i'd like to start out by conceding stone thing i'd like to concede to that and those should be paid it did the  release the surety on a payment bond then in the form itself it says that endo is releasing any state or federal statutory right and any private bond right although the document don't proceed against the barn it knew that this daughter was having financial difficulty there are numerous documents in the record where endo was threatening the debtor to get payment yet there's nothing in the record to indicate why and don't never right from that at that point in time when a check was received the contractor probably thought that he was getting paid pursuant to the  and you're saying well it's you know it's just seems so terribly inequitable that this would happen and it seems that you really got to rely on this arizona statute and the unconditional release form that your clients are we come to you i'm not sure it's entirely an equitable because this sub contractor and it was not left without a remedy it received a distorted check and it has a whole plethora of claims that can now pursue arising from a dishonored check point against us the bankrupt there not only that but under arizona statute against the persons who actually signed the check the signatories there are common law this case is different from figure in several respects first figure did not involve a dishonored check the law is clear that a replacement check  numerous cases from other jurisdictions in fact i have not been able to find one case from any circuit that has held that a replacement check issued on account of a dishonored check can constitute a contemporaneous exchange for a new value correct and there was also another reason that both figured and the writer decision are different from this case which is what this court has already touched upon the unconditional waiver there never was an unconditional waiver release form and the conditional language in that form if a contractor is conditioning his release upon actual payment he should always use the conditional form clearly that that act was designed to protect the labors in the material and just as money opposing counsel is indicated and that's why that form is there and in the published opinion by the bankruptcy appellate panel explained that in most cases that's what a subcontractor should sign  conditional form i think that's the reason why that form is there in the statute and no asks in its briefs you know what could endo have done to be more clear to indicate that it was only signing as consent signing the waiver as condition of receiving payment while it could have chosen a conditional form for one secondly and all could have modified the expressed terms of the waiver and in fact that's what was done in the united metro materials versus paying in block a case which is the arizona court of appeals decision that interprets the statute in that case they recognize that the contractor had made some changes to the unconditional form and said well it's no longer unconditional if you cite that in in signing does not accurately reflect its intent it should modify the form so i think i think both the statute and the arizona case law that construe this area of the law are all consistent don't sign that unconditional form unless you mean it and that unconditional form has not just this language in fine print down at the bottom of the page this is big bold all capitalized which that is required to be there and it's pacifically says notice this document waves rights unconditionally and states that you have been paid for giving up those right this document isn't forcible against you if you sign it even if you have not been paid if you have not been paid use a conditional release form it's hard to imagine something that could be more  clear there are several other distinctions between this case and figure out which i believe is that the question that one of you had asked me and i believe judge some brought up the collateral  earlier decision which is right or was the intent of the parties to this particular transaction the statute that we're all here talking about is the contemporaneous exchange exceptions set forth in section five forty seven c one in fact this transaction was not at issue in the waiter case secondly the statutory unconditional waiver form was not at issue in the earlier cases also this is a different construction project particular case on that construction project at that point in time and those are all impacted by how much remaining contract proceeds are there in the hands of the project owner at the time bring it would have built a much better and complete record on the issue of whether the surety was under secured at the time of the transfer on that project to have the opportunity to did not meet the requirements of the contemporary contemporaneous exchange exception in terre and throw the issue of before the bankruptcy court and before the public court right well and that's why the bankruptcy court ruled in favor of the trustee in fact the bankruptcy judge looked right at counsel for reuter and said are you raising the figure defense and the creditor said no so at that point the trustee had no reason to come forward with additional supplemental evidence and build a factual record on an issue that the creditor was not pursuing i could refer this court to the opening brief in the earlier writer decision with transcript of that hearing is cited were it shows that the creditor in that earlier proceeding ri right did you write that argument on the field if you did you want to he'll make the argument that you didn't have an opportunity to address the issue we made the argument that the issue was otherwise i believe we did it if it was not in the original briefs i'm certain it was in the petition for review in that case that california court of appeals case that construed that california statute it said that that waiver was effective regardless of whether the creditor in that case had been paid and  could not proceed against the bond that was the whole issue in that case whether the creditor could proceed against the bond so i don't think this is this is new law on it's the plain meaning of the statutes and and perhaps  contemporaneous i believe it does but i think that the simplest way to to dispose of this case and make sure that all similarly situated creditors are created equally is to look at the intent of the parties with this dishonored check that's what the bankruptcy appellate panel did it said it's clear from the record that jane if you jay intended the transfer to be in payment of a dishonored check it's clear that endo intended the transfer to be in payment of a dishonored check for those reasons alone i think this court can affirm the decision of the bankruptcy appellate panel and trustee concedes that the proper course of action for the unpaid subcontractor to follow is to pursue a bond client if my client had not been paid by the subcontractor it clearly would have done so the trustees position is inconsistent the trustee relies on the u c c provision that provides among other remedies the right to pursue principles it's better but the trustee ignores the language of the u c c as adopted in arizona and i believe throughout the united states that says that  what's reflected in this court's opinion and this court's opinion clearly reflects that the posture of that case was identical to the posture of this case in fact i think it actually started out as the same adversary proceeding where the trustee sued numerous parties for alleged preferential transfers in that case just as i think judge rowland soon will recall the tru relied on the very same affidavit that shows that the the various projects were underwater at various points in time or at the end of the very same af in this case shows that if least one point five million dollars remained in the owner's possession under the contract a year after the bankruptcy was while we submit that it is the same evidence and the trustee is bound by this court's conclusion that you take a snapshot of the project at the time has no relation to this case it's not a bankruptcy case there wasn't even an unconditional lien release involved in that case how births involved a conditional mean release a release that was in effect as of the time of the release and i didn't say that very well but he was trying to say there were some items i wasn't made for and i didn't intend to release that all the court held