companies were not paying the payroll taxes of companies were in s b a receivership so the issue is does it matter does it matter that the companies were in an s b a receivership and does it matter that the agent representing the s directed the creditors other than the i r s be paid the government rejects our use of the word or concept of quote government unquote to characterize the s b a in this case their position is that there's an iron clad rule a sort of strict liability that when a federal agency acts as a receiver it does so without any governmental authority in the story the government size the patroclus in adam's cases for their position the only problem is if the government of the government is that these cases support our position not theirs these cases make it plain that it is not always the case that when receivers pull appointed over a private entity the receiver always steps into the shoes of the private entity these cases say the receivership usually steps into the shoes of the private entity or under the circumstances may step into the private party in to so both cases allow for the unusual case where the receiver does not step into the private party status and remains a governmental authority so contrary about the claims of the government there is no rigid rule that when a federal agency acts as a receiver it loses its identity as the government it seems that the question is a matter of that stink facts under the case this case mr meyers case is a highly unusual case in the federal agency did not transform into a private entity it is unusual because the s b a through its agents to took direct part in the daily operations of the business a did so it was at acting outside of the receivership it was everything soley as an agent of the s b a a governmental agency you're your assertion aside from that first legal point has to be that mr myers was directed not to pay yes able to access yes the district court didn't think that that testimony allowed such a finding what do you say about that there was testimony from mr meyers that he was directed to not pay the payroll taxes first there are many many e mails in the record showing that mr stern took direct part  operational decisions there's testimony from two nonparty disinterested witnesses that mr stern was knee deep in the operations of the businesses and if he was taking part in the day to day operations of the business an accident very likely he was taking part in the decisions as to which creditors not pay argument that it was improper to grant a summary judgment or as a matter of law because of this governmental receivership relation that he could never be held liable did we disagree with the district court's ruling that under no circumstances could mr meyers escape liability because of the actions of the agent we need to reject that yes client's test about it take it that's about the size of it i'm sorry sir what your clients testimony that's about the size of it as far as i know mr kitchen's also in his deposition mention the fact that mr stern was is whether or not mr stern gave him instructions not to pay the payroll taxes or under the law that was would relieve him from pain he should be relieved of paying due to the fact that he should not be found to be a responsible party because the district court order in new york took from took from him responsible party stands also combined that with the fact that star and was participating in the daily operations of the business that should take from the responsible party status what about that the district court tried to parse the factual issue by saying that avalon held a majority interest in windows and unite and therefore had certain rights with regard to those two entities but those rights said nothing about the day to day operations of those two companies does that make any difference in your mind avalon had that was a controlling interest in window and unite they had the right to elect the board it typically like equity outfit attempt typical equity arrangement with the company well it would have a long was the holding company yes and they had voting rights to establish the millward which would have been easily done it wouldn't take much effort to do that and our position is that when the s b a took over avalon it took the rights on the rights of avalon through its voting power to control the underlying companies yes government were not involved in this would be a very easy case yes mr mars would be would be responsible party no question about why would i stand in your back to the government's involvement that yes government vollmer is everything ok how about the last factual twist i want to ask you about is the district court noted in relied in part on the fact that when windows and united voted to seek bankruptcy protection according to the district court they did not notify the s b a receiver and that i guess the district court signaled some sort of break between what the receiver might have been telling the people who are running those two companies issue about the government's involvement you know that you now have taken the position that that the government's involvement relieved him of the obligation the government's involvement makes this case heard trial and the question becomes what does the instruction to the jury look like an instruction to the jury would be that if they could that the government was involved and th help tell me how the court would help the jury determine whether the government was quote involved the court could instruct the jury that if they believe that brian stern that the government was involved but you need a little more than that right because if he if the s b a receiver for lack of a better term was involved in the day to day operations but had not told mr meyers to in your client's view to put payroll taxes to the back end of the line you you would not win right if you could show into the s b a receiver was involved as you suggest in the day to day operations and running everything making corporate decisions yes but when it came time to where to put the priority for paying debts yes the the government was involved in the operation supervising him he had no responsibility that's not what your goals are yes so the question before the jury would be whether the government involved and the court would have to define involvement yes and he would have no liability if if the jury said yes the government was and that's your case that's that's one of the arguments we're going to one of the arm is that your case our ca it would depend on the jury of involvement that the me suggest what he wants or for you i'm sorry the the answer for you i think assuming you're right that government involvement of some degree can absolve someone of responsible person status yes the only way you can prevail is if that involvement was of such a degree that the receiver was telling mr meyer to put payroll taxes to the back end of the line and pay other creditors first to keep the companies that's our case you're right that's what the jury would be asked yes did the receiver instruct or tell mr meyers to defer payroll taxes to the back and pay everybody else to keep vendors for example to keep the company afloat under your theory of the law if that's what the receiver told your client to do then your client's not a responsible person he's not a responsible person that also goes to our defense related to reasonable cause as well the gov had none what it wouldn't matter whether the government was not involved but the same factions for the area if the government was not involved i would be standing you no no no you know you have the controlling equity i want to make sure i understand eat do you agree concede is that tough work but do you agree that if mr meyers had been told under the normal corporate chain of command yes eat this would be a completely different case and it would be all about yes but the government is involved well case of them and that's i was a different rule of law depending on where the f b i see as a receiver there's should be a different result i mean that's your position that's the position you're telling us yes the government matters you had the same same relationship started on them and your client with no government involvement stern's work and yet you say he's  along for the government the fact that there was a receiver in this case and the fact that the receiver was the s b a does not change the fact that mr meyers was both responsible and willful what we need to have a responsible person talking about the responsibility problem now is significant responsibility and not ultimate responsibility so regardless of how much the as be involved insert itself in the company's day to day operations but the my it's reached that significant level of responsibility that we need for finding him a responsible person in the company but mr meyers argument is at a broader level that if the government on the one hand acting as a receiver of the s b a is telling him not to do something then the government on the other hand the i r s can't punish him for doing what the government told them in the first place not to do well for i don't think that there are some something to that notion well first i think one thing that's very important to keep in mind is mistaken belief let's say that the s b a was acting as the government telling him well which it didn't even tell him according to his own testimony to not pay the taxes well as a very experienced c p a mr meyers knew that he had to pay over the taxes and that it would be unlawful to do so and if he is hearing that mr stern purported government agent is telling him to do something unlawful well red flag should have gone up and say well what are my choices here you know i could either disobey this person that i regard as my superior or i could do something a lot of folk and kid been the case that say well your option is really to either disobeyed the superior paid to the lawful thing and pay the government or and probably look for a new job unfortunately or you go look for a new job but there are but mr myers is right about one thing undoubtedly and that is that there are no cases addressing a claim that a person can avoid a responsible person status if a government agent tells him receiver or private entity is the receiver the reason i ask that question is both of them are on the district under the district court's jurisdiction both are responsible district court as receivers so what difference does it make whether the receiver has a federal had on it or not it doesn't that is well it's already different but put it another way is there any difference between the would say in this particular case forget this yeah ok ok general proposition that the federal district judge the claires and it is a private entity and receivership entity yes i think that in this case the default was s b a loans that the government put the f b i in place what's the difference between the judge's relationship as overseeing the receiver of law of receiver ships controlled not right correct ok right and the terms of the district courts receiver or just now made the point that the government as the receiver there's not always acting rigidly as a private entity but if you look at the third circuit case petrus versus them pearl that we cited it's actually very similar to our case to in that respect when the company was put into receivership down to the serious similar language after receivership order which it's that into  level of response ability to be a responsible person and he was willful as a matter of law because he knew that taxes were being paid he controlled the company accounts and he paid other creditors ahead the s b a receivership makes a difference are there issues of fact about what the receiver told mr meyer to do or not know his testimony quoted by the district court is that the receiver was told that payroll tax liabilities had not been paid and he instructed mr meyer does  myers words he instructed me to pay the critical vendors the printers the drivers in the employees and when the other assets were sold or the bridge loan would be received we would take care of the other liabilities including payroll taxes if that testimony is taken in the light most favorable to mr meyers at summary judgment there's an issue about whether or not he was told not to pay payroll taxes right assuming we disagree with you on the broad question of whether or not the a a receivership makes a difference that if you if you wait on that first issue the case is over but if the s b a receivership does make a difference is there a question of fact about what mr myers was told i would see the jury would be important that the s b a is a receiver versus a and i speak for myself i get to see of why they should be treated differently if that's the case that there's a different there are different i would agree with you that would be a dangerous precedent to set and that it should not make a difference and the focus again is on control who had the checkbook i mean they both have the same obligation for those area obligation in terms of is that there's a greater fiduciary obligation on the s b a as a receiver than a private entity and i just can't understand that and there and we know of no rule of law that would set that i believe that the district court in new york i believe that they actually granted more power to the receiver then a private entity say the what did they said in order that said you're going to be treated differently didn't give more i mean by that i mean or from reading the decision of the decree of the court they incorporated if i'm not mistaken some sort of a federal statute well let me put it this way if there a different standard in granting a receivership because it was the f b i versus a bank that i don't know your own can you imagine it being a different story you got a big huge batch chase it takes bank and privileges he do for possessed by the general partners managers officers and directors of avalon and that that was basically where that was most likely him but like i said if that's what happens when you put a minute yes but there was figure they said they have the same powers it's given in the statutes but i don't recall the specifics of the statutes i'm sorry i'd like to move on that the government is saying that mr starr never told him not to pay the taxes but then again i believe you your honor you said a few moments ago that reading all the decisions and all the  i we would lose if the government going with it was if it was chase bank that was a receiver yes exercising the powers of the directors and so yes you lose i would say yes ok so it has to be because it was then the government misleading the government seems to want magic words like i command you not to pay the taxes i express like telling you not to pay the taxes but this is not how people communicate my wife doesn't say i command you to take out the trash she says trash bags full don't you think or she want to mother grass she says grass get how i don't want another letter from the actual way most so workplace supervisors don't use that kind of language they say something like deadlines approaching or whatever so it can be said  the critical better credit creditors first and then when mr marsal what about the payroll taxes he said will pay them later kick the can down the road i want to mention for a moment the governments are are pla can anyone look at the evidence in this record and come away with the conclusion that the s b a took no part in the operation of these companies the government keeps trying to split hairs about how window and you know our independent companies independent from the holding companies and mr stern says hey he had nothing to do with anything it was just a passive spectator silly thing mr marson you want all of this was happening was that the government had taken over his employer and when the government spoke through its agent mr starr he was to do as he was told mr maher start with an s b a took over the companies to calgary and come to the rescue  could look to them to tell him what to do about the mess he had it was hands how could he believe how could anyone believe that the government can tell you to do something and then after you've done it the government will and punish you for it mr marrs mr stern knew that mr myers was subjecting himself to the trust fund penalty and he said nothing mr starr watched payroll after payroll go by and he said nothing to reasonable cause defense was put into play to avoid an injustice and injustice that couldn't have been foreseen at the time that it was put in to the case law but the courts realize that they had to have a safety valve somewhere and this is a case where mr marrs should be given the benefit of those reasonable cause defense because at all points he was simply doing as he was told he would be doing what he thought was right at the government's position is a build not only will mr meyers be punished but this is going to hurt the federal bureaucracies it's