the lender knew that there was a material fact and it knew that the buyers didn't know or they couldn't reasonably discover it that there's a cause of action and summary judgment should not have decided here the facts of the case are pretty clear there was a report of easement which is critical because it put everybody on notice that there is an easement for utilities one of the key issue in the case there was a permanent powerful that's in the record the property was started construction two thousand and five by two thousand and seven it had been assessed the mechanics liens in two thousand and six and two thousand and seven had either been cleared or expired because they're only good for six months so by two thousand and seven everything certificate of occupancy for single family residences so that now you have to add that in the context of our expert testified that d m did more than what a reasonable foreclosure purchaser does in pursuing the property so if a reasonable foreclosure purchaser had to go to every city office to check for a certificate of occupancy before bidding that would be a different case it wouldn't be our case our case is the experts said and when you have a battle of experts i'll get the minute the expert said we did more than you need to do so you don't have to go check for certificate of occupancy that's not the test so and one of the one of the issues that the district got sidetracked on is certificate a recorded public public document it's in the building and safety department if you drive through the city but that's not the standard of a reasonable foreclosure purchaser and the it's not like the bank thought this was a normal sale with inspections and open houses and you send in your home inspector and get a report this is a foreclosure sale and the bank knew it and everybody knew it but this record also relied on waiver which under california law when you've you find out something with put on a duty of reasonable investigation so when when the when your client discovered we can't complete the house without getting this season and purchasing an easement  help me understand what sort of duty you have had that point should you have investigated and we have been reasonable to go to the prior owner to go to the bank and say what's the deal here there's no there's no easement that we need in order to complete the house so my client did discover that there was an easement issue within two months after buying the property and so then comes the question of who would do things with in a foreclosure contest because keep in mind we're not buying from the seller so if we had bought from a seller and the seller didn't disclose and i'm going to answer your questions i'm not avoiding we go back to the shapes that the shepherd statement of this is a huge issue if you're going to sell the  disclose it but for now we go through in a foreclosure context when you're buying from a bank you didn't own it didn't occupy it wasn't a joint venture partner was no partner of any kind was just a lender so now you know there's a problem the reason what my client thought in the reasonable reasonable thinking is the builder this the former owner who got foreclosed out how the problem in building you don't jump to zero necessarily someone who just loaned the money would have known this so when you did go and talk to miss where that she said oh i told the bank about it so had you investigated with the owner originally when you discovered it you would have found out then that the bank was aware of this defect and so my question would be why didn't the record or what should we know i would say it was unreasonable to do the investigation at that time  on i wonder jolly under the california case jolly i think the record is silent on the availability of the seller know that there's facts behind that but i don't want to go outside the record so on the record it doesn't show that the former seller was available co operative willing to tell you anything remember this is someone who got foreclosed out this is not necessarily someone who's just sitting in their office every day waiting to talk to people which and the answer to that goes to the other side as well you can't just call up a bank and go hey you had a borrower got foreclosed on you mind sending me over your files you can't do that and so if you say well if you why didn't you just sue the bank on a lark because maybe they knew well they're only talks about investigation i mean so so you foreclose you take the property you discover a serious defect answer the question as the district court thought it would have been reasonable at that point to investigate and had you investigated you would have found out that it was the bank and so i'm trying to understand why the apps not write the book the answer is that they are there is an answer but i don't think it's in the record and i think if the bank wants a lender wanted to show a waiver the lender had to ask why didn't you do this for which there are answers that like i said i want to stay within the record but if the lender didn't put forth affirmative evidence to show why wasn't she available you know we have something showing she was sitting outside your office all day begging to tell you her story but you wouldn't listen but that's not the record as it is is that required for reasonable investigation that somebody has to come affirmatively come up to be the investigator or no but there's no showing she was available that's that's what the record is missing to support a waiver argument as far as well an investigation argument not a waiver because you have to know you had the right which on this record we didn't know anything suggesting that your client did do any investigation in the record in the record there's no nothing to show the that either my client found out or that the seller was available or cooperative those are  factors because that there isn't anything in the record showing efforts to investigate that that's really what i'm trying to enjoy well that you can infer from the record since my client spent hundreds of thousands of dollars trying to solve this problem that my client would have tried to contact the former seller who had the problem try to contact to find out how do i get around this this is a huge issue so you could infer that my client would have done everything possible to try and turn this terrible deal into a reasonable deal to try and get their money out once they found out there's this real big problem because during this period i guess your client was using the properties collateral and was really you know was doing a number of things getting the benefit of the property because you own it you're not getting a benefit you're just getting to borrow against your own money and then when it spins out of control in the district court opinion and they say well it's a four hundred four million dollar loan against a six hundred thousand dollars property four million again six hundred thousand this was just one piece of collateral that that should have been obvious to the district court and apparently it wasn't you can't get more than one hundred percent against a piece of property that's not fit for our purposes doesn't have property as if everything was ok with the property what's your response i got my client use the proper pretty as best it could given the bad deal it had my client bought it found out it was a terrible deal had it been sold by the seller could have taken action against the seller because the seller knew didn't have any inkling subjective object of or otherwise that the bank knew it just didn't know because we know that when it found out that the bank knew within twenty two days that suit my client is shy about suing my client acted immediately when it found out so sick that it did it act take action inconsistent with a known right no because it didn't have a known right but why some sense understand why you your client didn't simply ask the banker omo whoever knew this information and in tell you hey did you guys know about this why they did what they're using it for loans and doing all of those things when you directly go back and say hey did you guys know about this we just learned about this banks don't tell you what they know and don't know banks tell you nothing unless your their borrower banks there's there's no evidence that a bank just releases information but to answer the second part or question why did it go ahead and use the property what choice did it had it sunk six hundred thirty thousand dollars into it it's stuck with a pig in a poke it doesn't doesn't have any reason to think it can go against the bank it can't go against the former owner because he didn't sell it to a did your doc did your client disclose the problems and it's long documentation when i was getting the collateral when i was cauterizing the property that's not before the court until i understand if you can answer my question i guess based on your answer i guess the and the answer is no i don't i don't personally know the answer but i can't that it would have done to someone else what was done to it it had the value that it paid for it and it but that's it we know it couldn't sell it for eight hundred thousand because that sale fell through for the same issue my client was stuck and the question is should it have been stuck when the bank knew it was going to stick it to but if the bank gives advice to ms where to hey you better disclose it's a huge issue but it doesn't take it's own advice and then we have in the record that it's not uncommon at foreclosure construction property so i can cite my question just reading it in context it suggested that he would have wanted one if it was required but what the other opposing counsel is saying in their briefs is that in two thousand and seven the city didn't require a certificate of occupancy for a residence and so it's it's hard to say to understand why somebody would say i would have required a certificate of occupancy even if it wasn't necessary for actually issued by this particular jurisdiction it was their policy to go determine the certificate of occupancy these were issued and if it turned out that one wasn't required by this jurisdiction they would have found out the underlying problem because it was in the record that the city provided they did nothing they didn't do that part of their investigation so if we understood mr parris testimony is saying in every case before we buy a purchase a residence we check if there is a certificate of occupancy we would have to understand statement that way right because their expert says you know the due diligence was above and beyond and they also state which i didn't hear you reap that the city didn't require  as are typical of occupancy for this sort of building in two thousand and seven where it appears that all the work was done i can't rebut that statement because it was discovered after the fact this is something that should have been looked into by d m residential before deciding whether or not the purchase is property so that it sort of a different expert view might be that but no the expert is wrong a reasonable investor would in every case look for a significant occupancy yes your honor a reason the best or whatever but isn't that wouldn't that be a genuine issue of material fact and if you have the experts or it is arguing what's reasonable for the intelligence it may be except that peter bear in this case admitted that he would have gone difference does it make if you have an expert that says the fact that he might have higher standards what difference does that make they've got an expert says that what they did is more than enough well so so so what if he says he does more i think he's in a better position to articulate a standard of care because he's in the business of buying these properties it was his to have a jury now and decide that more weight has ever given to the president's  that there was more than sufficient information for them to discover this issue whether or not they what do you do with expert statement that says what they did was enough an inquiry either with you to sign it no i don't discount it because if we if we consider everything they look at in determining whether or not to purchase this property we'll see that they would have discovered this issue but if that is if that's a factual question it's actually i don't think so because they admit this is a factual question but they admit these facts they admit that they looked at the deed of trust they admit that they investigated the property they admitted they they saw that the driveway was incomplete that this is in a state of construction a myth they did due diligence which indicated this property was still under construction and therefore there could be issues please give them to a fact who can choose to accept or ignore their view that was enough and i think the answer is that big based on the fact that they admit to that in and in and of itself isn't up to show that they had discovered the issue it was right there in front of them not that they should have but they had it was they knew about it and so they knew that there was no easement they knew that there was a utility is an issue it's right there on the record in front of them later because the size of the house required more energy than the original is that would provide and so that only really the building department had that information only after investigating with southern california   to ask either the bank or the prior owner for under the normals or foreclosure circumstances yeah and i think the problem with that position it is that they discovered the problem almost immediately after the foreclosure sale and so they have to assume that there's only two people who are going to know about this maybe three but the seller meaning that the borrower the from the bank and possibly the city and they did nothing for years two years went by without them our questions so wouldn't be reasonable i think if there's nothing in the records one way or the other about what would be reasonable as circumstances no there isn't the record is devoid of that information but they certainly knew who the lender was and they knew that the problem had been caused and it could only been caused by either the lender or the borrower right and they did nothing to investigate what happened instead they invested in the property to use it as collateral for loans they sat on their purported rights  and then after they had spent hundreds of thousands of dollars decided to try and then come after the lender say that you failed to disclose this and i think that's why the district court said this is a waiver i choose you really should have done something but you didn't say why you think that you think they knew about the absentees and all they knew if they admit that that's in the record they'd get that they found out about the utility is not i think twenty days after they purchased the property i could  not see i can point exactly tired i thought you were talking to before before the purchase oh i was i was referencing their discovery eventually they discovered that's nothing new you're not maintaining that they knew about the missing easement before they buy the property well i don't know whether or not i'm saying they should have known about the whole kuroda standard but i just kind of understand what you're saying ok because it sounds to me like you're saying they knew before discussion was to say this that they knew and you know maintained that now no i'm saying they should have known because of all the records that were available to them everything they had but that before the purchase of property they should have known ok thank you and your honor mr baird did not testify that he should of could of our would have looked for the c e o what he said it was at a deposition would you have bought the property if you had known there was no c e o depositions taken at a time when he knows the c e o wasn't issued because the utilities ment's were inadequate obviously if he knew the utilities easements were inadequate and that's why there's no c e o he wouldn't bought it if there was never seen any evidence that it was his practice to look for a c e o before every purchase now there's evidence that on occasion he had but in this case since there was no reason to do so because the due diligence investigation did not disclose any reason to think that this property wasn't done and everything was fine there was no reason to do that when you h you don't go oh it's probably not a good one let's check the just like you don't go oh probably the rough plumbing wasn't done very well we should open the walls i mean it just doesn't make sense when it's there to think it's bad second point i'd like to make is the bank set their prices eight fifty seven in the morning on the day of the auction with fifteen minutes to go before the auction in that fifteen minutes you can't drive to the city with your hope you get a parking spot hope you get in line hope you get the file hope you open it and hope even if you're not looking for jumps out at you that that's what the test was in this case because under the case we cited it's the circumstances of the case the record shows they set their prices eight fifty seven not the price in the notice of sale but a new price and when they do that that's the fifteen minute window they give you no one can say that no one should say within that fifteen minutes you're supposed to drive to with here to figure this out that makes no sense and lastly waivers an affirmative defense they have the burden not us they have to put in the record the right questions the answers to support them it's not there the district court didn't grab facts to say you should have known and that you knew you had it right there are no facts behind the conclusion there's a conclusion thank