property law the continuing violations of wells fargo and statue of limitations questions procedurally we have four tort claims in the declaratory judgment action claim they've been dismissed the four tort claims were dismissed the rule twelve c motion for judgment on the pleadings which is why we have argued in our briefing that this court should only confine its review to the four corners of the first amended complaint when it's considering whether or  claims are properly dismissed we understand there is a lot of information there's kind of a voluminous record that has been set before this court but as we have argued in our briefing we before the district court we asked because we pleat matters outside the pleadings had been submitted and we in our briefing we asked repeatedly if we're going to if we're going to go to summary judgment can we please follow the local rules can we please have a chance to brief that and district court struck with the pleadings stuck with the twelve c standard we think that's very important because the first amended complaint in this case was filed after we had received somewhere in the order of seven thousand pages of documents from wells fargo and we went through those very carefully to see if the allegations that we had in our original complaint held water and we found not only that they held water but there's even more evidence there to support our position in terms of this case being about montana property law we understand that the kind of issues that this panel is dealing with right now get decided different ways depending on different jurisdictions we have directed the court to three cases which we think provide some pretty clear guidance and again as we as we our briefing anytime there's a question of state property law the state's interest in the state's interpretation is sort of at its zenith and the federal courts are almost at some other lower points because  as has been you know noted many times in federal court decisions state property rights are not created under any federal source also here we are in federal court yes phil i wanted to ask you for me the pivotal issue in this case is whether or not the claims to the statute of limitations could you please address the limitations issue absolutely so who read that these claims are torts claims yeah except for the declaratory judgment interpret it at all it is our view it is your honor if you essentially alleging that the wrong defendant is trying to foreclose that they didn't they don't really rightfully hold the paper exactly why isn't that a conversion claim well the reason why it's not a conversion claim is because in order to resolve that question the deed of trust needs to be interpreted not the negotiable instrument because this whole theory of that part of the case arises under the montana small tract financing act and that deed is governed and specifically incorporates the provisions there but even anything you know so that's our that's our position is that you it's this is essentially about the deed of trust interpret in the deed of trust and seeing whether or not wells fargo qualifies as a beneficiary and we believe there's a that does is refer the court back to the montana small tract financing act because it's replete with references to that and since this is a piece of property that's under forty acres and is governed by non judicial foreclosure proceedings then all of the provisions of title seventy one chapter one of the montana code annotated control the interpretation of who is a beneficiary and that's really what the case comes down to is is wells fargo a beneficiary but it doesn't but how does it control how the underlying securities can transfer yes yes because it defines who is a beneficiary and under what circumstances and to answer that question it's going to require the and would you agree that those are barred by the statue limitations i would not why not because there is that this gets to a distinction between what would be called a continuing tort theory and a continuing violations theory and there are numerous a  ledged in the first amended complaint about tortious conduct occurring after may twelfth two thousand and twelve which would cover negligence negligent misrepresentation and may twelfth two thousand and thirteen which would  cover constructive fraud and consumer protection violations there were several foreclosure sales noticed within the two and three year time period there were councils but what authority do you have that the continuing are you why that would be the strongest case is because that's a montana case and fly could that is cited i know it cited in our brief it cited on page twenty eight of our response in reply brief it's in our brief but that's that's also a very strong one because that's a loan servicing case and in that case the plaintiff alleged that bank of america began engaging in wrongful tortious conduct at a point time in the past and engaged in a series of wrongful acts that continued right up to the filing of the point and the district court just said well the things that happened before the statute of limitations you can't bring a claim on those the things that happened within the statute point to a specific language but i can tell the court why i think that's a strong if you say that's a strong case i'm looking for a language in there that supports the concept of continuing violation it just basically talks about fraudulent concealment well they're tolling the statue of limitations well there's a the case talks about repeated acts of conversion and what happened in that case was that a woman and i know what the case is about that's i'm asking you to point me to specific language then talks about a continuing validation theory but i don't think it's there or the i don't have the citation of that but there's the port in the case where the court talks about how mclean had repeatedly wrote bad checks over and over again and they in the case they said that each time an act of conversion occurs a cruel or separate action happens right they ask for the statue of not apply here because we're only talking about actions that occurred within two and three years the following a complaint the point right doesn't help you that's just wrong since point i understand your honor yes ok but what i what i sorry if i didn't handle that the right way the reason why i think that case is a strong case is because it shows every time an action occurs an act of conversion in that case a separate cause accrues now i don't see that in that case ok i don't see that i don't see that analysis in that case that's why i was asking you to point me to it that case is about a series of free standing claims and they discover a new transaction and a new transaction and new transaction that's not what you've got here what you've got is a very long saga all stemming from one one not right that happened and at some point judge christensen found at some point knew about it yes ok so that's where he starts the clock and his ruling is that it's too late and it's really it's his oh yes i don't see this as continuing violation problem for actually and then i don't see support for the notion that montana's recognized the continuing well so what are you relying on for your yes so again the the montana just doesn't have a lot of case law in this area i mean it just sometimes in montana we find smaller jurisdiction we haven't probed all the grounds other courts have  theory that you want to please well understanding the question to the concerns of the court but i think the better case to look at would be awesome versus bank of america and i apologize if i if if my reading on that case is not the same as the court but well if i may your honor if there is a if the question here is how is the montana supreme court can interpret this case and if this court is not certain i think the more prudent course would be to send that certified question over to them i mean the is the closest case i could find that really talked about in a cruel of an act crew every time there's been a court is saying that that's not helpful to the court and i understand that and another case that side of this christian v in the case  of land arco which talks about the continuing tort theory and in the christian case it does mention a north carolina case which is called man zic which talks about the continuing violations theory but there is just not a montana supreme court that directly hits this issue i will agree with that your honor if there's no further questions i would like to reserve a few minutes that i write thank you very much good morning justices my name is ken lay i represent wells fargo and h s b c regarding the continuing toward dr and i'd like to briefly discuss one of the case that was cited in our briefs but not analyzed in a lot of detail and that is gomez versus state that's in montana supreme court case and as we've discussed federal courts must abide by state tolling rules and state policy with respect to tolling statute of limitations what really matters here is what the montana law says and what the montana supreme court would say and i think gomez is a critical case because it's very analogous to this  this case and it indicates how the montana supreme court would be likely to handle this kind of a circle but would they just but your best guess they would not apply the continuing tort doctrine but what would they face what they did that's what i'm asking they would find that the discovery doctrine applies that's what they did in the gomez case it was a situation where a gentleman is that because factually all of the opposing parties claims arise from one  source one one time period yes they did they do arise from you know an initial time period they all stem directly from that and i think when a transaction as opposed to a series of transactions is what i'm trying to get yes i believe that the parties the parties positions i think were fixed very early in the case where wells fargo was saying we service the loan on behalf of h s b c and we have the right to foreclose and certainly in two thousand and eleven the plaintiffs had taken a position directly opposite to that they were sending a cease and desist letter saying you don't have the right to foreclose the misrepresentation claims based upon a series  again these are allegations a series of allegations that wells fargo broke a promise to modify the law you know on that point i would no they're not because the the allegations with respect to relief action it's not as being predicated on an interpretation of the deed of trust i don't frankly understand a lot of what his argument was with respect to that i think the declaratory relief judgment here clearly has to do with conversion of the right to payment in the note and in the beneficial interest in the deed of trust his argument is i think pivots on his position that it's necessary to interpret the date of trust i don't know what language in the deed of trust would need to be interpreted to make a determination as to the nature if we're looking at what is the nature of the underlying cause of action i think it's clearly conversion whether we're talking about conversion of the right to payment under the note or conversion of beneficial interest including the right to enforce and foreclose i think that my understanding please correct me if i'm wrong my understanding yes and i'm happy to do that i don't believe that there are i don't believe that the plaintiffs have standing  this is an alternative basis for a firm in the district court if we don't resolve believe the district court had determined that they did have standing he determined that based on the pilgrim vs green point mortgage case the montana supreme court in pilgrim actually did not discuss standing at all and so i think the district court's reliance on that was misplaced the montana says the montana district court u s district court in montana has consistently  found that homeowners do not have the right to challenge they don't have they don't have standing to challenge the assignment of a deed of trust and most recently just in this past january in the case writing that says you know my note indicates here it's a foot now it's a foot yes it has a property owner facing foreclosure may be able to challenge the chain of assignments purportedly giving the loan servicer the right to foreclo clear suggestion to me and here let me just tell you what my problem is with your standing argument the first time one reads through the fact that in that case it's somewhat striking because there's folks who've been in this home for i think ten years without making a payment on the house basically and on the one hand one might think well why do we have standing what difference does it make who's for closing because surely they have this more fundamental problem but it's i think that the problem with their standing argument is that it really assumes right at the get go before there's been any discovery or or anything else we're just looking at the four corners basically of the complaint and i think what you're so mean is that  in opposing parties situation necessarily wouldn't be able to pay it in this case they've shown no indication of an ability to pay but of course we have to concerned about precedent and it strikes me that it's not hard to imagine a case where a foreclosure action could be initiated you know accidentally in error get the wrong property just in any kind of scenario might want to suspect where homeowners can care and have the right to come in and cure  surely they have the ability to have they have standing in a vixen action of a foreclosure action to come forward and and at least get in the courthouse door potentially i don't think that's the situation we're dealing with it is not the situation we're dealing with here again that's my kind of tried and i don't think there's any indication of that here don't don't mistake me that you're asking us to say these people don't have standing and we have to be concerned about the precedent going forward and it's  not hard to imagine another situation where where people might be able to hear my point is just that i think and this is actually the question i think you're standing argument is really pivoting on an assumption that they necessarily couldn't cure they would have any defense i would direct the court to montana a bankruptcy court decision in ray hoffman that was cited in the briefs ok and what that case and you know that cited to montana code annotated seventy one one one ten which holds that the assignment of the dead carries with it security and what the what the court remarked in that case was that the maker of the  the note should be indifferent to who owns or has interest in it so long as it does not affect their ability to pay and this is not a case where the knights are saying that somebody else is who they should be paying and i'm not speaking to a fact pattern here i want to pick a speaking of is that you're asking for a very broad ruling and you're asking us to make new law in a case where i think it could be maybe not a problem here but could be an awfully sticky wicket where the for eighty eight bankruptcy reporter one fifty seven it's a two thousand and thirteen case from the now before we if we for that we were having discussion you have discussion with just christian he said there was a case that was just decided last friday or west law five zero two seven five zero all right thank you i just want to get in the record thank you your hon if i could i wanted to go back to the gomez case just to briefly show how that is analogous to this case that was a case where a gentleman alleged chemical exposure at the  workplace started his job in one nine hundred eighty eight he went to see a doctor based on chemical exposure in one nine hundred eighty nine he filed a worker's comp claim in one thousand nine hundred two arising from this chemical exposure but he stayed on the job and continued to work until december of one thousand nine hundred two and there's no dispute that he discovered that he was in an injury a situation more than three years before he brought a suit but he tried to argue around the three year torts statute by citing the kind of trespass and nuisance cases that apply the continuing tort doctrine under montana law and his claim was that he was you know exposed to these chemicals until the last day that he was on the job so the last day according to his argument the last date of that he was in the harmful circumstances was the date  statute would begin to run in the montana supreme court rejected that argument they said we're not going to apply a continuing tort doctrine to this type of a case they said a straight discovery doctrine analysis would apply because you know once you've discovered the harm and that you're in an injury a circumstance the statute needs to run because otherwise plaintiffs can sleep on their rights remain in a harmful situation and delay the statute of limitations indefinitely and i think that's what the knights have done here they knew that wells fargo was servicing their loan on behalf of h s b c they openly disputed  that and they did nothing and they remained in what they contend was an injurious situation for years and i think the gomez case is very on point the court recognized that first of all continuing tort theory doesn't  work in all cases montana case law and continuing tort theory really does deal with trespass and nuisance situations the court in christian versus atlantic richfield has recognized that potentially it could apply to other cases but it also recognized us in that decision that there are many types of cases that theory just won't work the gomez case also stresses that montana tolling policy doesn't like situations where statutes will be tolled indefinitely and that's kind of what we have here to the extent that that case law from trespass and nuisance cases can be borrow applied to this situation the the analysis in the district court's analysis was one of whether it's a permanent or a temporary injury and under montana law that turns on a question of reasonable abate ability if a situation is reasonably a beta ball that's a temporary toward the continuing tort doctrine would apply so what does that mean if you if you look at the early case barely versus burlington northern what the supreme montana supreme court said was whether it would be reasonable you know reasonably available is determined by whether it would be reasonable for the alleged tortfeasor to abate the harm taking into account all the factors and you go through a case pacific kind of analysis it would not be reasonable in this situation to expect wells fargo or h s b c to abate the the allegedly harmful conduct because to abate that conduct they would have to basically accede to the plaintiff's position and surrender all interest in the property surrender any right to foreclose that's the abatement that the plaintiffs are looking for it's not reasonable to expect wells fargo to do that they have a duty to service the loan under the servicing agreement with h s b c and h s b c has a duty as trustee of the mortgage loan trust towards the investors in that trust and not simply abandon its interest in the collateral so so there's not there's several acts in this case that's why we're continuing tort dock to continue violations doctrine applies there are there is the one act back in april fourth two thousand and eight where they executed an assignment which is invalid but then there are several discrete acts of wrongdoing which are separate for instance going into bankruptcy court in two thousand and fourteen in asserting a proof of claim for over a million dollars that's completely different from what they did in two thousand and eight and this sheeting foreclosure sales paper closing yes that's true but they are separate they're voluntary they're made and they change in character because after wells fargo interacts with the attorney general's office and in our view misleads them they then go on into bankruptcy court and potentially mislead the bankruptcy court that's completely different than filing a piece of paper somewhere and the misrepresentation claims float absolutely your honor because those are within two in three years if the court determines those are discrete acts and something that i apologize i didn't mean the misrepresentation forgive me for interrupting but isn't the misrepresentation in each instance the same representation which is we hold this paper but it's different i mean it's there because after they have interacted with the attorney general's office and they' represented that they're going to do this fact finding and they know at that point there are noticed that they're supposed to investigate these issues they make a conscious decision this reviewed by their counsel to then take this position in bankruptcy court and that's completely diff that's our view that it's different theory is because the character of each action is discreet noticing a foreclosure sale canceling a foreclosure so that's that's our view on it ok and i would just like to point to one other thing because i know i'm running out of time please look at the rust that case by this same district court that we've cited in our brief it is on pages twelve and twenty six of our response brief the same district court in that case said until bank of america completed the foreclosure injury wasn't per was not was not prominent and so if the same district court held it in that position isn't this case still alive isn't and there hasn't been a completed foreclosure sale either so again thank you very much for your time thank you coun