decided out of the arizona court of appeals that i thought fairly illustrative particularly in this case i don't have a citation but it's a case that goes by the name of steinberger v indy mac which was issued were permitted the claim for payment slash the discharge of a debt on the homeowners allegation that one west had been paid all or at least eighty percent of the amounts claimed do under the loan due to an f b i c shared loss agreement which was attached the complaint the court permitted the claim even though at the pleading stage it was not clear whether the agreement why that particular loan report found that the agreement does does appear to provide that in exchange for one  federals loans the f b i see would reimburse one wasted eighty percent for any default in payments on these loans the homeowner allege that this agreement combined with insurance coverage and were other sources of reimbursement insurance and other sources is a matter we have been advancing since two thousand and eight we have had discovery on these issues repeatedly compelled though never produced the banks will take a dismissal or attorney's fees against them rather than produce which i want to i want to say to this court at the very outset because i know that there have been four cases that have come up to this court on appeal coming out of virginia one case out of maryland where it has been raised similar type allegations where  parties advance a theory that based upon various insurances model line insurances credit default swaps things of the sort that loans sitting within a credit or in any securitization trust have been paid in full but the arguments have always been that the loan is discharged and the borrower is wanting a release of the lien based upon the payoff of the loan and the one thing that i am not saying to you and that is that the distinction in this case is that i am not here and will readily admit to you in the my bar we're still owes money on the loan and we get into some questions on who the borrower owes monies to we've had from south carolina we had our ok maybe owed money to somebody well this wasn't the person well the bank the one thing that the one thing that we do know and this was submitted by way of affidavit to the court below in the in the twelve b six motion to dismiss was an affidavit that was fairly lengthy it perhaps should have been dealt with on a rule fifty six basis and if it was dealt with on a rule fifty six basis that that the party should be given a modicum of discovery rights relative to the decisions that have been that have been issued by th previously and specifically what what i'm referring to when the judge in his decision this is in the appendix page eighty nine stated in his decision the affidavit submitted in this case is whol speculative now i mean in a any twelve b six motion it least it's my understanding that the nonmoving party has the benefit of any any factual references whether be set forth in the complain what what have you well you don't have that and that well that's true that's true your honor but that's true but it but i mean this case started this he started out in the maryland in the the maryland court system was sufficient what's different about the maryland court system versus the federal system is that the federal system has has a standard set forth under the supreme court case nash craft beutel and that the plaintiff has the obligation of moving moving its allegations in the complaint beyond speculation to to to forget the phraseology exactly but but the and this is this is part of   there's no requirement in the maryland court system that a complaint be taken beyond that that speculative into that all or the ashcraft the wall standard so this case as it was filed was sufficient in my mind under the maryland system it was removed over to over to the district court by the defendants and they filed the motion to dismiss in part based upon the ashcraft vs ball  issue now in response to that motion to dismiss we had asked the court in recognizing the difficulty that we would face ask the court to grant plaintiff leave to amend the complaint based upon what we knew to be true to include those provisions from the affidavit which wouldn't be required in the maryland system to include provisions from the pooling and servicing agreement which talk at length about the obligations on the part of the securitization trust to maintain it take out insurance is to maintain insurances and to and to apply for insurance benefits on loans that go into default and in a securitization trust i mean right here i brought this with me today just to demonstrate for the benefit of the port this three to four and stack of documents is the pulling and servicing agreement the governs this trust is that far the record is k the bulling in service agreement is not a part of a record in this case for honor but but what i am suggesting to the court is that there are there are many things that could be added into an amended complaint to the extent that the court was was impressed that plaintiff had not satisfied and ashcraft be it ball standard and so who's your good deal well maybe it's maybe it's a maybe it's maybe it's a pretty good deal your honor bright but i have to i have rights seems to me like it's probably the end of the love business in this country no it's not your honor what what what is not being observed by the loan business in this country is that a lender or your loan basis i'm talking about right you know is that is that a securitization trust takes out insurance that is am or client owes who ever paid off the loan that would be absolutely correct well then why aren't they is your why did your client pay and insurance company we don't know who the insurance company is we have a lender that you're not paying anybody we have a lender that says we have a lender that says we're paid off and we're entitled still to go proceed with foreclosure and get double recovery on this and i'm saying i'm saying maybe you rent them if you're not going to make  come forward and say look we paid this note off we're now owed this mount of money i am sure my clients would be willing to extend those payments to the munder or to that if that ensure wide and this came up in the context of quiet title statute and again the mayor of the particular the particular issue under the maryland quite title statute that's different that says that if i filed this complaint with these allegations which we did that this action sh deemed in in ram action concerning the property itself so i'm concerned about the property i'm concerned about the deed of trust that sits within it ok i am not concerned about the note or the obligation on the note because that's a personal obligation and by by virtue of the terms of the statute that obligation is irrelevant what i'm talking about is if that loan was paid off in the hands of this lender then by virtue of subrogation somebody else now is entitled to that money but this lender no longer has a right to go forward under under and by virtue of the deed of trust to collect a second time to do something even if that's true it doesn't allow you to seek a quiet i didn't quite understand even under your theory yes that this money is owed to someone other than the and it would not support your suit to quiet title to remove any cloud from your client title to the to the home i don't see why not the statute indicates the statute indicates that if it's if it's the homeowners intention in filing the quiet title statute and i think in by its own terms it says you can seek to perhaps discharge the lien or you can seek perhaps to obtain an injunction and it's the injunction against these lenders that that the unintended third party based upon a contract that exists between two other parties there is no right or obligation rather on the part of of the homeowner in this case the third party just like pot going around and around what i'm suggesting to this court is based upon what has actually gone factually in this case is not and i think the end result of this case should be this is not that a deed of trust should be released but the deed of trust should should continue to exist for the benefit of the sub or subrogated party but that's not what you asked for that's not what you asked you asked to remove any cloud to the title that was one of the things i asked for an injunction and that's the only basis that's what acquire to civilization is i ask for an injunction to and i think and i think that in an injunction doesn't necessarily require that the deed of trust be released i'm saying the deed of trust can exist based upon the subrogated interest that continues to exist why would you want to do this when you're going to go  court's attention to page twenty eight of the appendix and when i read i mean were talks about miscellaneous proceeds being assigned to the lender says miscellaneous proceeds shall be applied to the sum secured by that security agreement whether or not then do with the excess if any paid to borrower there is recognition on the part of the drafters of this document that that money is making a come in from third sources and i'm suggesting in this case monies came in from third sources monies may be due to that third source but this these two lenders no longer have an interest in this at all there is no dog in this fight on the part of either of these lenders all right get your own the best answer i would have to that without divulging client confidences is that the client respects to judicial process you know i it's i hope your title action in state court was filed in response to the threat of foreclosure response to a threatened foreclosure you don't know that it well your honor i have no doubt that there was a threat in foreclosure at least to the extent of notices of default it's just again  was limited to the record there is that there are a lot of things that i that just have slipped my mind this morning because i was focused on what's actually in the record already so you don't know anything about the no default i have i have to say that's true your honor if and if it's not in the record i wouldn't have been prepared to talk about it to this court in any event and i apologize but not knowing the  years they not been paying anything that is correct i know that the complaint for closure act your papers whatever i you know we have all these cases all week and we should be knowing the prepared and the lower courts by other counsel i personally was not and only right you know i was in this very courtroom one day this will count against your time i was sitting over there waiting to have my case heard and i had judge winter who was chief judge you know from attorney general's office over lunch and you find out the answer to that question you come back here and by god i said to myself i'm never going to say that to the fourth circuit and i know what your case now you know yes you're right i want it i was prepared to argue legal issues and you're equitably actually prepared on the facts if you know the facts of your case to be able to help us you need to know better than anybody in the courtroom you and i do apologize for appearing unprepared john in this particular case the primary issue is is purely legal and the  out what he's what he does he acts on behalf of whoever is i with the money right yes you're on to make sure that they get their money back and secured by the real estate yes and  allegation in this case and a claim for four client title which is an equitable proceeding which means that if there is as judgment said a  to the the and you're on i also said earlier that this would be the end of the mortgage loan business as we know it if the appellant's position in this case law were made the law i'm not an expert in it but i  if i think that's about ninety nine point nine nine percent of the people out there i guess we like to hope so the if the appellant's position in this case were upheld no borrower would ever make the first payme because they get a free house as soon as i sign the trust up well that's the the ob this is the necessary implication from that is that no one would ever make loans no one would ever insure loans and as your honor said that would be the end of the loan the mortgage i i would say that this lawsuit is very weak and i would probably not like to express an opinion as to whether it's frivolous because that would all you people enter side of it yes your honor  and therefore i would so i would have no trouble making the r if the question came up i would have no trouble making the argument that it was frivolous but it would not is up yes your honor this has had three times  i'm i'm trying to avoid impugning the character integrity of another attorney when when it is not necessary ironically i do believe that the facts in the law do not support by any stretch of the imagination this case i think that's the top help that's when i'm one help help or explanation give me some help your honor if you were looking at a computer screen you saw that you would probably want to press help what is this the out what it meant any more than the district judge that it is intended i understand correctly to identify loans as they are on account i believe that the the plaintiffs expect understand that their expert can explain it and our view of it is that it is irrelevant because as a matter of law even if this showed that there weren't accounting accounting records somewhere that showed that this particular loan was marked as zero balance because their insurance proceeds all of which is speculation and is not facts in the record even if all of that were shown then as a matter of law it would still not add up to a claim for a valid claim for clear title for quite a title and when you sit down you might want to reread your own memory and accident leaf and misguidedly actually followed it in preparing for this morning i do think that the what i need to disagree with palin's counsel on one item and that is that whether the district court considered the experts affidavit because councils answer to that was it absolutely did consider it in fact what's clear from the transcript is that the district toward the district court considered the affidavit as a proffer of evidence and determined that it was not appropriate it was a speculative it was earlier the difference between the pleading standards in maryland and the federal court may exist it's not as substantial as counsel suggest it is but i think more important if counsel if  the plaintiff has evidence that would enable it to plead facts that would raise its claim from purely speculative to plausible then in the face of a motion to dismiss under twelve b six in the federal court is it is a legal conclusion to say that because of that payment the debt is released that's alleged but that's really only legal conclusion that's not a fact  well that comes in and there's multiple layers of answers to that first one is that precisely because it's purely speculative as to whether there's any question about the app elite standing second because the apple a is the loan servicer so the node itself may transfer ownership multiple times the trustee still is responsible for the service or still services  somewhere in somebody has records that will indicate who actually owns the note and in particular moment and the third thing is that if there is a contract of insurance which is alleged then exactly the proceed and or some contracts and then reimburse insurance sometimes the insurer proceeds in the name of the insured sometimes the insurer simply takes over because action of the race all of that here because it's purely speculative as to whether there even is insurance we don't have in the record of this case and i personally do not know what hat what what the circumstances are there but i do know that my client believes it still has the right to be here and from that one might even infer that it is either that there is no insurance or that it hasn't been paid or that it has the right under the insurance contract to continue acting in its own name and just deal with the insurance company as an accounting matter in any of those circumstances it doesn't add up to clear title because as counsel acknowledged the plaintiff still owes the debt just someone whether there is i'm sorry i'm out of time  exactly how much time left but i would like to answer some of the questions that were posed firstly this case was filed not under threat of a foreclosure in fact there was a foreclosure case that was pending before this case was filed however that the lender dismissed that foreclosure case voluntarily on its own i still don't know why they did it  but that's what happened the pendency of a foreclosure action would have prevented the ability on the part of the plaintiffs to have initiated this action the secondly plaintiff is not seeking free house and again and i want to emphasize that all i'm asking the court to recognize are the legalities that are actually going on the facts that are actually going on between the part and if if a service or on behalf of a a trust in which this loan is supposedly been assigned and can not come out has been paid off by somebody not matter where where i mean does does the notion should the notion lie that they should be entitled to a second time and this is why i brought up the notion of the right of subrogation it's the sub rigor that should have the right to come forward it's the sub rigor that has the legal obligation the legal right to come forward that loan has been in the hands of the trust paid off i'm not arguing that it's paid off by the borrower and i'm not suggesting to this court that my that the borrower doesn't continue to zero on that note i want this to be clear an action in which the orders that may pertain to that particular case and be issued pertain to the parties that are before it only and that is what i'm here to try and get this court to recognise or the court below to collecting on this note that right has now been assigned and i'm asking this court to simply recognise that legal princip allen i would suggest although i don't know particularly i do think that this is part of a report that would have been issued from the bloomberg reporting service that is available to not necessarily to the public at large but certainly to lenders and to those that have that have license the rights to access this information and this information will give information relative to the status of a particular loan in a publicly traded trust such as what this such as what goes on in this case i cannot explain it only mr william tallow can explain it i'm not i'm not but he attaches in support of his his affidavit that he had prepared and concluding that that this loan had in fact been paid off i think to the extent that the court below suggests as it did that that the affidavit itself is wholly speculative i mean i can't understand how a court or anyone can come to a conclusion that something is speculative unless they've taken a look at it and considered it and and judge titus polo took a look at this affidavit considered it concluded this is speculative and i think that that is wrong under the standards weatherby under twelve b six or summary judgment standard for the judge to have come to that sort of a conclusion the if anything if anything particularly with what's on the line in these in this regard it would seem all the more important in my mind that that the parties be allowed to engage in discovery to find out exactly what the heck has happened in here in regards to these these being paid off where the source of funds came from what the subrogation rights may be so on and so forth but so maybe my argument is a technical one maybe it is a technical one i mean we can look at it and say well yes t borrows money then you know so who cares who pays party a or party b and in that regard i am asking this course in a tech in this court a technical sense that particularly under the maryland statute which says that my borrowers up personal obligation on the note is irrelevant that we're looking at this piece of property we're looking at the lenders right and if if there is any in that deed of trust that continues what might that be and i am suggesting to this court that if anything again i am not even though we have was put in the complaint that that the lien be released i don't think that that's necessarily the proper answer conclusion in this case i think that the lien should stay in the property for the benefit of a subrogated party but the issue of segregation again is not before the court in this case and that issue we don't know who the who the stop him i mean i think there are books out there that are not going to stop him but that purpose is to expose loan and now it's important to recognize what goes on in the loan industry what is going on in the loan industry and in this case is not right anyhow i see my time is about to expire the one thing again it would be it would be the plaintiff's request or the appellant's request your honour's that again i i submitted and i do think that the case should be remanded if no other reason but to but to engage and discovered if you know to to get to the bottom of what is going to be understand your argument your time is right well thank you thank your honour's i appreciate your