story and as a result state law that was contrary to those interest was preempted our case involves funds that were payable to private parties no rights of the government were implicated gets my second point that in this case vernon was misapplied and my reason for that is that vernon if you accept vernon's reasoning if you accept that it should be applied to this case as well vernon did not take the prior owner the owner of the prior owner of the facility and remove that party from the liability but for it didn't say all right your life bill that he has been transferred to the new o imposed joint and several liability let's extend that and that this is probably a contract case now tell me in the agreement what language do you read rely on there are must look at the structure of the agreement the answers are the assets that were being transferred were specified there were a list of specific items that was the facility itself known as books and records contracts etc there was no mention of the transfer of accounts receivable whether they be from medicare or whether they be from non government source contract by not conveying to the new owner any rights to receivables that all retains the the prior owner retained any rights that existed now admittedly everyone realized that that would likely be paid to the holder of the provider number and that was the reason for the second part of the contract to which i was going to refer the language giving the prior owner access to the books and records to be able to monitor collection of receivables to which it was entitled and that is the actual language in the contract that refers to receivables to which the prior owner would be entitled back to the  exact language if you ask where it is or what it is what it is what the things right in front of you so tell me the again actually first part there there is no language there's just no mention of the acid being transferred with regard to the and his son quest not songcraft and for reimbursement purposes for the cost reporting periods prior to and including the effective date the which reflects the anticipation of the parties and this is not unusual when a business is told that there might be receivables on prior accounts coming in subsequently that will have to be reconciled and paid over pursuant to contractual obligations that taken from the medicare program all right and it was our cost reporting period the language used by medicare when they do their audits and and refer back but certainly it has an effect too with regard to receivables other than it is your honors when we've gotten past the iran and point and in an instance like this i would submit that it was clear to the parties what would be happening and when you have a contract that it's structured with only specific there's a needed assets being transferred that it is not necessary to go beyond that and specify what is not being transferred particularly when the intent is otherwise reflected in other language where the parties are reserving their rights too but the real problem here is that for all we know  that was part of it and then there was the trans that was with regard to the lease and certainly that was called for by the transfer agreement once again it doesn't require any time to pay anybody anything that's true your honor and perhaps it just came down to a friend i would agree and what the structure of this deal that we can see from the agreement is that raintree retained any obligations that arose prior to the sale period but also retained the right to receivables and benefits from prior to that period and on the other hand suncrest took on any obligations and would receive the benefit going forward  obligations including paying lease payments going forward taking over all the patients under the waste but then of course being able to recover from the in come of the property going forward it was a transfer designed to maintain operations for the benefit of the patien with regard to your question about how specific one has to be i believe the various state law cases cited a stablished the fact that the terms sometimes even critical terms can be read into a contract when necessary to give a good effect and that the intent of the parties of course is critical and i would submit again that their intent is reflected in the in the overall structure of the agreement as well as the specific language granting access to review the records i just like to finish in case it is relevant to your decision on the point about the application of vernon to these facts and then the misapplication vernon provided for joint and several liability wh essentially meant the it just gave the government the opera another party to go after it didn't tell the first party ok you can leave the table your scot free the government could collect from either of the parties at its choice and then lead those two parties to their contractual rights to allocate under normal concept of reimbursement and indemnity who was ultimately responsible if one were to properly applied vernon and again i would suggest it cannot be applied here there is no basis to argue that the prior owner comes away with nothing that the parallel to joint and several liability though there is no such thing would be joint and several entitlement where the government can pay the party of his choice and then leave the two parties pursuant to their contractual rights to sort out who is really in title which brings us back to the questions you've been asking in the focus on the contract that is what the case comes down to vernon has no impact i one other point i believe it is clear and undisputed that in the absence of a transfer of ownership pre partition pre bankruptcy petition rights to medicare receivables are assets of the estate i don't think we need to really explore that further i just want to point out some time was spent in the brief addressing that there is not another issue there if you're past the vernon issue and if you agreed that pursuant to the contract omega a successor to braintree is entitled to the funds i don't believe there is any other question about all the cases dealing with property of the estate and whether medicare receivables become part of that estate i in summary and i'd like to save the rest of the time i think that the entire argument of suncrest in this case comes down to application of vermin even in their discussions of the contract every point comes back to the fact that whatever the intent was vernon control and that despite the intent despite what the contract may say as up as a matter of law the the money goes to the water and as i indicated earlier i think it is clear and does not apply even if we work to look to the terms of the also occurred in this case is that because we assume the provider number and became responsible for the violations that were in place some crashed on the day that it took over the facility had to deal with government regulators who essentially the hundred eighty five thousand that we got almost harshly paid back the amount of money that we had to pay because raintree operation in the facility that's how this statute asking for funds which are kind of been obligated to make that payment absolutely that's what vernon holds that's what the regulations told that's what the statute told we would have been obligated to pay for any over  we are not we don't have the benefit of looking back five years after the fact but when this transaction went down what happened was that raintree knew that it was in dire financial straits knew that it had patients residents that it needed to care for and in the space of a day or two this transaction was put together so that these residents would not be thrown out on the street at that time no one had any idea whether there would be over get to the date of the transfer and that's what it says yes rank he was supposed to but if there had been over payments the government would have come looking to suncrest to make those payments ba could have sought a raintree payment amount is that not correct if they're not then no bankruptcy but everyone knew the bankruptcy was going into effect as of as of the time that they entered finance they were magically that has nothing directly and if the parties intended that if they intended that the funds suncrest received by operation of law were to go to reign free then they would have sent that that's that's but have had they intended for something different than the regular procedure in the industry they would have contracted and one of the things that occurs to me in listing is that your assumption about the fact that because you're picking up the liabilities you must be getting the overpayments because of the bankruptcy in fact if the overpayment went into went to range free it would go into the bankruptcy right think there's enough evidence one way in vernon line of cases and under the under the statute talks about the the medicare provider number being and let me let me frame it this way the medicare provider number is what the ticket that you need play in the medicare game and without that the government won't make any payments and so the holder of that provider number has certain benefits and certain obligations that's why that's why in vernon and in the dearborn case that we cited the the successor to the provider number was  them as a matter of contract but first you would go under the regulations because the regulations and the statutes do trump private agreement between the parties that private agreement has to be interpreted in  understand your argument that the provider number crunchers everything but the reasoning of the bankruptcy judge and i'm looking at the record one point one number two it seems to me the contract provisions which allow the owner to come back subsequently and examine the books and records for a reasonable time period would have little meaning that indeed there was not a need to get this additional information in our deal with and apply for seek reimbursement from these earlier parrots now that's that's that's the substance of what the bankruptcy judge faced a drilling off and what's wrong with that reasoning well what's wrong with the reasoning is that he never got to the point of saying that the funds go to suncrest by operation of law he contract doesn't say that it transfers away and now you know the question was asked earlier here were there other patients that nine medicare patients the answer is yes although primarily these were medicare residents in the facility there were non medicare  people involved and so those would be regular accounts receivable that would be analyzed under that that situation but medicare is that and exempt are different unique situation but the question was asked about you know what percentage of the one come of this facility was medicare as a practical matter probably most of their income was medicare or was it not i believe that with regard to the perhaps equitable arguments of what suncrest might be facing facing because of the fact that braintree went into bankruptcy that doesn't have any impact on the contract itself or what the parties intended it may lead to unfortunate consequences that may not think refuse often lead to recoveries often they don't but in this case there's nothing in the record that reflects that suncrest faces any liability here in fact the record reflect that all of the cost reports from medicare for all the prior periods were and the only and the result is a net payment back so i operation of the facility but in terms of consideration what suncrest got was a running facility that could take over turn key walk in and then start getting the benefits of it and with regard to the division was anything i believe it's a legal issue i it's an interesting combination perhaps but ultimately i think it's a legal issue and one final point us about interpretation of the contract that's clearly the focus here and another rule of contract interpretation is that under arizona law in particular subsequent time to time doc can reflect the intent of the parties as well and i would refer you to excerpt record page seventy one which is the letter from suncrest to the bankruptcy trustee after this money was received indicating that the money would be turned over subsequent su to two issues that had to be worked out one was the potential for subsequent requirements of medicare to pay money back and the other was a small matter that's really not relevant but i think that letter is another important factor that