respectfully submit should guide this court in its consideration of this matter and that is that when an attorney explains to his client repeatedly both in writing and verbal and in no uncertain terms the importance of complying with a court order confirms that actions are being taken by the client to comply with that court order has the client certify under oath to the court compliance with that court order and then receives an order from the court confirming compliance with the prior order that such is sufficient to defeat any suggestion of sanctionable conduct on the part of the attorney as it relates to compliance with that order i submit that when what brings us here today is a mistaken and unsupported believe that in two thousand seven mr robel decided to help tommy thompson hide certain copies of inventories even though according to robert evans the subject copies are not materially different from what has already been produced such a belief is illogical it is not supported by the record evidence in this case and i respectfully submit it should not serve as a basis for the imposition of saying when you say that the subject copies were not materially different from what was already produced what was already produced was the inventory of what was sold to what california gold wrecked your honor and there had been other things that had been produced for instance inventories from the sun so their bodies auction in the christie's auction and what and the the quote subject copies are for example the  what's labeled as the master bar in coin inventory eighty nine have a copy something like eighty nine ninety and these three by five cards and disks and that sort of thing are wrecked your honor mr ev testimony was that in two thousand and thirteen when those were discovered even he and he had been the curator if you will for the company even he had forgotten about these prior copies but he testified that there had been one inventory that had been updated from time to time but your recitation your honor is accurate and in saying that they are not materially different is there a particular document or person who compared the two side by side in and says this or is that an assertion or where would we look for the the truth of that i would respect for further core to the examination of mr other means in the district court hearing on the sanctions in particular the cross examination by mr robles counsel in those proceedings mr o'shaughnessy and what evan says they're not materially different he indicates that while there may have been minor distinctions between them that by and large they were substantially identical and that's a paraphrase your honor the testimony obviously will speak for itself in that regard if somebody testified to the contrary i mean the receiver apparently when they got  these filing cabinets seemed to think that they were documents that he had not seen or had not previously had well the documents may have been different documents because there were distinctions however i will submit to the court that there is a dearth of evidence in the in the record in this case that there was any material to stink ssion that in any way was causally related to holding up the proceedings and that that jumps to another issue in the in this case judges is that if we put aside for the moment the suggestion of whether or not these items should have been recalled by mr oval and should have been produced in zero seven as opposed to when they were found in two thousand and thirteen there is an issue that that remains and that is what was the implication of this alleged away and what are the what is the true measure of damages for the apple we in this case and i will submit that one of the areas where judge marble is opinion is is lacking with all due respect is that there is no analysis that has gone through in terms of what i will for two as the causation element and that is what was the the actual implication of this alleged six year delay in the production of these as a relates to the ongoing proceedings i would submit that in the absence of record evidence in that regard that insufficient basis exists for the order of sanctions will remind the court that when we look at the measure of damages in this case the equities militate heavily in favor of if not a reversal on the merits of the sanction award but a significant reduction in the award substantial windfall that appears to be the product of this award you recall there was a seven hundred thousand dollars settlement that was reached before mr kirk and mr ford went forward in their roles as respondents in the sanctions motion as as we understand it it appears that if this award sticks it will result in a significant windfall in terms of looking at what the actual economic costs were to the apple we of the allege sanction or purposely did not disclose what difference i later to a court order if one is to assume your honor in the in obviously in this case that's a big assumption but if one is to assume that the court is to determine that my client acted in a in a sanction of a way and we look in a vacuum at what the appropriate range of damages are in this case i submit to the court that equities militate heavily in favor of looking at what the actual damage was that was caused by that i do submit to the court that that is a highly relevant consideration for the court and in fact you remember from judge martin announcement court hearings of why is why is it i would respectfully submit that the basis for our system has to do with the proportionality of sanctions and punishments as opposed to the heart and if one is to say that the harm is x and we're going to award for time of the punishment i would submit to this body that that that would be excessive and that would be inappropriate in that regard i would i would ultimately you know i mean isn't there a law that sanctions for this type of conduct assuming that that's  thousand you can you can go above that for punitive purposes there is authority for that your honor however the issue is is where is that dividing line i would submit to the court that in this case there is insufficient evidence in the record to support the imposition of a four f sanction if i may return quickly as my time is eroding to to the merits let me say clearly and without equivocation mr robel did not know in two thousand and seven that there were other copies of inventories that existed beyond what his client certified had been turned over to the others not a statement earlier when you were running through these certifications about a court order confirming it sounded like you said confirming that mr robel had in fact done everything he was close to which order are you referring to judge i was referring to the order of satisfaction that indicated that the concern the terms of the consent agreement that called for the production of those inventories had been accountants and along with other individuals what was the date of that order of satisfaction approximately your honor the date escapes me currently i know the certification occurred in april of zero seven in the second certification in june of zero seven that's all around zero seven and by my right you said that he didn't know certain things in zero seven but would not his obligation have continued in even if we assume full soon for the moment that in zero seven he had a senior moment but because they were there until thirteen he would have had a continuing obligation if he suddenly remembered them all along is that correct why would i would agree judge that the duties ongoing however what i will point out is that the record evidence supports the contention that between zero six and zero nine nobody knew where these documents were and in fact there's no record evidence to support the contention that what was found in two thousand thirteen in four thirty one which was the other side of the duplex from where my client's office was was there in two thousand and seven and that's critical and if i may take ten seconds before i before i see distress this this is a brick duplex for thirty one in the basement is where these these cabinets were found in two thousand and thirteen i saw some reference that there were thirty on that side and four were six on the other side is that right there were thirty six total judge my recollection is that they were found in four thirty one but i will defer to the record on that the testimony of mr henson is that during that two thousand and six to two thousand and nine period that there were a lot of documents that were moving around for the companies in and out multiple people had access to this property between two thousand and seven and two thousand and thirteen and so what there is not a scintilla of record evidence to support is a suggestion that what was found in two th in those documents was in fact there in two thousand and seven when did when did your client become the owner of the property your honor and he owns both sides or did did and then he immediately leased it back to the companies and they used it for their office space i believe if i recall that it was around two thousand and one that he took in exchange for ok so he had it in some way but he had had it for a while you counsel your have your five minutes for may please the court you have new owners i'm steve take us it's my privilege to come before the court reprise in the dispatch printing company let me begin with thirty seconds of quick background to put this in context over two hundred business leaders from columbus invested twelve point five million dollars in the defendant's venture my client invest one million dollars the family that owns my client individually invested another five hundred thousand dollars using those investors moneys the defendants recovered a treasure worth in excess of one hundred million dollars perhaps as much as two hundred million dollars the investors never saw a dime they also never received any explanation for what happened to their money or what happened to their treasure and that's why this case was filed to answer those questions mr winter has told you today that the inventories that were produced were not materially different than the ones that were not produced that is an accurate your honour's in order to answer the questions that were presented by this case we needed four different se first the inventory of what was recovered from the shipwreck bear in mind much of what was recovered were coins that were in crossed into clumps and you couldn't tell exactly how many coins were in each clump but that's the first list the second was the inventory of what was deposited with the virginia admiralty court after the coins were curated after the crusts were broken off and the coins were separated materially different because now were as you had one clump you yes he was caught direct eve never or any of the investors in the case recovered any money here  and i respect the fact that he pursued the investment with a great deal of hard work and fees but it it seems to me that and i respect the fact that there was a hearing that these were important matters that would reveal what your clients were entitle to but at the end of the day there was no recovery and there's abundant evidence that mr robel appears to have done all he could to get his clients to turn the materials that were ultimately found over to you your clients and the rest of the and the rest of the lawyers and in light of the fact that you know nothing was recovered and expenses went went down why should you be entitle to anything for mr ruddle if in fact judge went too far in finding that these that role was motivated by impropriety i mean i think that's what we need to talk about right the damages if you will know the merits we have to determine of fact in light of the fact that there's really no harm at the end of the day right your honor there is indeed harm at the end of the day first of all the audit process that was pursuant to materially different issue and i'll come back to the ok go ahead in the district court mr robel said the same thing you heard his lawyer say here today right as he did not know there were these other inventories judge marley had the opportunity to listen to mr  testimony to assess his demeanor as witness to judge his credibility and judge marble he plainly clearly found mr robel was not credible not believable when he said he did not know so much more belief found and i quote robel himself was aware of the existence of other inventories another quote robel was personally aware that response of documents exist which have not been produced a third quote from judge opinion robel had quote first hand knowledge of the falsity of his statements those were the court's findings after listening to the witness judging his credibility and deciding who to believe those findings or support or yeah i mean i take your argument there your adversary at least spent somewhat more of his time than i expected saying that in fact these inventories that were discovered and thirteen were not materially different from the ones that were produced i guess especially what was sold to california gold now was there either a document or  piece of testimony saying ok here is the eighty nine ninety bar and coin inventory to take one example and we lay it aside the california gold inventory and here's what's in this one that's not in that one mr evans testified about the historical progression of these inventories and went through step by step because what happened i covered the first two inventories what was right in my it was zero and what was the positive with the court the third was the inventory of of the treasure that was left with recover them in a partnership after the settlement with the other claimants and the other relief litigation there was a split of the treasure and the claimants the insurance companies took approximately seventy eight percent of the treasure for themselves and then the fourth inventory is the one of california the sale to california gold those are all different inventory showing but i would assume and this is taking off from one murphy said that the upshot of this would be to say that somewhere there's this inventory of something that's this big and the stuff that we know where it went is only this big so here's the other items that are hidden in the inventories is there any testimony that that's actually what happened and that is that is essentially what mr evans did and what he explained he went through the process to track where it started in the beginning and what he he was able to we should look to evans's testimony to confirm or refute the allegation that there are substantially insurance companies and so there was that much less to be sold to california gold if the insurance what the insurance companies got and what california gold got exhausts what came up from the ship then there's no there's no hidden gold on the other hand if inventories earlier inventories show lots of items that didn't go to either place then you've got a real gripe that is what kay p m g was endeavo to determine but they were only given that last inventory the one that mr goble said that was the only one he knew about they never received the other ones they never could do the comparison that you're describing but now you now you  knowledge of these other inventories there's a letter that he wrote to bank one in closing an inventory there is the docket and the pleadings from the virginia admiralty case in which mr robel was the trial attorney showing repeated proceedings before the court in virginia regarding inventories the that were deposited with the court that was shared with the insurance companies there was the testimony of mr obama's co counsel from the virginia  of the treasurer who said that mr robel knew that evans was keeping these inventories in fact mr evans identified a memo that he wrote in which he noted that he had discussed his revisions to the inventory with mr robel there were mr wools own admissions in his testimony there were three of them at least judge marble the asked mr will directly question you searched some files for the inventories you not sir his answer i think at points in time i would have been aware of this question did you know the bob evans was the person in charge of keeping the inventory answer i knew that bob wasn't involved in keeping the inventory while he was with the company and then lastly and perhaps the most important piece about didn't is the testimony that was given by the receiver's financial advisor james hansen who tended a meeting with mr will will and others after the files were discovered in robles basement and mr henson said this question did mr robel say anything answer mr robel said so you found these inventories we said yes we found them and he referenced that the inventories were part of the materials that mr compston had not wanted turned over to the court as part of the court proceeding did he say why answer by mr or answer yes mr robel said that pops in had great concerns about secrecy and confidentiality and therefore didn't want to share materials unless he was absolutely forced to mr robel said thompson told him not to turn these over he clearly knew about them judge marble he found that there was abundant evidence in the record to support that conclusion mr elliot i think is the one who u court records or was any of these other inventories identified as being the one referred to as submitted in camera i don't know if that's there was an inventory referred to as the hol holabird the bird it was prepared by a gentleman by the name of fred holabird for the for the virginia court he was commissioned by the court i don't know if his inventory is the one nine hundred ninety three one or a a later version i just don't know the answer to that  but in fact one of the inventories that were found in mr robles basement was a copy of the holabird inventory even though he had told the district court judge sarkis had the case that the virginia court had the only copy in existence and you referred to his basement this is the whole business that's a basement somewhere in this for thirty one for thirty three structure direction or i am i right that there were some because i saw the reference to thirty five cabinets in the other side but that four to six were in quote his size that your recollection of the record it actually it isn't it's a it's a little more complicated than that quote took ownership of the property then in two thousand and seven mr robel moved his law office into the four thirty three side and the company moved to the four thirty one side and at that time the file cabinets were scattered throughout the both sides of the building then in two thousand and ten mr rules son started living in the four thirty one side as his apartment and at that time his son and friends of his moved the cabinets to where they were found by the receiver in two thousand and thirteen by by twenty two man neither side was being used as any kind of ongoing office by record companies wrecked exactly exactly and so when they answer your question george boggs when the receiver got there in two thousand and thirteen there were thirty cabinets on the four th irty one side in the basement there were four cabinets in the basement on the fourth thirty three side and then there were the final two on the third floor of the four thirty one side ok that's where they were he based on that testimony about the son and his friends moving them around the fact as to where they were found was at least arguably adventi left he was the keeper of the inventories and if you've seen the stack it's three foot high probably as well as what was on the computers in the disks and everything else he left the company in two thousand he testified that when he in his office was  at the four thirty one four thirty three building as was mr rolls at the time when he left in two thousand he testified those inventories were right where he did that were he left them behind in his files in that building he then started working for the receiver in two thousand and thirteen after the receiver was appointed and he testified those are the same inventories were found in two thousand and thirteen that were there when i left in two thousand will makes this argument well how do we know they were there in two thousand and seven in two thousand and eight well they were there in two thousand and they were there in two thousand and thirteen but the more important point is your honor as judge rebuttal and i can agree on one thing and that is that we would be able to refer the court's mr evans testimony for an appropriate discussion concerning let me make an observation it it seems that the most difficult hurdle you have to overcome is the standard here i mean we hear and are reading in the briefing diametrically opposed explanations for what happened here and you took a very strong position on your client's knowledge which is understandable mr toogood took quite the contrary but the reason why we must step back unless we he was on some sort of you know i don't know excessive effort to punish your client it's seems to me that all of these cases starting with garner say that a trial court is the place where these decisions are supposed to be made in unless there are some to monster bold palpable error in the factual determinations that the judge made we have to defer  thank you for the opportunity your honor to respond to that directly the trial court's factual findings are rather limited those findings i believe are contained page seventeen and there are essentially four factual findings that serve as the predicate for the conclusions and imposition of sanctions and i will submit to this core that as a matter of law it was an abuse of discretion to get to the result that judge marble got to based on those factual findings what were those factual findings they were that number one mr rubble knew because sixteen years before two thousand and seven he sent a letter to bank one even the employees acknowledge that in a vacuum a letter that was nearly two decades old perhaps would not be sufficient for the imposition of sanctions secondly the judge  found that a joint inventory that was filed in the admiralty case years before also demonstrated that that mr robel in two thousand and seven knew when he communicated to the court that there were no others that there were no others  again we're talking about what appears to be some tacit acknowledgement of a lack of material difference between and among these in the dories if there is no material difference between them then i submit to the court that that there there was not an issue here there wasn't a separate mentor it was essentially the same inventory the third factual finding is  that my client in appropriately relied upon his client's communication to him and didn't do enough on his own to confirm it keep in mind we have a c p a for the companies who under oath says this is all there is we have the c e o we have the board of directors we have the lawyer going in confirming that the company is having people go through the files he himself goes through some of them but not all of them and in that context i submit it is an abuse of discretion to conclude that that attorney didn't do enough he did everything that he could  with regard to that statement about i search some of the files is there any kind of follow up on that by either side in terms of how many how long that sort of thing i don't believe so your honor and the last is statements that m made in two thousand and seven to the court where where he's he's communicating and rely upon what his clients have told him that all inventories have been turned over as well as under oath testimony from the c p a and the board of directors so to to step back and to to respond your honor to your inquiry in light of the foregoing i strongly submit that we have met that hurdle of abuse of discretion here that factual record is insufficient in light of everything we know about this case to turn to the lawyer is client fled left him holding the bag to turn to the lawyers say you've got to pay two hundred twenty five thousand dollars out of your own pocket that is an abuse of discretion is it is a technical or legal matter if you will the findings on page seventeen that you refer to encompass about two paragraphs in there essentially that mr rove will knew or should have known the whereabouts of the inventory that's the argument in the briefing goes to a number of other things including the fact that the inventories were important and you know mr to go spoke about that your your position is that based on the limited findings the judge made he extrapolated all the other findings into legal conclusions that could not have been supported by we have the global tack test that the supreme court of set forth for us and in order to find that somebody has made themselves willfully blind such that sanctions have can be imposed there has to be a finding that my client took some actions to affirmatively make himself blind of what was going on there is not a scintilla of evidence in the record to support that finding now insole with respect to those findings on page seventeen the statement says your client informed the court his clients had produced all inventories they ever possessed is that not a stronger statement that i i have been advised by my clients that they produced x and y and that had it been made in that form at least the court in the adversary's would be on notice that he was not making any assertion on his own as a as an officer of the court and then there could have been follow up they are certainly different verbiage your honor and we could probably have an hour long discussion about the implications of that and what it may mean well let me say this my client was not ordered to certify he certainly had an obligation to be forthright and candid and honest with the court and we all have that as attorneys however to stand in front of the court in to indicate after you've communicated with your client the board of directors the and your client a certified under oath that they've turned over and complied with an order and say your honor my clients have done what they were supposed to do and to say it firmly and to say it loudly and to say it definitively is that sanctionable conduct absolutely not your one there's insufficient evidence to really conclude anything from that into what the record does show is in two thousand and thirteen when the receiver took custody of thirty six cabinets they didn't go through and on premises at four thirty one four thirty three they moved into a warehouse they were moved there shuffled around they went through in there who knows what was where and what cabinet was where we just simply don't know and what is the foregoing i respectfully request that the courts reverse the