the court jonathan iran on behalf of helen in this case timothy ritchie i'd like to begin with the argument that we raised concerning bank of america's negligence in allowing eight years to pass between between the time of mr rich's default on the loan and the foreclosure sale because if the court agrees with us on that and gives us the relief we're seeking on that and that will obviate the need for the court to reach the other legal issues that we've raised and to frame the issue i think it's important to note that we're talking about causation in the restitution context a lot of course i can see in the fourth circuit case that says this but a lot of courts around the country have said that the causal chain may not extend so far in terms of the facts or the prime span as to become unreasonable or there's a ninth circuit case called am a tech industries two sixty five f thirty nine seventeen says exactly but i just voted so when we're talking about the time span an eight year delay that implicates the question of whether it was unreasonable or bank of america to wait that  now i understand market forces in the real state area can can be a factor we're not saying that bad is irrelevant but what we're saying is that in this case we flag issue in our sentence and memo we said the house deteriorated because where is there evidence in the record of the declining condition of the house or the property there is no evidence neither side  in evidence of on that want to let me you need to have put in evidence on that point to prove it to the court at that and saying well now well the government would have needed i position is that because you've been in it than if there's a mortgage i would assume because it's been paid for eight years for eight years there was no one paying on this note but it's richie wasn't common as you're making a lot of assumptions about the condition of the property which is just that for a big success the burden might well be on you tube per well here's why i think it's and it's not because when we said what we did in our government's response in their memo filed the day before the senate hearing was very interesting they didn't say the house is fine they didn't say the drop in value from a three point five million dollar appraised value in two thousand and five and by the way there's never been any whiff of something wrong with that appraisal report five million dollars in two thousand and five to a one point one million dollars sale price of foreclosure in two thousand and fifteen they didn't say it was all market they didn't say it was even worse in two thousand and nine mr rich is lucky we waited until two thousand and fifteen to sell to sell it they didn't say it's not our burden we're not going to figure it out what they did say was we've talked to a  bank official the bank official has looked at the file the bank official says it's not the bank's fault despite the fact that the bank official parents said that there were errors in the for various  the late the proceedings so when i read that i thought well that's that's interesting you know they're going to call this bank official to substantiate what they're saying in their in their memo and all least be able that that you or someone say that there was someone forged bill yes there was an underwriter as i understand it was there if it's available to testify about the underwriting process and that the government and call that person either and you know they had it so they had noticed two witnesses prior to the sentencing hearing and that's not in the record but i can tell you i went back and looked at this an underwriter and then someone else who was also going to be called testify if called about the loan application process there was no one ever noticed as a potential witness on restitution so i think in this unique context where the government is essentially saying we've ch and believe us the best will believe the bank they say it's not their fault i think it is their burden to come in and back that up because i think unlike the presumption that you've postulated about where someone's living in the house over a period of time that that's not falling down i think the assumption could be quite the opposite in the case where there's a home that dates of the acts of sixteen hundreds on a piece of property and no no one's paying on th note why should we think that that house is is being maintained why can't the bank if it is why can't the banks they're the ones who would be maintaining it they're the ones who have access to that information the burden should be on them you know it's a lot easier for the government to pick up the phone and call the bank and say hey we've got this issue about what the bank did or didn't do can we talk to you thanks not going to talk to me if i call that i can't do a thirty b six deposition in this context and say hey  someone who can talk about the government can do all that and we see from the record the government didn't do that they talked to someone or at least and i have no reason to believe they didn't and that person apparently gave them information that for whatever reason they chose not to put into evidence at the senate's so i think in this case and it's a unique situation i wouldn't i wouldn't say that their court needs to issue some broad ruling on this but  the unique circumstances of this case the government didn't meet its burden to show an unbroken chain of causation and there was enough swirling around that the government should have been on notice that that was necessary one case that the government was the victim they took possession of stolen temper and then held it for of a denture a purposes and the value of the timber declined over many several years and by the time the government sold the temper they sold it at a substantial loss and the district court in that case ordered restitution for the loss in value the ninth circuit reversed that and the court observed that any reduction in the temperature value stems from the government's decision to hold the timber during a period of decline in prices not from pilar's criminal acts and i would say that that's analogous to what's going on here you know the there has to some limit to what a bank can let happen before the causal chain is broken and we say that reduction in price is the bank's fault and here you have evidence of the record the bank's own admission that there were at least some errors in the foreclosure process on various occasions that contributed to it or at least needed to be explored in the government didn't do that so we're asking for a rule that says when a defendant raises a credible claim that in intervening circumstances broken the chain of causation it's incumbent upon the government to bring in evidence at least primus facia to say that there's no such we talked about other aspects of the rest to sion argument i don't recall that actually coming up front and center i in this in the natural sentencing hearing but i don't think that i needed to ask him for a rule and then we had we had case the court was confident that the that the but of what had happened was there was there were just a climbing sale you know declining land values in the court said in that case that's not just the declining value of the property due to market forces is not in itself a basis for a finding that there was an intervening cause but in this case again it's not just that and we have also encouraged and in that case  just sort of my yorks just that it was a case and i was somewhat analogous to you or your birth to make that show she said that that's what she she would she would want to put the burden on the defendant and you know respect at least in in this setting the information is going to be particularly more available to the government than the defense to and get information surprise information loose from the bank as took steps they did take or didn't take to idea of where to place the burdens in that particular situation applies here both for legal and you know because of the statue and also because of the particular circumstances that are at issue here so on on this point if the court does agree with us that there was a burden on the government the government inexplicably failed to meet that we would ask that the court  tell the government you had you had a bite of the apple you had information that you said existed to rip to rebut what the defense had said you didn't you didn't meet the burden and fair opportunity to do so and you didn't and that should be in our view the end of it because you know the government had it had information had a chance i don't think government should get a second bite at that apple now on if the court doesn't resolve the case in that way i think another issue that the court will need to reach is this issue about  point it just kind of crossed our minds and we were trying to we were trying to wait on it just hadn't occurred to us that this was an issue until we're in the sentencing hearing but we raised it and judge bennett acknowledged that the world knows that bank of america took over countrywide and paid for its paper at a steep discount so bank of america's we don't know the record that's an abyss you would need to remember i think four but we know one knows what bank of america actually paid for this loan i think it's fair to assume that it was a very steep discount because this was already a distressed asset so i do think it's senate soon memo but the government had its theory with respect to restitution it's very was it's very simple take the outstanding principal amount subtract the foreclosure sale price and we said that's at the at the sentencing hearing assumption we said that's wrong can't do it that way so i think i think i would love it if you would just say that they didn't meet the burden but were not asked for that i think a remained on that issue just exercising the course discretion about how to send a case back and what's but you could take the official notice of it and let me ask you this respect to the cases that you cited in your pre is there is there any need for a court to think through this will notice or is the presumption that any time a successor bank takes over the is i don't know if you could have such a broad presumption but certainly in the time frame after two thousand and eight where there where banks are failing it it probably is fair cases for a different proposition which is simply that you you look at the actual cost it's not that there's a presumption that that the least as i read the cases it's not that there's a nestl presumption that the price has declined but the reason you look at the actual cost is you need to know what the lend what the successor lender of the purchasing lender skin in the game is it could be that you know for example  america had bought mr rich's loan for two million dollars and only got one point one million dollars in foreclosure we would be having this discussion we would still have all their arguments about why we think they're not entitled to restitution but they would have a loss the problem is in some cases there is you need to know for your starting point what what the actual cost is so you can understand whether they've already been fully paid now civil leads totally different right bank of america can go after mr ritchie civil for the delta between the foreclosure sale price and the and the outstanding pencil amount that can go for interest you know that's that's the difference criminal restitution is designed to do something totally different you're supposed to make both the victim whole in this case of bank of america paid less than one point one million dollars they've been made whole already so that's why we think on remand we need to know what their but what their damages the please the court good morning i'm catherine gavin from the united states i want to start first i guess in response to how mr ron started his argument claiming that the causation element was not proven here because of the alleged neglect to lay that the government did not meet its burden of proof and i would submit the record is very clear that the government did make a pr of a loss and there is absolutely nothing in the record to indicate that there was anything on reasonable about the time period in which the sale took place that there was any neglect the way in appropriate delay or damage to the property in fact i would point your honour's to in the joint hendrix one of the exhibits at the government presented at the sentencing hearing was exhibit i believe it's exhibit one at which is a a summary essentially that was filed in the circuit court i'm sorry jay to eighty eighty one was an also if you look down there are all kinds of of other expenses of the bank incurred that are not part of the restitution but what's important here is that one of the items is property inspections preservation costs of  somehow this witness in the courtroom that it was the government's burden all the way first of all the government indicated at the beginning of the hearing that the witness was there if the judge wanted to hear any anything more from the bank of america the judge said no braun could call this witness there is nothing prevented there was nothing preventing mr braun in advance of the sentencing of subpoenaing a witness from the bank of america to talk about the issues that he wanted to talk about he simply stated in his sentencing memorandum in one sentence that there was this undue delay at the that there was delay delay and damage to the property no evidence he could accord his own client and also argue that honor and and frankly he could have called his own client the defendant he was in the courtroom he could've called him to say what had happened to the house so i would submit to your honor's that the burden did in fact shift after the government made its pr its made its made its case as for the amount of restitution as mr pronk to his credit exhibit knowledge openly to the court of the issue of bank of america buying the country wide and at discount was never mentioned in anything until in the middle of this hearing mr braun suddenly said by the way judge everybody knows this and the judge and i would submit and i have taken the position i think it's still true your honour's that the judge did not take judicial notice in that in the transcript when this issue came up the judge at first asked me can you say whether the loan was written off and i said i don't know that  of course now looking at this of course it was not looking at two eighty one and that was always my understanding but being suddenly asked this question i i said i don't know the judge then asked well i can take judicial notice can i that everybody knows that that that the bank of america bought countrywide and and my response was your honor i think i don't know because i don't think and when i said that judge bennett then shifted gears he did not say i am taking judicial notice that there was that the bank of america bought countrywide at a discount including the sloan he never said that and he didn't take that notice what he then did was shift to well let me look at the government's exhibits let me see what evidence is here and when he did that he looked at government exhibit one in government exhibit two which were the deed of the sale in two thousand and fifteen plus the document i just referred to government's exhibit one and concluded that the loss amount was what we were saying was for as i read the cases that the defense cited and the cortin's in those cases the courts are looking at purchases being made essentially by a third party on a secondary market that's not what happened in my understanding with what bank of america did here bank of america bought the entire bank of countrywide the entire business and became countrywide and so in doing so bank of america not only took on the assets it also took on over liabilities all the problems that countrywide may have had it became countrywide as opposed to being a third party that by some assets and to me i think that's a really significant difference because even the newspaper article that that the defense cited in their brief even though it was not in the record below the first two although all of the the monetary loss and disaster that was inflicted upon be away when it actually as a result of buying countrywide so to then say bank of america might get a windfall because one of these many many assets when it bought the entire company works in all warts and all somehow there's one can even if one could figure that out that somehow they would get a windfall if they get the principal balance back but yet on the other hand claiming that somehow bank of america has dirty hands which they argued at sentencing and therefore should take on shouldn't get anything because countrywide did something wrong i mean it he wants it both ways and i think that's inappropriate construct that's a different factual situation than what we have here here that's not what we have so i think if we were in a situation where bank of america bought some of the assets on the secondary distinction in the cases but i just think as a practical matter and as the concept of the meaning of harm to the victim where you have a successor that just takes over the entire business they are the victim and they're not getting a windfall because if they had taken over the business and countrywide continued i think we'd all agree country by gets the full amount the full  foreclosure and and sale for collateral and what i'm saying to the court is there's no reason where the company that buys the entire business should be in that same position it's different than when you're taking a calculated business risk or investment by buying selected assets on a secondary market then i think that's part of the inherent calculation that you're doing as a business to buy these assets but here where you're buying the entire business i think it goes beyond  so i would submit that that that the government's calculation was correct and that to the extent there was any question with the defense bringing it up it really i would submit that it was their burden to bring it up and they should not as they should not get the second bite at the apple because they brought it up at the last minute and particularly considering the the maybe the the value of the property the documents that are in the mentioned by judge bennett specifically because primarily i would say that because the pre sentence report specifically said that n p r a applied to this case and that makes a difference  pay an order a lesser amount or choose not to order restitution and all under that the standards otherwise who's the victim on causation that's all the same so it's really what one both of the courts  object to that either in writing prior to the hearing or at the hearing itself when asked judge bennett specifically said ok so the issue of losses here any other issues any objections and the answer was no they're not court said not didn't use the word adopt but said that i have read the entire percent report and all the attachments and so in my view he did adopt it there was no dispute about the statements that were in  your honor we haven't found a case you've heard that discusses this windfall concept in the context of of a purchase of a bank's assets and liabilities i will say there's nothing in the record i think we need to remain at the very least just to actually understand what the what happened and what the what the purchase really was and what was purchased whether it's assets liabilities or some some combination so the record is not developed on that but i think it's important that the court give the district courts and guidance about once that's sorted out what is the starting point and to me the distinction that ms gavin raises about let's assume for the moment that it was just  purchased is the right of countrywide to get restitution in this and maybe other cases where countrywide would have gotten  but what's the what they're saying is we bought that right at a discount when we purchased everything but you can buy someone's right to put to get restitution at a discount because that wise in the face of the point that you're making the actual victim countrywide went out of business when banks go out of business and there are cases i've found a case you know there are several that i've seen where it's time for us to show a bank is out of business and there's no there's no victim to give restitution to that's really what happened here you had a six even if countrywide was their assets and liabilities became part of bank of america countrywide itself didn't exist an countrywide had existed yes they could have they'd been a different position than bank of america but we really need judge bennett to understand as best they can be done and i grant you it could be a hard process but i bet somewhere in the bowels of bank of america you can get some information about what the allocation was of distressed loans and you can make a reasonable estimate that's what statutes require just a reasonable estimate that makes sense and i think  do that but he has to be given the opportunity to do that now on the on the question you asked mr gavin about the basis for understanding which statute was lied first of all it is a big deal don't but i i believe the record is not clear that that's what judge and it did because the one very one sentence reference in the pre sentence report but even if it's not clear we have some case law to suggest that we can trying to figure that out judge bennett say it's the m p r if you find of course we argue that it doesn't occur and i haven't seen anything persuades me that the government's correct i mean i think that the cases that we cite and the language in in the in understood and and i don't know if i'm sorry to add another one to your pile but i think it's important the court consider that and it's not as if i'm in the quote the government if they felt that missed they could have proven bank fraud they could a charge that they elected not to and we really you know this particular offense just shouldn't be the basis for an m p r a the application then the ari there are many many many title eighteen offenses that will still be applicable after the court hopefully rules with us on this just not this one or others that don't have as an element any effect on prop with that i will submit on the papers on the rest and thank you very much for their own will come down a great council and then go into the