the notice of assignments they count better now this is not a theoretical question recognition of such a right would mean that alleged assignee could in the words of the fourth circuit create rights out of nothing more than a notification on the other hand recognition that section four a six merely recognizes or stablish is the right of the accountant debtor to not make duplicative payments without notice keeps in place the existing rights and obligations under the common law now that was that there was a real difference in this case between those two things because the jury was only instructed on durham's statutory cause of action under section four of sex they did not have to find durham in fact had purchased any of the accounts at issue and in fact the evidence was that dur didn't know which accounts it had purchased and which accounts it did not purchase in under derms alternative security interest theory the jury also did not have to find that durham in fact had a security interest or that that security interest in collateral was somehow they had the right to collect on that as a result of some existing still existing debt or default now instead based on durham's statutory cause of action the jury was allowed to find for durham based on a notice of an alleged assignment and the failure to pay the alleged assignee now why why doesn't does section four o six not create an independent cause of action i think you start with the language of it which squarely speaks to the right of the account debtor it talks about the rights that an account debtor may pay it and may discharge its obligations by either paying to the account holder without notice or to pay to the assignee after notice and comment t section four zero six reinforces that point two says that it provides for the general role and surname and account debtors right to pay the assign or until the account  receives the appropriate notice so we're talking about a statute that is recognizing the account debtors rights and in effect our position is that section four six is a shield it is a shield for the account out or so that they are not subject to duplicative payment demands prior to getting notice of an assignment well how do you and subsection a the last sentence after the account or has received notice the statute provides that the account or may not discharge the obligation by paying the assign or but in this case isn't that exactly what happened well you're  right your honor the account debtor again it's talking to about the rights of the accountant debtor in one situation it gives the account debtor a defense in the other situation it does not give the account debtor a defense our position is that there is nothing in section four of six big gives the assignee a cause of action it doesn't create a right for the assignee out of thin air merely by sending a notice so it is true that aquaman in this case after notice would not have the defense well i paid i paid the original account holder but that doesn't speak to the question of whether or not section four of six gives the assignee a cause of action for the assignee to have a cause of action you would have to look traditional kinds and it's our position that recognizing just like the fourth circuit did that section four zero six does not create an independent right and cause of action is not going to upset any apple cart here there are common law claims that assignees have been bringing for ages for these types of clients breach of contract breach of a signed contract action on account accounts stated wrongful payment there are various common law claims out there that could sit and have that these types of causes action but that's not the cause of action that was asserted here the complaint is very clear that this was a statutory cause of action under section four of six and der recognized the distinction between those two things we have a nearly parallel case this call portfolio servicing it was cited in the twenty a j letters this is the same factoring agreement with the same law firm they just brought german brought in another case against a different account debtor  and in that case the court recognized the problem associated with an independent cause of action under section four zero six suggested that there might not be one in german went back they amended they added a common law action on account in that case now could derm have done that in this case yes at a certain point they could of but now we're going group superseding interfered with well i i i think you know at the beginning of this case when germ theory was that they purchased the accounts then i don't think that the bankruptcy proceedings would have interfered with that at all but at a certain point in the case and i think it was right around summary judgment it became clear that derm had no evidence of which accounts it had purchased and which is it had not and then it said well we've got a security interest in all these accounts and so i think once they move to that theory i think we're running into a real problem with bankruptcy court jurisdiction because they are asserting a security interest in the accounts that are owned by the by the d business of suggesting to the court that it should try and avoid issues but all of this quite frankly should be sent over to the bankruptcy court because we've got an adversary complaint in the bankruptcy case right now filed by the trustee against durham suggesting that durham took more money out of the business than they put into the business so this this case is directly relevant to that  theory and that's also another point as to why section four zero six and why the use of it here created problems if in fact derm had been required to prove that they had a security interest that there was a charity interest in and to collateralized the debt that they had and they would have had to have shown that there still was a debt and that they had not been fully paid back but section four six allowed them to short circuit all of that because they just had to show hey we sent a notice and they paid the account holder after the notice that's that's creat right out of thin air and it's not consistent with what their actual theory was and it's only by recognizing the statutory cause of action under section four of six that they got away with that you mentioned at the beginning in talking about four o six the durham had not a stablished which accounts had been assigned to it does doesn't matter under four of six while it might matter if there's a security interest being alleged does it matter under four o six or simply sending a notice that says it's been assigned to us start paying us is that all that's necessary or we think it should matter you know we think that sex for six talks about assignments it doesn't talk about security interests section six zero seven talks about security interests they didn't assert a cause of action under six of seven had this served as a cat cause of action under six to seven force capital holding in from the four circuit section six of seven doesn't create a cause of action either would apply because there's a subsection i think it's six o seven d that says this counsel to this section creates no duty for the for the for the account that or doesn't already exist so  i think the answer your question is yes it matters they did not show that they purchased these accounts the factory agreement here talks about accounts that are purchased and the signs they use those terms acquittal won't play a factor grima talks about non purchased accounts in which they have a security interest that are not assigned and so i guess my question is it probably matters much more  auckland which accounts have been paid well i mean i think it you know did it didn't matter at the time to that talk when and as to well you know they pay of they had the other well it i think it didn't matter i mean they had a provision in their local council agreement that says that you can to sign this agreement our accounts with our in consent which they never days and it certainly matters now right because i mean the narrow auckland is you know number one out the one point five million dollars in foreclosure funds that were not remoted by the law firm which we've alleged should have been set off once the jury recognized or set off dissent and so i think all of those things do matter your honor and i think the biggest problem here though is once the district court recognized this as an independent cause of action it basically threw the burden of proof out the window for what would normally be required to be to be proven here and i think just one more example that for i need in my r acquire g and g m ac auckland did not was not a successor so that law local council over a minute and so there was a again just the recognition of that cause of action that statutory cause of action that does not exist allowed derm to just blow right through that burden of i'll stay with the balance of my time thank you overcome one that i don't believe that auckland can stab wish to have to demonstrate that there was a complete absence of evidence supporting a jury's findings and that they could only result from share some eyes or conjecture or there's such an overwhelming amount of evidence in favor of the movement in this case aka that reasonable and fair minded jurors could not arrive at a verdict against iraq when if you don't have a cause of action under nine four zero six it's not a really difficult burden is it well that wouldn't be a jury finding your honor that would be a legal issue and we're going to be dealing with that certainly let's talk about that first then in the appellant's brief section be to it page twenty six they argue that we are preclude enforcing our security interest because we didn't plead that claim docket entry one is the complaint and like to read some of the paragraphs in that complaint that i think are important for the panel to hear paragraph eleven and you've been told that all we did was seek our private right of action under nine four zero six and that therefore we didn't assume any responsibility for proving the obligations that were required under the underlying relationship between the parties that's what the trial courts was told and discounted and that's what your honour's have been told their graph eleven of our complaint acuna connelly entered into an agreement titled local counsel agreement a duplicate of which is attached the underlying contractual relationship agreement was attached to our lawsuit as an element of our claim paragraph twelve on or about november seventh two thousand and twelve connally entered into a non recourse receive a bull's purchase contract and security agreement with term paragraph thirteen in addition to the sale of accounts connelly also granted durham a security as security for all present and future obligations of connelly a continuing security interest in the purchased accounts and a security interest in certain specified a collateral which included non purchased accounts and all proceeds of those accounts before i continue that was the critical paragraph of the complaint which established for judge mara why he completely discounted in his order the argument that was made again today that this case is identical to the s b s case s b s did not include a claim for security interest you're posing counsel also indicates that the jury was only instructed on these debts for a cause of action do you agree or disagree with that i agreed that there was an instruction on that cause and that was or not shown any other cause of action which contract or any other cause of action no i don't believe there was i believe that there was only instructed on one issue they were instructed on the nine four zero six issue we did not assert in that instruction that there was a private right of action being asserted we simply asserted that they breached their obligation to pay us and as a result they did not discharge their obligation in paragraph fifteen on or about december twenty first two thousand and twelve and again to september tenth two thousand and thirteen and again unst january seventh derm transmitted a letter to auckland advising auckland that the purchased accounts had been assigned to derm and that auckland should pay all existing and future invoices to durham we characterized count one as a breach of a statutory duty to pay accounts that has been the basis for the argument it was not an accurate statement or not as accurate as it could have been but under the case law the fact that we titled it that doesn't dictate what the claim is and as a result of the pleadings that were asserted in paragraphs eighteen through twenty two pursuant to the factory agreement connelly offered in durham agreed to purchase certain accounts arising from the provisions vent existing and future accounts the factory agreement that was attached to the complaint specifically provided in paragraph four that we were granted a security interest as collateral for repayment of any and all obligations and liabilities whatsoever and in paragraph four point two the collateral that we received was any collateral now or hereafter described in any u c c filed against the client naming durham as the secured party and all of clients right title and interest into the following property now or hereafter acquired section four point two point one all accounts erin federal including accounts purchased by durham here under and repurchase by client close parenthetical so you are proceeding on the purchased accounts as well as the accounts in which there was a security interest there was no question about that your honor no question whatsoever i'm confused because in your brief in your summary of argument on page eighteen you say the trial court correctly denied auckland's motion for judgment as a matter of law thus permitting durham to enforce it security interest in the accounts and there's no reference to the those are the county accounts in which you have a security interest but there's no reference to the purchased accounts well we did not proceed on any level at all in any in any part of the case that we had to prove purchased accounts that was not our position and i think that your honor hit it right in the head when you indicated what does nine for a six require nine four zero six does not require a party to establish specific accounts that relate to the nine four zero six assignment once a notice of a sign is delivered indicating that there is an obligation to pay the asked me it doesn't matter whether the accounts are purchased meaning we advanced against them or on purchased and by the way oh if we disagree with you on your interpretation of for a six and conclude that it does not include accounts in which you had a security interest and it only included purchased accounts then in that case we would not be able to sustain a cause of action that would probably be one of the most disruptive rulings throughout the country because every bank it takes a security interest in a in a borrowers collateral and does not lend specifically again against accounts hundreds of times a day a stablish lockbox relationships where they finance people for working capital in order to continue to have this country move with adequate credit facilities they depend and rely upon the right to receive direct payment from the obligation parties the customers have those payments made into a lockbox if they have to prove purchase accounts as opposed to merely having a security interest which is not the case and i'll deal with it a little more detail that would be stream lee disruptive for any financing that goes on in connection with this facilities  i notice i'll just point out that the order i'm referring to by judge marr was documentary one fifty six where he said the court rejects defense argument that the plaintiff must identify actual purchases and identify actual c g a w again invoices it purchased significantly the case law upon which to federalize citing to s p s is unpersuasive because the complaint sought payment on purchased accounts whereas in the instant complaint seeks payment on both purchased and non purchased accounts of page seven there's reference to nine six zero seven of the u c c your honour's might be interested in knowing that when they suggest that we had a responsibility to prove that or plead it nine six seven is in part six of article nine which is the remedies section not the elements section nine says nine six zero seven is merely a statute which identifies the rights that a secured party has in the event of a breach there not a single case cited by that by byock when this appeal which established that we had any responsibility to cite to or otherwise refer and rely upon nine six zero seven although nine six zero seven your honor was contained in the joint pretrial stipulation and was and the issues that were identified by awkward in connection with that element were specifically identified as tribal issues of fact in connection with the standing argument on page twenty seven of the appellant's brief they argue that we have no standing because there's a bankruptcy issue involved in this case a lower court's order that was entered by judge sidney weaver back in one nine hundred ninety three was originally adverse to a young lawyer who was forty one years old at the time in service counsel to capital factors that younger lawyer would be many we didn't disagree very often judge sitting waiver not i but we did disagree there the reason for that decision was empire for him held that when my client capital factors received payment from the accountant or those payments constituted cash collateral that were property of the bankruptcy estate he then held  because the debtor rejected our factoring agreement as an executor a contract or security interest was lost we took that up to the district court last we then took that up to the eleventh circuit and prevailed but what auckland didn't advise you all this the empire for him case involves a situation where that we were actually paid the fines not as situation where the debtor itself had already received payment and the lawsuit required us to go after the attack the account that or for the purpose of collecting again there is no property of the state issue here the next issue was whether or not auckland was an account debtor so one of the standard that i mentioned when i first started to question is did the jury have sufficient evidence to show that hakim was the party obligated on the accounts that were paid after they received our notice of assignment in connection with the servicing rights that they performed in can in regard to the g m a c acquisition and you honors i'd like it there's not a lot of time left so i'd like to point out that in volume five page ninety one forty nine one thirteen one fifty two nine fifty one auckland's representative clearly testified that they assumed the responsibility of paying the accounts they assume the responsibility of servicing the accounts the checks that were identified for the jury in the exhibits at document two thirty one  indicated that they were checks drawn by oc when loan servicing unlocked oplan loan services accounts and it was awkward loan services money there's a few issues that are a bit distracting i call them white noise i'd like to go through them with you very quickly number one awkward argues that because they didn't give us their consent we didn't have the right to receive payment i'm pretty comfortable that your honour's have already read nine for a six subsection day it specifically says a term in an agreement between an accountant or in the ass in or is in affective to the extent it seeks to prohibit restrict or require the consent of the account there why is that because the uniform commercial code drafting committee and every legislature in this country has decided that it's more important to allow people to get financing and it is to allow an account at or to suffer a small inconvenience of getting a notice of assignment and pain the ass me it also goes on to say that you can't use an element of the fault in a contract to preclude the right of assignment the next item of white noise is their argument to be one section twenty four where they say that we didn't prove an assignment because we didn't establish that we purchased the accounts they cited to no case in support of that position none we cited to a plethora of court decisions including apex which in which that court specifically indicated that there is no distinction whatsoever none but twenty for the purposes of a nine for a six assignment whether an account is purchased or whether or not there is a security interest in it the king of not citing cases i want to go back to this argument of i have a cause of action under not for zero six and the cases that have been sided specifically from new york and some other jurisdictions if you cited any cases in which a court has recognized the cause of action and wish there was not an additional claim i believe the answer would be yes your honor when i say cited we provided the court with supplemental authority that was an order entered by judge james robert out of the united states district court for the western district of washington in seattle it's document one forty five in the record it's a case called united capital funding court versus erickson in that case judge roberts specifically held that force capital was an unpublished decision which sought to predict how a maryland court would rule he specifically found as did judge mara in our case here that when one is asserting a claim under nine for a six year entitle to rely on the state law in connection with the common law rights that arise in connection with nine four zero six what the judge said in that case was unlike the decision in force capital in this case they clearly recognize that an ass and he has the right to sue under their common law and that pleading a claim under nine for a six gives rise to that your honor i don't i hope and i don't have much time i'm going to answer your question that i have to stop i'm specifically looking it toward new york law because that's really what we're and the new york law that we cited to your honor is it's like all the bills and i believe i believe that the court in making that distinction we believe that we've alleged a common law claim understood but if you disagree with that and if you did it with a climate or none for that's the reason for my question and if you disagree with that our position is in connection with nine four zero six one doesn't have to assert that there is a private right of action under that statute to prevail one only needs to assert that there was an underlying relationship between an account that or an asmer that that right was assigned that the security agreement or factor in the remit between the parties granted a party a security interest in the accounts and as a result of the payment made there was no discharge of the obligation the twamley case and other decisions have to have in our opinion clearly established that one doesn't have to plead a common  you can assert the elements necessary to establish a comma right in connection with an argument that there was a violation of nine for a six and as a result the obligation was not discharged that's that that's the position we take honor i find it odd that i have to say this that the legal theory in a case matters it it determines how the issues are litigated is determined what you have to prove it determines how the jury is instructed and what they are required to find duty to pay accounts the jury instructions page eight of the jury instructions durham has brought a claim for violation of the new york uniform commercial code section nine washington court did but the fact of the matter is they pled a statutory cause of action that does not exist it went to the jury a statutory cause of action that does not exist and they were allowed to get a judgment against auckland on a statutory cause of action that does not exist based on underlying obligations whether it's purchased a cow or a security interest that they did not prove and were not required to prove that is a legal issue before this court and we respectfully believe that this court should reverse in light of yours set off argument what's the remedy well if we agree with you that there's no private cause of action for zero six case then the case is over you know we can't get  we're not getting money back from durham so the case is over are set off argument goes by the wayside your honor thank you