00:00 - Good morning everyone.

00:03 - Welcome to our second I'm

00:05 - for twenty twenty four

00:07 - of the superior court of Pennsylvania.

00:09 - Last year the superior court celebrated its hundred and twenty

00:12 - fifth anniversary a bit belated all the

00:15 - dirt covered nineteen

00:17 - but I am so glad to be able to carry out the tradition of our

00:19 - quarter back

00:21 - and it's my pleasure to introduce our power members

00:24 - to my right.

00:25 - Judge Mary Jane bowes of allegheny county.

00:29 - To my left media left judge Alice to both Philadelphia county

00:32 - the morning.

00:34 - To my right again judge Carolyn Nichols of Philadelphia county

00:38 - warning.

00:39 - And to my left judge Mary Murray of allegheny county.

00:42 - Good morning.

00:44 - Judge Maria McLaughlin of Philadelphia county.

00:47 - Fish making king of Delaware counting.

00:50 - Morning.

00:51 - Judge Megan Sullivan of Chester county.

00:53 - Boring

00:54 - and our newest judge judge Joe Beck of allegheny county.

00:57 - The morning.

00:59 - Judge Sybil will be joining US as our accused will judge later

01:02 - on today.

01:03 - I ask that you please turn off your cell phones.

01:07 - During argument we ask that you please state your name and

01:09 - party that you represent at the beginning of your oral argument.

01:13 - If you have co-counsel with you please introduce him or her to

01:15 - the court as well.

01:17 - We have read your briefs are very familiar with the facts of

01:21 - your case so we ask that you focus on the issue or the issues

01:24 - that you would like US to reconsider.

01:26 - Please remember that we are in error correcting court.

01:29 - So it's helpful to US if you can point out where you believe

01:32 - that the trial court made a mistake and why that mistake is of

01:35 - such a magnitude

01:36 - that the relief that you want is wanted by this court.

01:41 - I want to.

01:43 - Recognize our court criers mr Jeffrey bar ton mr Michael welker

01:47 - thank you so much

01:48 - and also a wonderful suit

01:50 - a security staff Sean Brennan.

01:53 - Brian leventhal and we are borrowing Scott town from the

01:56 - supreme court today thank you all for being here.

01:59 - As well as our police officer

02:01 - Smith much easier name than last time.

02:05 - And.

02:07 - If there is more than one appellant or appellee you must decide

02:10 - in advance how you wish to divide your time and advise US of

02:13 - the same.

02:15 - Opponents if you wish to reserve time for a bottle please let

02:17 - US know at the beginning of your argument.

02:20 - We look forward to your oral arguments we'd like to thank.

02:24 - Pcn for filming this unbox session.

02:27 - I'd like to introduce you our commentators.

02:30 - Nancy Conrad president of the Pennsylvania bar association.

02:34 - Thank you for being here

02:36 - and Jen Jennifer coats worth the chancellor of the Philadelphia

02:39 - bar association

02:40 - both of whom are

02:41 - are here and will be commentating today.

02:44 - And.

02:46 - I want to recognize sitting in our first row all of our

02:49 - judicial summer insurance please stand.

02:52 - Thank you so much for being here.

02:55 - And my chief clerk and one of my clerks is here as well thank

02:58 - you all for being here today.

03:01 - I'm going to.

03:02 - Take.

03:03 - A.

03:04 - Ask for your indulgence and take advantage of personal

03:06 - privilege today.

03:07 - Before you begin.

03:09 - As many of you know my chief clerk's husband Alfred quasi died

03:13 - over the weekend.

03:15 - I'm dedicating this on court en banc in his memory and I was so

03:18 - bright

03:19 - he attended or sinus college on a presidential scholarship and

03:23 - he was the editor of the widener university school of law's law

03:26 - review.

03:26 - The Delaware journal of corporate law.

03:29 - It was at weiner that he met his love of his life Lisa who is

03:33 - my law clerk my chief clerk.

03:35 - He not only had his own law practice

03:38 - but he was

03:38 - an esteemed member of the law offices of Thomas j y

03:41 - llc of Philadelphia insurance defense firm.

03:44 - In addition to Lisa

03:46 - he leaves behind his two sons Christopher and Kevin.

03:50 - I lived life to the fullest and participate in so many act

03:53 - outdoor activities and he was a youth soccer coach as well.

03:57 - As Lisa stated to me earlier this week when we spoke

04:01 - this will do a lot darker and sadder with his passing may his

04:04 - name be for a blessing and we dedicate this to him today.

04:07 - Thank you.

04:10 - Hello my name is Nancy

04:11 - Conrad.

04:13 - I am an attorney and partner

04:15 - at the law firm

04:16 - white and Williams

04:17 - in Philadelphia

04:18 - and the hype Ali.

04:20 - Additionally I had the honor of serving.

04:23 - As the president of the Pennsylvania bar association.

04:27 - With me today is Jay Jennifer coats worth.

04:31 - An attorney

04:31 - and partner

04:33 - at margolis edelstein.

04:34 - In Philadelphia.

04:36 - Attorney coats worth also serves.

04:39 - As chancellor

04:40 - of the Philadelphia bar association.

04:44 - Welcome to the Pennsylvania superior court for two days

04:47 - on unbox session.

04:50 - The superior court was established in eighteen ninety five

04:54 - and is made up of fifteen

04:56 - judges.

04:57 - The superior court here civil.

05:00 - Criminal

05:01 - and family cases.

05:03 - That are appealed

05:04 - from our state courts

05:06 - in each.

05:07 - County.

05:08 - Where trials take place.

05:11 - From the sixty seven counties in Pennsylvania.

05:14 - The superior court receives about six thousand

05:18 - appeals

05:19 - every year.

05:20 - And writes about three thousand

05:23 - opinions

05:24 - a year.

05:25 - The superior court is charged with reviewing cases that had to

05:30 - taken place

05:31 - in our county courts.

05:33 - To determine.

05:35 - That the parties.

05:37 - Have received a trial

05:39 - that is fair

05:41 - and that complies

05:42 - with the rules

05:43 - of law that have been developed over time.

05:47 - Typically the court sits

05:49 - with a panel of three judges.

05:52 - But today

05:53 - a full

05:54 - on buck panel sets to hear argument.

05:57 - This is known as the

05:59 - en banc court.

06:01 - The court a sitting and bonk

06:05 - because the judges have determined.

06:06 - That the cases

06:07 - have issues.

06:09 - That are sufficient

06:10 - importance

06:11 - to receive the analysis

06:13 - and review.

06:15 - Of nine out of the fifteen judges.

06:19 - These judges

06:20 - have reviewed a written verbatim transcript of the entire trial.

06:25 - That is being appealed

06:26 - and they have also reviewed legal briefs.

06:29 - From each lawyer

06:31 - stating the reasons that they believe.

06:33 - The decision by the lower court should be upheld.

06:36 - Or reversed.

06:38 - These br reefs also provide references to prior cases.

06:42 - That have been heard and decided.

06:44 - Where the courts have addressed the same or similar issues.

06:49 - Being able to consider.

06:51 - The history and reasoning of prior court decisions.

06:55 - Helps to create guidance.

06:57 - Predictability

06:58 - and concern I didn't see

07:00 - any ongoing decision.

07:02 - Of our courts.

07:04 - In addition to reading

07:05 - the transcript from the trial

07:08 - and reading the briefs

07:09 - of each lawyer.

07:10 - Each of the nine judges today

07:13 - will hear oral argument from the lawyers in the cases.

07:17 - This allows each lawyer to pay personally address to the court.

07:21 - Why he or she believes.

07:23 - That the court got it right.

07:25 - Or did not.

07:27 - And that the decision should be upheld

07:30 - or overturned.

07:32 - Some terminology for your reference.

07:35 - The person

07:36 - or party raising the issue to the superior court.

07:39 - Is the appellant.

07:41 - And they have the burden of providing

07:43 - that there was an error in the court below.

07:46 - That decided the case.

07:48 - The appellee.

07:50 - Is the party who wants the court to

07:52 - hold the.

07:53 - Or sustain.

07:55 - The decision of the trial court.

07:58 - Because the burden of overturning

08:00 - the court's decision.

08:02 - Is upon the appellant.

08:04 - That party will argue first.

08:06 - Followed by the appellee.

08:08 - The appellant will have

08:10 - orbital time of several minutes

08:12 - to conclude oral arguments.

08:15 - Before addressing today's arguments

08:17 - and on behalf of our calls leaks

08:19 - we want to acknowledge president judge Lazarus

08:21 - and thank her for inviting the Pennsylvania

08:24 - and Philadelphia bar associations to participate in this in box

08:28 - session.

08:29 - And now I'll turn it over to Nancy to discuss the first case.

08:33 - In the first case

08:34 - that will be argued before the court.

08:37 - The court will address whether evidence

08:40 - leading to a dui charge was properly suppressed

08:45 - by the lower court.

08:47 - Due to a violation

08:49 - of the municipal police

08:51 - jurisdiction act.

08:53 - By way of

08:54 - brief background.

08:56 - Chief Edward sharpe was on patrol

08:59 - in French creek township.

09:02 - The chief

09:03 - is the chief of the polk

09:04 - thorough

09:05 - police department

09:07 - a township next door.

09:09 - While in French creek township.

09:12 - He observed a vehicle you're traveling east.

09:15 - In the westbound Lane

09:17 - for about half.

09:19 - A mile.

09:20 - Before it stopped.

09:22 - Near a shop.

09:23 - The chief at that point

09:25 - initiated a traffic stop

09:28 - and as he approached

09:29 - he recognized

09:31 - the driver of the vehicle.

09:33 - Stephen akin.

09:35 - The chief

09:36 - and mr akin.

09:38 - Knew each other

09:40 - and had a friendly relationship.

09:42 - The chief noticed

09:44 - that inside the car.

09:46 - In the middle of the center console.

09:49 - There was a Martini glass.

09:52 - To remain fair and impartial

09:54 - the chief called his colleague.

09:57 - Sergeant Heller

09:58 - also from

10:00 - the polk borough police department

10:02 - to come.

10:03 - An investigation.

10:05 - Sargent Heller transport it

10:08 - akin to the hospital

10:10 - for a blood draw.

10:12 - Thereafter he arrested

10:14 - aiken

10:14 - and charged him.

10:16 - With driving under the influence.

10:19 - Prior to trial

10:21 - mr aiken filed a motion to suppress the evidence that is

10:26 - to exclude

10:27 - the evidence

10:28 - from the trial proceedings.

10:30 - Akin argued that the traffic stop

10:34 - in French creek township.

10:36 - By a polk borough police officer.

10:40 - Was not legal.

10:41 - Under the intergovernmental cooperation act.

10:45 - And the municipal police

10:47 - jurisdiction act.

10:49 - At the hearing to suppress the evidence.

10:52 - The parties stipulated that is they agreed

10:55 - to the following facts.

10:57 - First.

10:58 - Dutch.

10:59 - Chief sharpe's observation of aiken's vehicle

11:03 - and the traffic stop.

11:05 - Occurred in French creek township.

11:08 - Next.

11:09 - That at the time of the stop.

11:12 - There was a joint municipal agreement.

11:15 - Between

11:16 - polk borough

11:18 - and French creek townships.

11:20 - For police officers

11:22 - to be provided

11:23 - by the polk borough officers

11:26 - to French creek township.

11:30 - While French creek township

11:32 - had a resolution to adopt

11:34 - the joint municipal agreement.

11:37 - There was no ordinance

11:39 - adopting.

11:41 - The joint municipal agreement.

11:44 - The trial court

11:45 - concluded

11:46 - that the intergovernmental cooperation act.

11:50 - Did not

11:51 - authorize

11:53 - the traffic stop.

11:54 - Because French creek township.

11:57 - Had not enacted an ordinance

12:00 - adopting

12:01 - the joint municipal authority agreement

12:04 - with polk

12:05 - thorough.

12:06 - As

12:07 - Had been requested.

12:09 - The trial court suppressed the evidence obtained.

12:14 - As a result.

12:15 - Of the chiefs

12:16 - track traffic stop.

12:19 - A motion for reconsideration

12:21 - was denied.

12:23 - And the.

12:23 - Commonwealth both a Pennsylvania.

12:26 - Appeal to this court.

12:28 - The primary question then before the court.

12:31 - Is whether the lower court

12:33 - erred

12:34 - in suppressing the evidence.

12:36 - Under the municipal police jurisdiction act.

12:42 - Warning

12:42 - warning your owners.

12:45 - Mine's called easily Graham the first assistant district

12:47 - attorney in venango county Pennsylvania.

12:50 - Really an honor to meet you all is my first time ever in the

12:52 - capitol building despite

12:53 - living in Pennsylvania for quite a while so.

12:55 - Good to meet you welcome we're happy have

12:57 - your.

12:58 - Children.

12:59 - So if I may begin.

13:00 - Exactly like president George buzzers indicated

13:02 - I'm not gonna

13:03 - go restarts again because I know that every one of US.

13:06 - Who's been we

13:06 - know why we're here.

13:08 - I will briefly indicate.

13:10 - He's been bit of a.

13:11 - Journey

13:12 - here.

13:13 - This case was filed twenty seventeen.

13:16 - The issue

13:17 - however I'm going to ask the court to really

13:19 - hone in on.

13:21 - I think it's something to

13:22 - absorb and really focused.

13:24 - Correctly so

13:25 - in the memorandum opinion.

13:27 - Which is even though I raised three issues the one that I'm

13:30 - really asking the court to.

13:31 - Combine in a sense

13:33 - is whether the municipal police jurisdiction act

13:36 - as it is applies in this case requires or demands suppression

13:39 - of the evidence.

13:40 - Excuse me what would we do if.

13:43 - Go ahead.

13:44 - Briefly I'm I just wanted to to review with you I

13:47 - I'm a little unclear as to

13:50 - what you are arguing.

13:52 - And.

13:53 - As the.

13:54 - As a

13:55 - violation or under under watch.

13:58 - Part of the statute.

14:00 - So in reading your re argument brief.

14:04 - I see the incorporation of

14:07 - an.

14:07 - A

14:08 - Section eight nine five three a five

14:11 - district

14:12 - and.

14:12 - I

14:13 - I was

14:14 - wondering

14:14 - are you now arguing that that

14:18 - section is applicable to this case.

14:20 - So thank you for that question judge.

14:22 - You

14:23 - correctly pointed out that

14:24 - a three does not apply and I guess

14:26 - that'll say merely off the bat.

14:28 - Section eight three

14:29 - as amended by our legislature pre recently

14:31 - I'm not arguing that that applies

14:33 - but for today's purposes your honor I am arguing that of

14:35 - subsection a five.

14:38 - In other words.

14:39 - Would apply

14:40 - in this scenario

14:41 - okay so then

14:42 - my follow up questions to you are.

14:45 - The section a five of the n p j first appears.

14:50 - In any.

14:51 - Written form.

14:53 - In.

14:54 - My esteemed colleague.

14:55 - Judge foes of descent.

14:58 - So.

14:59 - In reviewing.

15:01 - Of

15:01 - The.

15:02 - All of the things that were filed

15:05 - from suppression.

15:07 - Your suppression motion.

15:09 - Argues a three

15:11 - and a four.

15:13 - No mention of a five.

15:15 - Then in your appellant brief.

15:19 - At page.

15:21 - Fifteen and sixteen.

15:24 - It says the.

15:26 - Commonwealth still acknowledges that a technical violation of

15:28 - the n pj occurred in this case and the commonwealth is not

15:32 - asking for the requirements of the npg a

15:35 - to be overlooked.

15:37 - So

15:38 - In light of your appellate brief and your suppression motion

15:41 - not mentioning a five and now the first time.

15:45 - In your

15:46 - advocacy and your written advocacy we see it in the re argument

15:49 - how is the a five section not waived.

15:52 - Yes judge.

15:53 - So.

15:54 - Gets going in order but as you presented it.

15:58 - Why I started off by saying that

16:00 - kiss is a bit unique in the way in which it arose here

16:03 - and certainly in the beginning.

16:06 - Wasn't going to and didn't argue in fact

16:09 - that it applied at all.

16:11 - However I can judge

16:12 - is very correctly pointed out something

16:14 - I think that I knowing I overlooked

16:16 - but that the trial court overlooked as well

16:19 - and what I mean by that is.

16:22 - It's a it's a fact specific determination that as long as I

16:25 - look at it your honors.

16:26 - What I mean by that is.

16:28 - I'm not going to sit here today and say that the municipal

16:30 - police jurisdiction act absolutely does have situations that

16:33 - will merit suppression.

16:35 - But as far as why wouldn't be waived you're on.

16:37 - Is is

16:38 - again the law's the law

16:40 - and

16:40 - if the courts have to make a decision Asian today

16:43 - as how the municipal police jurisdiction act as enacted by our

16:46 - legislature

16:47 - and how it applies to these facts

16:50 - I can put the cork and always.

16:51 - Apply it based off of this

16:52 - what is now six sections in that the.

16:55 - Act itself judge.

16:57 - Right but it has to be brought up in every

16:59 - procedural

17:00 - in all procedural postures in order for the trial court to even

17:04 - address it.

17:05 - And it was not addressed in anything before the trial court

17:08 - including your nineteen twenty five be opinion.

17:11 - So how is it not waived I mean.

17:14 - There's.

17:15 - Clear case law especially.

17:18 - A very recent case commonwealth vs Smith.

17:21 - That says you can't change your suppression theory

17:24 - and.

17:25 - You know once you've.

17:27 - Filed the suppression motion and argued it

17:29 - so how how how how do we get around Smith.

17:32 - Yes judge

17:33 - so so as I see it here.

17:35 - My argument has always really been the same.

17:38 - It didn't specifically indicate subsection a five judge

17:41 - but the cases that I specifically

17:43 - mentioned in my written brief.

17:44 - In both written briefs.

17:45 - I mentioned cases like Stein and bora which go.

17:49 - As well as hobo which is the newest

17:52 - case from a twenty twenty two

17:52 - and why I talked about those my brother's up again your honor.

17:56 - In my.

17:57 - Re argument

17:58 - on bonk.

17:59 - Is because.

18:00 - I mean things have changed since the case even went to trial.

18:03 - Certainly there there were something that happened.

18:07 - The

18:07 - court appropriately remanded to the lower court because of a

18:10 - lack of a

18:11 - colloquy

18:12 - to the

18:12 - defendant

18:13 - was not advised at a suppression hearing whether he had the right

18:16 - to counsel

18:17 - so the superior court correctly remanded it ducked down the

18:19 - lower court proceedings

18:21 - we redid that same suppression hearing that we had from the

18:24 - very beginning.

18:25 - Judge honor.

18:26 - Ruled differently than judge white

18:28 - did in the initial proceeding

18:29 - and that that is what I then appealed

18:31 - but my own saying that we should look at things that happened.

18:35 - After the fact

18:36 - after your case.

18:38 - No no judge only as it would apply to cases that has no

18:41 - binding precedent I would ask the court to stay the hubble does

18:44 - apply.

18:45 - Now because it was

18:46 - in

18:47 - By this peer court as binding.

18:49 - I have a question regarding the shade take.

18:51 - The shape tests and

18:52 - regarding the second element which

18:55 - is the deviation from the np.

18:56 - Ga.

18:58 - So

18:59 - What's lacking here is a resolution

19:03 - between and.

19:06 - Frankfort township

19:08 - and.

19:11 - Anyway I guess I.

19:13 - Hope borough a.

19:15 - Borough police.

19:16 - And.

19:17 - His.

19:18 - Cars.

19:19 - Do both of those

19:21 - entities

19:22 - have legislative bodies that could actually enact a resolution.

19:27 - Or is the reason that they just had an agreement is yeah they

19:30 - had their law legislative bodies.

19:32 - Around but they just dropped the ball and forgot to get the

19:35 - legislative approval.

19:37 - Right

19:38 - in your honors what would I

19:39 - attempted to do just in full candor to the court and also just

19:43 - with my professional obligations

19:45 - at the suppression hearing I completely stipulated to the

19:47 - admission of every single one of the.

19:49 - The ordinances resolute oceans in agreement.

19:52 - Because it is not my position

19:54 - that it was done correctly in fact

19:56 - I'll say before this court today

19:57 - it was not done correctly

19:58 - so as far as would have been done I guess that's my question it

20:01 - could have been done but it just wasn't

20:03 - they have legislative bodies.

20:05 - It was not done correctly so

20:07 - which is why in my brief I say it was a violation of the mpg

20:10 - yeah absolutely what.

20:11 - If you have this information do

20:14 - you know was it just an oversight

20:15 - by.

20:16 - The township was a French creek French creek township just

20:19 - overlooked it did a resolution seven ordinance

20:22 - unintentionally exactly Joseph there was a

20:24 - row an agreement there was a resolution

20:26 - it just never.

20:27 - Got to the point of an ordinance.

20:29 - I supposed to further make that argument and then what the

20:31 - facts support

20:32 - that same officer who was the chief of police at the time he

20:35 - had been patrolling in that exact area for more than ten years

20:38 - so it wasn't as if this was something where he intentionally

20:41 - decided you know what.

20:42 - I'm going to take a full and extra judicial foray into another

20:45 - jurisdiction like I know.

20:47 - But after this happened they did enact the legislature did go

20:51 - back and two the.

20:53 - Proper procedure you

20:54 - they did not that we can take that into consideration either

20:57 - but

20:57 - they did know how to do it and they did do it.

20:59 - Yes absolutely

21:00 - so you're taking the.

21:02 - Position similar to

21:03 - hubble.

21:04 - Not not ho a gland but but but hubble that.

21:08 - Chief officer was on official

21:11 - business like you said he normally.

21:12 - Did that and he saw.

21:14 - The

21:15 - defendant.

21:16 - Driving the car I think on wrong.

21:18 - Wrong side wrong

21:19 - wrong side completely yesterday so

21:21 - which presented quote an immediate clear and present danger to

21:24 - persons and property.

21:26 - Yes you're so even though the subs

21:28 - sex guns might have been

21:29 - flubbed or not

21:30 - presented properly you're you're trying to say that.

21:35 - There is an exception there because

21:37 - your immediate

21:38 - clear and present danger because he's driving on the wrong side

21:40 - of the street wines

21:42 - and

21:43 - things.

21:44 - Exactly

21:44 - if I may just to show what I believe to be the disappear of

21:48 - course trend towards exactly that scenario

21:50 - and why I think hobo

21:52 - and in another case that I mentioned.

21:54 - Pretty and merchant are so important

21:56 - is all three of those give examples of

21:58 - situations just like this.

22:01 - In hubble in particular the driver was.

22:03 - Operating the car in an erratic manner

22:05 - and the officer ended up going into an area

22:08 - and was in fact an area that was not in his jurisdiction and

22:10 - there was simply no excuse under the pj that he didn't violate

22:13 - that act.

22:14 - Sorry unhelpful

22:15 - listed.

22:17 - Wasn't there a bolo early earlier in the evening

22:20 - saying there's a suspect

22:21 - around

22:22 - and.

22:23 - In hobo didn't the officer also said it was part of his routine

22:27 - patrol because this was right on the line.

22:29 - Exactly so.

22:30 - So the.

22:31 - The.

22:34 - Number one

22:35 - he acting.

22:36 - Officers from the proper township.

22:39 - Have

22:39 - put out information asking for help.

22:42 - To other

22:43 - to other areas correct.

22:45 - I would agree that that's how that case would certainly be.

22:48 - Differentiated between this one judge.

22:50 - The the

22:51 - the two other cases though that I believe further develop maybe

22:54 - some factual scenario closer to this one.

22:57 - So in prati the other case that's mentioned.

23:00 - Which is even before this case.

23:02 - The officer was there wasn't a bolo in prati

23:05 - there was a very very loud and as the officer described the

23:07 - concerning noise

23:08 - in a direction in the area

23:10 - that was not in his jurisdiction.

23:12 - So the officer responds to the area

23:14 - and finds a drunk driver.

23:16 - A person slumped.

23:18 - On the wheel passed out

23:19 - and that resulted in a dui arrest and conviction was appealed

23:23 - the court said that suppression was not married in that

23:25 - situation when.

23:26 - And why the problem that we're going to have that.

23:30 - This quoted

23:31 - the.

23:32 - Moving case while

23:34 - and the supreme court took that

23:37 - case up and they looked at that case

23:37 - and they said.

23:38 - If the n e.

23:40 - J was not.

23:42 - Enacted properly.

23:43 - There's no jurisdiction.

23:46 - By the police officers in the responding jurisdiction

23:50 - to even do with anything and

23:52 - therefore the appropriate response.

23:53 - Is to

23:54 - dismiss the charges and get rid of this suppression.

23:58 - I believe that the superior court has said that that would not

24:00 - be the case judge

24:01 - I I understand the supreme

24:03 - superior court has said that but I think the supreme court says

24:06 - that once the.

24:08 - The choir

24:08 - and I think that would like amusing to the next point I really

24:11 - wanted to make

24:12 - and

24:12 - judge Holden also correctly pointed out that the our supreme

24:15 - court has tended to shy away from o'shea

24:17 - however

24:18 - I think the very last sentence in the memorandum opinion was

24:21 - o'shea is still good law.

24:22 - Understood the factors duty as.

24:24 - That was another point that I wanted to ask you about and

24:26 - including.

24:28 - I.

24:30 - There's a plurality opinion.

24:33 - Stating.

24:34 - That.

24:36 - Basically

24:37 - o'shea's good faith exception and in Pennsylvania we don't

24:40 - recognize good faith exceptions

24:42 - now it's plurality.

24:44 - And.

24:44 - Only three three justices voted for it but.

24:48 - If we're in on.

24:50 - The the three-prong

24:51 - shea test.

24:53 - And.

24:54 - Here.

24:55 - We have av.

24:58 - A.

24:58 - Unlike hubble

25:00 - we have the suppression was granted

25:02 - and so.

25:03 - How can we.

25:05 - With who blend and with that current plurality opinion

25:09 - and and then with

25:10 - the actual defense this being suppressed unlike in hubble

25:14 - and.

25:16 - How do we find the the the errors law there.

25:19 - So as I see it your honors

25:21 - the.

25:22 - Over

25:23 - I mean.

25:23 - Obviously many decades the law has really

25:26 - evolved here

25:27 - and become more specific as to

25:29 - how the mpg does apply

25:31 - and what I mean by that is.

25:33 - I'll use another case as an example

25:36 - I supposed to make my point.

25:38 - Bore of which cause point

25:39 - I think then the entire court's holding there.

25:42 - Was quote even if a technical violation occurred.

25:46 - Suppression is not warranted

25:47 - because quote it would run afoul of the legislative intent of

25:50 - the mp

25:50 - shire which is to promote public safety.

25:53 - So the this case is

25:54 - why I think it is different than a couple of the examples

25:56 - provided such as lubin.

25:58 - Is

25:59 - The officer in this case wasn't even remotely.

26:02 - Looking for the issues

26:03 - and in the the words that I

26:05 - kept focusing on my brief as much as I could was.

26:07 - This wasn't a fishing expedition even in the slightest

26:10 - if the officer had

26:12 - decided you know what

26:13 - even a little bit you know twenty feet overlying here because I

26:16 - think

26:16 - that there might be some drug activity that is not acceptable

26:19 - whether it was

26:20 - cap was.

26:21 - French creek

26:23 - paying polk.

26:24 - Borough

26:25 - to provide police services

26:27 - but they were judged yes so that that officer who was

26:30 - performing those duties in that area.

26:33 - Yes that was the agreement it's.

26:34 - That he understood at the time

26:36 - like indicate there was a resolution.

26:38 - But that's why he was odd operating in that way I do agree with

26:41 - judge seldom

26:42 - it

26:42 - There is no

26:43 - ascent.

26:44 - A good-faith exception

26:45 - however a fe five

26:47 - does talk about.

26:49 - In a sense the exception of the mpg

26:52 - which is.

26:53 - It's the fat question

26:54 - in all of these are going to to be different

26:57 - and if I may your honors I think that.

26:59 - There's one quote for the layman case that I talked about.

27:02 - That actually

27:03 - probably sums up my entire argument really

27:05 - and the quote is this.

27:08 - And that's a seventy eight a sec under eighteen

27:11 - it's an officer was not engaged in an extra judicial fishing

27:14 - expedition.

27:15 - Nor an attempt to expand the sphere of power.

27:18 - And Hattie of the appellant in fact needed assistance the

27:21 - officer was in the best position to provide it.

27:23 - And had the appellant had a heart attack.

27:26 - Excuse me rather than being drunk he would urge US to permit

27:29 - the officer to help him

27:30 - and allowing an officer to do their duty must effectively and

27:33 - beneficially to the public will sometimes put them in a

27:35 - position to see crimes.

27:37 - And find drunk drunk drivers

27:39 - such would be a poor reason to limit their ability to provide

27:42 - the full measure of service to the public

27:44 - and why I quote that cases

27:45 - it's a perfect exe simple really would happen here the officer

27:48 - was not looking for anything

27:49 - but he just happened to

27:51 - hit him in the face so to speak

27:52 - and

27:53 - driving on what he describes as

27:55 - where he always does that

27:56 - when he sees an individual driving

27:58 - on the wrong side of the road

27:59 - so I think it begs the question what was he supposed to do.

28:02 - Because I'd agree again might my point is absolutely it was a

28:06 - it was a violation of the

28:07 - pj

28:07 - No doubt about it.

28:09 - Do you think a strict interpretation of the empty chair would

28:12 - disincentivize police officers

28:15 - to take appropriate action such as what occurred here.

28:18 - To be candid with the court I think it would be disastrous if

28:20 - there weren't exceptions that allowed for that ok specifics and

28:23 - I was just like this.

28:24 - And just one more question

28:26 - history.

28:26 - And the pellet.

28:27 - In your appellant brief though you

28:29 - you've indicated and.

28:31 - Agreed that there was an mp j violation here with no exception

28:35 - that fit.

28:36 - So I I'd agree.

28:38 - One absolutely

28:39 - a violation of the mph

28:41 - and pj judge

28:42 - I do believe that a five does apply.

28:45 - To this scenario.

28:46 - Today.

28:48 - And I.

28:49 - Suppose my my very last thing cause I'm not reserving any

28:51 - rebuttal time.

28:53 - The judge both dissenting.

28:56 - Opinion I agree with a fully

28:57 - I think that describes the

28:58 - factors that they should play in this case.

29:01 - Thanking yours

29:01 - thank you.

29:12 - Good morning I'm Robert varsity I represent the appellee Steven

29:15 - aiken.

29:19 - I like to begin my argument by pointing out and.

29:22 - Following up the points made by.

29:25 - Judge Sullivan as it relates to the a five exception for

29:28 - official business in.

29:30 - The context of this case.

29:32 - Not only do I believe

29:34 - and I put it at my brief that was the first time that I heard

29:37 - that argument made on the application for reconsideration.

29:41 - But also I don't believe that the record in this case.

29:44 - Would allow this court to provide any kind of meaningful

29:48 - review to say say that that's sub sexual or that section.

29:52 - Exception I.

29:53 - Would even apply in this particular case.

29:56 - The best that we can read from the transcript if you review it.

29:59 - As officer.

30:01 - Sharp's.

30:03 - Testimony.

30:05 - When he's.

30:06 - Very summarily indicated that.

30:09 - He was traveling to utica.

30:12 - Which is enough.

30:13 - Neighboring jurisdiction.

30:15 - That he purportedly had jurisdiction over.

30:18 - That's as far as he went he said he was passing through both

30:22 - jurisdictions.

30:24 - There was no.

30:25 - Record or any testimony developed as to whether or not this was

30:28 - his regular customary routine.

30:31 - I think it's a stretch to say that we can even consider that

30:34 - exception for purposes of this appeal.

30:37 - No.

30:40 - By and large from that from the reading in the record that this.

30:43 - At the suppression.

30:44 - It appeared that the.

30:47 - The facts were stipulated to by both parties is that

30:50 - is that an accurate portrayal.

30:53 - Of the suppression.

30:55 - In part judge Sullivan

30:57 - they did stipulate to the fact that.

31:00 - While they stipulated to the admission of all the ordinances

31:03 - and the resolution in question.

31:05 - Both

31:06 - the original ones that were passed

31:08 - passed in two thousand and six.

31:09 - And the corrective measures that were taken two thousand and

31:12 - eighteen to.

31:13 - Address this

31:14 - situation.

31:17 - So.

31:18 - Unless you think the police officer should have just allowed.

31:22 - Your client

31:23 - to

31:23 - Drive on the wrong side of the road would be killed somebody

31:26 - I was expecting that question your honor.

31:29 - The answer is of course he should have stopped them

31:32 - absolutely

31:33 - because at that point he didn't know whether that driver.

31:36 - Was driving under the influence of alcohol whether he was

31:39 - having a sudden medical emergency.

31:41 - Or whether he's having a mechanical problem with his vehicle of

31:44 - course we stop him.

31:46 - It's a public heart attack

31:48 - correcting it helped them to do

31:50 - an absolutely.

31:52 - Absolutely.

31:53 - Absolutely I think that's

31:55 - been discussed to some of the precedent that cited in.

31:58 - Our briefs.

31:59 - Some the supreme court cases.

32:02 - I think is even laymen that suggested that opinion that.

32:06 - He has an affirmative duty.

32:08 - To perform that stop when there's

32:11 - an exigent circumstance like this.

32:14 - However.

32:15 - The point being.

32:17 - That.

32:18 - Mission accomplished

32:19 - he addressed this public safety concern and the eliminated

32:22 - through the traffic stop.

32:25 - But at that point.

32:28 - You let the defendant go.

32:32 - Let's stop is proper you're saying.

32:34 - Based on him driving on the wrong side of the street but once

32:37 - he confirmed there wasn't.

32:38 - An emergency I e medical.

32:41 - Just let him go that's what you're saying

32:43 - correct

32:44 - and.

32:44 - I'm

32:45 - touching on.

32:47 - Part of the.

32:50 - Discussion in the very brief concurring and dissenting opinion

32:53 - of chief justice saylor where he indicated that.

32:57 - He would agree.

32:59 - With.

33:00 - Judge donahue justice donahue whose decision to suppress in

33:04 - that particular instance particularly.

33:06 - In the US.

33:09 - Constitutionally.

33:11 - Sensitive area of suspicion less seizures.

33:15 - How how

33:16 - how is that case.

33:19 - Parallel to this case.

33:21 - Because it's it seems to me that wouldn't it's very different

33:24 - fact pattern there there was an.

33:27 - A an inter

33:29 - discipline of.

33:30 - An inter jurisdictional agreement

33:33 - to set up a roadblock sir cracked.

33:34 - And they were stopping folks for dui checkpoint.

33:37 - There was a western Pennsylvania dui task force that was

33:41 - established by a number of municipalities in allegheny county.

33:45 - Including the two in question in the.

33:47 - Lubin decision.

33:49 - But here we have.

33:51 - One municipality

33:52 - that lack sufficient police force

33:55 - to provide protection for their citizens

33:58 - so they enter into an agreement.

34:01 - To pay.

34:03 - Poke poke borough to provide that

34:05 - correct

34:06 - correct and.

34:07 - The police officer was really unlucky course of his routine

34:10 - duties by doing so.

34:12 - While there the parallel I see between the two cases is you

34:15 - have a maintenance apache a lubin which was Robinson township.

34:20 - Who actually I think in the

34:22 - in the opinion sites.

34:24 - That

34:24 - the supervisors in that township

34:27 - did approved by resolution.

34:29 - This

34:30 - participating in this.

34:31 - Is the only one that's the only municipality that had an

34:34 - agreement relative

34:35 - I believe that task force

34:37 - so that's that's really not the situation here and.

34:41 - Isn't that

34:41 - the goal of this act

34:43 - to provide.

34:45 - Public safety.

34:46 - And

34:47 - order to insurers

34:49 - that charge Nichols said that clear and present dangers are

34:51 - addressed by police.

34:54 - The act as I understand it is interpreted by the supreme court

34:57 - has a door.

34:59 - Function

35:00 - and that is to.

35:01 - Not only promote public safety.

35:04 - But also.

35:06 - Maintain police accountability maintain.

35:09 - And

35:10 - so don't we have that here a French

35:12 - French creek borrower saying

35:13 - to poke

35:14 - we'd like your police officer to come and provide protection

35:18 - for US.

35:19 - And so isn't isn't that particular goal being met.

35:23 - By.

35:24 - The

35:24 - actions of the police in this case

35:26 - yes just suppose that it is being met but I think arguably

35:29 - unlawfully.

35:31 - Because as the court is indicated in

35:33 - lubin.

35:34 - You know despite the fact that there may have been an interest

35:37 - or desire for this.

35:39 - Drug task force the sobriety checkpoint you didn't go about it

35:42 - the wrong way therefore it's

35:44 - illegal knowledge right way which is that

35:46 - a technical violation of the act and we have many cases beef

35:50 - forest both in the supreme and superior court.

35:53 - Addressing technical violation

35:55 - and don't those.

35:56 - Cases and shocked US at this act shall be liberally construed.

36:00 - They do your honor

36:01 - yes.

36:02 - But when you're speaking of the actor

36:03 - are you speaking about the I ca which is the intergovernmental.

36:07 - Cooperation act or the miss will police juristic should act.

36:11 - Municipal police or section at the side of the municipal police

36:14 - jurisdiction or

36:15 - act as an as in lubin.

36:17 - The majority opinion of that court the supreme court.

36:20 - Upheld two parts of.

36:22 - Justice Donna Hughes decision

36:24 - number one

36:25 - was the analysis of the ic a

36:27 - and the m p j.

36:29 - Where it was deter German they were violated.

36:32 - And the ultimate.

36:35 - Relief there which was a suppression.

36:38 - That was the majority opinion I think that's why you can uphold

36:41 - judge earners decision in this particular case.

36:44 - When he ruled to suppress evidence based on lubin.

36:48 - Without going through the o'shea.

36:50 - Balancing test.

36:52 - There was a

36:53 - there was a resolution and moving

36:55 - but it had expired three years before the stopping question of

36:58 - her occurred.

37:00 - So I believe the supreme court said.

37:02 - We don't even need to consider whether there is

37:04 - a resolution versus an ordinance.

37:07 - And what we have here.

37:08 - Is.

37:09 - I think you'd agree

37:10 - if we were to go the o'shea row is a question of letter vs

37:13 - spirit

37:14 - correct

37:15 - yes yes.

37:16 - And.

37:16 - Certainly I think even

37:18 - opposing counsel has.

37:20 - Honestly stated yes

37:21 - violated the letter.

37:23 - Resolutions were not permitted and had been ordinance.

37:26 - But we also have a township.

37:29 - That had.

37:30 - No

37:31 - Police of a town

37:32 - required the policing assistance of

37:35 - polk borough

37:36 - park barrel agreed to do it French

37:39 - township French creek township.

37:40 - For whatever reason erroneously passed a resolution

37:43 - making this determination the police.

37:46 - Were.

37:46 - Knew that they knew they were being paid to do this.

37:50 - And

37:50 - then we have your client.

37:52 - Driving down the wrong street wrong side of the street

37:54 - with a Martini in since center console.

37:57 - And what what do we

37:58 - do with that.

37:59 - Given under the circumstances here

38:02 - and given that o'shea is still good law.

38:05 - What do we do with that.

38:06 - Well I think we follow rub in my position

38:09 - that I would advocate that we follow lubin decision and

38:11 - determine or not was there

38:13 - a.

38:14 - Violation of the the act.

38:16 - If there's no exception that fits under the mtg a.

38:20 - And and and

38:21 - on top of that you have a violation of a ca which means that.

38:25 - In effect.

38:26 - The French creek township did not properly legislate and

38:29 - approve this arrangement.

38:31 - With polk borough police

38:33 - and with one of only conceded.

38:35 - You no

38:36 - by.

38:37 - The commonwealth but.

38:38 - It

38:39 - Guess a concern and hearing that echoed like by my colleagues

38:42 - is we're creating a disincentive.

38:45 - For.

38:46 - Police protection to take place.

38:48 - Now but for mess up with the resolution over adopting the

38:52 - ordinance properly.

38:54 - There's no police protection

38:56 - and you have someone driving down the wrong side of the street

38:58 - Martini in console.

39:00 - Anything could happen from there

39:03 - or any other act for that matter.

39:04 - Without our protection.

39:06 - Is it a disincentive for the police or is it

39:09 - an incentive for the townships to do it right

39:11 - because there's case law that says that maybe.

39:14 - We need to write it so that the townships know.

39:17 - What their obligation is and

39:19 - clearly.

39:20 - The township

39:21 - knew what it's obligation was

39:24 - because in twenty eighteen they did.

39:25 - Pass the appropriate legislation.

39:27 - It was because of this case that they correct then there so.

39:31 - Ladies and the legislature

39:33 - are pissed that the purpose of the mp j is to give.

39:37 - Authority of police in one government entity the authority to

39:41 - go into another.

39:43 - Government

39:44 - entity

39:45 - and and perform police activity

39:48 - or in this case

39:50 - there was an agreement

39:51 - so so that.

39:53 - French town.

39:55 - French creek

39:56 - township did give authority.

39:58 - To the police officer

40:00 - to come in and police within frenchtown.

40:06 - Township French creek

40:07 - township sorry.

40:09 - And.

40:10 - It's not as if.

40:12 - Any so that

40:13 - I sort of come back to that second element of the shade task

40:17 - which is

40:18 - there was some authority given to this police officer

40:22 - it just was probably done I assume by the executive branch

40:25 - because I assume it's executive

40:27 - branch who enters into contracts.

40:28 - As opposed to the legislative branch

40:31 - and so isn't.

40:32 - Nicole.

40:33 - A deficiency minimal.

40:36 - In terms of applying the second element of the shade test.

40:39 - It wasn't for the woburn court.

40:42 - And I think it is of no moment here that once it's.

40:45 - Passed.

40:47 - If it's not properly passed.

40:50 - It's an ultra virus act on behalf of the township.

40:53 - You don't have.

40:54 - The the

40:55 - and just to give a brief overview of the process.

40:58 - This particular municipality it's a township is governed by a

41:02 - board of supervisors

41:04 - they legislate through ordinances they conduct their business

41:07 - as activities.

41:08 - Through public meetings they pass

41:11 - resolutions on day to day things.

41:12 - When it comes to legislating as a required to pass US.

41:15 - This cooperative agreement they have to do it by ordinance

41:19 - and

41:20 - when you do it by ordinance you give.

41:22 - Public notice.

41:23 - You give the public an opportunity to comment.

41:26 - On matters that if fx the community

41:30 - budget allocation of personnel

41:31 - and potential liability issues at least there's an opportunity

41:35 - for the public to be involved

41:36 - and that's why the legislative act.

41:39 - Of using this ordinance is so important and that wasn't done

41:42 - here in one of the things that

41:45 - the lube in court and just justice

41:46 - Donna is focused on this.

41:48 - Is how the failure to abide by the ic a.

41:51 - Affected some of the core functions of local government bodies

41:55 - including expenditures.

41:57 - Allocating personnel liability issues num.

42:00 - I concede that in French creek

42:04 - township wanted this they wanted.

42:04 - Polk borough police then and they did it for many years correct

42:08 - they did it

42:08 - unlawfully for many.

42:10 - The only case that come this far what happened to all the

42:14 - I mean if I had to stop other people.

42:16 - If he's been doing it like the common law said for like ten

42:19 - years

42:20 - he didn't have I didn't have

42:21 - such a thing

42:22 - they finally got a good defense attorney.

42:25 - That night

42:26 - really got to

42:27 - fuck we finally had.

42:29 - A pro se defendant and now he's talking about.

42:32 - Counsel I thought the march and case if we could just turn our

42:35 - attention to that finance is also a supreme court case.

42:39 - Little bit older

42:40 - but in that case it's indicated that the.

42:43 - This.

42:44 - Admin as well actos not to create

42:49 - impenetrable jurisdictional walls.

42:50 - That bastards criminals

42:51 - hiding in their shadows.

42:54 - That's ominous language.

42:58 - That dovetails nicely with the.

43:01 - Desire to interpret this act.

43:03 - Liberally

43:04 - so as to ensure that even when there are procedural missteps as

43:08 - in this case.

43:10 - That the police.

43:11 - Are not disincentivize from doing the job

43:15 - to

43:15 - Avoid.

43:17 - A

43:17 - Danger to the public safety

43:20 - and I don't

43:21 - think a quick question though.

43:23 - Was it a purchase procedural misstep or a legislative misstep.

43:27 - It was a legislative misstep.

43:30 - They were supposed to pass this agreement

43:32 - enacted through an ordinance and they use the resolutions that.

43:36 - Statutes vary be specific

43:38 - that has since been rectified amended by our legislatures they

43:41 - could do it either way

43:42 - but back then.

43:44 - It required an ordinance.

43:48 - Do you think that there's any difference yeah I know I know I'm

43:51 - coming off relied

43:52 - heavily on hubble.

43:54 - But in hobo.

43:56 - The

43:56 - the

43:57 - the stop was not suppressed gi bleed

43:59 - like the the jumping off point for review here is.

44:03 - A bit different because.

44:05 - Suppression was actually grab noted here.

44:08 - I

44:09 - Do because I review it becomes different.

44:12 - I do your honor from the standpoint that you had a very good

44:16 - record in hobo.

44:17 - As to the police officers routine and customary

44:20 - patrolling

44:21 - where you don't have that here.

44:24 - I have a question.

44:25 - And

44:26 - aside from like the ordinances that we're talking about

44:29 - and all these different acts prior to these being acts being

44:33 - actually

44:33 - initiated

44:34 - and

44:35 - statewide.

44:36 - Wasn't there something in common

44:39 - law that allowed a police officer

44:40 - if he saw a violation in a different municipality

44:43 - to stop somebody.

44:44 - I I I

44:45 - can't.

44:46 - I

44:46 - Can't speak to that.

44:48 - Form basis your hon our but I can tell you that before all these.

44:52 - This expansion of the jurisdiction act I think there was only

44:56 - one exception that was hot pursuit

44:58 - and that was the law for years.

45:00 - You could only leave your jurisdiction.

45:02 - And enter.

45:03 - A neighboring jurist diction extra territorially if you're in

45:06 - hot pursuit.

45:07 - Of a criminal episode that started in your jurisdiction.

45:12 - But since then the

45:13 - legislatures has expanded the authority.

45:16 - Of the police through this

45:17 - and pj.

45:19 - Well the reason I'm asking is one of our last panels we had a

45:22 - constable

45:23 - saying that you know.

45:24 - As a peace officer of the law he could

45:27 - arrest somebody if he saw a violation of the law and I'm like

45:30 - why wouldn't the police

45:31 - as a

45:32 - quote peace officer be able to.

45:34 - Stop somebody a violation of the law

45:36 - and clearly somebody on the other

45:38 - side of the road is a violation.

45:39 - Whether you're in hot pursuit or not.

45:42 - Well I think they could sure they could stop them I mean again

45:45 - it's a public safety matter nobody wants to see a motorist.

45:48 - Or a motor vehicle.

45:49 - Trudging down the road in the opposite Lane of traffic or

45:52 - driving erratically almost striking other motorists.

45:55 - But I think the issue then becomes the legality.

45:58 - And the fall out

46:00 - if there was no.

46:02 - Authority to do so I think that's what the lube in case and

46:05 - justice Donna he stressed.

46:07 - That.

46:08 - The court is trending toward.

46:11 - Deciding these type of cases.

46:13 - Based on.

46:15 - Statutory construction.

46:17 - And.

46:22 - I'm trying to think of what she said specifically.

46:25 - And shying away from the good faith exception that's.

46:28 - Set forth in o'shea.

46:30 - To they're focusing again on statutory authority.

46:33 - That's what lube and stressed and they cited a number of cases.

46:37 - To talk about.

46:39 - Those instances

46:41 - since o'shea.

46:42 - Where they haven't even talked about o'shea and they struck

46:45 - stress specifically.

46:47 - On statutory authority.

46:50 - Was there any other police officer that he could have called

46:52 - when people remember.

46:54 - Oh he did he did he detained he did because he knew someone he

46:58 - he knew the defendant.

46:59 - Be detained my client roadside

47:01 - let's say he didn't know that defend it and that's why.

47:04 - The reason why he called because our whole thing is

47:07 - and

47:07 - he didn't have the right to stop them because it was never an

47:10 - ordinance

47:11 - correct so once he did stop them you agree that he had the

47:13 - right to stop him

47:15 - but nothing else

47:16 - so what should he have done.

47:18 - Like say he didn't know.

47:20 - What the law requires well okay

47:23 - if you say it doesn't no because.

47:24 - He caught somebody right he didn't call him because.

47:27 - I don't have jurisdiction to stop him

47:30 - he called him because he happened to know

47:32 - the person he stopped

47:34 - so let's say he didn't

47:35 - because we're.

47:36 - Going to set precedent.

47:38 - What would he have done.

47:40 - While he

47:41 - would he did do as he called another meme Ember of his police

47:44 - department

47:44 - was also an authorized

47:47 - to engage

47:47 - anybody authorized.

47:50 - And.

47:51 - No they have no police officers

47:53 - so basically you could just run wild and discount.

47:56 - Apps.

47:57 - State police would have jurisdiction over those areas that

48:00 - don't have their own.

48:01 - Of

48:01 - Service

48:02 - that that's what he should have done Lisa

48:04 - yes.

48:09 - There are no other questions I think everybody for your time

48:11 - this morning.

48:13 - Thank you both very well argued.

48:16 - In the second case on today's docket.

48:19 - Mr Bernard.

48:20 - The defendant in the lower court.

48:22 - Is the appellant

48:24 - the party bringing the appeal today.

48:27 - The underlying

48:28 - case

48:29 - is a tort action.

48:30 - Involving claims of negligence.

48:33 - Legal malpractice

48:35 - and breach of contract.

48:37 - However

48:38 - the central issue in the appeal.

48:40 - Is narrowly related to civil procedure.

48:44 - Civil procedure

48:45 - is a group of rules and standards that the court follows.

48:49 - In adjudicating

48:50 - civil litigation.

48:53 - And appeals involving the interpretation

48:56 - and application of Pennsylvania rule of sit rules of civil

49:00 - procedure.

49:01 - The superior court's standard.

49:03 - Of review

49:04 - is de novo

49:06 - which means

49:07 - a new.

49:08 - Therefore

49:09 - in hearing this matter.

49:11 - The court will ignore all presumption ns

49:14 - and conclusions made by the court below.

49:18 - Prior to August of twenty twenty one.

49:21 - Lean hired Bernard

49:24 - to represent him.

49:25 - As legal counsel

49:27 - in litigation against Philadelphia gasworks.

49:30 - Lynn was not victorious

49:32 - in that case.

49:34 - And thereafter filed a tort action against Bernard rd.

49:39 - One of the main facts in dispute in this case

49:42 - centers on whether Bernard

49:44 - was served and received adequate notice.

49:48 - Of the lawsuit against him.

49:50 - In civil court.

49:52 - Service can be made in many forms

49:54 - including some personal service.

49:56 - By a process server.

49:58 - Or third party a.

50:00 - Service by.

50:01 - Mail.

50:02 - Acceptance of service

50:03 - and so forth.

50:05 - The rules dictate what level of service is required.

50:10 - The rules also dictate.

50:12 - The documents

50:13 - that must be provided to the responding party.

50:17 - At the time of service

50:19 - and what information must be included

50:22 - in the pleadings that are filed.

50:24 - In this matter Lynn argues that Bernard was served via

50:28 - certified mail

50:29 - in Massachusetts by a process server in September and October.

50:34 - Of twenty twenty one.

50:36 - In December of twenty twenty.

50:38 - Lynn filed a precipice

50:40 - for entry of default judgment.

50:43 - When attached to the precipice.

50:45 - A copy of their certificate of service.

50:47 - Of the notice of the press a pizza

50:50 - entered the default judgment.

50:51 - Stating that the notice had been served

50:53 - by mail

50:54 - on November twenty fourth of twenty twenty one.

50:58 - That trial court then entered the default judgment

51:01 - on December eighth of twenty twenty one.

51:05 - Here Bernard argues

51:07 - that service was insufficient

51:10 - and that the affidavit of service was fraudulent.

51:13 - Further Bernard contends.

51:15 - That Lynn failed to provide him a copy of the complaint.

51:19 - As required.

51:20 - Forcing Bernard to get a copy

51:24 - from the local court python Terry.

51:25 - The trial court paints a different picture.

51:28 - Citing that during the subsequent hearing.

51:31 - Bernard abandoned the argument that service was fraudulent

51:34 - and conceited that he was indeed

51:37 - served with the complaint

51:39 - and a notice of the precipice to enter default judgment.

51:42 - However he contends.

51:45 - That he was fine forced to concede this argument.

51:48 - By the trial court.

51:50 - To date.

51:51 - The record contains no information

51:54 - or explanation for Bernard's failure to appear.

51:58 - On December twenty.

52:00 - Dis twentieth of twenty twenty one.

52:02 - Bernard filed a petition to open the December eighth

52:06 - default judgment.

52:07 - With preliminary objections attached.

52:10 - Following review of these pleadings.

52:13 - On march twenty first of twenty twenty two.

52:17 - The trial court deny fyi this request.

52:19 - On the basis of Bernard's petition to open.

52:23 - Lacked the attached

52:24 - and detached pleadings.

52:26 - Lacked a meritorious defense.

52:29 - In other words

52:30 - Bernard did not follow the rules of civil procedure initially

52:34 - and did not assert

52:35 - a compelling reason.

52:37 - Why

52:38 - the the automatic judgment in favor of Lynn

52:41 - should be reconsidered.

52:43 - Bernard contends.

52:45 - That he did state a meritorious defense

52:48 - within his preliminary objections.

52:50 - Specifically he contends that Lynn failed to allege

52:55 - whether the contract in

52:56 - question.

52:57 - Was oral or written.

53:00 - And if written

53:01 - to attach

53:02 - a copy of the cant tracked.

53:04 - As required by the rules of civil procedure.

53:08 - Ultimately Bernard is hoping to influence the superior court to

53:12 - reject the trial court's decision

53:14 - to deny his petition to open a default judgment.

53:18 - Thereby allowing the parties

53:20 - to revisit the lawsuit

53:21 - from the very beginning.

53:25 - Is there anyone here on behalf of the appellant.

53:28 - Was not

53:29 - in that case we will allow you.

53:31 - To briefly

53:32 - argue

53:32 - from the employer's point of view just so we have some

53:34 - information about the cases

53:36 - more than Georgia the spirit good.

53:38 - Morning

53:39 - my name is

53:39 - rhetoric fox reform on behalf of the appellant.

53:42 - Defendant joke or better

53:43 - a Jack Bernard.

53:46 - Thank you for the opportunity to come here in my five years of

53:48 - practice

53:49 - to argue

53:50 - for the Supergirl

53:51 - ombre roku

53:52 - we look forward to it.

53:55 - This particular case is about the rules of civil procedure.

53:58 - The interpretation of the rules

54:00 - and the basics upon which we learn in law school.

54:03 - With your

54:04 - mandatory language impermissible language.

54:07 - Here this particular matter

54:09 - or default judgment was filed against my client.

54:12 - For failure

54:13 - or respond to the complaint.

54:15 - And a petition to file to open the default judgment

54:19 - was filed within ten days a literal.

54:21 - Default judgment filed on December the eighth.

54:23 - The petition to open the default judgment filed on December

54:26 - twentieth.

54:26 - The result was filed on December twentieth

54:28 - cause the last day to file fell on a Saturday.

54:31 - So that Monday

54:32 - December twentieth.

54:33 - I filed a petition over depot the judgment.

54:35 - Under rule two thirty seven.

54:38 - Point three be.

54:39 - A petition to.

54:41 - The court show Oprah

54:43 - show opener before judge if a petition was filed timely within

54:45 - ten days

54:47 - and.

54:47 - The.

54:48 - Answer with a meritorious defenses attach

54:50 - or.

54:51 - Preliminary objections

54:53 - were one of the more plume object has met for.

54:56 - That rule was amended in two thousand and

54:57 - nineteen to the guts of it that

54:59 - the.

55:00 - Preliminary objections were trying to understand.

55:03 - What.

55:03 - The basis.

55:05 - So in this particular file three bloomberg objections.

55:07 - Black observed improper service.

55:10 - Or lack of jurisdiction.

55:12 - And failure to attach to

55:14 - to conform to a rule of court

55:15 - there was proper then.

55:17 - We'll prob service was actually improper your honor

55:19 - service was improper because

55:21 - the.

55:22 - Trial

55:23 - trial attorney.

55:24 - I can

55:25 - I can see that because I was forced to by the trial court

55:27 - the

55:28 - trial judge originally wasn't there an allegation of fraud.

55:31 - Corrupt fraudulent but that was withdrawn right well I was

55:33 - forced to concede.

55:35 - I was forced to continue but with the drought judge.

55:38 - Trial judge

55:39 - specifically stating I

55:40 - stated

55:41 - that an envelope was sent to my client in Boston Massachusetts

55:44 - and I stated that it was a letter in envelope which is a

55:46 - incorrect statement

55:47 - it actually was a copy of the docket report

55:50 - the complaint was not there.

55:51 - The

55:52 - plaintiff filed the affidavit of service.

55:54 - The trial court judge specific we said we

55:56 - did you did you client receive a copy of the complaint no it

55:58 - was not one an envelope

55:59 - well did you

56:00 - eventually receive one well yes judge when I enter my appearance

56:03 - I did provide my client with a copy of the complaint

56:05 - but that's still not proper service

56:07 - so the

56:08 - truck would force me to abandon

56:10 - I didn't want to abandon it because we wondered that there were

56:12 - some.

56:12 - Shenanigans going on with that.

56:15 - I was forced to.

56:16 - Mr Zealand

56:17 - your honors.

56:18 - Has won is representing pro self pro se

56:20 - and according to my client who who's a

56:23 - retired attorney.

56:24 - Representing him and he speaks actually no English

56:27 - the individual who appeared

56:28 - at the hearing zoo here before judge Cohen

56:31 - one camera didn't work

56:32 - and he actually spoke

56:33 - clear English.

56:35 - And here

56:35 - the prior hearing before the superior court

56:37 - where was argued in Philadelphia

56:39 - he did not appear

56:40 - and today did not appear.

56:43 - So what was your meritorious different

56:44 - that's inquiring minds want to know what was in those pills

56:47 - or the place that was their actual contract in this case

56:51 - well there was no

56:52 - well there

56:53 - there was no contract.

56:55 - So

56:55 - How could there be an objection.

56:57 - I.

56:58 - Apply objection on the basis that

57:01 - the contract was not attached.

57:02 - To the complaint

57:04 - the contract can be oral written

57:05 - and under rule ten nineteen age

57:08 - and any pleading any complaint you must plead whether or not

57:11 - the contract or written

57:12 - months

57:13 - that's mandatory language.

57:14 - That permissive you must do it if you failed to plead that

57:17 - then the polymer objection has merit

57:19 - it's not about whether that is going to win you a.

57:22 - Stay that it's an oil contract allows the trial court to

57:26 - conclude that there was a written contract

57:28 - and therefore the failure to attach the written contract.

57:32 - Is prior which is required by ten ninety I

57:35 - have the rules that you must

57:36 - if there's a written contract you must attach a copy of the

57:38 - contract.

57:39 - Know what I'm saying is that the failure to state whether or

57:41 - not there was a written contract allows there to be a

57:44 - presumption that there was a written contract guess you're.

57:47 - Okay

57:47 - so.

57:49 - Would have had to say there is no contract.

57:52 - With what he would have to say right there's no contract or the

57:54 - contract is oral with contracts where

57:56 - he failed to do that

57:57 - so therefore their plenary objection

57:59 - had merit.

58:01 - In two thousand and sixteen when the Pennsylvania supreme court

58:04 - changed due to the rule

58:05 - if it's intent was to relax the rules or open a default judgment

58:09 - because it was to give parties an opportunity to be heard.

58:11 - Litigator case.

58:13 - In here.

58:15 - He was one of more opponent objection had merit.

58:17 - It has merit.

58:19 - I mean I raised three that had married but I was forced to

58:21 - abandoned too.

58:22 - But I had

58:23 - met the requirement to go through whether or not.

58:26 - We hit a farm one

58:28 - on any basis or on any basis so

58:30 - if you have one that has merit we can look at that.

58:32 - You're sure.

58:34 - If we could just drill down

58:35 - the language rate since the two thousand and sixteen.

58:39 - Amendment.

58:40 - Now says

58:42 - merit.

58:42 - Or an answer with a meritorious defense correct.

58:47 - What does merit mean

58:49 - in in the context of preliminary objections there's not much

58:52 - case law out there

58:53 - that is correct so this.

58:55 - Is where I'm actually this court to do to establish a test

58:58 - for the trial court

58:59 - so what we have to look at what is the very essence of purpose

59:01 - upper limit objections

59:02 - but rejection about chicken case of these improper venue

59:05 - lack of court George did

59:06 - or just merely to correct the pleadings

59:08 - so that parties have fair notice

59:10 - of what the claims are against them.

59:13 - So.

59:14 - In looking at it

59:15 - as

59:16 - If sitting in front of the post

59:17 - the standpoint of a trial court judge.

59:19 - If it's.

59:20 - If it's a plumage action that you will potentially subsisting

59:23 - and therefore it has merit.

59:25 - We just look at it from the the pleading stage

59:27 - not within that discipline we're just going to win at trial

59:30 - but it's all about just the pleading stage

59:32 - correcting the pleadings

59:34 - and that to nineteen age is

59:36 - designed

59:37 - to correct the pleading so the defendant news with the claims

59:40 - against them

59:40 - within it's oral contract or written cutter

59:42 - what are the terms of those contracts

59:44 - and the failure to

59:45 - to plead that

59:47 - but it.

59:47 - Didn't address

59:48 - for example the negligence claims.

59:52 - It's not clear.

59:54 - Obviously pro se litigants.

59:56 - Whether the complaint sounding in contract tort.

01:00 - 00.506 But there was.

01:00 - 01.896 No allegan

01:00 - 03.092 there was no.

01:00 - 09.535 Nothing in your p o to address whether their failure to state a

01:00 - 12.716 cause of action or to the negligent side of it will

01:00 - 14.016 statue of.

01:00 - 16.796 Franklin as a at affirmative the new matter item

01:00 - 19.496 so when my answers that's why I plead statue limitations

01:00 - 19.916 to

01:00 - 21.806 To get into the truck so they can see

01:00 - 24.096 through the discovery process in the summary judgment

01:00 - 25.346 that statue limitations

01:00 - 27.206 peo you could plea.

01:00 - 28.626 That

01:00 - 30.746 appellant failed to state a cause of action

01:00 - 31.586 because of the.

01:00 - 32.916 Unintelligible.

01:00 - 33.506 It

01:00 - 34.766 Because the complaint is

01:00 - 35.886 unintelligible

01:00 - 36.686 without cigar

01:00 - 37.916 that's a dimmer your honor

01:00 - 41.365 and you could stay to dinner however this case law ltd said

01:00 - 42.366 statue limitations

01:00 - 43.886 must be played as a new matter

01:00 - 45.006 item.

01:00 - 46.916 So what I did I always play as a new matter

01:00 - 49.586 to prevent other plenary object glimmer objection to my plan

01:00 - 50.276 objections

01:00 - 52.016 I read the file appeals for

01:00 - 52.466 get.

01:00 - 54.266 Kicked out what we did get kicked out

01:00 - 57.595 and proceed with litigation process

01:00 - 58.698 so the basis of your PR was.

01:00 - 02.306 Dealing with the rule ten nineteen h yes.

01:01 - 04.106 Ok failure to.

01:01 - 07.405 Specify fyi whether it's an all written contract and if written

01:01 - 08.996 failure to attach the written.

01:01 - 10.666 Document or if there was one.

01:01 - 12.626 In enroll clearly states that

01:01 - 16.256 a petition shall plea whether the contracts or in shell

01:01 - 18.576 that's mandatory length that's what we all learned a lot

01:01 - 19.976 outside I think you're

01:01 - 22.856 all you're telling US is that the trial judge

01:01 - 24.896 improperly conflated.

01:01 - 27.776 The need to have a meritorious defense.

01:01 - 31.046 With the provision of the vote that provides

01:01 - 34.976 it's sufficient if you have a preliminary objection of merit.

01:01 - 35.816 That could

01:01 - 37.086 wreck your honor.

01:01 - 38.376 So he.

01:01 - 41.636 In your view committed an error of law

01:01 - 42.936 that is correct.

01:01 - 46.765 And is it in regarding the Plymouth every objections to open

01:01 - 47.996 the default judgment.

01:01 - 49.446 It doesn't

01:01 - 50.876 do is one

01:01 - 55.165 limit one meritorious preliminary objection sufficient or does

01:01 - 57.206 it have to be Plymouth every objections.

01:01 - 58.526 That challenge.

01:01 - 01.526 All the causes of actions in the complaint

01:02 - 04.616 your honor says one or more apologies that has merit

01:02 - 05.736 one or more.

01:02 - 08.756 Any meritorious Fleming objection would require.

01:02 - 10.646 The plaintiff to replete

01:02 - 11.636 and that's

01:02 - 13.226 what we're dealing with here if.

01:02 - 15.536 If in fact the plaintiff was required

01:02 - 18.565 to plead if they're bringing breach of contract action the

01:02 - 21.175 required they are required to plead whether it's in oral or

01:02 - 22.176 written contract

01:02 - 23.366 if written attach it

01:02 - 25.766 and if they don't do that they have to replete

01:02 - 27.836 that first complaint becomes a reality

01:02 - 29.016 that is Gretchen.

01:02 - 31.676 Thank you.

01:02 - 32.936 I think you're honest

01:02 - 33.296 with

01:02 - 34.727 the questions.

01:02 - 37.315 Thank you very much I think it

01:02 - 38.636 really appreciate your time today.

01:02 - 44.276 The next two cases were consolidated for argument.

01:02 - 50.276 The cases arise out of disputes among family members who owned

01:02 - 53.336 interest in an educational consulting

01:02 - 54.146 business

01:02 - 55.706 learning sciences

01:02 - 56.886 international.

01:02 - 58.466 Michael taffe

01:02 - 00.086 found it the business

01:03 - 02.486 learning sciences international.

01:03 - 04.406 In two thousand two.

01:03 - 06.716 Claiming a fifty percent

01:03 - 07.556 voting

01:03 - 09.476 and twenty five per cent

01:03 - 10.946 equity interest.

01:03 - 14.876 Michel gifted his brother Brian tells.

01:03 - 16.466 A fifty percent

01:03 - 18.986 voting and twenty five percent

01:03 - 20.486 equity interest

01:03 - 22.226 and his parents

01:03 - 23.346 Eugene

01:03 - 24.146 and Marie

01:03 - 26.876 tote each twenty five percent.

01:03 - 28.406 Equity interest.

01:03 - 29.756 In some

01:03 - 31.076 there were four

01:03 - 31.826 joint

01:03 - 33.036 owners.

01:03 - 34.256 Each holding

01:03 - 36.956 a twenty five per cent interest.

01:03 - 39.626 In two thousand and twelve I have.

01:03 - 42.776 An operating agreement was executed.

01:03 - 43.676 That it would

01:03 - 45.896 and provided that it would not be

01:03 - 46.766 amended

01:03 - 48.506 except by written

01:03 - 49.686 agreement.

01:03 - 51.296 Of the members holding

01:03 - 52.616 two thirds

01:03 - 53.816 of the voting

01:03 - 54.596 interests

01:03 - 55.746 of the company.

01:03 - 58.286 In twenty twenty one.

01:03 - 00.066 The owner's.

01:04 - 00.956 Interests

01:04 - 02.306 and relationships

01:04 - 03.486 deteriorate.

01:04 - 05.256 Appellants

01:04 - 06.176 Brian

01:04 - 07.416 yuji.

01:04 - 09.716 Emirate howth executed.

01:04 - 10.916 The first

01:04 - 12.386 written consent.

01:04 - 14.636 That authorized them

01:04 - 15.876 to adopt

01:04 - 17.576 a twenty two ninety one

01:04 - 18.756 operating

01:04 - 19.776 agreement.

01:04 - 21.596 In Michael's absence.

01:04 - 24.146 They then executed

01:04 - 25.326 a second

01:04 - 26.666 written consent.

01:04 - 28.976 That authorized them

01:04 - 30.186 to terminate

01:04 - 31.386 Michael.

01:04 - 34.436 Michael along with his wife the

01:04 - 35.556 apple it's.

01:04 - 37.046 Thought a complaint.

01:04 - 38.966 Against the appellants.

01:04 - 40.826 Brian Eugene

01:04 - 41.976 and Marie

01:04 - 44.246 seeking injunctive relief

01:04 - 45.596 and damages.

01:04 - 48.776 Including a declaratory judgment.

01:04 - 50.726 That the twenty twelve

01:04 - 52.256 operating agreement

01:04 - 53.966 remained effective.

01:04 - 56.246 The twenty twenty one

01:04 - 57.366 agreements

01:04 - 58.946 were null and void.

01:04 - 01.916 And that Michael remained.

01:05 - 03.896 Executive at the company.

01:05 - 07.016 After briefing by the parties

01:05 - 08.876 the trial court entered

01:05 - 10.136 two orders.

01:05 - 11.616 First.

01:05 - 12.726 Granted in

01:05 - 12.986 the

01:05 - 16.016 police Michael and his wife's motion

01:05 - 20.876 and finding that the twenty twelve operating agreement

01:05 - 22.046 controls.

01:05 - 24.236 And the court denied.

01:05 - 25.596 Appellant's.

01:05 - 27.416 Brian Eugene

01:05 - 28.976 and Marie's motion.

01:05 - 30.866 Seeking enforcement.

01:05 - 33.026 Of the twenty twenty one

01:05 - 34.146 agreements.

01:05 - 37.556 App Elise next filed a motion

01:05 - 39.656 to dissolve the business

01:05 - 41.516 and after hearing.

01:05 - 43.286 The lower court

01:05 - 44.006 entered

01:05 - 46.226 an order finding good cause

01:05 - 47.556 to liquidate.

01:05 - 49.026 Dissolve

01:05 - 52.016 and appoint a trustee for the business.

01:05 - 54.026 The appellants.

01:05 - 56.786 Ryan Eugene and Marie.

01:05 - 58.526 Also appealed

01:05 - 59.646 this order.

01:06 - 01.976 Following the appointment

01:06 - 03.596 of another custodian

01:06 - 06.146 and while the appeals were pending.

01:06 - 10.915 The trial court accepted the custodians recommendations to

01:06 - 12.746 approve licensing certain.

01:06 - 14.666 Is I assets

01:06 - 16.256 to Michael.

01:06 - 18.206 The appellant

01:06 - 20.066 Brian yuji

01:06 - 21.306 and Marie.

01:06 - 23.216 Appealed this order.

01:06 - 28.435 The issues before the court for this particular part of the

01:06 - 29.876 case include.

01:06 - 34.286 Whether the trial court committed reverse percival error.

01:06 - 37.226 By granting on summary judgment.

01:06 - 39.596 A declaratory judgment.

01:06 - 41.486 In Michael's favor.

01:06 - 46.586 Also whether the trial court committed reversible error

01:06 - 48.746 by ordering the dissolution.

01:06 - 50.306 Of the company I.

01:06 - 51.516 I.

01:06 - 52.716 And.

01:06 - 54.176 Weathered the trial court

01:06 - 56.306 committed reversible error.

01:06 - 57.696 By appointing

01:06 - 58.806 a custodian.

01:07 - 02.306 The final question in this appeal.

01:07 - 04.286 Which was a separate issue.

01:07 - 05.696 That was raised

01:07 - 07.976 in it's own separate filing.

01:07 - 09.836 Is whether the court

01:07 - 11.486 wrongfully approved

01:07 - 14.276 of the actions taken by the custodian.

01:07 - 15.776 Remember

01:07 - 17.096 the trial court

01:07 - 20.066 appointed a custodian to act on behalf.

01:07 - 21.446 Of ls I.

01:07 - 24.056 A custodian is a person.

01:07 - 25.916 Who conducts the business

01:07 - 27.146 of a corporation.

01:07 - 31.196 Similar to what a power of attorney does for an individual.

01:07 - 35.906 A custodian has fiduciary obligations to a company.

01:07 - 37.676 And it's shareholders

01:07 - 39.236 and must abide

01:07 - 40.106 by certain

01:07 - 41.516 ethical requirements.

01:07 - 44.726 Acting in the company's best interests.

01:07 - 48.176 The appointed custodian in this matter

01:07 - 51.566 filed a report and recommendation with that report.

01:07 - 53.636 Citing several options

01:07 - 55.976 to liquidate certain ls I.

01:07 - 59.246 Assets and wind down it's affairs.

01:08 - 02.156 Pursuant to those recommendations.

01:08 - 04.286 And with court approval.

01:08 - 08.665 The custodian sir sold and licensed

01:08 - 09.826 ls sys intellectual property.

01:08 - 10.866 Too.

01:08 - 14.216 Appley and apple's new company.

01:08 - 16.296 In this appeal

01:08 - 17.546 appellant argues.

01:08 - 19.496 That the court made a mistake.

01:08 - 21.746 By approving these transactions.

01:08 - 22.886 Because

01:08 - 25.076 the transactions were unlawful.

01:08 - 26.456 Or improper

01:08 - 27.696 for for

01:08 - 29.246 distinct reasons.

01:08 - 30.836 They constitute.

01:08 - 32.156 A breach

01:08 - 34.646 of the custodians fiduciary duties.

01:08 - 39.266 As the transactions were poor financial move for lsc.

01:08 - 41.486 The actions violate.

01:08 - 43.556 The court's stay order.

01:08 - 45.746 The custodian lacked.

01:08 - 49.046 Legal authority to make those transactions

01:08 - 49.976 and

01:08 - 52.376 that the transactions constituted.

01:08 - 54.356 Unlawful self-dealing

01:08 - 55.616 by the appley.

01:08 - 59.016 The apple iis

01:08 - 00.146 refute those

01:09 - 01.446 arguments

01:09 - 05.486 and contend that the custodian acted properly in accordance

01:09 - 06.576 with the.

01:09 - 08.816 Authority provided to it by the court.

01:09 - 12.116 Will now go to the courtroom for argument.

01:09 - 16.766 I understand that there are

01:09 - 19.886 two cases here and that the second case has somewhat.

01:09 - 22.376 Different parameters than the first case.

01:09 - 23.976 So.

01:09 - 26.546 Who's going to be arguing

01:09 - 27.836 case number three.

01:09 - 28.766 While you're

01:09 - 31.046 planning on arguing the two of them together.

01:09 - 35.905 Your honor Mike maha of dickey became a on counsel for the

01:09 - 37.076 appellant I'm joined by Mike

01:09 - 38.346 mccann recalling

01:09 - 39.686 council Steve's offer.

01:09 - 41.366 My understanding is that

01:09 - 41.936 these

01:09 - 45.475 two Shepherd appeals were consolidated for purposes of oral

01:09 - 49.075 arguments so we planned to argue them together I argue to be

01:09 - 50.726 arguing the whole thing yourself

01:09 - 51.476 I will

01:09 - 54.625 my unrest landing a bit was in light of the multiple appeals we

01:09 - 56.606 were afforded twenty but I absolutely

01:09 - 00.025 and I would only ask that we be permitted to resume five

01:10 - 02.335 minutes of time for rebuttal I'll give you more than that if

01:10 - 03.566 you needed it's a

01:10 - 06.146 complicated set of facts here.

01:10 - 08.966 So why don't you start and then.

01:10 - 11.316 We'll hear from your opponents.

01:10 - 14.676 Thank you your honor

01:10 - 15.756 of.

01:10 - 19.495 The company at issue in this case Alicia was formed by these

01:10 - 21.026 parties in two thousand to.

01:10 - 25.856 Each of the four owners my required Eugene Marie and Brian to.

01:10 - 27.656 Seventy five percent donors

01:10 - 30.775 and the appellee Michael to through

01:10 - 31.256 the twenty five percent average.

01:10 - 34.856 Hold in eco full ownership interest in this company.

01:10 - 38.816 After two thousand and two and two thousand and ten the company

01:10 - 42.056 was in a position to grow its business very rapidly.

01:10 - 44.966 The company expanded to Florida into other states

01:10 - 48.025 and in fact each of these owners relocated to Florida where

01:10 - 49.556 they remained permanent residents

01:10 - 50.856 to this day.

01:10 - 52.556 Now in a closely held.

01:10 - 54.187 Is our side.

01:10 - 57.563 It is hardly a remarkable notion that family members have

01:10 - 58.564 disagreements

01:10 - 00.084 and yes brothers fight.

01:11 - 03.354 Such was the case here over a period of twenty years

01:11 - 06.804 and yet these parties consistently work together

01:11 - 09.203 work through their differences and build an incredibly

01:11 - 10.404 successful business.

01:11 - 13.644 Relevant to this case by two thousand and seventy teen.

01:11 - 17.123 The record showed that Alice I was churning off some twenty

01:11 - 17.814 five millions

01:11 - 19.734 twenty five million dollars of year.

01:11 - 21.234 In annual revenue.

01:11 - 23.904 Now subsequent to that period.

01:11 - 27.114 The revenues remained at or around that level.

01:11 - 30.293 In two thousand and twenty two the business dropped sharply due

01:11 - 31.524 to the covered pandemic

01:11 - 34.434 but even setting that aside we would Grant that.

01:11 - 37.164 In some sense this might be viewed positively.

01:11 - 40.194 There's nothing inherently wrong

01:11 - 41.266 with a consistent revenue stream.

01:11 - 43.404 And yet the record in this case showed that.

01:11 - 45.084 All four of the owners

01:11 - 46.854 most of all the appellee

01:11 - 48.354 were not satisfied

01:11 - 48.864 with

01:11 - 50.724 flat revenues in this business.

01:11 - 53.963 Everyone wanted this company I mean I think you're getting into

01:11 - 54.624 a lot of

01:11 - 57.384 the details I mean the two issues

01:11 - 01.133 that you raised on a PR is one the trial court's finding that

01:12 - 02.964 your clients attempt to amend.

01:12 - 04.354 The.

01:12 - 07.044 The bylaws was illegal not ready

01:12 - 08.164 and second

01:12 - 10.614 the trial court's finding.

01:12 - 13.674 That I ordering the dissolution

01:12 - 14.944 without.

01:12 - 17.454 A mandatory mediation so.

01:12 - 20.933 We're all very familiar with the facts of the case if you could

01:12 - 22.374 just start to address your

01:12 - 26.784 comments about the issue racing on a peoria particularly because

01:12 - 28.734 I think your first statement.

01:12 - 30.094 Talked about

01:12 - 31.114 the.

01:12 - 32.334 Ownership interest.

01:12 - 35.394 Why aren't we really foe focusing on the voting.

01:12 - 37.234 Interests

01:12 - 40.913 that is an issue with respect to the the first issue you raised

01:12 - 41.914 honor.

01:12 - 45.954 And why was it incorrect for the trial court to look at the.

01:12 - 47.874 Voting interests.

01:12 - 51.354 If I am understand the agreement correctly it specifically

01:12 - 54.144 talks about voting interests not ownership interest

01:12 - 56.783 what your hon ours touching on believe I believe is the

01:12 - 59.213 distinction between the two thousand

01:12 - 59.754 and twelve operating agreement

01:13 - 02.454 and the two thousand and twenty one operating agreement

01:13 - 06.654 and what my clients have a course attempted to carry out

01:13 - 09.803 and two thousand and twenty one was

01:13 - 10.314 to amend the operating agreement

01:13 - 14.153 to convert this company from a member mandated they have the a

01:13 - 15.714 though thirty to do so in

01:13 - 16.834 may.

01:13 - 19.704 Twenty twelve agreement very clearly says.

01:13 - 23.214 That it can only be amended by the voting.

01:13 - 24.834 It.

01:13 - 26.244 Interests

01:13 - 28.044 cut our interest cent.

01:13 - 31.134 How does the court incorrect.

01:13 - 32.464 In.

01:13 - 36.173 Disregarding the clear and unambiguous language of the twenty

01:13 - 37.224 twelve well

01:13 - 40.974 our position on that your honor was that there were

01:13 - 43.494 numerous instances throughout the agreement

01:13 - 46.973 where a particular decision was reserved for members holding a

01:13 - 47.974 voting interest

01:13 - 51.264 and that was a define term under the agreement members holding

01:13 - 52.524 a two thirds interest.

01:13 - 53.334 Or

01:13 - 55.344 Hold a majority interest period

01:13 - 56.754 differences as opposed to the.

01:13 - 58.234 Cause the only

01:13 - 59.514 individuals that hit the fifty

01:13 - 01.314 that had voting interests were.

01:14 - 04.704 Eugene top hat fifty percent voting interest in the Michael talk

01:14 - 07.524 had fifty percent voting interest cycle talking brought.

01:14 - 08.964 On by US

01:14 - 10.084 so so.

01:14 - 11.634 You know from tip to get that

01:14 - 13.434 so we can get down to the business

01:14 - 14.064 here.

01:14 - 17.274 Is from the trial court's perspective and the points we're

01:14 - 18.544 concerned with.

01:14 - 21.893 Is from the chocolate's perspective your clients violation of

01:14 - 23.784 the two thousand and twelve operating agreement.

01:14 - 25.614 With meaning the.

01:14 - 29.274 The enactment the attempted enactment of the twenty twenty one.

01:14 - 30.714 Operating agreement.

01:14 - 34.973 The ear records assignable views of the parties over major

01:14 - 36.804 structural decisions of the llc.

01:14 - 39.144 An extreme distrust

01:14 - 42.144 and animosity between the parties personally which may.

01:14 - 44.814 Operational management of

01:14 - 47.124 ls I impractical and.

01:14 - 48.264 Impossible

01:14 - 50.093 well that that's getting towards the issue you have the

01:14 - 52.853 solution your honor I'd be happy to move on to that kind of

01:14 - 53.854 lead sure

01:14 - 54.204 I could

01:14 - 56.214 say about for years it operated

01:14 - 57.664 but the Internet what.

01:14 - 00.774 The animosity isn't that what led to the twenty twenty one.

01:15 - 05.003 The new operating agreement which I think was based in Florida

01:15 - 05.454 correct.

01:15 - 06.874 Isn't that in Florida.

01:15 - 08.724 Yes the parties were in Florida.

01:15 - 09.744 Florida

01:15 - 11.242 and at two thousand and twelve was

01:15 - 12.250 agreement I think

01:15 - 14.244 which was based in Pennsylvania.

01:15 - 15.574 Yes.

01:15 - 21.053 All of this going on the animosity extreme name callings and

01:15 - 22.764 all the other stuff that went on.

01:15 - 28.344 That kind of led down the road to this twenty twenty one.

01:15 - 31.254 Operating agreement any attempt to cut.

01:15 - 33.174 Michael toth out.

01:15 - 37.073 I don't think that the the timing there is quite correct your

01:15 - 37.748 honor I think with

01:15 - 38.029 the

01:15 - 40.914 evidence and what the trial court's opinion reflected that.

01:15 - 44.844 A lot of the animosity in the rancor was found to post date.

01:15 - 45.894 Our clients'

01:15 - 48.234 actions with regard to this operating agreement and.

01:15 - 50.914 Agree with when and what would be the point of.

01:15 - 55.404 Creating a twenty twenty one agreement which in effect cut out.

01:15 - 59.424 Michael toth if the if it wasn't a product of all of the

01:15 - 01.524 disagreement distrust and animosity

01:16 - 01.854 what

01:16 - 03.013 was going on the

01:16 - 06.083 our clients explanation for adopting the twenty twenty one

01:16 - 07.194 agreement your honor was

01:16 - 10.284 not to exclude Michael from the company entirely

01:16 - 13.404 but rather to transition from a member managed company

01:16 - 16.194 to a manager manager he would no longer be ceo

01:16 - 16.704 correct

01:16 - 19.434 correct he would be and one contributing one

01:16 - 21.354 just as all the other owners were.

01:16 - 22.974 In a position where.

01:16 - 26.153 The outside professional managers to run the day-to-day

01:16 - 28.823 operations of the company would be

01:16 - 29.304 accountable to all of the owners

01:16 - 30.604 Michael included

01:16 - 32.274 and our clients it's

01:16 - 33.514 intention.

01:16 - 35.034 Was that Michael would remain.

01:16 - 39.444 Leaders but you're arguing facts to US and we have to accept.

01:16 - 42.864 The weight that the trial court put on various facts

01:16 - 43.914 so

01:16 - 46.494 Unless there were facts the trial court really

01:16 - 47.424 rely on

01:16 - 49.554 that have some legal significance

01:16 - 51.924 we we have to accept.

01:16 - 54.144 What the narrative is

01:16 - 55.554 up from the trial court.

01:16 - 58.434 So what the parties were intentions

01:16 - 59.154 that's where you

01:16 - 00.534 argued before the trial court.

01:17 - 04.554 But let me I wanted to say I do want to get to the issue of the

01:17 - 05.874 dissolution

01:17 - 07.230 and.

01:17 - 11.364 The provision in the twenty twelve operating agreement

01:17 - 12.804 regarding disallow Lucian

01:17 - 14.754 and the mandatory

01:17 - 15.964 mediation.

01:17 - 21.053 And the trial court made a finding that the animosity between

01:17 - 23.184 the parties was so significant.

01:17 - 28.944 That any further mediation was impractical or impossible.

01:17 - 30.454 So.

01:17 - 32.544 My question for you is

01:17 - 36.264 under the doctrine of impossibility of performance

01:17 - 39.054 or impracticality of performance

01:17 - 41.424 how is that provision

01:17 - 43.044 still enforceable.

01:17 - 46.763 I think I take the point your honor and I think that that point

01:17 - 49.794 would carry a lot more force if we were talking about here

01:17 - 52.704 was a non-binding mediation prohibition.

01:17 - 55.943 What the operating agreement provide your place by the way

01:17 - 56.304 didn't it

01:17 - 58.344 I'm sorry it was a non-binding

01:17 - 00.264 a mediation they did take place

01:18 - 03.533 there was a non-binding aviation that took place if it was not

01:18 - 05.394 the binding mediation process that

01:18 - 07.374 strive by the operating agreement.

01:18 - 11.814 In which the binding mediator would be authorized to impose

01:18 - 12.844 solutions.

01:18 - 14.874 Impose resolutions to individual.

01:18 - 15.564 A.

01:18 - 16.344 That

01:18 - 18.354 if that provision is

01:18 - 20.034 if the trial court says.

01:18 - 23.784 It is impractical for this.

01:18 - 24.774 For

01:18 - 27.234 this for the parties to go to mediation

01:18 - 31.494 and there is a there is a concept in contract law

01:18 - 33.294 that when a provision

01:18 - 35.754 is impossible to perform

01:18 - 38.034 or impractical to perform

01:18 - 39.504 that provision.

01:18 - 41.424 Is not enforceable.

01:18 - 45.683 So my question for you is how is that provision even

01:18 - 48.594 enforceable when we have a finding from the trial court.

01:18 - 52.704 Which I'm going to trust is based upon sufficient evidence.

01:18 - 54.744 That that performance.

01:18 - 59.063 Is impossible and therefore unenforceable my first reaction to

01:18 - 01.913 that your honor would be the impossibility of perform once is a

01:19 - 04.883 legal conclusion not a factual finding and so that would be

01:19 - 07.764 subject when we have a factual finding from the trial court

01:19 - 08.874 the trial court's

01:19 - 10.464 mediation was impractical.

01:19 - 15.354 That the trial court indicated that mediation was impractical.

01:19 - 17.034 Based on its belief

01:19 - 21.174 and speculation that following the binding mediation process

01:19 - 23.933 that is at some point the parties would find them but I come

01:19 - 26.694 back to my initial point about rid of the evidence.

01:19 - 30.744 If as long as the facts that the trial court relied upon

01:19 - 32.094 are in the record

01:19 - 34.044 we have to accept that

01:19 - 37.134 as a factual basis for US to apply the law.

01:19 - 40.493 I understand that and I accept that your honor and I understand

01:19 - 43.344 that under the applicable standard to review the trop court.

01:19 - 44.154 Is.

01:19 - 47.123 Entitled and required to make factual findings that are

01:19 - 49.104 entitled to a certain degree of deference.

01:19 - 51.984 For the trial court is not entitled to deference.

01:19 - 56.033 Is what we contend here to have been a failure to apply the law

01:19 - 57.034 properly

01:19 - 58.164 and in the context of

01:19 - 59.325 solution.

01:19 - 00.594 It is our position

01:20 - 04.494 that the trial court d deviated from the very demanding standard

01:20 - 07.554 applicable to the involuntary dissolution.

01:20 - 10.824 Of an otherwise profitable and viable I c

01:20 - 13.224 I proceeding in the manner that it did here

01:20 - 14.514 whoa wait a minute counsel.

01:20 - 16.884 Before you even get to that point

01:20 - 19.284 and coming off judged above point.

01:20 - 22.674 This is a matter of contract interpreter station

01:20 - 23.424 so it's

01:20 - 24.204 a matter

01:20 - 26.754 it's a question of law unless there is ambiguity.

01:20 - 28.704 And we are obligated under the

01:20 - 32.124 principles of interpretation to give effect to all provisions

01:20 - 33.984 of the agreement itself.

01:20 - 38.484 Section twelve point one the dissolution provision.

01:20 - 43.193 States the company shall be dissolved only upon the occurrence

01:20 - 44.544 of the following events.

01:20 - 49.074 One of which is by an order of court where the members can show

01:20 - 51.834 that they're deadlocked and the management of the company

01:20 - 54.984 except as set forth in section seven eleven.

01:20 - 59.063 Seven eleven is the binding mediation

01:20 - 00.212 provision regarding decisions.

01:21 - 01.220 Think.

01:21 - 03.280 If we were to accept

01:21 - 04.600 your position.

01:21 - 09.159 That the decision onto solution had to go to binding mediation

01:21 - 10.160 first.

01:21 - 11.950 Whatnot wonder.

01:21 - 14.950 Section twelve point one superfluous

01:21 - 16.990 and no need in the agreement.

01:21 - 19.600 Because if your position is that

01:21 - 20.320 you go

01:21 - 22.420 binding mediation for dissolution

01:21 - 25.869 but twelve point one says the members go to court except as

01:21 - 27.280 provided in seven eleven.

01:21 - 29.470 New have redundancy in your agreement

01:21 - 30.910 and in doing that.

01:21 - 32.050 You

01:21 - 33.170 basically.

01:21 - 35.230 Eliminate one of those provisions

01:21 - 38.409 I I don't I respectfully disagree that it's redundant your

01:21 - 39.220 honor because

01:21 - 41.620 while the binding meet creation process.

01:21 - 45.520 Can resolve the deadlock in a way that avoids the solution.

01:21 - 48.609 It is not a foregone conclusion that it will resolve the

01:21 - 52.000 deadlock well but they can't contractual provision though is.

01:21 - 54.640 The company shall be dissolved.

01:21 - 58.839 So by an order of court when there's a deadlock in the

01:21 - 01.120 management and the necessary showing made.

01:22 - 05.289 Except as provided in seven eleven

01:22 - 05.770 of the lord accept means that

01:22 - 07.900 dissolution goes to a court

01:22 - 09.520 on that issue of management.

01:22 - 12.580 Except for those instances under seven eleven.

01:22 - 14.510 Let me ask you

01:22 - 15.940 if seven eleven.

01:22 - 18.880 Talks about decisions of the company.

01:22 - 21.970 And suppose the company is as in past.

01:22 - 24.850 On a certain vendor there should be doing business with.

01:22 - 27.670 If we adopt your interpretation.

01:22 - 29.830 Then that impasse

01:22 - 31.930 will be a basis for dissolution.

01:22 - 35.770 Underneath your interpretation of this contract

01:22 - 39.609 that any impasse on the decision of the company is a basis for

01:22 - 40.610 dissolution

01:22 - 44.709 b because seven eleven is in section twelve point one that

01:22 - 47.800 talks about this solution except for seven eleven.

01:22 - 49.840 And seven eleven says

01:22 - 52.030 it pertains to disputes self.

01:22 - 54.130 They're in an impasse over a vendor.

01:22 - 57.310 Your interpretation will mean you can go to court

01:22 - 00.219 and ask for dissolution on that I know of no instance where

01:23 - 03.040 something so minor owner would be the basis for dissolution

01:23 - 06.220 all especially when you compare it to the criteria

01:23 - 09.189 under twelve point one with you attracts the statutory law for

01:23 - 09.910 dissolution

01:23 - 12.609 or if we gave the impression that that was our position your

01:23 - 15.819 honor I would like to to disavow

01:23 - 16.360 it because what the agreement says

01:23 - 19.539 with respect to dissolution as members being deadlocked and the

01:23 - 21.430 management of the accompanies affairs rs

01:23 - 23.170 and I don't think that

01:23 - 25.570 a dispute over which vendor to use

01:23 - 26.780 for example.

01:23 - 30.069 In and of itself constitutes a deadlock in the overall

01:23 - 31.360 management of the agreed

01:23 - 33.370 and which we have argued in our brief.

01:23 - 35.530 Is that in this context.

01:23 - 38.230 Deadlock carries a very specific meaning.

01:23 - 41.500 It's not a deadlock in the sense that there are one issue or

01:23 - 42.250 two issues

01:23 - 44.470 on which the members happen to disagree.

01:23 - 45.370 Rather

01:23 - 48.460 it is a demonstrable history of a failure

01:23 - 50.650 to agree and work together

01:23 - 54.069 in order to carry out the most basic orbits before the court

01:23 - 57.160 though that the issue here is the court ordering liquidation

01:23 - 59.320 not restate so it's a dissolution.

01:23 - 01.540 So on the issue of dissolution.

01:24 - 05.649 Are you saying that has to go to binding mediation under seven

01:24 - 08.739 eleven that refers to decisions of the company as opposed to a

01:24 - 09.940 deadlock in management.

01:24 - 12.760 Aren't we a lack of because that's

01:24 - 15.430 all the company decisions of the company.

01:24 - 16.570 As opposed to

01:24 - 18.130 about the company.

01:24 - 21.580 Because he heard a lot about that so this would the deadlock

01:24 - 23.880 it's my understanding that seven eleven and believe me

01:24 - 24.950 I wrote.

01:24 - 27.190 The piece blow in favor of.

01:24 - 31.030 The binding mediation process for that to go forward

01:24 - 32.440 but looking at it.

01:24 - 35.830 Is the deadlock about

01:24 - 36.340 the.

01:24 - 37.900 Management of.

01:24 - 41.230 The company or is it about the becoming

01:24 - 44.288 the company in other words about the management they the

01:24 - 45.550 governance the

01:24 - 47.260 entire structure.

01:24 - 50.050 Of the company for which judicial.

01:24 - 53.470 Dissolution may be inappropriate remedy.

01:24 - 57.069 Now I agree if it's a deadlock of the company like you said the

01:24 - 59.200 vendors or matters like that.

01:25 - 00.430 Yet

01:25 - 01.780 you know mediation.

01:25 - 05.110 Might be appropriate but where we are now.

01:25 - 06.220 But it

01:25 - 07.520 is.

01:25 - 09.100 Binding mediation.

01:25 - 10.490 Viable.

01:25 - 11.570 Where we are now

01:25 - 12.850 and the company has.

01:25 - 15.430 Literally no no employees

01:25 - 16.900 managers customers

01:25 - 19.900 or operations so there's no big business

01:25 - 21.670 decisions left mandated.

01:25 - 23.110 Going with his left

01:25 - 26.290 the management of Allah sai my understanding is so.

01:25 - 27.970 The mediation

01:25 - 30.880 that may have taken place months and months ago when I wrote.

01:25 - 31.960 The opinion

01:25 - 35.410 is no longer in play that governance is no longer.

01:25 - 37.510 In exists anymore.

01:25 - 41.830 So what could binding mediation that fact him judged both point.

01:25 - 42.580 You know.

01:25 - 44.530 What is the practical.

01:25 - 46.460 Point.

01:25 - 48.550 Of mediation at this point.

01:25 - 50.470 Where we are now.

01:25 - 54.070 While I appreciate the concern your honor the one the one

01:25 - 56.590 item that I would push back on initially.

01:25 - 59.440 Is that the idea that bisbee business is dead and gone.

01:25 - 00.400 Out

01:26 - 02.440 what in fact happened here

01:26 - 05.380 and I understand that necessarily we're getting a little bit

01:26 - 07.630 outside of the record because some of this happened

01:26 - 10.480 subsequently but some of it is in the next some of it isn't

01:26 - 14.619 so it's a still in the wreck but what happened here very much

01:26 - 17.589 consistent with the plan of dissolution that this court ordered

01:26 - 18.190 stayed.

01:26 - 19.580 Was that

01:26 - 22.330 the appellee undertook a series of actions

01:26 - 25.899 that effectively transitioned this entire business operation

01:26 - 27.490 from one corporate entity

01:26 - 30.669 to a different building across the street that happens to be

01:26 - 32.800 operated by another corporate entity.

01:26 - 35.620 That he formed during the pendency of this litigation.

01:26 - 38.559 Of which he happens to be the sole one hundred per cent one

01:26 - 40.900 owner people lawsuit going about regarding that.

01:26 - 42.280 You know

01:26 - 46.810 we don't right now your honor and we were hopeful to avoid that

01:26 - 50.199 by how there is litigation in Florida my understanding is there

01:26 - 53.229 is active litigation going there is litigation in Florida that

01:26 - 56.740 was stayed that was not brought in response to that particular.

01:26 - 58.610 Company.

01:26 - 59.320 A question

01:26 - 00.130 and.

01:27 - 03.640 The issue of binding mediation I know you've filed preliminary

01:27 - 06.010 objections relative to that which were denied.

01:27 - 08.290 Yes and how has that issue.

01:27 - 11.230 Preserved for purposes of this appeal.

01:27 - 15.279 I would agree that it's not ripe for appeal if we were

01:27 - 18.670 attempting to appeal the trial court's denial of the.

01:27 - 20.830 Preliminary objection in that regard.

01:27 - 24.579 The reason that it's preserved is that we believe that on these

01:27 - 25.180 facts

01:27 - 27.340 it was a predicate condition

01:27 - 31.150 to ordering dissolution on the contractual and statutory

01:27 - 33.580 etiquette to judicial intervention you're saying

01:27 - 36.639 correct okay did you articulate that in your nineteen twenty

01:27 - 38.470 five b statement irony issues.

01:27 - 42.879 I believe we did your honor we pointed out that the two order

01:27 - 44.650 dissolution subject to.

01:27 - 48.010 Section twelve a one of the operating agreement or.

01:27 - 49.480 Pursuant to subject.

01:27 - 52.690 Support a four of the dissolution statute.

01:27 - 53.620 That.

01:27 - 56.290 Any inability to continue on the

01:27 - 58.960 business and conformity with the operating agreement.

01:27 - 02.229 Necessarily require the trial court to give effect to the

01:28 - 03.910 binding eighty are requirement

01:28 - 07.090 and that by failing to do so that was an error of law

01:28 - 09.939 independent of any factual findings

01:28 - 10.300 the trial court may have made.

01:28 - 11.142 Counsel.

01:28 - 13.270 Many ask perhaps of

01:28 - 15.370 the obvious question here

01:28 - 17.110 on these provisions.

01:28 - 19.930 Because that will drive the result in this case.

01:28 - 22.180 In your opinion.

01:28 - 24.340 What matters.

01:28 - 28.810 Would go to a court under section twelve point one two.

01:28 - 32.799 And what matters would go to binding mediation under section

01:28 - 35.470 seven point eleven how do you distinguish those two.

01:28 - 38.110 Well

01:28 - 39.640 your honor I think that.

01:28 - 43.689 Section seven point eleven is more broad and that it bright in

01:28 - 45.010 it that embraces Deb

01:28 - 47.560 and disagreement on a multitude of issues.

01:28 - 52.180 Individually issues that may not end of themselves rise to

01:28 - 54.760 something that would warrant dissolution of the company.

01:28 - 55.780 But

01:28 - 56.990 section seven

01:28 - 59.499 on section twelve of the agreement when we're talking about

01:28 - 00.940 dissolution specifically.

01:29 - 02.890 I think that a deadlock

01:29 - 05.230 in the management of the company's affairs.

01:29 - 07.510 Contemplates that there would be

01:29 - 09.910 a number of decisions of the company.

01:29 - 11.800 In which the members would be.

01:29 - 13.120 Deadlocked

01:29 - 14.330 such that.

01:29 - 16.390 If that deadlock were not resolved

01:29 - 18.550 it would inhibit the company's

01:29 - 21.430 ability to complete the most basic functions

01:29 - 23.560 and fulfill it's corporate purpose.

01:29 - 26.500 So to the extent that there are

01:29 - 28.960 a number of those agreement disagreements

01:29 - 31.329 that would be so severe as to

01:29 - 32.402 prevent the company from functioning.

01:29 - 33.730 It would be appropriate

01:29 - 36.730 to submit those disputes to binding mediation

01:29 - 39.789 by cause as your honor pointed out except as seven section

01:29 - 42.850 seven point one is a limitation on the general rule.

01:29 - 44.140 Now

01:29 - 47.379 we're means that it has to pertain to things that section

01:29 - 49.420 twelve point one does not apply to

01:29 - 52.330 but what I think you just explain to the court

01:29 - 55.240 was redundancy between the two provisions.

01:29 - 58.539 That seven point eleven is broader and can include batters

01:29 - 59.890 under twelve point one.

01:30 - 03.070 Except twelve point one uses the word accept.

01:30 - 08.889 I read except as set forth in section seven point eleven in

01:30 - 10.480 this agreement to mean that.

01:30 - 12.110 If that.

01:30 - 15.789 If that provision if that prefatory

01:30 - 16.360 clause was struck from section.

01:30 - 18.610 Twelve a one to one.

01:30 - 20.500 Would that would mean is.

01:30 - 24.160 Any deadlock in the management of the company's affairs

01:30 - 26.890 what inexorably lead to dust the solution

01:30 - 29.200 with no other recourse whatsoever

01:30 - 32.469 what exception as seven section

01:30 - 33.100 seven point one of this agreement.

01:30 - 35.350 Provides is an off-ramp.

01:30 - 36.460 By which

01:30 - 38.770 a dispute or a series of disputes

01:30 - 42.039 which would otherwise lead to the dissolution of an otherwise

01:30 - 43.360 Bible enterprise

01:30 - 44.660 shalt instead

01:30 - 45.710 initially.

01:30 - 49.000 Be submitted to the binding eighty our process and depending on

01:30 - 50.200 how that unfolds.

01:30 - 52.870 There may or may not remain disputes

01:30 - 56.709 with section seven point eleven would produce a more draconian

01:30 - 59.919 result on the issue of dissolution

01:30 - 00.340 than section twelve point one.

01:31 - 02.260 Because your reference to

01:31 - 03.910 binding mediation.

01:31 - 04.720 Is

01:31 - 08.905 And not appeal able decision it may even be more narrower than

01:31 - 09.906 arbitration

01:31 - 11.876 you're saying we were going to submit to

01:31 - 16.016 binding mediation which may be a bit of a mock an oxymoron.

01:31 - 18.146 But the parties have to live with that.

01:31 - 20.276 With no right of appeal or whatever

01:31 - 21.656 and no court review

01:31 - 24.386 so that may be actually more limiting

01:31 - 27.235 than section two twelve point one is that how you want to see

01:31 - 30.205 dissolution handled in this company we we don't your honor at

01:31 - 33.175 our position would be that the binding mediator would not be in

01:31 - 36.446 a position to say yes or no the company is going to be dissolved

01:31 - 37.916 but that's the issue

01:31 - 41.126 I think the binding mediator would be in a position to say.

01:31 - 42.606 Their art

01:31 - 46.375 identifiable issues on which the parties are in dispute and

01:31 - 48.476 we're going to work through those individually

01:31 - 52.346 and I may impose resolutions to those individual disputes

01:31 - 54.476 such that at the end of this process

01:31 - 57.325 we will no longer have a deadlock and a sense that the

01:31 - 00.715 company's not act like I could accept that accept section seven

01:32 - 03.056 point eleven does not limit the scope.

01:32 - 06.625 Of what can go to binding mediation

01:32 - 07.166 is written in very broad terms

01:32 - 09.836 in terms of disputes decisions of the company

01:32 - 12.895 what you just described to me was limiting the scope of what

01:32 - 14.366 can be submitted to mediation.

01:32 - 16.556 This doesn't limit the scope.

01:32 - 20.516 I I accept that it's very broad your honor but

01:32 - 22.376 I as the decisions of the company

01:32 - 25.045 the sessions of the company and

01:32 - 25.736 then getting back to judge Nichols

01:32 - 29.036 who made the distinction here about of or about the company.

01:32 - 31.675 I'm trying to understand how we can read both of these

01:32 - 34.646 provisions and not be in conflict with each other or

01:32 - 38.245 how one does not obviate the need by way of redundancy and what

01:32 - 39.246 your honor maybe.

01:32 - 42.445 Maybe driving at there is a distinction that has been talked

01:32 - 45.715 about this case decisions of the company versus decisions about

01:32 - 46.716 the car penny

01:32 - 48.836 and we've never taken the position that.

01:32 - 50.286 Something.

01:32 - 53.125 As fundamental as whether the company should be dissolved or

01:32 - 56.035 which operating agreement governs the company's affairs we we

01:32 - 57.206 haven't taken the position.

01:32 - 00.085 That those are decisions of the company that would be subject

01:33 - 01.196 to binding mediation.

01:33 - 04.346 Rather what we have taken the position on is that.

01:33 - 06.506 Individual decisions such as.

01:33 - 09.656 How the leadership responsibilities throughout the company

01:33 - 10.667 should be allocated

01:33 - 14.036 what the company's product mix might be at any one given time

01:33 - 17.065 to the extent that that is what is driving the disagreement

01:33 - 18.836 here and what drove the patel the

01:33 - 19.526 plaintiffs'

01:33 - 20.756 petition for dissolution.

01:33 - 24.116 Those could be handled on a case by case basis.

01:33 - 26.636 Through binding mediation your view is that.

01:33 - 27.566 The

01:33 - 29.966 mediator wouldn't deal with

01:33 - 32.666 was it wouldn't visit dissolution at all

01:33 - 35.546 but we'll deal with the deadlock in terms of the.

01:33 - 37.676 Bread and butter management.

01:33 - 42.115 Challenges or disagreements or

01:33 - 42.296 disputes issues and a hope would.

01:33 - 45.686 If the binding if the mediator is unable to do that.

01:33 - 50.936 That's when the judicial intervention of.

01:33 - 54.896 Dissolution would be appropriate as I that's how we interest.

01:33 - 57.446 That's how we interpret the agreement with

01:33 - 59.726 the agreement contemplates that.

01:34 - 03.265 Binding mediation while it hopefully

01:34 - 03.506 will serve as an off ramp to.

01:34 - 07.135 Avoid dissolution but I interpret it may not do so oh and in

01:34 - 08.136 all cases

01:34 - 11.065 and all we've argued here is that the process should not be

01:34 - 12.066 short circuited.

01:34 - 15.266 That to the extent there was an actionable deadlock here which

01:34 - 16.326 I haven't.

01:34 - 18.236 Gotten to yet in my presentation but.

01:34 - 21.116 Assuming that for purposes of argument at a minimum.

01:34 - 23.725 This should have been submitted to the binding eighty or

01:34 - 25.256 processor twenty minutes.

01:34 - 28.386 Thank you your honor.

01:34 - 34.346 You still have your bundle.

01:34 - 37.856 Good afternoon good morning not sure.

01:34 - 38.486 That

01:34 - 40.556 afternoon already now that afternoon.

01:34 - 44.005 It's a privilege to be here my name is f from grail and you're

01:34 - 45.656 on behalf of the applebee's.

01:34 - 47.366 Michael and Lina tenth.

01:34 - 50.186 Let me thank and acknowledge the support of my.

01:34 - 52.976 Up counsel to r from Brian be van

01:34 - 56.426 and at Julia gentleman from r our office as well

01:34 - 57.506 and I believe

01:34 - 00.716 a long time ago in this case started Emily Kincaid

01:35 - 03.685 who is now the honorable Emily Kincaid and is sitting

01:35 - 05.666 downstairs in the house of representatives.

01:35 - 08.605 Representatives worked on this case as well so let's

01:35 - 10.316 acknowledge her assistance as well.

01:35 - 12.456 Thank you for.

01:35 - 14.036 Your preparations

01:35 - 15.776 it's a privilege to argue here.

01:35 - 18.896 Let me suggest a way to cut through all of this

01:35 - 21.506 because there's no real disagreement that I hear.

01:35 - 22.896 That.

01:35 - 24.156 The.

01:35 - 25.976 Operating agreement.

01:35 - 27.716 In two thousand and twelve

01:35 - 30.446 precluded amendment without

01:35 - 32.186 the unanimous.

01:35 - 35.996 Vote of the two voting interests.

01:35 - 37.326 I think that there's

01:35 - 39.206 pretty much agreement as there was

01:35 - 40.326 in the court.

01:35 - 41.036 With judge

01:35 - 43.076 Nichols and judge called greenie

01:35 - 44.436 and death.

01:35 - 45.824 And

01:35 - 46.956 judge Olson.

01:35 - 48.036 That and.

01:35 - 49.286 The

01:35 - 50.606 two thousand and twelve

01:35 - 51.816 agreement.

01:35 - 54.026 Applies and controls.

01:35 - 55.686 Let me.

01:35 - 56.916 Suggest.

01:35 - 58.916 That there is a way that we

01:35 - 01.256 don't have to even deal with

01:36 - 04.645 what we think is an easy question

01:36 - 05.156 that seven eleven doesn't apply

01:36 - 07.916 for other reasons that judged to be as suggested

01:36 - 10.226 and also for the language itself.

01:36 - 11.526 Whether or not.

01:36 - 13.416 The the.

01:36 - 15.086 Matters that were.

01:36 - 18.536 Quote unquote deadlocked were quote of the company.

01:36 - 20.186 Or about the company

01:36 - 22.046 and we had a clear.

01:36 - 23.666 Direction from

01:36 - 24.956 Jack Mckinley.

01:36 - 28.916 And from judge ward hearing all of this that

01:36 - 30.266 it didn't apply

01:36 - 31.736 and judge.

01:36 - 33.326 US and ca clearly

01:36 - 35.516 did not believe it didn't apply as well

01:36 - 37.706 we don't have to even decide that.

01:36 - 39.216 And.

01:36 - 40.536 Let me ask you

01:36 - 41.706 whether.

01:36 - 43.596 Every.

01:36 - 46.016 Way every Avenue.

01:36 - 48.296 To get to dissolution.

01:36 - 51.146 Under section twelve point one.

01:36 - 56.126 There's four different provisions if we look under twelve.

01:36 - 57.146 A

01:36 - 58.826 Two forgive me

01:36 - 00.126 Roman at

01:37 - 01.176 I threw

01:37 - 03.356 I threw four went for for.

01:37 - 06.026 For for different ways to get there.

01:37 - 09.746 There's also four different ways

01:37 - 11.756 to get to dissolution.

01:37 - 13.976 Under the llc statute.

01:37 - 15.276 Under fifteen.

01:37 - 16.856 P a c s

01:37 - 18.836 eighty eight seventy one.

01:37 - 21.746 I'm sure I'll get this wrong a four.

01:37 - 23.726 Etc etc etc.

01:37 - 27.056 As judge ward relied on the statute.

01:37 - 30.026 There's a cognate provision under twelve

01:37 - 31.176 point one.

01:37 - 32.256 Two.

01:37 - 33.686 But there's also.

01:37 - 37.526 Two different alternative ways to get to dissolution.

01:37 - 39.416 Based on the facts the

01:37 - 41.216 judge ward found and

01:37 - 43.976 dressed the judge also points that out to US

01:37 - 45.986 there was a breach of fiduciary duty.

01:37 - 47.846 There was oppression.

01:37 - 51.206 But excuse me counsel on your point.

01:37 - 54.236 About a eighty eight seventy one I

01:37 - 56.126 I believe I am correct on this.

01:37 - 57.776 When you

01:37 - 00.566 construct your operating agreement.

01:38 - 04.766 I you have the ability contractually to alter.

01:38 - 08.636 What the statute provides with limited exception.

01:38 - 10.826 The agreement here.

01:38 - 14.396 Says the company shall be dissolved only.

01:38 - 17.426 Upon the conditions stated in the agreement.

01:38 - 20.096 Does that not supplant.

01:38 - 23.666 What the statute provides in terms of dissolution

01:38 - 26.156 when your agreement says it can only be done.

01:38 - 28.556 On only on those circumstances

01:38 - 29.796 by a court order

01:38 - 31.226 it's it's a great question

01:38 - 32.966 but I believe if we look

01:38 - 35.396 further at the llc act.

01:38 - 37.736 Under eighty eight fifteen

01:38 - 39.656 c fifteen.

01:38 - 41.906 That you cannot

01:38 - 43.766 in an operating agreement.

01:38 - 46.136 Alter the provisions.

01:38 - 49.376 Under which dissolution may be ordered.

01:38 - 53.216 And that's exactly what this operating agreement did.

01:38 - 53.996 By.

01:38 - 54.716 What

01:38 - 58.706 counsel see me as the twenty twenty one the the new one.

01:38 - 01.526 Was actually the the interpretation that the

01:39 - 04.226 that the that council is suggesting.

01:39 - 07.466 That you have to go through binding mediation.

01:39 - 09.836 Before you get to dissolution.

01:39 - 13.226 Would impose a condition precedent.

01:39 - 15.356 That in every case.

01:39 - 22.106 These parties would have to go to binding mediation.

01:39 - 24.326 Before

01:39 - 25.676 they could go to court

01:39 - 27.506 and that deprives.

01:39 - 32.576 The legislature of enforcing it's public policy.

01:39 - 34.316 Of requiring

01:39 - 35.906 a judicial Avenue.

01:39 - 39.116 Of oversight to protect investors.

01:39 - 43.076 That their expectations will be fulfilled that there will be.

01:39 - 47.954 Under eighty eights eighty eighty eight seventy run or a is the

01:39 - 49.496 binding me nation.

01:39 - 50.726 Is a

01:39 - 54.536 is a condition precedent before going to court I think it's.

01:39 - 56.516 Before.

01:39 - 58.856 Judicial intervention.

01:39 - 01.136 Via dissolution.

01:40 - 03.356 Can take place I think that's.

01:40 - 05.718 What what's being said because being able to.

01:40 - 09.266 Work Fred did deny believe the pios most.

01:40 - 11.936 Of US have concerning.

01:40 - 15.926 Bind implementation of binding mediation but did order

01:40 - 17.336 nonbinding.

01:40 - 19.826 Mediation which did take place

01:40 - 20.366 on

01:40 - 21.956 On two occasions write.

01:40 - 26.455 An informal discussions back and forth right and the ndp issue

01:40 - 27.476 of futility

01:40 - 30.835 didn't go anywhere while not one lie that by the time they got

01:40 - 32.156 to the dissolution hearing.

01:40 - 34.736 There was testimony that judge ward credited.

01:40 - 35.906 That

01:40 - 37.056 the.

01:40 - 40.796 Entity was already in a downward death spiral.

01:40 - 43.808 From which there had already been a

01:40 - 45.596 vocal financial loss

01:40 - 47.906 but an irrevocable loss.

01:40 - 49.586 Of property they.

01:40 - 51.506 Have employees

01:40 - 53.036 they couldn't hire.

01:40 - 55.976 Of reputation that this company was.

01:40 - 59.996 A company is in a very different place now than say when I wrote.

01:41 - 02.696 Opinion months ago.

01:41 - 04.116 I.

01:41 - 07.885 Might indeed Microsoft is no longer ceo so his governance is

01:41 - 10.346 not an issue and that was a major issue.

01:41 - 13.556 For binding for mediation previously

01:41 - 16.555 and like you said the downward spiral and in the interim

01:41 - 19.616 custodian report addressed a lot of those issues in terms of.

01:41 - 21.296 Assets wasting of.

01:41 - 23.892 Action had to be taken and so on

01:41 - 25.782 so we're in a different place

01:41 - 27.022 today.

01:41 - 30.282 Than we were a months ago so the viability of.

01:41 - 33.132 Binding need a mediation at this juncture.

01:41 - 38.142 Yes we don't think it was viable back yeah I know if

01:41 - 38.479 know.

01:41 - 40.192 Word.

01:41 - 43.302 Was your document counsel write your clients document.

01:41 - 47.092 Forgive me I'm

01:41 - 48.232 yeah I mean.

01:41 - 50.232 Why she why shouldn't we.

01:41 - 52.842 Look very closely at

01:41 - 56.141 this provision when it's drafted by sophisticated parties on

01:41 - 56.832 both sides

01:41 - 59.262 because the legislature says you can't do that.

01:42 - 02.622 Okay legislature says you can't

01:42 - 03.912 change

01:42 - 06.102 the way you can get to dissolution.

01:42 - 09.071 You can't change eighty eight

01:42 - 09.432 seventy one asking another question

01:42 - 11.112 why did your

01:42 - 15.222 client not have a fiduciary responsibility

01:42 - 19.782 to the existing company until such time as it was in fact

01:42 - 20.922 dissolved well

01:42 - 21.732 what.

01:42 - 23.412 What he did have.

01:42 - 26.802 Was an existing fiduciary duty to the company

01:42 - 28.632 while he was still there

01:42 - 32.682 and throughout that time as judge ward recognizes.

01:42 - 34.182 He stayed there

01:42 - 35.742 he kept running

01:42 - 37.992 he kept the fingers in the dike.

01:42 - 38.952 The.

01:42 - 41.382 Top people had already he left.

01:42 - 43.042 He knew.

01:42 - 44.682 Member this is not

01:42 - 45.832 I began.

01:42 - 49.511 This is a personal services consulting company where he is the

01:42 - 50.512 consult.

01:42 - 51.072 Yes

01:42 - 53.892 but at the duty has to continue

01:42 - 57.402 otherwise anybody could just quit and immediately

01:42 - 58.122 set up.

01:42 - 01.931 A competing company sale I don't

01:43 - 02.232 work there any more but wait a sec.

01:43 - 04.242 First of all he had it

01:43 - 06.222 in the operating agreement.

01:43 - 07.902 He had the right.

01:43 - 11.502 To pursue other business opportunities.

01:43 - 13.962 Communicating against the company.

01:43 - 17.592 There was nothing left to compete at that point for openers

01:43 - 19.932 but wait a second let me hear me out.

01:43 - 23.772 From the time that they are attacked.

01:43 - 25.432 They would have.

01:43 - 26.472 Michael

01:43 - 28.242 the this case begin when.

01:43 - 31.242 Michael went to court and tried to get rid of them

01:43 - 32.862 they had already tried to get.

01:43 - 35.682 To dispossess his ownership interest

01:43 - 37.812 right all of this app you know the facts

01:43 - 39.132 it was horrible

01:43 - 40.402 and it started.

01:43 - 44.501 Over three things that never go together religion family and

01:43 - 45.502 politics.

01:43 - 45.912 Yeah.

01:43 - 49.302 And then talk about that and then.

01:43 - 51.732 The excuse was.

01:43 - 52.362 At

01:43 - 54.012 My colleague mentioned that.

01:43 - 56.693 The revenue dropped in two thousand and twenty two is wrong

01:43 - 58.302 it dropped in twenty twenty.

01:43 - 00.372 Three weeks before

01:44 - 04.362 they they kicked him out and it dropped below because of coven

01:44 - 06.042 closed all the schools

01:44 - 07.722 and the teachers need to be

01:44 - 09.462 in the schools that didn't

01:44 - 11.802 have this court tell judge ward.

01:44 - 15.672 You have to appoint a custodian and not a receiver

01:44 - 17.652 she did that she pointed out.

01:44 - 21.792 Why all the you're saying all the actions that were taken

01:44 - 23.652 by the custodian.

01:44 - 26.892 We're in furtherance of maintaining

01:44 - 28.192 the company.

01:44 - 31.782 Absorbed dissolving it now cause they argue.

01:44 - 33.112 You know.

01:44 - 34.632 They they make much.

01:44 - 38.502 Because of the custodian wasn't back the same individual

01:44 - 39.762 but it's wrong

01:44 - 42.162 his brief he read the order.

01:44 - 44.182 Is that he was

01:44 - 45.822 his act one job.

01:44 - 49.632 To preserve and maintain the bow you.

01:44 - 52.812 He has never sold a fig.

01:44 - 54.552 He's.

01:44 - 58.662 While he's licensing the the intellectual property for a

01:44 - 01.272 thousand dollars a month or no no no no.

01:45 - 05.801 What he's licensing the the property for was a non-exclusive

01:45 - 06.802 license.

01:45 - 09.162 Which for something which wasn't being used.

01:45 - 13.602 And he licensed it for two point seven million dollars.

01:45 - 15.382 Because.

01:45 - 17.322 Had he not done he's

01:45 - 18.972 Michael to the assumed

01:45 - 20.352 liabilities.

01:45 - 24.462 That would have cost the company depending on when they were.

01:45 - 26.112 They were liquidated.

01:45 - 29.922 At the time Michael took them over they were a million dollars.

01:45 - 32.832 If we had waited until the hearing.

01:45 - 36.552 On judge why or when judge would approve that order

01:45 - 39.102 it would have been two point three million dollars

01:45 - 40.312 because every

01:45 - 43.032 night every sixty days or ninety days.

01:45 - 45.072 The liquidated damages

01:45 - 46.312 went up.

01:45 - 46.902 And

01:45 - 49.812 the custodian started out offering that

01:45 - 52.272 non exclusive license by the way

01:45 - 53.832 he first offered it.

01:45 - 55.992 Non exclusive license

01:45 - 57.942 to the rest of the world and there were no.

01:45 - 00.582 License software where you get two for there.

01:46 - 01.542 Wasn't a

01:46 - 04.002 point that the company's software

01:46 - 07.391 really didn't have any value about dr manned crusoes

01:46 - 10.871 partnership that's exactly and so he had to lie said the

01:46 - 13.841 company had to license in order to produce value that's exactly

01:46 - 17.562 right okay now and doctor dr marzano marzano.

01:46 - 18.912 Refused.

01:46 - 21.012 To work with right

01:46 - 22.542 I mean that these were.

01:46 - 24.312 I understand the point but.

01:46 - 26.382 We've got two cases here.

01:46 - 29.172 If I can ask you to help US out with this for a moment.

01:46 - 31.512 On the first appeal.

01:46 - 33.852 We have a decision where the court

01:46 - 35.002 and.

01:46 - 36.142 Ordered.

01:46 - 37.282 A.

01:46 - 38.302 Custodian

01:46 - 38.892 to.

01:46 - 41.262 Manage and liquidate the company

01:46 - 43.092 and a stay was granted.

01:46 - 46.602 During the course of the appeal.

01:46 - 48.522 Michael left the company.

01:46 - 51.462 An emergency petition was filed with this court

01:46 - 53.232 and we stepped in

01:46 - 55.512 even though there was a stay in place

01:46 - 56.502 and we wait a minute

01:46 - 58.302 and we said you because.

01:46 - 01.842 I think you have the order.

01:47 - 03.702 A little bit backwards.

01:47 - 06.102 What happened was

01:47 - 07.222 Michael.

01:47 - 10.752 Who was struggling to keep the company afloat.

01:47 - 13.482 To produce the work product.

01:47 - 15.672 By the end of the school year

01:47 - 16.912 if he hadn't.

01:47 - 18.942 It would have caused lawsuits.

01:47 - 21.282 He stayed on.

01:47 - 23.092 And he worked

01:47 - 24.732 one hundred percent towards.

01:47 - 26.482 The.

01:47 - 27.672 Fulfillment

01:47 - 30.732 of those contracts now I understand that that that the point

01:47 - 33.401 that I'm trying to get to is is different and good given the

01:47 - 34.442 time that you have please.

01:47 - 35.842 Go here with me.

01:47 - 38.332 He.

01:47 - 39.852 Asked the council.

01:47 - 42.132 To seek a stay.

01:47 - 42.942 Secret.

01:47 - 45.372 Relief from this court stay.

01:47 - 48.012 Of the dissolution or.

01:47 - 50.182 And.

01:47 - 52.602 This court granted that.

01:47 - 57.102 He then went to the court and said he went to the trial court.

01:47 - 02.292 At the end of the school year at the end of the contract cycles.

01:48 - 06.071 He said we can't renew these contracts there's nobody there to

01:48 - 07.072 serve them.

01:48 - 09.312 I have very little staff.

01:48 - 12.102 I cannot fulfill the obligations.

01:48 - 14.262 If I sign up

01:48 - 15.912 these contracts again.

01:48 - 20.772 We will get to we will not be able to perform them is against

01:48 - 20.982 it

01:48 - 22.962 Violates my fiduciary duty

01:48 - 24.172 to the company

01:48 - 26.712 to react these contrasts understand all of that.

01:48 - 29.382 Commission should resign council.

01:48 - 33.071 That's way off though were what I needed to ask you but but

01:48 - 34.482 thank you for the clarification.

01:48 - 38.472 My point is is that we have an order and the first appeal.

01:48 - 39.072 A.

01:48 - 42.192 Evolve which involves an order of dissolution.

01:48 - 43.782 In the second appeal

01:48 - 48.071 we have the appointment also have a custodian that was posed to

01:48 - 49.842 manage the daily operations.

01:48 - 52.092 Of that is also being appealed.

01:48 - 56.052 If we were to agree affirmed the trial court

01:48 - 57.462 in the first appeal.

01:48 - 02.021 How do we reconcile that with the actions taken by the receiver

01:49 - 03.312 in the second appeal.

01:49 - 08.171 Because we would effectively then be vacating that order would

01:49 - 09.222 we not how do we

01:49 - 12.552 I'm asking what the remedy would be and how do we then we

01:49 - 13.612 reconcile

01:49 - 16.392 the actions of this receiver in both cases

01:49 - 19.692 well what happens with a company with no employees.

01:49 - 21.522 Let's say Michael had stayed.

01:49 - 24.507 He can't contract he can't hire

01:49 - 26.322 he will come to work for this company

01:49 - 28.362 and none of the customers.

01:49 - 30.822 Trust this company to re up

01:49 - 32.182 and remember.

01:49 - 37.691 Because of their actions do we have to vacate the second apps

01:49 - 41.892 custodian order if we farm the first one whatever you do.

01:49 - 44.172 Do not vacate the

01:49 - 45.942 appoint st of the custodian.

01:49 - 49.031 Because that appointment of a

01:49 - 49.632 custodian as the wife is to renting

01:49 - 51.012 we have two appointments

01:49 - 53.232 and the first appeal and in the second appeal

01:49 - 55.842 I'm trying to understand how we reconcile both.

01:49 - 58.392 Well we have a custodian.

01:49 - 00.042 Right now.

01:50 - 02.542 Who is.

01:50 - 04.962 Maintaining the status quo okay

01:50 - 06.202 okay.

01:50 - 08.832 Where there is.

01:50 - 12.942 A dissolution that is appropriate and valid.

01:50 - 14.922 A ruling under the trial court

01:50 - 18.551 and supported by the law because there are alternative ways to

01:50 - 19.552 get there.

01:50 - 22.722 Under eighty eight seventy one and twelve point one eight two.

01:50 - 25.182 You never reached the issue.

01:50 - 28.242 So the second appeal would be mood.

01:50 - 28.932 That

01:50 - 29.532 the.

01:50 - 32.172 I think it goes back to the trial court.

01:50 - 33.222 To

01:50 - 34.492 Then.

01:50 - 36.322 Merge.

01:50 - 39.582 Well you could call it murder but the

01:50 - 40.272 the.

01:50 - 41.692 Custodian.

01:50 - 45.942 Who's down in the trial court managing the assets

01:50 - 47.802 and maintaining the value.

01:50 - 50.172 Has to have some direction

01:50 - 52.902 as to what to do with this hollow shell

01:50 - 55.482 at that point and that is eternity fool over it.

01:50 - 57.022 That's missed that set

01:50 - 58.362 that mr should follow

01:50 - 59.262 who has

01:50 - 02.711 served I mean the reason why it was the same person was he has

01:51 - 03.312 served so there.

01:51 - 06.402 Are conflicts as it's the same person it's the same person

01:51 - 08.142 but doing different things

01:51 - 09.852 and he never does anything.

01:51 - 14.111 On his own that that's that's a major thing without going to

01:51 - 16.722 the court and getting judge ward to to rule on it

01:51 - 18.012 and he has counsel

01:51 - 19.302 and he has an expert

01:51 - 20.712 and he had any athletes'

01:51 - 22.182 reports that we have

01:51 - 23.362 absolutely

01:51 - 23.562 no.

01:51 - 24.552 Maintenance.

01:51 - 26.832 That's a maintenance provision as opposed to.

01:51 - 28.140 If the solution

01:51 - 28.890 order

01:51 - 30.160 I mean now

01:51 - 32.020 that's the difference between the two water so.

01:51 - 34.440 We if we agree in the first appeal that

01:51 - 36.120 the court was within its rights.

01:51 - 37.830 That this didn't have to go to

01:51 - 39.000 binding mediation

01:51 - 39.720 the court was.

01:51 - 43.710 Correct in ordering a custodian to dissolve this company.

01:51 - 47.009 Now we have the second appeal where we have the same person who

01:51 - 48.690 was the manager even on a daily basis.

01:51 - 50.970 Does it have to be ratified then.

01:51 - 53.580 Or does it is it moot

01:51 - 54.060 or

01:51 - 56.130 Vacated mood because things have

01:51 - 57.310 already done

01:51 - 57.660 now

01:51 - 00.690 you know there's there's a bank account their tax

01:52 - 02.790 returns that were filed as if

01:52 - 06.119 it takes a price it takes up press it's economic things

01:52 - 09.990 happened in the meantime so when affirmance in the first appeal.

01:52 - 14.430 All would not affect actions already taken by the interim

01:52 - 17.070 custody in order in the second appeal I don't believe it.

01:52 - 19.680 The second appeal.

01:52 - 22.949 He addresses whether or not the trial court had the authority

01:52 - 27.540 to appoint him and if we were to affirm about this solution.

01:52 - 31.560 We still need to address did the trial court erred

01:52 - 33.390 in appointing a custodian.

01:52 - 36.989 And I think had the authority to do that and it did under what

01:52 - 37.990 is it and.

01:52 - 41.159 Will have appellate procedure seventeen a one and there's also

01:52 - 44.130 a trial court provision for maintaining the status quo

01:52 - 45.690 during appeals

01:52 - 47.940 there's also the inherent power of the

01:52 - 49.740 of the trial trial court two

01:52 - 51.660 to take action met that

01:52 - 54.450 begs to be taken it needs to be taken in order

01:52 - 55.690 to protect.

01:52 - 57.750 So all of those reasons

01:52 - 59.580 are good reasons why.

01:53 - 01.710 When mr xi floated

01:53 - 03.540 from his appointment.

01:53 - 05.640 Until

01:53 - 07.470 this court rules.

01:53 - 08.800 Should be.

01:53 - 12.144 If you would ratify event of a dissolution.

01:53 - 14.730 He would sound synthesis to create an

01:53 - 17.460 orderly process we need to pay bills

01:53 - 19.290 because things are happening there's

01:53 - 20.560 there's still.

01:53 - 21.570 That they're still

01:53 - 22.170 leased

01:53 - 23.910 premises they're still.

01:53 - 27.539 There still tax returns winding nigga continues even after

01:53 - 28.560 formal dissolution.

01:53 - 29.400 Sure

01:53 - 32.789 I said winding up the affairs even continues after dissolution

01:53 - 34.560 order absolutely but right now

01:53 - 37.769 mr chap a la doesn't have an order of dissolution so he would

01:53 - 38.770 need to.

01:53 - 40.410 To and I'm not sure

01:53 - 43.230 that that's for wiser procedural heads than I.

01:53 - 44.560 Whether judge

01:53 - 47.759 this this case has to go back to judge ward to enter the

01:53 - 48.840 dissolution order

01:53 - 51.660 or with directions from this court or whether

01:53 - 55.169 you can make it happen by executive he not at the first appeal

01:53 - 56.730 give him the authority to do that.

01:53 - 59.250 The authority to

01:53 - 01.020 to dissolve to liquidate.

01:54 - 04.450 The.

01:54 - 06.600 To liquidate appeal with the.

01:54 - 09.660 Trial court entered an issue

01:54 - 10.830 and at.

01:54 - 11.760 Entered

01:54 - 13.830 an order of dissolution

01:54 - 15.630 and that was stayed

01:54 - 17.730 yes and then it was never.

01:54 - 20.460 Reached because we didn't get there

01:54 - 22.170 because of a settled

01:54 - 22.620 point

01:54 - 23.770 eleven.

01:54 - 26.730 You sent US back to mediation in the footnote

01:54 - 28.980 to page thirty eight and thirty nine

01:54 - 29.598 and which

01:54 - 33.240 he wasn't Ron and him were here exactly and that really wasn't

01:54 - 34.620 I argued.

01:54 - 36.120 A whole lot

01:54 - 36.750 up.

01:54 - 37.860 In in the

01:54 - 39.070 in the appellate court

01:54 - 42.150 what if we if we affirm and the stay is lifted.

01:54 - 46.289 Then that first order which is now affirmed allows the

01:54 - 47.730 custodian to go forward

01:54 - 50.070 for liquidation and dissolution does it not.

01:54 - 52.620 I would hope so your honor and the fact that you.

01:54 - 54.090 So clearly.

01:54 - 56.550 I would hope that gives him.

01:54 - 58.120 That.

01:54 - 00.180 Comfort he's very careful

01:55 - 01.450 and he doesn't

01:55 - 03.510 especially in this litigious atmosphere.

01:55 - 06.089 I'll tell you I've never been in a case in practice since

01:55 - 07.090 nineteen eighty six.

01:55 - 08.130 Cars must come

01:55 - 09.570 up in a death penalty cases

01:55 - 12.719 never been in one this contentious

01:55 - 13.230 there are seven separate appeals

01:55 - 14.730 he talked about two cases.

01:55 - 17.070 Live here your time expired.

01:55 - 20.219 Way before if there's anything else I can address otherwise I

01:55 - 21.300 want to thank you for your.

01:55 - 22.680 Family dispute

01:55 - 23.830 that's what happens.

01:55 - 26.730 Okay

01:55 - 27.930 other things happened to.

01:55 - 29.560 Alright cancel.

01:55 - 33.580 Are you Yang.

01:55 - 37.620 Steve's offer on Mike my last partner

01:55 - 38.970 and I'll just deal with the.

01:55 - 41.430 If I could with the the last

01:55 - 42.550 few minutes here.

01:55 - 46.800 And I just I think the discussion here today and the rebuttal

01:55 - 47.940 that I'd like to present.

01:55 - 49.380 Eliminate

01:55 - 51.330 actually elucidates for all of US

01:55 - 54.330 the problem that this case has created

01:55 - 55.200 which is

01:55 - 57.660 is this a liquidation

01:55 - 59.970 was this a dissolution.

01:56 - 02.759 What in the world was this thing that was entered and I'll tell

01:56 - 03.760 you what it was.

01:56 - 05.310 It was a submission

01:56 - 06.283 and this was

01:56 - 09.660 what it really was is a hijacking of a business.

01:56 - 11.310 That's what this thing was.

01:56 - 12.880 The the.

01:56 - 14.640 In this particular case the plaintiffs.

01:56 - 16.770 This business is up and running

01:56 - 18.030 it's been up and running

01:56 - 20.130 since before the lawsuit was filed

01:56 - 21.840 it's been up and running before.

01:56 - 22.650 The

01:56 - 23.196 the

01:56 - 24.750 the parties took action

01:56 - 28.007 in January of two thousand and twelve al-Assad is up and.

01:56 - 31.470 Managed as a leader his leadership this

01:56 - 33.810 will let me be clear Jack Nichols is it's it's.

01:56 - 34.650 It's

01:56 - 35.950 operating

01:56 - 38.579 as Superman does when he gets into a phone booth and goes

01:56 - 39.580 across the street.

01:56 - 40.900 That business

01:56 - 41.970 that was I s I.

01:56 - 44.910 Is now structural empowerment the only difference is

01:56 - 46.710 when the band was reformed.

01:56 - 48.750 Our clients were left in the cold

01:56 - 51.149 they are not part of the management but they have the same

01:56 - 51.810 customers

01:56 - 54.170 at the same school districts they have the same contracts

01:56 - 55.270 they are the same same

01:56 - 55.950 people

01:56 - 57.810 that are involved in running that business.

01:56 - 59.680 The only thing that's different

01:56 - 00.700 is they shed

01:57 - 03.450 the other owners because they don't want to share

01:57 - 05.640 seventy five percent of the equity it's not that.

01:57 - 10.290 I no longer exists ls I still exists it's a shell because

01:57 - 13.860 everything including now according to our custodian

01:57 - 17.069 which you know and who is a liquidating trustee which if if

01:57 - 18.240 this was a dissolution

01:57 - 20.160 it would be a liquidating trust he

01:57 - 24.060 has given the competitor now our direct competitor

01:57 - 26.670 a full licence to use the same software.

01:57 - 30.539 Presenting this if you're now saying that emphasize a shell of

01:57 - 31.230 a company

01:57 - 35.280 why why are you pursuing this because our clients have rights

01:57 - 36.430 judge to grow they have

01:57 - 38.070 they have rights here and they were and.

01:57 - 39.750 Seventy five percent owners

01:57 - 40.950 getting all of their.

01:57 - 45.149 Net but where it is now wouldn't it be to their benefit in

01:57 - 46.350 their best interest to.

01:57 - 48.300 Just liquidate and

01:57 - 51.989 and sharing the proceeds of of whatever is happening with this

01:57 - 54.689 new company I'm just trying to understand what would we be what

01:57 - 55.690 would you be media in

01:57 - 56.160 what way

01:57 - 57.030 do

01:57 - 58.620 You have service contracts.

01:57 - 02.340 These are service contracts including by the way dr marzano his

01:58 - 05.010 contract which runs with I s I.

01:58 - 08.580 With with the new company now well I he he's got to

01:58 - 11.700 know he's got a contract that runs through with al-Assad

01:58 - 13.840 through two thousand and two thousand and twenty five

01:58 - 16.379 which the only testimony we ever got in this case because we

01:58 - 17.910 didn't have much procedure below.

01:58 - 19.890 The only testimony we had from

01:58 - 20.700 dr

01:58 - 24.480 Marzano was that he had no intention of violating his contract

01:58 - 25.980 with Ella sigh he just

01:58 - 28.110 he believes as I think most of the.

01:58 - 29.680 Customers believe

01:58 - 31.350 that al-Assad is now operating

01:58 - 33.510 as under a different flag this court to.

01:58 - 36.090 This court should take this thing ing

01:58 - 39.870 that judge war created by way of a dissolution order

01:58 - 41.050 and reverse it.

01:58 - 43.860 This is not a this is not a deficit so that

01:58 - 46.530 a mediation would take the mediation takes place

01:58 - 49.110 these these parties get together in a room

01:58 - 52.289 and they figure exactly what they intended with their operating

01:58 - 54.569 agreement even in the two thousand and twelve operating he

01:58 - 55.920 might have to be more of a boxer

01:58 - 56.670 referee

01:58 - 58.350 then this and this.

01:58 - 59.370 Doesn't expose

01:58 - 01.230 you got this I think this rola.

01:59 - 03.060 That you got this from the beginning.

01:59 - 07.289 The the the rancor in all of this you know the the the turmoil

01:59 - 08.580 between the family members

01:59 - 10.200 this is was addressed

01:59 - 12.000 in the Potter decision

01:59 - 14.070 which judge Lazarus you you gave

01:59 - 15.340 your credit to.

01:59 - 16.870 Him the.

01:59 - 18.610 Steiger case.

01:59 - 22.469 The parties are not supposed to just start throwing mud at each

01:59 - 24.869 other and say now we can't I'm not working with these people

01:59 - 25.870 anymore.

01:59 - 29.280 The one hundred employees that work at this company be damned.

01:59 - 32.909 Where we want the company does all that of out of existence we

01:59 - 36.809 know was non binding but wasn't

01:59 - 37.170 there extensive mediation done with

01:59 - 39.210 an incredibly esteemed.

01:59 - 40.750 Lawyer

01:59 - 42.150 and it went nowhere

01:59 - 43.080 it here's the thing

01:59 - 45.779 there was a there's a there's the sword of damocles hanging

01:59 - 47.100 over everybody's head

01:59 - 49.440 during that because there's a lawsuit that's been filed

01:59 - 52.079 and so yes it's a little different when you're talking about we

01:59 - 53.520 need to work at a business solution

01:59 - 56.190 and maybe one of those those people that were involved

01:59 - 58.260 could have helped these parties and maybe the.

01:59 - 00.230 Final result would have been you know what

02:00 - 01.860 seventy five percent equity owners.

02:00 - 04.140 Michael needs to be the ceo of this company

02:00 - 06.329 maybe that's what the result would have been and then we

02:00 - 08.640 wouldn't have had but there was a lawsuit that was filed

02:00 - 12.750 and so we're dealing with claims that were made by a a plaintiff

02:00 - 16.199 that is mad his feelings are hurt all of that stuff that was

02:00 - 18.030 discussed directly in the Potter decision

02:00 - 20.540 and just you bro I just wanted to address such a bizarre.

02:00 - 22.150 I wanted to address.

02:00 - 25.860 What it is that we rely upon and defer to in terms of judge ward.

02:00 - 27.270 Jr judge ward

02:00 - 30.630 is entitled to the inferences from the facts.

02:00 - 32.220 No question about that

02:00 - 32.970 but.

02:00 - 34.300 As.

02:00 - 36.690 The the Potter case makes clear.

02:00 - 40.680 Findings that are based on erroneous facts

02:00 - 41.890 and conclusions

02:00 - 43.050 need not be

02:00 - 46.709 just wholesale adopted here and the the wholesale adoption that

02:00 - 47.710 I'm suggesting that

02:00 - 48.790 this court avoid.

02:00 - 51.149 Is that the parties are so angry at each other because they

02:00 - 53.550 suit each other and there's no contentious litigation.

02:00 - 54.930 As my learned colleague

02:00 - 56.310 correctly points out

02:00 - 59.159 that that somehow means that this family and it's been fighting

02:00 - 00.382 and these two brothers that have not

02:01 - 01.860 been fighting for twenty years.

02:01 - 04.679 Can't continue their business

02:01 - 04.860 operation I'm here to tell you that.

02:01 - 08.039 The answer to this is not to dissolve this company out of

02:01 - 08.610 existence

02:01 - 11.760 in judge ward even recognize that because she didn't do it.

02:01 - 13.440 She created this thing.

02:01 - 16.079 Where she said while there's going

02:01 - 16.320 to be a two state solution here.

02:01 - 18.670 Two parties are going to going to be two companies

02:01 - 20.550 they're going to share order dissolution.

02:01 - 23.699 While ditching because judge pellegrini at our last argument

02:01 - 24.300 rays that

02:01 - 25.890 he wasn't sure what the member.

02:01 - 28.679 He that's exactly what he said and if you look at what the

02:01 - 29.505 order says that

02:01 - 31.889 she says oh they're going to share all the assets of the

02:01 - 33.600 company what kind of disillusion

02:01 - 35.310 have you ever seen that looks like that.

02:01 - 38.169 Parties are going to share personnel they're going to share.

02:01 - 40.994 In the ip the valuable ip of the company.

02:01 - 42.944 This was a business solution

02:01 - 44.684 that was suggested by.

02:01 - 47.924 The the planets in this case which judge ward adopted.

02:01 - 49.254 That's all because.

02:01 - 50.394 There was no dissolution

02:01 - 51.594 simply a question.

02:01 - 53.024 Beyond it's probably yes or no

02:01 - 55.694 on the llc agreement.

02:01 - 56.294 Yes.

02:01 - 58.094 Does it have

02:01 - 01.724 a non-compete or non salute solicitation clause in it.

02:02 - 03.344 It does not but

02:02 - 04.184 also

02:02 - 06.854 that he's an owner and he's got that year.

02:02 - 09.404 That's a separate issue from whether.

02:02 - 12.644 Once he leaves the company if he still owes fiduciary duties.

02:02 - 13.424 Owner

02:02 - 14.864 that's another lawsuit

02:02 - 15.584 okay.

02:02 - 17.774 Hopefully not we'd like to avoid that.

02:02 - 20.984 Thank you.

02:02 - 22.374 Thank you very much.

02:02 - 36.064 And.