[00:00:01] Speaker 01:
Next, we have Inray Nysporek, Scott Staffney arguing for appellant, Ryan Carson arguing for appellees.

[00:00:16] Speaker 03:
All right, thank you.

[00:00:18] Speaker 03:
Mr. Staffney, would you like to reserve any time for rebuttal?

[00:00:23] Speaker 00:
I would, five minutes.

[00:00:25] Speaker 03:
All right, thank you.

[00:00:26] Speaker 03:
Please begin.

[00:00:28] Speaker 00:
The bankruptcy court needed to adjudicate that subject matter jurisdiction existed in order for it to have dismissed Nisporik's adversary complaint, as well as to have granted the purported creditor's motion for relief from stay.

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And with respect, it is Nysporic's position that this court has a sui sponte duty to determine on its own whether subject matter jurisdiction was proven with regards to each of the bankruptcy court orders upon which these appeals are premised.

[00:01:11] Speaker 00:
Nysporuk would urge this panel that consideration of Nysporuk's late-filed brief with regards to her appeal of the bankruptcy's court's grant of release from state might help this panel in performing this task, which is part of the judicial discipline necessary for the exercise of Article III judicial power.

[00:01:41] Speaker 00:
And those same arguments will be offered to those appellate courts, which will review this panel's decisions regarding the Bankruptcy Court's exercise of Article III judicial power applicable to the facts of this case.

[00:02:01] Speaker 01:
Well, counsel, are you suggesting that the Bankruptcy Court didn't have jurisdiction to resolve the adversary proceeding that your client filed?

[00:02:11] Speaker 00:
No, I'm not, Your Honor.

[00:02:13] Speaker 00:
He did.

[00:02:14] Speaker 00:
What I am suggesting is that even as part of that adversary proceeding, in order for it to have been dismissed, there would have had to be, you would have had to have found that there was

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jurisdiction over the claims which were being made.

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Because the two things are pretty much indistinguishable.

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While he did, he must have found that he had jurisdiction with regards to the motion for relief from stay,

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still needed jurisdiction in order to have dismissed the adversary complaint on the merits, which he did.

[00:03:18] Speaker 01:
Didn't you purport, didn't Ms.

[00:03:20] Speaker 01:
Porrik argue when she filed the adversary proceeding that it was a determination could be made by the bankruptcy judge that he had authority under the

[00:03:32] Speaker 01:
bankruptcy code or the rules or the law to determine the merits of what she was asking for relief for?

[00:03:41] Speaker 00:
Certainly, Your Honor.

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And the two are not necessarily opposed.

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And what I will do is go on to further elaborate the judicial inquiry arguments and aware that I may have to further brief this later on.

[00:04:03] Speaker 00:
Because of the way Nisporik's proceedings below were handled by the bankruptcy court, this case, which involves important issues for this nation, has become a simple one to resolve for purposes of these specific appeals.

[00:04:22] Speaker 00:
Nisporic appeals assert that the bankruptcy court prematurely dismissed her claims against the statutory trustee and the purported creditors before that trial court conducted a proper judicial inquiry as to the facts and law on which those trial court decisions were premised.

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The factual and legal issues which are before this court regarding the bankruptcy court's decisions include without limitation those set forth at pages four through five of Ms.

[00:05:02] Speaker 00:
Borich's opening brief and also the one asserted by respondents regarding the appropriate standard for denial of the motion

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for reconsideration, and also with regard to appellant assertion that Nisporik's claims were, I mean the Appellee's assertion, that Nisporik's claims were appropriately dismissed pursuant to the equitable doctrine of claim preclusion.

[00:05:33] Speaker 00:
Appellees do not dispute that the Bankruptcy Court adjudicated disputed facts pursuant to a motion for summary judgment in order to reach its judgments, dismissing Nisborik's adversary complaint and granting the purported appellant's motion for relief from state.

[00:05:59] Speaker 01:
Excuse me, Uncle, just one second.

[00:06:00] Speaker 01:
What you're saying is the court resolved to speeded issues of material fact.

[00:06:05] Speaker 01:
And in fact, the court's decision revolved around the doctrine of collateral stopover issue preclusion, correct?

[00:06:14] Speaker 01:
Uh, yes.

[00:06:17] Speaker 01:
Okay.

[00:06:17] Speaker 01:
You did not, in your opening brief that you filed in either appeal, address the doctrine or the application of the doctrine of collateral estoppel.

[00:06:27] Speaker 01:
So why shouldn't this court simply affirm the decision based upon your failure to address that basis of the court's ruling?

[00:06:37] Speaker 00:
Your Honor, the appellee said the burden of proving its preclusion argument.

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But they cited no authority whatsoever, the facts of this case, entitled them to application of equitable.

[00:06:52] Speaker 01:
Does that matter to us if the basis of the court's decision was a legal one and you don't address it on appeal?

[00:07:00] Speaker 00:
I believe it does, Your Honor.

[00:07:03] Speaker 00:
Even if one forgives this omission on their behalf to have argued to either the bankruptcy court or this court that it should be dismissed under the doctrine of claim preclusion in Washington, it is well established that issue preclusion should be invoked

[00:07:30] Speaker 00:
by bankruptcy courts only after careful inquiry because it blocks unexploded class that may lead to truth.

[00:07:40] Speaker 01:
But doesn't the appellate rules still require that you address the basis for the decision in your opening brief and failure to do so waives any challenge you may make to that claim?

[00:07:54] Speaker 00:
Well, Your Honor, actually in the opening brief,

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as many facts that go to that.

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For example, when you get to the question of claim preclusion, it's based on the notion that a claim can be precluded

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where a note has been lost and that has not been disclosed.

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But as is pointed out in the original brief, such modifications, it's not clear at all as to whether they can either make a modification.

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And with regard to that, I'm relying on the congressional oversight report.

[00:08:37] Speaker 01:
What's conceding is you didn't address the question

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of claim preclusion, what you're conceding is you raised issues of material fact with regard to the grant of summary judging.

[00:08:49] Speaker 00:
Your Honor, I would prefer to say I am not conceding anything.

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It has long been a principle of equity and of justice that courts will look to the facts and apply the law.

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And in a case involving the magnitudes of the issues being raised here, that would go directly opposite this.

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And in my view, and one which I'm perfectly happy to argue on appeal, would violate the Constitution.

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I'm happy to answer any other

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And of course you have with regards to that.

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But what I would say is here, preclusion has not been shown to be appropriate either factually or legally for the reasons stated in the sports reply brief at pages 13 through 17, including without limitation the question of fact and law as to whether a purported creditor of a note which has been lost

[00:10:09] Speaker 00:
has the authority to enter into a modification.

[00:10:12] Speaker 00:
And of course, that gets us back to the subject matter jurisdiction argument that I began with because the note itself has its own predator requirement that they be a note holder.

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and Washington statutes have a statutory standing requirement that they have to possess the lost note.

[00:10:42] Speaker 01:
So counsel, what evidence did you present that was contrary to the declaration?

[00:10:49] Speaker 01:
What specifically?

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That they held possession of the note in a specific location

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in California in a bank vault, what actual evidence, not speculation, not records that you believe demonstrate, what testimony or evidence did you present contradict that?

[00:11:09] Speaker 00:
Your honor, I referred, or not, my clients referred to the declaration of the, the appellees, which was supposed to prove that, and they showed that the assertions in that declaration, that the note was attached and the deed of trust was attached, were false, and that that was made

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under penalty of perjury.

[00:11:41] Speaker 01:
Now, if you answer my question, the question is the declaration that stated the note was in existence in a bank in California and they have possession of.

[00:11:52] Speaker 01:
What evidence did you present that that was in fact not true?

[00:11:58] Speaker 00:
Because he says in his declaration that he has attached a copy of the note and the deed of trust

[00:12:08] Speaker 00:
and they are not attached.

[00:12:10] Speaker 00:
So you've got multiple levels of problems here.

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One, he's testifying under oath that he has done something that he has not done.

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And two, you have a problem in that it goes to Nysborek's arguments that the government, excuse me, that the appellees are using

[00:12:38] Speaker 00:
an electronic note.

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And if you take a look at the 2006 version of the Washington Code, you couldn't have a security interest in a mortgage at that time.

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But you could have a security interest in electronic channels at that time.

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And the way you

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achieved this security interest was by creating an authoritative copy.

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So basically, he's able to sidestep this whole issue by simply not attaching those documents.

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And they have not met their burden of proof under the circumstances.

[00:13:31] Speaker 00:
Our whole position here is you're probably aware that we believe that

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courts, including bankruptcy courts, are helping those seeking to foreclose on homes to take them by not requiring them to meet those basic legal norms that everybody else must.

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And we think that while that may have been appropriate,

[00:14:03] Speaker 00:
at the height of the financial crisis.

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It's not appropriate now where it appears that the appellees in this case and the courts which are supporting them not having to make those proofs

[00:14:24] Speaker 00:
are all engaged in the same thing.

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And so it is our position that under these circumstances, the Bankruptcy Court, this court, the Court of Appeals, and the Supreme Court have an obligation to the people to investigate these charges where they go to the very basis of the court's power to decide these cases.

[00:14:54] Speaker 03:
But you have about half a minute left.

[00:14:56] Speaker 03:
Do you want to reserve?

[00:14:57] Speaker 00:
Yes.

[00:14:58] Speaker 03:
All right.

[00:14:59] Speaker 03:
Thank you.

[00:15:00] Speaker 03:
Appellee?

[00:15:09] Speaker 02:
Thank you, panel.

[00:15:11] Speaker 02:
My name is Ryan Parson.

[00:15:12] Speaker 02:
I am attorney for the appellee in this matter.

[00:15:18] Speaker 02:
I don't have a lot of time necessary here.

[00:15:24] Speaker 02:
I think the core issue here as I read the court below decision on the motion to dismiss converted to a motion for summary judgment.

[00:15:37] Speaker 02:
Is that?

[00:15:39] Speaker 02:
There are there are alternative basis bases for the course decision.

[00:15:44] Speaker 02:
On the one hand, the court determined that the.

[00:15:49] Speaker 02:
Particular challenges to the

[00:15:54] Speaker 02:
the appellee's standing to foreclose on the note, on the deed of trust, enforce the terms of the note, et cetera, were satisfied by finding that there was no question of material fact as to possession and location of the note.

[00:16:22] Speaker 02:
his honor Mr. Gantz pointed out, there is nothing on the record that calls into question the veracity of that particular statement.

[00:16:35] Speaker 02:
Now, the argument here is that because of a, maybe an erroneous filing, a filing that lacked a certain exhibit, that that in and of itself is

[00:16:52] Speaker 02:
evidence that the note doesn't exist or the note's been lost or destroyed.

[00:17:01] Speaker 02:
But that is not affirmative evidence from the debtor that it is.

[00:17:09] Speaker 02:
It is evidence that perhaps there was a mistake made in filing the particular document from Mr. Fogelman.

[00:17:20] Speaker 02:
But the testimony that the note exists and exists in a vault was not controverted.

[00:17:30] Speaker 02:
That evidence was before the bankruptcy court.

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And appropriately, the bankruptcy court ruled that the appellees had standing.

[00:17:41] Speaker 02:
Secondarily, there's the question of this claim preclusion.

[00:17:45] Speaker 02:
And here, I think it's important to go through the

[00:17:51] Speaker 02:
the history just briefly, because as was briefed and presented here and below, you had a Chapter 7 matter that was brought by the debtors in 2011.

[00:18:17] Speaker 02:
There, they declared their intention to reaffirm the death, and they received their discharge.

[00:18:25] Speaker 02:
In 2016, they sued on a variety of theories to essentially stop the foreclosure at that time and the enforcement of the note and deed of trust.

[00:18:41] Speaker 02:
Ultimately, that lawsuit is dismissed with prejudice

[00:18:46] Speaker 02:
on stipulation of the parties.

[00:18:50] Speaker 02:
Thereafter follows a loan modification in which the debtor accepts alternative terms for the modification in exchange for a cessation of the foreclosure and modification of the loan itself to deal with the loan default.

[00:19:10] Speaker 02:
Unsatisfied, apparently.

[00:19:14] Speaker 02:
and unable to make the payments after that 2019 modification, we come to the present bankruptcy matter that was filed in 2023, along with the adversary matter.

[00:19:30] Speaker 02:
And here, contrary to prior representations, prior attempts at stopping all of this, the debtors now claim essentially that

[00:19:45] Speaker 02:
perhaps they didn't know what they were doing in 2016, they didn't know what they were doing in 2019 when they agreed to a modification, and that because of these particular issues, they should be able to argue all of the things, bring all of the issues back that they had brought previously.

[00:20:07] Speaker 02:
The court below rightly determined that these issues, the questions of standing, the questions of

[00:20:15] Speaker 02:
a variety of what he calls judicial inquiries were barred by either the doctrine of collateral estoppel or res judicata.

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And there's no evidence to suggest that the court did not make an appropriate factual inquiry.

[00:20:37] Speaker 02:
Admittedly, the opinion on the motion for summary judgment is short.

[00:20:44] Speaker 02:
But is what we are saying, is what is being requested that the court below present some voluminous finding of fact and conclusion of law in order to support a conclusion that the court has reached or that that in itself is error?

[00:21:02] Speaker 02:
That seems like a stretch to me, but that would be error.

[00:21:06] Speaker 02:
That would be considered error.

[00:21:09] Speaker 02:
Finally, with regard to the issue of claim preclusion itself, as Judge Gann properly pointed out, and as we pointed out in our briefing, the issue, the argument for why the court below was wrong on the issue of claim preclusion is absent from the opening briefing.

[00:21:35] Speaker 02:
And this in and of itself indicates that the

[00:21:39] Speaker 02:
This court shouldn't even consider arguments as to claim preclusion.

[00:21:46] Speaker 01:
Council, can I ask you, is the same thing true of the stay-relief question and the question on reconsideration that was fought?

[00:21:55] Speaker 01:
Is there anything in the opening brief that addresses stay-relief or reconsideration?

[00:22:03] Speaker 02:
I haven't seen either, Your Honor.

[00:22:06] Speaker 02:
And I have the brief in front of me.

[00:22:08] Speaker 02:
I reviewed it before the hearing.

[00:22:10] Speaker 02:
And when I read this brief, it is a recitation of the judicial increase and the issues that they've had all along with regard to where's the note, standing to foreclose, no possession, et cetera.

[00:22:31] Speaker 02:
But as to the procedural issues that you have asked about, I don't see it there.

[00:22:37] Speaker 02:
This particular debtor has been very, you know, steadfast in her determination to stop this foreclosure at all costs.

[00:22:51] Speaker 02:
And certainly on a human level, I can understand that.

[00:22:54] Speaker 02:
But she's had numerous bites with this apple.

[00:22:58] Speaker 02:
Her husband and her have proceeded to take these numerous bites in front of the court below,

[00:23:07] Speaker 02:
the United States District Court, the State Court, Spokane County District, Superior Court, et cetera.

[00:23:17] Speaker 01:
That skipped over one point that I think we didn't discuss in your recitation of the facts, and that was that before the last bankruptcy case was filed, the debtor went to State Court to try to enjoin the sale before she filed bankruptcy, and that

[00:23:34] Speaker 01:
request for an injunction was not granted by the state court.

[00:23:39] Speaker 01:
That resulted in filing the initial petition under Chapter 13 that ultimately converted to Chapter 7.

[00:23:46] Speaker 01:
Frank?

[00:23:48] Speaker 02:
That's accurate.

[00:23:49] Speaker 02:
The Spokane County Superior Court case that you're referencing is, I believe, entitled Church of the Gardens and Knifeburg v. Gadati.

[00:24:00] Speaker 02:
The

[00:24:01] Speaker 02:
The primary claim in that case is for an injunction of the foreclosure.

[00:24:07] Speaker 02:
They attempted to get a preliminary injunction, did not, and then filed the underlying chapter 14.

[00:24:15] Speaker 02:
That's accurate.

[00:24:16] Speaker 01:
And so in order to obtain the injunction, they would have had to demonstrate that there was a likelihood of success on the merits or that there was irreparable injury to them in order to achieve that.

[00:24:27] Speaker 01:
And either they didn't show one or the other or both.

[00:24:31] Speaker 02:
I believe the primary reasoning of the court, if I read my notes correctly, was the lack of probability of success on the merits.

[00:24:40] Speaker 01:
So if there had been a claim that there was no note that they could establish any standing, then that would have meditated scenes in favor of granting the injunction.

[00:24:54] Speaker 02:
Yes, Your Honor.

[00:24:55] Speaker 02:
And in fact, had they made that factual showing before the Superior Court as

[00:25:01] Speaker 02:
had they made that showing here in below in front of the bank or I think we'd be talking about a different situation entirely, but we're not.

[00:25:14] Speaker 02:
And that's all I have in unless the court has questions.

[00:25:17] Speaker 02:
Additional questions for me.

[00:25:19] Speaker 03:
Alright, any further questions?

[00:25:21] Speaker 03:
Judge again?

[00:25:22] Speaker 03:
Thank you.

[00:25:27] Speaker 03:
Yeah, I go.

[00:25:28] Speaker 03:
Yes, you've got about 30 seconds left.

[00:25:31] Speaker 00:
Okay, I'd like to point out that once again, what's being told to this court isn't true.

[00:25:41] Speaker 00:
The original

[00:25:44] Speaker 00:
motion to restrain the sale pursuant to RCW 2164 130 was denied because

[00:26:01] Speaker 00:
the commissioner didn't have time to review the pleadings.

[00:26:07] Speaker 00:
Then Agnes filed this appeal pro se.

[00:26:12] Speaker 00:
And once this case was dismissed, we went back to the Superior Court and filed a motion for summary judgment on this issue, which got put back

[00:26:27] Speaker 00:
because the appellees in this case and the defendants in that case needed to have it set back and it's been set back again.

[00:26:41] Speaker 00:
It was due to be argued tomorrow.

[00:26:44] Speaker 00:
But at some point, our courts have to start looking at facts and courts should not be

[00:26:54] Speaker 00:
uh, offering to help one side or the other, especially when it comes to issues as important as subject matter jurisdiction.

[00:27:08] Speaker 00:
Uh, and I bet my time's up.

[00:27:09] Speaker 03:
All right.

[00:27:11] Speaker 03:
Thank you.

[00:27:12] Speaker 03:
This matter is submitted.

[00:27:14] Speaker 03:
And I think that's the end of our calendar.

[00:27:17] Speaker 02:
Thank you, panel.

[00:27:19] Speaker 03:
All right.

[00:27:20] Speaker 03:
So all rise.

[00:27:23] Speaker 03:
This court is in recess.