[00:00:02] Speaker 01:
In Ray Perlman, Peter Kleidman, Appellant and pro se, Michael G. Spector, Council for Apple Lee, Jordan Jean Perlman.

[00:00:16] Speaker 04:
Okay, we've got Mr. Kleidman on Zoom, it looks like. Can you hear us?

[00:00:22] Speaker 00:
Yes, I can, Your Honors.

[00:00:23] Speaker 04:
Okay, go ahead and make your appearance.

[00:00:27] Speaker 00:
This is Peter Kleidman, creditor and appellant pro se.

[00:00:33] Speaker 04:
Okay. You want to reserve a little time for rebuttal?

[00:00:37] Speaker 00:
Yes. Let's go with six minutes, please.

[00:00:40] Speaker 04:
Okay. And remember, again, are you able to see the clock so you can see what we see in terms of?

[00:00:47] Speaker 00:
Yes, Your Honor.

[00:00:49] Speaker 04:
Okay. Can we start at 15 again? Because those are all process questions for me. So let's give them the full 15, okay? Okay. All right, you may proceed.

[00:00:58] Speaker 00:
Yes, first of all, thank you, Your Honors, very much for allowing me to file electronically and also for allowing me to appear.

[00:01:06] Speaker 04:
No, Mr. Kleiman, it's the times. We all learned how to do this during COVID, so we're good at it now, I think, okay?

[00:01:14] Speaker 00:
Yes. Well, I think that the most appropriate thing for me to do is to ask you whether you have any questions for me.

[00:01:24] Speaker 00:
You know, you've read the brief, so there's no point in me just saying what I already wrote. So if you have questions, please fire away.

[00:01:33] Speaker 04:
Well, let me begin with sort of a housekeeping one. The constitutional argument was not raised in the bankruptcy court, correct?

[00:01:41] Speaker 00:
That's correct.

[00:01:41] Speaker 04:
Okay. And you're claiming that the statute is vague?

[00:01:46] Speaker 00:
Yes.

[00:01:46] Speaker 04:
Is there a particular language in the statute that you think is vague?

[00:01:49] Speaker 00:
The answer is that in terms of an action against a fraudulent transferee, there's nothing in the statute which makes it clear that a creditor can't go after a fraudulent transferee. That's my only point.

[00:02:18] Speaker 04:
Okay. All right. We can – if you want to let that one go, we can take it from there. Okay? On that one? Okay.

[00:02:26] Speaker 04:
Okay. And the second point is help us out with why your action – in new york even if you now explain it as being something solely in your mind against miss hunter wasn't a violation of the state to the extent that was an attempt to collect a debt against mister perot

[00:02:50] Speaker 00:
The the phrase against Mr. Perlman, it's a little tricky because it's not really clear what it's modifying.

[00:02:58] Speaker 00:
The debt is against the action is not against Mr. Perlman, but the debt is against Mr. Perlman.

[00:03:05] Speaker 00:
But in any event.

[00:03:07] Speaker 00:
The reason is the Ninth Circuit's interpretation. I quote a bunch of Ninth Circuit cases where they say you can't – it's not a violation of the state if you go after someone who's liable for the debts of the debtor. Now, I understand that they are typically referring to, let's say – A guarantor or a surety where there's a direct relationship between the creditor and that third party guarantor, for example.

[00:03:40] Speaker 00:
But the language in the Ninth Circuit, which seems to be broader than that, it says if there's someone liable to the debts of the debtor, liable on the debts of the debtor, then the creditor can go.

[00:03:52] Speaker 04:
Who was the original New York judgment against?

[00:03:55] Speaker 00:
Against Mr. Perlman.

[00:03:56] Speaker 04:
Was it against Ms. Hunter?

[00:03:58] Speaker 00:
No.

[00:03:58] Speaker 04:
Okay. Was Ms. Hunter's liability based on anything other than she was the recipient of a fraudulent transfer in your mind?

[00:04:05] Speaker 00:
Yes.

[00:04:05] Speaker 04:
What was that?

[00:04:06] Speaker 00:
No, no, no. I'm sorry. The only claims against Ms. Hunter in the purported stay violation case is the alleged transferee in a fraudulent transfer scheme.

[00:04:16] Speaker 04:
So she doesn't have an independent debt to you?

[00:04:18] Speaker 00:
Correct. Correct.

[00:04:21] Speaker 04:
Okay, so why then, let me go back to the original question, why isn't that a problem under 362D if at the end of the day what you're doing in New York is collecting a debt that's owed by Mr. Perlman?

[00:04:35] Speaker 00:
Well, I guess the thing is that if you have a guarantor... She wasn't one, right?

[00:04:40] Speaker 04:
I mean, she wasn't a guarantor.

[00:04:42] Speaker 00:
Right, but I'm saying in the situation where you're going after a guarantor, you're trying to collect a debt against the debtor from the guarantor.

[00:04:51] Speaker 04:
No, no, no. The guarantor made themselves liable on the debt. Okay, that's very different. So if you've got another example, I'm all ears, but that one I don't think I'm with you on, okay?

[00:05:01] Speaker 00:
Okay, all right. I'll let that one slide.

[00:05:04] Speaker 00:
I will lose in this court on that issue, and I'm okay with that. Well, then why are you here?

[00:05:11] Speaker 00:
No, because they're not entitled to attorney's fees.

[00:05:19] Speaker 04:
Okay. Yeah, that's the next argument, right? Go ahead.

[00:05:22] Speaker 00:
Well, yeah, that's the most powerful argument. In other words, Mr. Perlman was not damaged by anything I did. If I violated the automatic stay, he was not damaged. And so he has no claim under 362K.

[00:05:37] Speaker 04:
Well, okay, that's based on a bunch of out-of-circuit law, right?

[00:05:44] Speaker 00:
Well, the only, yes, there's a lot of Outer Circuit law.

[00:05:47] Speaker 04:
Well, I mean, you've read Schwartz-Toward, right?

[00:05:50] Speaker 00:
Yes.

[00:05:51] Speaker 04:
That's the more direct instruction to us, wouldn't you say? That's the Ninth Circuit who reads our papers, grades our papers. They tell us what to do. Don't you think that came to a different conclusion?

[00:06:01] Speaker 00:
Absolutely not, Your Honors, because that case never squarely considered the situation which we have now. In that case, and I argue this extensively in my reply brief, is that...

[00:06:16] Speaker 00:
because they raised the argument in the appellee's brief, and that is, in that case, there were damages other than the attorney's fees. They never squarely addressed the situation which is before the court now.

[00:06:28] Speaker 04:
Well, let me give you a hypo, okay? If Schwartztower, among other things, said...

[00:06:35] Speaker 04:
The mere fact that the valuation has ceased doesn't mean that we couldn't find their attorney's fees payable also under 362K. Doesn't that suggest to you that the attorney's fees are not necessarily tied to what you might call damages? And by the way, I've got other problems with the argument, but that's one. Give me your answer to that one.

[00:06:54] Speaker 00:
Yeah, I didn't actually follow what you said, Your Honor. Here, I'll try again.

[00:06:58] Speaker 04:
If what Schwartz Howard said is the mere fact that the contemnor, or whomever you want to call them, has stopped doing the horrible things, doesn't cut off the right to attorney's fees because one is still enforcing the stay, including through appeal, doesn't that suggest to you that attorney's fees are not necessarily tied to damages?

[00:07:18] Speaker 00:
No, that's not correct, Your Honor. In that case, there were damages other than attorney's fees. There were damages other than attorney's fees. And that case decided that if there are damages other than attorney's fees, then you're absolutely allowed...

[00:07:38] Speaker 00:
to go after the creditor and collect, in addition to your damages, in addition to your damages that you got other than attorney's fees, you're allowed to collect all the other attorney's fees that you incur as a result of trying to make yourself whole on the damages that you originally incurred.

[00:08:03] Speaker 00:
suffered. So that case never squarely addressed the situation which is before this court. It never addressed the situation where a completely undamaged individual hires an attorney to go after the creditor and say, oh, well, I wasn't damaged before the attorney started working on the case, but my damages occurred after the attorney started working on the case and

[00:08:28] Speaker 04:
Okay, let me pause you because I ain't buying any of this, okay? I'll just be blunt with you. The great thing about the automatic stay is it's automatic, right? The whole point is that it puts the burden on people who think the stay doesn't apply or shouldn't apply, or let's clarify whether it doesn't, to what extent it does, to come in and talk to the court and not to decide on their own that I don't think the automatic stay applies. The whole point of this is to give the debtor a respite.

[00:08:58] Speaker 04:
If they enforce that, if they don't have any other damages, they can't claim under 362K, which severely undermines 362K, wouldn't it? I mean, what should the debtor have done here? Just wait until they think you've harmed them, and then? Yes.

[00:09:15] Speaker 04:
And in the meantime, you're violating the state?

[00:09:17] Speaker 00:
Well, Your Honor, Your Honor, 362... Well, let me make sure we're on the same page.

[00:09:23] Speaker 04:
You are violating the stay under 362A1, correct? I think you've conceded that, correct? Well, I've conceded it in... Okay, so if you're violating the stay under 362A1, why do we have to wait for the debtor to decide, oh, now I've been damaged and now I'm going to stop that from happening anymore? Why does that make any sense at all?

[00:09:47] Speaker 00:
It's a question of statutory interpretation.

[00:09:50] Speaker 00:
And there's even a case, the Easley case, that they cite where it says the purpose of 362K is to make the debtor whole. If I violate the stay by going after Ms. Hunter, his wife, the alleged transferee, so assume arguendo that I'm violating the stay by going after Ms. Hunter, the alleged fraudulent transferee, Now, she would have huge claims against me under 362K, but not Mr. Perlman.

[00:10:19] Speaker 04:
No, she wouldn't because she's not the debtor.

[00:10:21] Speaker 00:
Okay.

[00:10:22] Speaker 04:
I mean, you can see where this is. I mean, you're within your six minutes. Do you want to stop now or do you want to keep going?

[00:10:29] Speaker 00:
No, I'd like to just go a little bit. Okay. 362K doesn't refer to the debtor. It refers to an individual. Ms. Hunter, if she feels she was damaged, she can go after me. Mr. Perlman was not damaged one iota, not one penny, not one penny before Mr. Spector started working on the motion.

[00:10:48] Speaker 02:
How about the fact that the statute says 362K gives damages including attorney's fees? So it makes the damage, the attorney's fees, by statutory construction, it includes attorney's fees as a portion of the damage.

[00:11:05] Speaker 00:
Well, what you're missing there is the beginning of it. It has to be an injured, someone injured by the stay. He was not injured by the stay. In any event, I'll let Mr. Spector speak, and then I'll... Yeah, because you've got one more point to make, I think, right?

[00:11:23] Speaker 00:
Yeah. Okay.

[00:11:25] Speaker 04:
Okay.

[00:11:26] Speaker 00:
Mr. Spector? I'll let Mr. Spector speak.

[00:11:28] Speaker 02:
All right. He'll come up right now.

[00:11:32] Speaker 03:
Very briefly, Your Honors, good morning. Michael Spector for the appellee, Jordan Perlin.

[00:11:38] Speaker 03:
This was an ongoing violation. He was warned about not violating the stay. He continued to proceed in the New York action. I had a conversation with him saying, you're violating the stay.

[00:11:53] Speaker 03:
Stop. And he said, I am not violating the stay. I'm going to continue. And in fact, he did continue. which forced me into the position of having to file the motion. So as Schwartz-Tallard said, everybody recognizes that attorneys' fees for ongoing violations are compensable. That's the end of the story. This was ongoing. He didn't say, I'm going to stop. He said, I'm going to continue.

[00:12:19] Speaker 04:
We didn't get to that part yet, yeah.

[00:12:22] Speaker 03:
Unless the court has any other questions for me, that's all I have.

[00:12:25] Speaker 04:
Well, let's talk about A3. Is that a problem?

[00:12:29] Speaker 04:
To the extent that what he was doing here was trying to capitalize on or exploit a fraudulent transfer claim?

[00:12:38] Speaker 03:
Well, I think it has so many layers to it because not only was he trying to collect the judgment, he was trying to create a community property estate by avoiding the transfer and then going after that community property assets, which would otherwise belong to the bankruptcy estate.

[00:12:55] Speaker 04:
So that's an A3, but is that the debtors to complain about?

[00:13:00] Speaker 03:
That's probably the trustee's.

[00:13:02] Speaker 04:
Now, I think there might be a distinction between are you entitled to stop him from doing that and are you entitled to recover? Those might be two different questions.

[00:13:10] Speaker 03:
Right.

[00:13:11] Speaker 04:
So if you have any thoughts about that, we're all ears.

[00:13:13] Speaker 03:
No, I think that the enforce against property, the state probably belongs to the trustee, but nonetheless, we had to do something to stop all three of those things from occurring. Continuing on with the collection against the debtor, trying to pursue property of the bankruptcy estate, and actually going after assets, if he was successful, that would belong to the bankruptcy estate. There's a whole slew of estate violations.

[00:13:39] Speaker 02:
Is there any distinction in the statute between the actions that may be pursued as 362 actions to prevent a violation of the estate that are assigned only to the trustee or only to the debtor?

[00:13:51] Speaker 03:
I don't see, I'm not aware of that, no. Yeah, it's a little tricky, I think.

[00:13:56] Speaker 02:
And you understand the distinction that Judge Crawford was making?

[00:13:59] Speaker 03:
I understand.

[00:14:01] Speaker 02:
It might be a distinction between what can be recovered and what is a violation of the stay.

[00:14:06] Speaker 03:
Right. I understand.

[00:14:08] Speaker 02:
And damages that might flow from that might be different.

[00:14:11] Speaker 03:
We're not seeking... We didn't seek any monetary damages for physical, actual harm or any harm to the property in question. It was merely to...

[00:14:22] Speaker 03:
stop the violations of the state.

[00:14:26] Speaker 04:
Okay.

[00:14:28] Speaker 04:
I think Mr. Kleiman may get to this point during his rebuttal time. Do you want to comment at all on the issue about the rate for attorney's fees?

[00:14:40] Speaker 03:
Yeah, certainly. I mean, I've Submitted, as stated in my declaration, numerous employment applications throughout the Central District of California. My rate has always been approved.

[00:14:51] Speaker 03:
The judge is entitled to rely on her knowledge and experience of not only the community rates, but what her knowledge and experience of me is. And she knows me very well. She knew me very well prior to that hearing. And she knows that the community, my rate is just a fraction of what the rest of the community is charging these days.

[00:15:10] Speaker 03:
And she found that to be a very reasonable rate. And it is. It's a mere fraction. She's entitled to rely on it. And there was nothing in the total amount. There was nothing excessive, monstrous, grossly absorbent, or anything like that. And Mr. Kleiman's only argument, by the way, was that my rate was too high. And not that the total amount that was...

[00:15:36] Speaker 03:
A compensator was inappropriate.

[00:15:38] Speaker 04:
I think that's right. Okay. Remind me, was there an evidentiary objection at the trial to your declaration?

[00:15:45] Speaker 03:
As to the rate, I believe there was.

[00:15:46] Speaker 04:
Okay. You want to talk about that?

[00:15:50] Speaker 03:
I believe the objection was relevance.

[00:15:56] Speaker 04:
Okay. It wasn't hearsay.

[00:15:59] Speaker 03:
I don't believe it was here, so I think it was relevance. My knowledge of my rate as approved by the bankruptcy court. I mean, believe it or not, every single bankruptcy court in Central District of California says my rate is reasonable. I mean, who's to say otherwise?

[00:16:15] Speaker 04:
No, I just want to make sure that Kleidman gets to make that argument. Okay. And I think he does. Okay? Okay. All right.

[00:16:22] Speaker 04:
Okay, thank you very much. Thank you. Okay, back to Mr. Kleidman.

[00:16:30] Speaker 00:
Yes, Your Honors. This notion of an ongoing stay is completely baseless. I did two discrete acts.

[00:16:37] Speaker 04:
Can we pause for one sec? I think we need to get back on his time, okay? Okay. I'm sorry.

[00:16:41] Speaker 01:
I think he had five minutes. It was under five. Okay. All right.

[00:16:50] Speaker 04:
I think it was about, it was a little under four minutes, if I remember correctly. So we'll give them four, we'll give them a couple extra seconds here, okay? All right. All right, go ahead, Mr. Klaben.

[00:17:01] Speaker 00:
This notion of an ongoing state is completely baseless.

[00:17:05] Speaker 00:
I did two discrete acts. I got an order and I attempted service. And the only other thing I did, the only other thing I did was I told Mr. Spector that I intended to prosecute against Ms. Hunter. The mere act of telling him that is not a violation of the stay. So there was no ongoing violation of the stay. If I say to someone, I'm going to do something, I'm going to do X, and X would be a violation of the stay, the mere act of saying I'm going to do it is not a violation of the stay.

[00:17:39] Speaker 00:
And it doesn't cause any damage, any monetary damage. When I do it, Then, and I cause damage, then someone can prosecute me under 362K. Your Honors, there was not one penny of damage to Mr. Perlman. And in fact, there couldn't have been, because I'm going after the fraudulently transferred assets. I'm going after Ms. Hunter in connection with my action, which we, for purposes of arguendo, violated the stay.

[00:18:13] Speaker 00:
Mr. Perlman doesn't suffer one penny of damage. Even if I were to prosecute against Ms. Hunter all the way to the end and get a judgment for $20 million against her, he would not suffer a penny. He has no claim whatsoever. to any of that. And his financial position doesn't change. He is not damaged one penny. And with the other, I'm sorry, I can't see the names on the screen, but on your left, I'm not sure which judge mentioned that, this issue of including attorney's fees You have to look at the whole statute.

[00:18:56] Speaker 00:
It says if you're injured, you have to be injured first before you're allowed to get that. What the interpretation is that you're suggesting, anyone in the world right now, anyone in the world could say, oh, I'm going to sue Mr. Kleinman in an adversary proceeding. having nothing to do with this case, and could say, oh, Mr. Kleiman violated the automatic stay. Here are my attorney's fees, so I want Mr. Kleiman to pay me $5,000. I give this argument, which he doesn't even rebut, that an interpretation which allows an undamaged individual to prosecute a 362K proceeding.

[00:19:33] Speaker 00:
And, you know, well, you read my papers, and I'm not sure what the rebuttal is, how you refute that argument, because anyone in the world could do it.

[00:19:40] Speaker 02:
So your position is, if I've got it right, a debtor has to suffer some financial loss that's measurable first before they can then seek relief and include attorney's fees. If they only say that I'm damaged because you refused to stop doing something that violates the stay, but I haven't suffered any damage yet, then they can't then get attorney's fees for forcing you to stop by bringing an action in the bankruptcy court. You don't have to take any affirmative action to get relief.

[00:20:13] Speaker 02:
You don't have to seek any order from the bankruptcy court to authorize you. You put the burden on them to get and suffer some injury first that is measurable by some standard you've imposed. Otherwise, they can't recover. That's your position.

[00:20:30] Speaker 02:
Okay, that's all we wanted to know.

[00:20:31] Speaker 00:
That's all we wanted to know. Thank you. But that's what the statute says.

[00:20:34] Speaker 02:
The statute says... That's your interpretation of the statute.

[00:20:37] Speaker 04:
Yeah, we're going to give you our interpretation, okay? Anything else?

[00:20:41] Speaker 00:
Well, the thing is, is that an interpretation that you're suggesting would go against Schwartz-Tallard, because then anyone in the whole world... And that's your reading of Schwartz-Tallard?

[00:20:49] Speaker 03:
Yes.

[00:20:51] Speaker 00:
Anyone in the whole world could then sue me and say he violated the stay, I want my attorney to sue me. If they prove that you violated the stay.

[00:20:58] Speaker 04:
Okay, the matter is submitted. Thank you very much. Okay, we'll get you a written decision as soon as we can. Thanks. Thank you. Thank you.