good morning you know honors me please the court james morton for helen t mobile with the court's permission i'd like to reserve three minutes you know right off your honour's as our briefing reflects the district court's judgment awarding the seven million point two or eleven is a liquidated damages provision or is a limitation liability but i don't see anything that was either pled or put into evidence that eleven point two was not a liquid data damages through vision that it was a penalty or that the plaintiffs had to mitigate damages is there i think was put in honor i think the argument was certainly made as a matter of law that the clause could not be a liquidated damages provision and i'm not sure that the notion of putting any evidence on that bill to t m liquidated damages provision that burden fell to the z to prove it at the trial court obviously rejected the notion that was that it was a big u s not as two eleven two your honor the trial court found as to eleven two that even if the clause were construed as a liquidated damages provision it would be a penalty that's true as a matter of law you service zooming it were a liquidated damages provision the second provision by its description and its terms there is no case law that's been cited to this court that would suggest that a clause that sets a maximum apply an amount of liability as this one does by its express terms was it argued that at that that section eleven was not a liquidated damages provision your honor it was not argued by t mobile that it was not a t mobile didn't have the burden to do that t mobile wasn't trying to prove or disprove liquidated damages that burden fell to the sea but the other side at least made an argument that it was liquidated damages brought on the face of the clause you honor and on the face of the clause as a matter of law it is neither a liquidated damages provision nor is it enforceable as a liquidated damages provision under delaware law that's subject to the novo review here your honor and there isn't any issue waiver with respect to that either no affirmative evidence factual evidence of any kind was introduced by either party to establish that  inquiry analytically and two steps the first inquiry is whether within the four corners of the agreement section five point eight language is going to be in forcible or it's too indefinite to enforce all of the district court's specific findings went to that issue under the four corners of the agreement everything it had to say about the provision reflected that by its terms section five point eight was not a complete enough nor direct enough to carry the interpretation t mobile put on it that's the first issue ok the second issue is it's too indefinite to enforce your honor and you're going to take it out of the contract the issue is would the parties have formed an agreement without that provision that's a separate and indicate pendant coriander delaware although it seems if that were it was so important how in the world that way to the fourth draft before it was even brought into play well your honor let's look first at  the standard that we're applying to the draft and it wasn't the fourth draft of before telematics as an obligation came into polite but here's the problem that i'm really having with this and this is what i'd like you to focus on objectively reasonable negotiator would have looked at the discussions leading up to this contract and been able to draw the conclusion that a telematics obligation of some kind was not important to the this agreement was reached not as it ultimately got reflected in the contract was it in forcible was it important that conclusion is in a staple from this record what was the first thing that mr question the way you posed the second question with the parties have entered this contract without that isn't that a credibility finding i don't think it has to be your honor on this record first of all the district court never undertook to make it and it's clear from her findings of fact she rejected your arguments about five point eight and she found that the parties had not come to any agreement that telematics had to be in conclusion but the foundation for that was her findings on credibility that she didn't accept your client's version of the negotiation your honor again to look closely at her finding her finding and her only credibility finding was not about the negotiations it was about the meaning of section five point eight itself she never made any finding related to what the negotiations revealed on the importance of telematics not as it was reflected in the dream it but to the reason the agreement was reached in the first place that's the pivotal difference and there's nothing to defer to their your honor the absence of a finding was that one of the pieces of evidence that came in was one of the attorneys that looked at this had no idea why section five point eight was even put there at the close of the discussions the attorney asked about that but that didn't mean that section five point eight up to that point your honor wasn't important to the party but just because it was essential you think you were communicated to the people that are negotiating on your behalf two things it seems to me are clear from this record in response that your honor the first is fact the district court rejected that section five point eight would be enforceable it never made a finding of fact the telematics was not important to the reason this agreement was reached and it was critical to that but parties have a very few as to what it would cost and there was talk about it would be five million a year there was talk that he had asked for twelve million a year and obviously it was a negotiated term that was one of the findings that the court made as i recall and in looking at that one could say well if we put tel aside the numbers involved in the agreement reflect an agreement that is in line with what a normal sponsorship agreement would be with regard to racing cars now why doesn't that explicit binding that finding was not may second this contract in its price is wildly out of line with other here is reflective of the parties having reached an agreement only on sponsorship in fact it's reflective of the notion that there was a factor of consideration a portion to telematics there isn't any other objective in the record v c had received under this contract or would get for three years of sponsorship and telematics a total of fifteen million dollars an average of five million dollars per year the accept those factual findings for the exact reason that your honor stated within the court corners of this agreement that telematics provision is not enforceable t mobile you will not get to enforce it but the essential term analysis starts right there we put that behind us and we look at ok if we're going to form a new contract with sponsorship only which by the way there is no evidence in the record documentary or testimonial that these parties would have reached a mutual contract for sponsorship only for fifteen million dollars v c never produced that evidence there's no document that would be attached to it the contract itself doesn't say it so now we have to look at how did we get to this contract in the first place we got there because of telematics there's no dispute about that in this record at all the front end of the district court's opinion establishes if that were the case normally having once of our time done a fair amount of graft and you would put that in your recitals you would put it front and center in another provision you wouldn't bury it at the last provision of a provision and the sponsor search section of father so i was five point eight was the only thing that even mentions the word telematics the two things to that your honor price is only a single sentence in this agreement as well so i don't think you know idea that it's a single sentence a single pretty understands the prices an essential term we don't necessarily understand that telematics is an essential term unless there's something else that tells us that at the end what tells us that your honor is everything about the negotiations leading up to this agreement which to inform us with any specificity as to what the parties are expecting of each other and with regard to those obligations what those obligations mean in agreement before this the most that b g ever received was one point five million this was going to be an average of five million over three years therefore there must have been a great consideration of telematics without any evidence in the record as to who what where when and how anyone finding out would be porsche and folks wagon is that you know in europe is it in the united states is that  is there is nothing that what we've read right in the trial transcript that informs us with regard to any meeting the meeting of the minds and that is the conclusion that the district court drew and therefore section five point eight was not going to be enforceable as t mobile construed but then we have to take the next step and say is there a meeting of the minds on the contract that the court didn't find or would a contract only have been reached here with the telematics provision in it in affectively drafted or not when we posed that question as i said there is no evidence in this record that a sponsorship only agreement would have been reached by these parties have to grant says grants the right what right did you have that you could grant well the judge found judge problem asking you what right did you have that you could read if that's how you interpret that clause we have no right but the fact of the matter is others right is looking at the words i mean b c grants to the mobile the right to be the exclusive wireless supplier or car supplying wireless connectivity the judge found below that that was not capable of interpretation and that was not appeal drawn or the issue of that close or not was not what appealed oh they didn't they didn't feel that finding of the trial judge the argument they make which is a very interesting argument is forget about the fact that that causes unintelligible and is not going to be enforced you still have to consider whether or not it would have been included under this  ality analysis that they do that apparently the trial judge had an obligation with respect to a clause that she could not understand it very pro evidence to try to understand and found that it was unintelligible so the cause of unintelligible having  unintelligible she then went let's go let's go back what was the argument that you made at trial as to those words really made sort of grants to team up all the right to be the exclusive wireless carrier mr meissner testified that was his understanding that what he was supposed to do was simply to promote telematics that's what he testified to that's what the judge found the judge found that his  testimony was credible the judge found that the testimony that was given by the team over witnesses was not believable she didn't believe ok let's go with that you can believe my meisner and the obligation is we're going to try to hook them up it works great but that that's all we're doing we we have we have no obligation to with any specificity approach anybody at any of the car manufacturers and on behalf of the mobile establish concrete contractual terms and so what we got to do is kind of in introduce them now one of the key points that i thought your adversary brought up that i'd like you to respond to is this if there is a lack of specificity with regard to telematics the economics of this agreement seem to be out of line with prior agreements that you've made for sponsorship only agreements so what is the consideration that requires a essentially a sweeter deal if you will in this agreement now that judge robinson has the term and you agree with judge robinson that this is merely a sponsorship only agreeing well first judge respectfully i would disagree he did more than simply what you said he did the fact of the matter is he did make various kinds of in course he did promote them but the fact of the matter is that there are more than ample evidence in the record one of things you take a look at they completely abandon damages at the trial level you know you raise the possibility of malpractise it was your teacher decision they decided to attack the contract there's absolutely no attack whatsoever on damn just anywhere in there and you'll tell me if the reference to the record is wrong if in the past your client sponsorship agreements have been in the one point five million dollars per year area and now well you are the judge below entertain the witnesses you looked at the witnesses sheet made judgments as far as their credibility is concerned the judge her place the money why why the increased amount here what was what is your answer to that question it's not an increased amount he testified at one point in time he was negotiating twelve million dollars for two cars per year that's part of the testimony this in the record the fact of the matter is is that if what you're going to do want to appeal is trying to parse different pieces of evidence below without considering everything the judge looked at the judge looked at a whole bunch of different factors she believed the fact that he had properly priced this thing but in the back up going to the prior to this agreement the amou that were given for sponsorship deals were approximately how much for the only evidence that i recall being in there was not the primary sponsor or secondary sponsors and they were anywhere from one hundred thousand to seven or eight hundred thousand and my recollection and this deal was seven million a year this deal was seven million for the primary sponsor are but the fact of the matter is they had what they had they done any primary sponsorship deals prior to this judge's record doesn't deal with that issue the joe the record deals what the man was know whether they did or not sir i only know what the record shows i was a trial where i mean i was partner i don't know the questions you would ask in preparing is i mean is there going to try to show that telematics was the the secret ingredient financially higher but you know you can show that that wasn't the case before you obviously used that but your honor or you didn't have a contract before you wanted to raise that issue below i mean the fact of the matter is i can and to stay with mr morton is going to raise  or you can do is look at what happens in the trial court we were the only ones that talked about value whatsoever and at the point in time your honor we sent out a letter indicating as a default they were already in the form of a seven million dollar payment so the issue was not at that point in time the season ended in at the end of september he was a new season going to judge found that he had already extended money and resources in the new season the judge found below that one million dollars was not enough for the first year in that the contract was that was or races i don't yeah believe so and i'm a little confused on that one judge i don't i don't recall that that argument was made below i remember you being made about five twenty but with respect to eleven point two the fact of the matter is that it is a liquidated damage was that's how it reads and you do you defend that you think that's right is there such an animal under delaware law no sir i don't believe so look if you look at that language is relatively clear that it's a liquid new damage because it's not  liability away and why do you say it's kind of a limitation and i know that the title doesn't necessarily control but it has range from fifty thousand were fifteen million so why  i mean i'm not sure it's correct to say it's liquidated but you're on if you read the clause unless you want to be captured with the heading in which case when you go back if i point you the same to cold sponsorship but if you read the clause the cause is a liquidated damage cause it isn't a cap on liability it's a liquid in damage caused because they are we having other kinds of liability claims which in the racing industry could be any number of things that are being waived in exchange for this formula and the formula a liquidated damages cause you don't sit around and try to figure out what the profit was and what the profit wasn't and remember again they never said anything about damages a trial you made a strategic decision with tact contract you got across appeal for  her word second seven million correct right or so and and that leads in the next question she says your paragraph forty five you see did not present evidences with efforts to mitigate the mobile's breach you disagree with that no obligation to if they're an unsophisticated negotiator that's what they negotiated and it's clearly liquidated damages dollars and i just i mean the problem they have eleven tooth stock that says the maximum aggregate liability of either party and the exclusive remedy shall be limited to fifty thousand or the aggregate payments payable under this agreement whichever helps us whichever is higher right that argues for liquidated damages provision but the way it starts off as the maximum aggregate liability sounds like limitation of liability well judge it could except that in a limitation of liability clause generally speaking that's what you're doing you're capping in terms of dollars ok in this case they're weaving different when it is that they can bring in exchange for those payments and you'll notice also that there's a clause in no that indicates that the payment requirements survive the contract that's in there too i mean there's no question but that that was negotiated between the parties and the other question there's also a question that nowhere below did they ever say squat about damages they were trying to defend on the contract that's the reason they did with they did there's nothing there's need not provide for the record expectancy with regard to the second seven million because reading eleven point two you should because of their strategic decision it was incorrect they were wrong and as a result they pay the monies that they contract to pay because our client forego other kinds of claims that he could make in the event of a breach so that's what makes it a liquidated damages clause as opposed to  ask you this question why is it ever for the district court to have decided looking at expectancy and looking at that there with of any evidence in the record with regard to  seven why is that fair why did she do that no i didn't say why did she do it i said why is it or why is it because when you have a liquidated damage clause all of those various factors you just discussed are not to be considered so the case on the third circuit says when you have liquidated damages the only material mount is the liquidated damages you don't sit around to figure out whether or not the only question is whether or not it is a basis for which there is in this case because of the waiver of other kinds of liability and the fact that it's hard to determine what provision i'm saying he doesn't love it was even clause i was not judge i'm saying it doesn't have to be it can be justified in the fact my question is that the district court make a finding of fact that the were two thousand assuming it's a liquidated damages or vision it's a penalty and she's not going to force you talk about the second seven million yep or two thousand you know the second sentence but it's true there is a liquidated you go perhaps the analysis in the dell case that was handed a from the district of delaware is helpful in that respect when they do the analysis of what is reasonable and what's unreasonable if what the judge said if what the judge said was look i think that that's an unreasonable amount of money so we're going to public policy i'm not quite sure why she said that but under the normal analysis you would do with liquidated damages the only question the second prong would be is it an reasonable is it too much ok now she didn't indicate that she thought was would against public policy property saying it's too much but the fact of the matter is  unreasonably large but she did it might be going against but that's a question of law as a question of concern if it is a liquidated damages caused then the judge is an earth saying that ok if you're also recall that the judge pointed out that the that she also talked about jetliners with respect to the other points the issue judge green when you get back down to it is it or is it not a liquidated damages cause that's a question of law looking at that language unless you find that that clause in the us requires outside testimony which i don't believe it shocks the conscience as an adele case where gal was trying by waiting from december thirty one to january fifteenth they were getting other years worth so you agree with the simple proposition that if we agree with her that it meets the shocks  the judge grants and complied with i believe it's referred to in delaware law as expectation damages the first of all on primaries aunts are shipped in evidence in the record i would point the court to our trial briefing at j thirteen sixty four to sixty five and then specifically also j a one two two seven and the court will see that there are no primary sponsor ships that come near five million dollars a year looking next at the expectancy damages issue that clearly is the basis on which the district court reported to award expectancy damages the z put in no affirmative proof on that issue and this award flunks delaware law as a matter of expectancy damages it is not an issue of mitigation it is not a question about waiver of a defense under delaware law or the costs avoided judge am group member over for to excuse me are part of the affirmative measure of damages and the z cannot get seven million free and clear without costs for racing which was its obligation under this contract that award is not the unsupported when we turn to liquidated damages counsel said this is a question of law now to clarify we don't have a burden of proof on damages we could sit back in this trial and do nothing the question about whether this damage award is just leviathan or their argument is they don't have to do anything because it is a liquidated damages provision they can which which they said was a question of law your honor we agree with that there's no factual testimony on this in the record as a matter of law that clause is not a initial seven million that you say there should have been a deduction for course the record showed that the sea had spent a lot of money to get ready for the race before your first seven million dollars was due in january first when he sent you that they passed without you doing anything you didn't terminate you didn't pay the money you didn't send them any letters or do anything so what was wrong with her awarding a five seven million why why did she have to make a deduction for cost when they have already spent a lot of money to get ready and were gay they were expecting years of annoying right and they didn't get it your honor two things there is no evidence in the record that they spend a lot of money that's an first time that expectancy damages became a part of this case prior to that v c had argued only and attempted to prove only that this was a liquidated damages provision they did not enter duce any evidence expectancy damages which was there or affirmative burden what we have shown on appeal your honor conclusively is that somewhere in the neighborhood of two point five to five million dollars was the cost for racing this car or says two point five five million per season for one car now if you went through an analysis we can argue about whether it was pure or correct expectancy analysis but you certainly could argue that she comes out in about the right place in this sense if the assumption is that for one car you would be in the area of two point five to five million per car per season and she looks at the life of the contract is three years which means that it's some point five to fifteen million for the life of the contract she says you know we're not through the entire life of the contract seven million is about right why isn't that i understand it might not be as exacting as you'd like to get that but in the end it ends up in about the right place  honor for two reasons first i want to bring rule fifty two to bear here those specific findings are required we can't do this by inference or into it and second you can't get there from here there isn't any evidence in the record it calls this rough justice or even justice on the court's intuitive analysis because the district court never went through those specifics to show what costs were avoided incurred or anything else and we would be speculating here on that and you cannot affirm a seven million dollars damage award on speculation this court has to reverse it it would have to be liquidated damages provision other words if it were the event of her breach it talks about a maximum allowable award of damages in a range of damages the section also said which ever is higher that kind of virtue it is sets forth eight burden of proof within that range or on or and that's what the case law says it's fifty thousand or the remaining amount as a fourteen million here whichever is higher right and it's losses arising from so the clause itself has a burden of proof to bring the that the maximum end of the range of the proof is available is the contract measure no the it's already there if the words whichever is higher are left out you still have a maximum end of the range but but but you still have a range within which the party has to make prove you don't automatically entitle somebody to that some certain otherwise the provision would be written differently it would say if there's a breach you get it and liquidated damages provision of i'm still a model if the maximum end of the range will say it's fourteen million or when it was at the beginning to conduct fifteen million and you don't need you can put a period there but it says fifty thousand and the aggregate amount remaining do under the agreement which is fourteen million comma whichever is higher what does whichever is higher mean if you've already told me that the maximum end of the range is fourteen million right and if the other end the lower end was   so that's first of all what the provision says on its face second if we look at the law that deals with liquidated damages provisions certainty in the amount for a breach is required at a bare minimum and finally even if we get past this analysis there's no doubt that imposing that in this instance for terminations is a penalty just as the district court said and delaware law wouldn't get what was in the minds of everyone but when if you read it it almost sounds like it's a combination of liquidated damages provision and a limitation of the court shouldn't be straining it to read it as a liquidated damages provision your honor particularly given the label and assume that that is recoverable within the clause under eleven point two i don't think that it is conclusive that they get the fifty but if it is that would be a penalty in that situation and you would never enforce it as a matter of liquidated damages fifty thousand dollars for a one thousand dollars loss proves my point so even if the clause is read to provide for these sums to certain without proof or with short proof delaware law is not going to enforce this clause thank you very much thank you to both counsel will take the matter under advisement w take about fifteen to twenty minute break before we come back with the next