counsel there's a couple issues on appeal like to spend my time this morning with your permission and unless you direct otherwise to focus on one two orders that the district court had entered the first order that i want to discuss is that the court failed to consider peers networks affirm a defense that was excused from performance due to frustration of purpose second after a get addressed those i'd like to address the the common issues of fact in law between this case and the other case that was pending before the district court and explain why the court should not or should have consolidated those two cases the first issue of the contract issues are of course reviewed i do know though and with respect to the failure to consolidate the two cases that were pending before the judge that's a that's a abuse of discretion standard two contract provisions that are really important in the in the case first of all there was an agreement by between the parties careless and blitz where paris will pay cold marketing fee the revenue that was received from on long distance carrier or inter lat to traffic and secondly there was a change in law provision that allowed the parties to serve a notice to renegotiate if there was any legal action that materially affected the ability of a party to perform a material obligation under the agreement because i know you are familiar with the facts but i think i understand some of how the law that was that came into place may have changed the parties agreements and let me explain a little bit about the telecommunications issues that were at issue appears as a telecommunications provider puts as one of its customers peerless provide services to blitz and blitz then provide services but uses those services and and resells those services to some of its customers the calls in question here all go from long distance carriers or local exchange carriers third party carriers through peerless areas then delivers those calls to blitz and then blitz either has a services or delivers those calls to to its customers testimony was that the records were below reflect that about sixty percent of blitzes customers were prepaid calling card providers on the traffic that said issue peerless would typically collect two forms of compensation from these other third party carriers the long distance carriers would pay peerless and what's called interest inter ladder were switched  access the local exchange carriers would pay peerless what's called a reciprocal compensation and then the idea was under the contract to paris which share thirty percent of the intra lateral with the into carrier compensation that was received by peers person share that with southwestern bell and an id t that when calls go from a local exchange carrier to another local exchange carrier to a prepaid calling card platform but those calls are in fact long distance calls not local calls and the court concluded that it's in that scenario the local the prepaid calling card provider has an obligation to pay the local exchange carriers research long distance switched access  i was not the arrangement that the parties founded their agreement on part of the agreement that was at issue and in front of a district court appearance was collecting revenue from third party carriers to reciprocal compensation long distance carriers and pain a portion of it to blitz who had prepaid calling card customers in light of the id t decision what the industry did and what the court ruled was that peerless and any local change carrier that was exchanging traffic with it within the scenario would be able to receive long distance revenues or switched access fees from the prepaid calling card providers to which the traffic was destined so that i decision had a material effect on the party's agreements the court didn't mean that he couldn't still collect the he couldn't still collect payments on blitz services well the peerless could collect payment on some of blitz traffic to the extent it wasn't destined to prepaid calling card platforms and isn't that all you were quired to pay a percentage of to blitz yes but here's how it here's how that scenario change the the agreement between the parties peerless could under that scenario collect under it in light of the id t decision could have collected revenue from either blitz t extent it provided prepaid calling card platform and there's no evidence that it did or it could collect money from the blitz customers that were prepaid calling card platforms if under the id t decision it would make no sense of the parties agreement for peerless to share thirty percent of the revenue under the contract when it's collecting money from either blitz or blitz blitz is customers that is the material change in law that affected the obligation of parents to pay and i think the court below there was that there was evidence in in the declarations in response to the motion for summary judgment at that that appearance was only collecting about sixteen percent of its of its revenue from long distance providers in light of the id t decision but the court kind of kind of hung up on that made the same point you did your honor that well if you collected sixteen percent just pay thirty percent of what you collected the court ignored the whole fundamental shift in how the comp the id decision changed the business relationship between the parties instead of peerless and delivering traffic to blitz and its prepaid calling carpet customers and having no right to charge those companies the i d p decision said  could charge those bills prepaid calling card providers switched access and it would make no sense on the part of premature for peers than share thirty percent of that with with with let's and that was the fundamental error that that the court ignored the court actually and it was does it have any i mean obviously it has an effect in that district does it have any effect beyond that district the that there is another fundamental problem with the court's order the court said that bought blitzes argument that it was neither binding other parties in a presidential in the northern district of florida but that's not the contract language the contract language really is a a a a a any it was any legal decision could trigger the change in seems like that wasn't plowed with very much less a facade he had just sit in fact it isn't even use the term frustration says peerless performed all duties owed under the parties agreement other than any duties which were prevented or excused and therefore never breached any agreement with blitz that that's right your honor and the pattern jury instructions provides that this is the jury instruction for that from a defense the law excuses a defendant's ability to keep its promise if the purpose of the promise was frustrated or the promises impossible to perform and where the allegations in that and your pleadings that it was impossible to perform we didn't and we had to use agreed your honor that we did not use the actual elements of the frustration of purpose defense in the affirmative defenses but the rules for pleading particularly with when it comes to a form of defenses is is the response is the plaintiff put on notice that that you're a firm of the fence peers raised this frustration of purpose defense in response to a summary judgment motion filed by blitz two and a half months before the close discovery that the court didn't consider or didn't rule upon that until many many months after the close of discovery but peerless spent a significant amount of time in its briefs blitz responded to it and rather than the court addressing specifically the frustration of purpose defense that parents had argued in the summary judgment motions prior to the pose a fact discovered two and a half months before the close of fact discovery the court just did even did even consider it in his in his order but wasn't the summary judgment order limited to an interpretation of the change in law provision i'm having a little bit of trouble because my understanding is the district court just kicked it down the road and said you can still raise that defen it just said you can't use it in summary judgment and i'm just i'm a little confused about the connection between the change in law on which the summary judgment was based and the frustration defense blitz had raised before the close of discovery but its blitz filed a second early stage motion for summary judgment on its declaratory judgment count and said that under the contract asked for a ruling that under the contract the change in law provision  thousand and fifteen the first motion that blitz filed was in may of two thousand and fifteen pairs responded in may of twenty fifteen discovery closed in july of two thousand and six twenty fifth twenty fifteen and the court ruled on all of those summary judgments at the end but the point is  that really the pleading standard is there is there a prejudice to blitz for not having under rule eight a you can the real question under eight c i'm sorry under rule eight see the question is does the plaintiff have proper notice  replete and that opportunity was not given given the state of the time given the timing of the motion or the ruling on the motion thank you thank you jurisdictional question i believe that has been resolved by the court's orders but what i'd like to do is skip since it is a quicker argument that we can get to quickly i'd like to address the final argument  which my colleague did not address and that is the question of whether there was an abuse of discretion in allowing evidence regarding types of traffic for the purpose of damages that were not part of the internal lateral language that was in the original contract now the the argument that the  makes is that we did not plead anything other than interim latta traffic and so we would not be entitled to anything other than into a lot of traffic and therefore we should not be able to introduce evidence and it was and it was error on the part of the trial court to allow evidence of other types of traffic well as the trial court found when we well let me back up as record that our pleading our complaint did put peerless network on notice that we were seeking damages for all lyall ations of the contract and that we were seeking all types of traffic mr kelly himself at the pretrial conference and form the district court that they anticipated we would be looking to introduce evidence of types of traffic other than intra lot of traffic which is what prompted us to renew a motion to amend the complaint just to make it clear and the court responded by saying you don't need to do that the motion was denied it was frankly the best denial of a motion i ever got because the court said i'm denying it you don't need to amend you've already asked for it and so the contention that there was surprise a trial when mr kelly stated to the court in open court that they anticipated we would be introducing this type of evidence three months prior to the trial beginning well that doesn't ring true that there was no surprise and there was an express ruling which has not been appealed where the district court said we're good the pleadings included so having addressed that point let me go to the question that mr kelly was addressing which is the summary judgment on the question and the interpretation which is a legal issue of the contract provision of the change in law provision allows peerless to renegotiate the contract not to just unilaterally stop paying us but to renegotiate the contract if there is a judicial action that materially affects p ability to perform any material obligation under the contract as we stand here today peerless still has never done to fight for the district court or for this court or even for blitz what material obligation was affected and that's an important point here because in summary judgment there needs to be some indication of what is the material fact question what is the genuine issue peerless presented the declaration of its c e o john barnacle where he talked about such things as mr kelly was just discussing that well before the id t decision we were able to collect a lot more after the id t decision we were only able to collect about sixteen percent of what we were collecting on blitz traffic prior to the i v t decision well what is the material obligation here the material obligation under the contract is to pay blitz thirty percent of what you collect on its traffic and relating to the question of the various types of traffic the evidence at stated the parties agree that we were paying on all traffic so the question of well that there were these different types of traffic that you need to look at and the blitz and the id t decision dealt with this type of traffic and called into question what we have to pay you know they were paying on all traffic and that was effect of august first two thousand and eleven a little math here about eight months before the id t decision came out so when i do t comes out they're paying on all traffic so the question then is all right well what obligation we looking at the obligation to pay thirty percent of what you collect if before you were collecting a thousand dollars on a traffic and now you're only collecting one hundred sixty dollars an hour traffic you no longer have the obligation to pay us three hundred dollars you now  obligation to pay us forty eight dollars thirty percent of the hundred sixty and so our position and the district court agreed is there is no material obligation that has been affected in any way regardless of whether it is a quote material effect there is no effect now mr kelly says well we should have been allowed to argue frustration of purpose well first off the district court correctly observed that peerless did not plead frustration purpose it did not even plead excuse the ninth affirmative defense that peerless points to  performance they say we performed everything we had to do other than whatever may have been excused that's not an allegation that we were excused from something or even peerless putting blips on notice as to why they were excused that's why the cases out of illinois that talk about the pleading of frustration of purpose specifically say that you must specifically allege the elements of frustration of purpose now correctly observes in its reply brief that there is a different pleading standard in the federal courts than there is in state court understood but even under rule eight where the requirement is putting blitz on notice of the argument that wasn't done the first time the frustration of purpose everyone reared its head in this case was in response to the motion for summary judgment and as the district court observed that's improper you have to plead it before you argue it in response to a motion for summary judgment this frustration of purpose relevant to the question before the court on summary judgment frankly i don't believe it was and what i was about to inform the court is that even if frustration purpose were a viable defense to consider it's not satisfied here because the question here is not a matter of war and yet one of the elements of frustration of this is that you need to essentially destroy any value that peerless would obtain through this contract that their reason for getting into this deal is gone and it isn't that essentially their argument on the change in law sort of like the fundamental premise behind the contract was gone after the change in practice that followed the id decision well that that is part of what has developed as they were argument and quite frankly looking at the facts it doesn't apply and looking at the law of illinois it doesn't apply judge ripple was on a panel of the can tell us case that we cited where there is a very clear statement that for the purpose of frustration of purpose the fact that you are disappointed really doesn't do it ordinary business risks associated with market fluctuations financial instability or company failures have never been a sufficient basis on which to invoke frustration or impracticability because businesses knowingly take on such risks when they enter commercial transactions it does not matter that it is an act of government that may have made the contract less advantageous to one party so even if the id t decision were actually act that matter which it wasn't because not only because a it is a district court decision in texas that is not binding on anyone other than the parties to that case and in fact has no precedential value even for that same judge in the next case but it is in unpublished opinion that doesn't even appear in west law or lexus if you want to find that case you have to go to the northern district of texas to find it it's not out there and so to argue that that materially affects the obligations of parties to a contract governed by illinois law one of whom is an illinois company and one of which is a florida company is specious there is no binding effect on these parties or on this contract now worthy id t decision a fifth circuit case that says it is illegal to route pre paid traffic in the state of texas or it is illegal to rewrite to reroute to route pre paid traffic period and they can comply with their obligations exactly the obligation there is the routing of traffic and they now have an appellate court a circuit court opinion intro putting f c c log that's another important factor here we're talking about creation of law versus interpretation of law mr kelly talked about and i wrote down what he said he referred to the id t decision as a law that came into place well no it's not law that came into place questionably law at all other than as it relates to those two parties but what the i p t decision did is the district court judge there looked at the one nine hundred ninety six telecommunications act which is express referenced in our contract and it applied the language of a two thousand and six f c c administrative order and said based on the language in this f c c order the pre paid carriers are considered carriers who have to pay access chargers that was it it applied the to see the two thousand and six f c c order to nine hundred ninety six legislation o contractors in two thousand and eleven a correction signed in november two thousand and ten these laws to the extent they are laws were in place it was merely the application the law to new circumstances because now prepaid carriers instead of calling through an eight hundred number you could call through a local number and so there was a question well how do we apply the law to this it's no different than if blitz were to come in and say well we are going to start making left turns on a red signal well known on the no we're going to apply the existing law that says you can go straight or you you can't go straight you can make a right turn on red that law it's in place we're going to apply it to your new theory to your new circumstances and that's thwarts the contract well not the evidence at trial and from the jury's verdict was that peer list collected seven point eight million dollars on blitz traffic which meant that they owed about two point three million dollars to blitz instead they chose to keep all of it and may i finish my point briefly very briefly a frustration of theory purpose the remedy is not i get to keep everything under a contract that has now been frustrated the remedy is you have to purge yourself of the benefit of the contract which would mean pay blitz the full seven point eight million dollars not keep it all for yourself thank you counsel  so i think mr marcus towards the end of his argument it acknowledged that the id t decision applied f c c decision in a way that had not previously been considered on calls from a local change carrier to a local exchange carriers and whether switched access charges apply in that scenario and i think he said to try to write down odd that the that id t decision resolve the question of quote according to mr marcus how do we apply this prior c decision to these call scenarios of calls from one local exchange carriers to another local should care involved create a calling card traffic in response to the argument from opposing counsel what is the most direct way that you can put had to pay thirty percent of that to blitz the reason that it changed the reason and remember the any legal decision it would have to be presidential it didn't have to be binding it didn't have to be in the district court but how did that how did that decision affect your obligation to pay thirty percent it's what it collected right it had a material effect on the obligation because instead of collecting from long distance carriers and local exchange carriers for this traffic that was destined to blitz peerless could bill blitz to the extent it had prepaid calling card and remit thirty percent of that collection in theory to blitz itself or peerless could bill the prepaid calling card providers and in theory remit thirty eight percent of that to blitz that's not at all what the arrangement was under the parties agreement the agreement was appears would collect from third party carriers and remit a portion of that to blitz it wouldn't the that was the premise of the contract the i t t decision and put why to it instead of collecting from third party cares we're collecting from our customers and remitting payment back to that customer why make a difference that why is that a material change in your obligation to pay them thirty percent of what you collect that's not at all what that some of the not all meant to what the contract contemplated and i'd point out that really the court found that that material effect language not heat the court focused on the material obligation we focus on the material effect to the parties obligations and and we think we've argued that that is ambiguous and it was wrong error for the court to decide that the term material effect on the party's obligation was  and an up and then just simply conclude that it didn't have any effect on the on the payment obligation we think that we should have been able to go to the jury with the disc question of whether there was a material obligation finding with respect to the frustration of purpose i'd point out that there's a case in the tenth circuit yellen versus cooper where that the courts have held that even if a party doesn't plead affirm it an affirmative defense courts can still say consider that to the where it's where it's obvious on the from the pleadings that that a from a defense is proper and again that relates to the notice under rule eight see if a party has notice of the affirm of defenses it can certainly plead that it