morning your honour's may it please the court i'm michael rafferty i'm here on behalf of drexel chemical company from memphis i'd like to reserve five minutes for rebuttal yawners this is the the deal that all bow made with drexel was a great deal for all and there were at least four features to it that made it so first of all all of all was facing paying one hundred arbitration to determine what the amount of that cost would be so they entered into this agreement with drexel that immediately cut in half both of those costs so where so instead of paying one hundred percent they were now paying fifty percent of to two major items the data compensation amount and the arbitration costs this also gave them immediate access to the market they had been trying to arbitration and so they are so from july until november they're dancing around with no artist they make a deal and then they try to hire drexel's lawyer that pay fifty percent of the cost of all future payments at drexel makes to our board if in the future as their compensation in order to maintain the registration but that agreement didn't specifically mention arbitration that it could i know that later on that's one of the issues no your honor it not specifically identify arbitration on the other hand at that time that's what triggered the whole thing the whole arena arrangement was that they were getting ready to go to arbitration which is why they wanted  hire drexel's lawyer so the the question there and that's why the word cost is so important that this court pointed out to us the last time we were here for the first time and and that is that the costs if it was if it did not include arbitration it they wouldn't have needed to use the work cost in there they would have just said the amount of the data compensation but it says it's the cost of the payments for data compensation future payments made in order to maintain the registration so by using the word cause i submit to the court that that is a clear indication they knew that arbitration was at least a possibility it's not a natural requirement they could negotiated this and not actually had an arbitration but but at that point all ball but it's definitely facing arbitration because that's why they were non contacting jeff list the lawyer that drexel used in washington c but to go back to the immediate access that they got they signed this agreement december seven thousand nine hundred ninety eight they then him imported two hundred four thousand gallons of actors seen that in that month so they had been trying for months to get their own registration were able and when i were unable to do it without getting opposition from no artist by entering into this agreement with drexel they cut their costs in half and they got immediate access well we know that in november of one and they knew at the time in november of one thousand nine hundred four a special review had been announced by the e p a know vargas had done a tremendous amount of work in connection with that they developed a lot of data they had a lot of charges that they were going to expect and they took notified all ball of this in july of one nine hundred ninety eight when they made their offer to pay and said hey there's a lot more to making what sounds like an equitable argument here when we're looking at the contract language which is a contract that largely drexel drew up and had an opportunity to cover  to really set out everything that they wanted this contract to cover so why are you suggesting that we that we should read things into the contract or draw inferences when direct didn't specifically put that in the contract well to answer that question your honor take is twofold one is of course judge found says well under the facts that are presented here both parties were drafters of this agreement there were multiple versions of it that went back and and he said you know i'm not reading it i'm not going to construe it against one party or the other because they both obviously contributed to it even though there's no testimony from the parties about specifics but you can  based on the drafts that went back and forth so so as far as that goes i would submit to the court that it's not accurate to say this was drafted by drexel this was initially drafted by drexel but both parties contributed to it and if there isn't any any ambiguity that's really the problem here it's in the provision that was drafted by by all that's the paragraph seven that cut the terminations provision to doesn't say what is the effect of terminations and that's what this case is all about but to answer the question that you asked though your honor and that is this equitable issue if you look at what mr all ball testified his understanding was what what the agreement was it's exactly what we say it is what he says is quote we agreed to pay fifty percent of whatever bob paid bob brock bob shockey being the owner of drexel while he drexel what's in the agreement it's while drexel was in the agreement they but they did put the determination provision in there with obviously that's that no one disputes that but it's what was drexel paying and what was its obligation to pay while this agreement was in effect and between drexel and all bar the agreement between i mean is that the agreement yes yes your honor and and so it's and judge from also made another important factor not a finding of fact that i submit is can is contradictory to or is not supportive of his all to me in conclusion of law and that is he made the point in found that all those rights under this agreement were entirely derivative of  drexel's and drives and obligations so if you look at whatever drexel obligated itself to pay all ball was obligated to pay half of it there is no question that what the agreement says if you look at the notes of their own president you know he he puts down that is half of drexel's out of pocket plus fifty percent forward that is a perfect summary of paragraph two your honor or actually yes paragraph to which included the seven hundred fifty thousand dollar  downpayment lump sum that was half of drexel's data compensation payment in the one nine hundred ninety four arbitration and half of its costs associated to that because if you look at the ninety four arbitration decision it was and the amount of data compensation was eight hundred seven thousand dollars and some change so clearly seven hundred fifty is not half of that it's half of that would be obviously four hundred thousand and then than the other findings where judge urged i submit to the court is in his conclusions of law on its front pages thirty nine through forty one this is a peculiar situation isn't it counsel because the judge seem to really be deciding issues of fact where do you say what do you say the court acted solely as a matter of law what feature where well as solely as a matter of law i would sue me it's a it's urged as a matter of law is in the conclusions because he concluded that well those facts he came up for the wrong exactly well and in the wrong way and i was made to the court the way this court should look at it is how do you and how do you determine what his conclusion his conclusion of law is it because there's nothing that he refers to in either fifth or the record or of any testimony from anybody agreement was good for drexel as well drexel received seven hundred fifty thousand dollars at the inception payable over time that they otherwise would not have gotten if all one had pursue its follow on registration with syngenta which is which it aband ed drexel ignores the fact that it did in fact draft the original agreement no word it's a penny of that council admits that he he says then there after it's party contributed in different ways and the relevant provision here your honor is paragraph two sub that sets forth what all because payment obligations are after the payment the seven hundred fifty thousand dollars drexel drafted that provision there was no negotiation there there was no discussion regarding that provision it was drexel's language the tennessee courts have held that the drafter of a provision of a contract is held responsible for the ambiguous language in clear language that they put in a contract even if the parties engaged in negotiation in drafting of other provisions of the contract the fact of the matter is if draft drexel wanted to make clear that all ball was responsible for all data costs that drexel obligated itself to syngenta prior to the terminations the contract through a day at a cut down a call in or otherwise they should have said that the fact of the matter is they didn't the the rationale behind holding and ambiguous provision against the drafter of the agreement is that everything else being equal the drafter of that provision should have to bear the consequences of the unclear language it uses if you take the terminations provision which all bonded at the second sentence of paragraph seven i would submit that the at the time that sentence was added it was said that it says something in the fact of after the payment of the seven hundred fifty thousand dollars also has the right to terminate the contract the only obligation that all bar had after the payment of the seven hundred fifty thousand dollars was the pavement obligation that set forth in paragraph two some i so there's no other obligation that all by house where it found that both parties were drafters did it not yes they did he did so where's that lead i threw against i believe that the court erred in finding that all ball was a drafter of the provision of the agreement that set forth what its payment obligations were by having a factor a conclusion of that year as a conclusion of law i believe based on the the tennessee agree that   and there are no future all any future payments if the confidential statement formula is not approved but that time there were to the court construed your provision against you and  provision against it no i don't because i think if you construe the payment provision the obligation provision to subdivide against drexel then it should be read as all by understood it through the testimony of its witnesses determined in the record this court could have done it just as easily so they say i get an inference that it was sent and have a factual determination it was your honor originally it was determined in summary judgment finding by the district court that the that the language was unambiguous in this court found that it was ambiguous and so it was back down for a trial and that's where the extrinsic evidence came in regarding the fact that drexel the exchange of draft of the agreement the facts of drexel time and then drexel made what we've referred to as a prepayment because due to its upcoming arbitration with syngenta of one point five million and they sent an invoice to all for half of that a mild all but was considering getting out of the scene business at that time anyway so it immediately terminated the agreement the court found that that terminations occurred after that payment had been made and so all bought paid an additional seven hundred fifty thousand dollars plus interest based on that one point five million dollars payment by drexel because he's saying he if you look at the fines are there actual information to arrive at that conclusion yes sure if you look at the facts he sent consult any particular statute or he knew the rules against direction right is  that agreement for purposes of finding that the ambiguous language should be construed against the drafter that he committed an error in finding that all boss somehow drafted that language we don't dispute that all bought contributed to presented didn't shed any light on this there the relationship regulatory relationship created between the parties by virtue of the supreme it is something referred to as a supplemental distributor relationship as mr rafferty referred to under a supplemental distributor relationship the supplemental distributors rights and obligations are entirely derivative of the obligations of the follow on regist fifty thousand dollars but there were other costs that incur that were incurred during the during the life of the agreement and that was in direct forgot a bill later for those cough just donald i would agree with you if the relevant provision stated costs of data payments or costs of data compensation but the language states corsa future payments understood that language to mean the amounts of future payments doesn't  say future payments made as they had a compensation yes if it said costs of data compensation would be having a different argument but i think the fact is as costs of payments at least in obama's mind in this you know this is what they understood the agreement to mean was that that cost of payments meant amount of payments so only when a payment was made was their obligation triggered now this isn't a typical supplemental distributor relationship obviously in the court her testimony on this at the trial typically you have a follow on registrar who manufactures or formulates the product and then they give it to the supplemental distributor  then puts it brand name and then pays a royalty to the following registrar for being able to use the if we follow your logic doesn't that put in the potential in the position basically to hundred fifty thousand dollars payment had already been made terminated the next day and the court held it responsible for half of that so they've already been stuck for a million and a half plus interest with respect to this they haven't been in the actors in business now since two thousand and six and drexel is still seeing seeking to recoup additional monies from the supplemental distributor relationship because of all had narrow rights and responsibilities i would submit that if the converse were true if this were it an agreement between two follow on registrars regarding the scope of their liability to each other for data cost or a in agreement between an original a follow on registrar or the follow on registrar it actually has regulatory responsibility for payment of data compensation costs that that sort of extrinsic evidence should be taken into account in in interpret ing the language of the ambiguous agreement here however for ever reason judge family though recognizing that this was a supplemental distributor relationship and it has no obligation for data compensation costs as  supplemental this group distributor failed to take into account the relation regulatory relationship between the part draft of the agreement there was a survivability survivability provision where the payment obligation that became paragraph to sub i was going to survive the terminations of the of the agreement up through the what was then stated term of the agreement the end of two thousand and five i would submit to you that if if the in the language of what that obligation was didn't change over time that if the cost of future payment language really means as drexel asserts all data compensation obligations incurred prior to termination then a survivability provision really makes no sense it's only if you consider that language to mean as all bob understood it the amount of payments made that then that obligation would survive regardless to the then stated term of the agreement that it makes sense and that in fact that surviv ability provision was negotiated out of the agreement and i believe the court failed to take into account the fact that when you remove a provision that provides for the m b liable to track for the cost of those studies if they were requirement no your honor because all was requirement is set forth in what the agreement is and all was understanding in our interpretation of we view them for that purpose so we'll hear from counsel you have some time left thank you on your the first time we were up here the question that judge cook asked was when does this end court that if you look at the experience of the people who testified everybody had about thirty years twenty five years of experience and literally every witness on both sides we had experts who testified on both sides they can't tell you exactly you know that a b c equals x but there are a lot of easter eggs in all of these mit materials that help reach the conclusion and i court it's an inescapable conclusion that what abaza interpretation is couldn't possibly have been what they were what their intention of the parties was in december of one thousand nine hundred eight when they entered into this agreement because of the way fifth for is constructed we want this data and in it and it puts this information out there and says this is what we want and if you want to maintain your registration you're going to have to produce this material to keep your registration in place to maintain the registration which contractual obligation to all box and to do that you have to notify e p a how you're going to comply how you're going to satisfy that d c i there were two d c i's in this case one in two thousand so they know that they're their registration maintaining their label and continuing their registration is dependent on drexel doing what it's supposed to do to comply with the d c i so when drexel made its offer to pay to of artists back in two thousand and four i guess it was in gent i'm not sure which one it was but it whatever one it was at that time it solidified its commitment to satisfy that those two d c i at that point that's where you took that triggers the the second part of the last paragraph or the last sentence of paragraph to which is these are the costs of future payments so the question then still comes back to ok well we know that drexel is still paying because mr bernard testified in the in at the trial that he was still getting invoices and it was because it was satisfying the two thousand four water monitoring data requirements in the two thousand and four d c i so they even that question came up in the arbitration and they issued a clarification and i submit to the court this is a very important question of law that this court can look at and look at that clarification order because it addresses the very question that we're asked to deal with here which is when does this in and what that what syngenta told the arbitration requirements way way we try to make it is mark small a bread box as we can and meet his needs to ascertain the continuing safety of the product but we don't know when  say no more of that but some of the monitoring could go on continue for a while and it will be what it is and that's the best we can do we know that the e p a will one day say  satisfied we can't say when but everybody has the same incentive which is to cut it off at some point but that drexel syngenta and ultimately all ball as well yawners this is the cost of having done business is not the cost of doing business this was an agreement this was a means to an end that's why it was set up the way it was set up and that's why it was so attractive to all bar that they instantly terminated their application for their own registration and jumped in bed with drexel and agreed to to the deal that they did the experts all agree is perfectly legal but unique if you think that they should have paid you yet they should have paid half of  dollars and twenty cents less the seven hundred fifty that they've already that they paid so they get credit for that but then they also need to pay half of what drexel continues to pay until that two but it is it but there will be a terminations to it at some point but it's that terminations is when e p a says it is satisfied by the monitoring that they've gotten up to that point but i can't tell the court with any kind of certainty when that will be other than the everybody has the same incentive which is to get it to him thank you on its terminations we will consider your case carefully and