n you know how we're going to fact you each have twenty minutes and so that would give each of you an argument for rebuttal on one part of it so perhaps coun team tech could come to the podium first and let's let's ascertain how we're going to handle to handle our time because i know that you have one more person at counsel table so maybe you can tell me how you propose to handle your time and i'll see whether we agree or not stretch go ahead i i will be the only one arguing ok what i anticipated was taking eighteen minutes for argument and saving two for rebuttal and i wouldn't go a strike of a bottle if that was i mean your rebuttal is actually on the case that you appealed so are you going to do you want to hear what counsel for trend is saying on their particular appeal or do you think that you can cover that all in the first eighteen minutes because there are so many issues and i'm not i'm not going to try to address all of them i will probably say little or nothing about the daubert issue which is the issue on cross appeal until the last two minutes and then i'll just try to be very brief about that if i have time in the eighteen minutes because that's questions or whatever i i may get into it but all right well why don't why don't you do your eighteen minutes and save your two if you know if at the close of it if either of you feel that for i mean with within reason if  that if you every feel that you didn't have an opportunity because of how we configured it didn't have an opportunity to say something i might be inclined to give you a minute or two as far as that goes our then president player teach them on the stand and i wanted to ask him a critical question that i felt i could not ask him that was central to the case which was why did game tech terminate trans distribution rights and the summer of two fantasy you've really abused for zero three and for all the summary judgment i think kind of goes to the crux of everything here in terms of because the summary judgment if what if say if the summary judgment were partly granted let's assume that for a moment value goes up in the four zero three analysis that's so i don't want to conflate the issues but you know going to say that there is a little domino effect here or they are they do have some relationship to each other but now summary judgment which is to me the most difficult issue here you have a contract and it comes down to i think the judge ruled against you in the sense that said that on whether you've seen a generic contract did not violate as a matter of law promoting or retaining language is that correct he actually ruled two different times two different ways on the summary judgment ruling itself judge callahan what he said was and i'll quote it to you reasonable jurors could not disagree that the use of generic contracts for five out of a total of fifty conductors do not constitute willful failure to promote resulting in a material breach of the distribution agreement we took that to mean we could still litigate whether there was a breach it would not have been a material breach that's all on being able to justify terminations once the judge got to where we got to trial and the judge was ruling on motions in limine e however the ruling got a bit different and the judge ruled arguing before the subject jury that the use of generic contracts alone constitutes a breach of the distribution agreement so we've now gone from a material breach to a breach which really put me in a dilemma with questions for the right now that's seems to be the ultimate ruling and then the however the judge gave the jury a limiting instruction at the beginning of the trial and said something that seemed to be in conflict with that altogether what he said was evidence concerning trends used of generic contracts may only be considered in your determination of whether trend breached the covenant of good faith and fair dealing but may not be considered as a basis for game text termination of the distribution agreement seemingly not making it clear whether he was ruling that it was a material breach or whether we could still argue that it was a breach of the of the contract language itself and not just a breach of the becoming an infidel and so we were in a terrible quandary as to how to proceed it was something that i pointed out to the court when he was fashioning this limiting instruction that i thought it was going to be terribly confusing but the upshot of all of it is all three of these rulings are incorrect as a matter of law because we were dealing with a question of fact that should have gone to the jury well i mean let me just ok it really comes down to do you have a contract and so we're interpret in the language that the contract and that summary judgment in this in the record that you have the virginia situation in the record then after the git that when there's no notification that the contracts not going to be renewed then they go to the generic contracts they didn't use those before and then they go to that then after that then you have the next step which doesn't occur here but did occur there they go to bettina th and so you don't in texas have those facts that they actually want to someone else and i think clearly if if you got to that point if you had that point if they'd gone to tina in texas i think clearly there would be an error in granting the summary judgment but the fact that they didn't do that but then you introduce that evidence you know for a motive intent or whatever it is that enough and also does putting the name in the contract does that  actually four clauses not just a duty to promote and but let me start out by saying that this distribution agreement is not a like many commercial contracts that this court probably sees mortgage to a contract don't often list everything you must do and everything you or him you're prohibited from doing what they do is they set forth a central purpose and they have language in there that's general language yes there is no clause in there that says you must use a written contract th says again jack and there's nothing in there that says you are prohibited from using a contract it doesn't say that the wall that they had done what they just put some little star up in the corner of the contract that's the way that they change that now clearly as a matter of law and something like that you would have to lose something here it's just a question of the use of the change to the generic context of the time and what happened to virginia is that enough exactly it's all in the context but there are four sections well two sections of the contract but for different duties one is that the distributor will represent the products are products not other people's products to the distributor will promote to the best of its ability thore the distributor should take all commercially reasonable measures to retain and section three point three that says any efforts to sell competing products it doesn't say any sale of competing products it says any efforts to sell competing products there is absolutely no doubt in my client's  mind at the time that it is making its decision to terminate trend that it knows exactly what mr honest the president of both the trend and it is is doing he is using generic contracts where he has never used them before and trend is to step aside at the end of the of the relationship which could be in two thousand and nine or a trans election it could be earlier and it's going to be paid for the next year based on the assumption that it had stayed in place in other words what customers to trend hand back to gain technology say hand back we couldn't contract with them directly but they would go to another game tech distributor so the whole contract was set up so the trend had an economic motive to maximize the number of customers that had at the end of the contract not to have a generic contract or any reason to take them anywhere else because it was going to get paid for doing absolutely nothing for three years afterwards first time he ordered his sales force to go out and offer generic contracts to all two hundred fifty customers who are he issued that order just a month or two after negotiations with  tech for more favorable terms collapsed long running negotiations that were in the trial record and right after he had threatened game tech that he was going to take the customers to another manufacturer regardless of whether was a breach of the distribution agreement because they wouldn't pay him additional money and give them better terms next linked the use of generic contracts and made them particularly attractive by cutting the pricing that he was offering to customers by forty or fifty percent for renegade pricing that we talked about in our beliefs and finally he commenced this generic contract plan in texas within thirty to sixty days of doing it in virginia and finally we were seeing his success in virginia i mean there was plenty of evidence from which a judge could say there's a question here about whether you're acting innocently instructing me engaging in this new economic this new business approach of generic contracts or whether what you're really doing is setting up to do in texas exactly what you've done in virginia and the fact that this is coming on the heels of such an acrimonious and failed negotiation over new terms and right after you've made a threat to game tech that you're going to take them to another distributor and you're doing the same thing in virginia you're carrying through where your contract is ending you're signing customers to new generic contracts for two year terms even though your contract designing by its terms with being tekken three months there's plenty of evidence here for a jury to to conclude that what you're doing is you're taking those initial steps the any efforts not to promote game text products to the best of your ability but to  evidence and we have a we have a reading of a general contract here it doesn't say specifically you can or can't use a certain type of contract form but it has all this best efforts language commercially reasonable language and in the context of the party's relationship and reading the we are in a lesser situation here that's correct judge nelson because clearly the distribution agreement says that trend collects the money from the customers and remits it to us after deducting a commission the distribution agreement also says trend has no obligation to pay us except from monies collected from customers so if a customer becomes a bad credit that's a trend oh there's no money so they're really just a collection agency for us but clearly we didn't have a security interest in the document but our view was that's really our property our money that's being collected there segregating it into a bank account and they were emitting it to us weekly and the required to remit it to us weekly with a statement of what the minute they don't have any independent duty to pay us merely because we gave them product they're only collecting their problem texas law well if that's your money because that's what i'm hearing you say that that's our money it's not your money it's a payment obligation that's clearly trans argument is that we can't be in a direct contract with the customers however we had just gone through a proceeding with the texas lottery commission way we did business and the texas watery commission held it lawful now we didn't get the lottery commission didn't get to the specific issue of is there an agency relationship that it looked at this revenue pricing scheme and tried to determine whether know tech had too much control and held that it was lawful there is no precedent in texas that says one way or another whether calling them an agent is somehow going to make us violate texas law but i think that we don't have to get to the point of determining whether there's an agency or not we look at the practicalities the fact the circumstances under the contract and determine you know under these circumstances what they were really doing was holding money in trust for us and remitting it judge nelson is whether the other element of damages should have been excluded under d'albert the final remaining element of damages i think ruling on that on the conversion cloning i guess i had thought that all the way through maybe that sorts itself out when we go back to trial but on the daubert issue we have a clear circumstance here where the judge found three of the four damage measures were too unreliable to go to the jury they were all in the same series of three or four pieces of paper stapled together the same rationale was being used to justify lost profits in the three that were excluded and the one that was allowed in it suffered from the same circumstances of business in that industry is not enough he needs to show his methodology and he needs to have work papers to back it up so that there can be something verifiable testable on all this and i see that i'm running down to my  to minutes on solely the cross appeal issue part right we have a number of issues that are raised on appeal and i would rather respond to the court's questions  depends on how you land on the triable issue for the generic contract matter part of the heart of the argument by going to the failure of the three point one and three point three duties something mentioned the distribution agreement that so on the failure to promote you do have you go from contracts that say the name came tech to generic contracts you have it in the context of what's happened in virginia you know  threat being made why all of that together why and then you know one virginia then after that happened then that they went to petition or why if you give all inferences to game tack why isn't that enough to go to trial and that both in a motion in limine stage judging anderson said i'm very concerned about the four zero three issues with virginia that was a two week jury trial were scheduled for three weeks which by the way turned into four weeks  but i'm not closing the door i will allow game tech let's get down to submit the questions that you want about virginia right number a lot of questions ok but that gets to why you know if you assume that the summary judgment was properly granted then when you go to for a three analysis i agree with you that courts can say this would take way too much time yeah it's probative but it would take way too much time and i'm going to control this trial and one was a longer trial and i don't think that you can you know i don't want to add three weeks to the trial that i'm doing and it isn't that probative but still that doesn't the summary judgment that virginia situation was also offered to give context to the summary judgment and why there might be a triable issue on that and that's where i'm concerned at the time of the summary judgment ruling i believe judge anderson said in reference to the virginia to the discussions concerning what was going on in virginia you saying that because he wasn't going to let you do it on the four of three that you can't consider it for the summary judgment and i don't think that necessarily follows well i mean i think we have to look at those two separately and you know i think that there would be no doubt obviously if the facts in texas were that they went from game tech to generic and then also contacted bettina that i don't think i don't think summary judgment would be proper but judging anderson seemed to say something about if it had been that important for you to have game tech on those contracts that would have been something that you would have stated in your agreement so i don't think i just don't think that that had anything to you know as a matter of law i don't think that had anything to do with promotion the decision an argument i guess at the summary judgment level as is judge andersen was saying if generic contracts  e were so important to you why isn't there and you heard mr mr walsh's response to you with the same response you gave the judge understand we can't think of everything but there was something in the contract that they would they mr walsh mentioned the texas lottery commission proceeding that had occurred in january of two thousand and two that was a proceeding in which the texas lottery commission had brought a claim against both a game t proceeding mr ramos wanted to distance himself from the connection between game tech and train gaming by virtue of the texas lottery commission proceeding that was the beginning of the generic contract that was the purpose of going to marry that was the purpose of the generic contract in the texas proceeding you have a well that's part of that what he said you know they're saying ok but you know for summary judgment purposes they're saying the purpose wa that they're going to do what they did in virginia right correct so the question is you know i can't resolve those factual disputes but what they're saying just that create a tribal issue and should that have gone to the jury if you look at the texas distribution agreement and the texas regulatory scheme for distributors and manufacturers the generic contract does absolutely nothing to allow trend to transfer customers trans customers to some other manufacturer under the generic current or the distribution agreement when what game tech has been arguing is this distribution agreements going to be in place for some two and a half years from the events that we're now talking about the generic contracts that were being signed up by a small minority of the bingo conductors had a period of one year so they would have to be renewed and renewed for a third time at the end of the the earliest period of time in which the texas distribution agreement could be terminated was two and a half years from the end of this period of turmoil at the end of that if the game tech chose to terminate the distribution agreement by the early out early terminations provision then what did the distribution  provide with respect to the customers of trend generic contracts meant nothing whatever the agreement was we have two separate tiers of agreements there's a distribution agreement between the manufacturer again ta and trend this is that two and a half year agreement underneath that we have the subset we're trend has individual contracts with its being the conductors out of the fifty eight halls that are at referenced in the record twenty of those had no written agreement whatsoever they were oral out of the fifty eight there were these five or six that were the generic contracts but when the district just reached an agreement terminated so did those generic contracts terminate regulatory provisions of texas law a manufacturer can only manufacture a distributor can only distribute a single conductor can only conducting go none of the three can do any of the other three let's a true and again tex got a loser argument but but it seems to me there's a problem if they base their decision to terminate on what happened in virginia the jury need to be told about that and let that argument or  defense where he stand or fall as the main part of the sleight of hand with respect to that presentation is the texas distribution agreement was terminated aug twenty seventh or august twenty eighth  so the carts a little bit before the horse awards but tina come in there but tina come say and sat before the terminations or is that after determination i believe it is before determination your honor i'm not  give me one second here it's very close in time the virginia agreement i know that trend signed an agreement with the team less than sixty days before the september twenty eighth expiration date the trend virginia agreement i don't remember it was it would have been right about that time and i just don't remember the virginia facts clearly enough to tell you that the phone number i don't believe the tina agreement is in the record in the texas case council may correct me but i'm not certain  that it would have been right about the same time i did i also tried the virginia case and song familiar with the venue virginia fax i know that it was less than sixty days of september twenty eighth i can't remember if it was forty five days or thirty eight days or twenty days i just don't remember that the the generic contract claim in part is a is a red herring because it was  submitted to the jury the jury did to consider was generic contract something that was a breach of the parties agreement and that was specifically submitted on the covenant of good faith and  jury considered game text argument that trans use of generic contracts in texas was a breach of the covenant of good faith and fair dealing and the jury returned the verdict and said no trend did not breach the covenant of good faith and fair dealing by the use of generic contracts if we would have had a different result from the jury if the jury would have said yes tran breached the company of good faith and fair dealing i think then there would be an argument w ok that should have then been considered for the breach of the distribution agreement a basis to terminate the distribution agreement but in fact when you raise good faith and fair dealing as a basis to terminate the distribution agreement game tech only asserted two bases for terminating the distribution agreement no notice of default said one pricing that was really the primary issue that was  dispute between the parties game tech saying this pricing scheme that trend is using doesn't give game tickets minimum return the facts on the in the case were in fact four of the four or five inventory contracts that game tech complained about thing made more money off those they made off of their approved revenue share contract and they lost that at trial the jury said no that pricing is not a basis for terminating distribution agreement that was the primary issue that we're fighting about we then got to the generic contract issue and the jury stad trans use of generate contracts was not a breach of the common good faith and fair dealing how could they have then said but it is a more serious breach that allows you to terminate the distribution agreement that's that's totally inconsistent my argument would be that it would be an inconsistent verdict had the jury come back and said the breach of the company good faith and fair dealing trended breach then we have an argument ok well if the if the judge precluded the jury from using  the breach of the common good faith and fair dealing as a basis to find the terminations distribution agreement we have an argument but in fact the opposite occurred the jury considered the issue generic contracts were put in front of them so i don't think you could i think i would argue a little bit differently on the conversion issue but when you go to the breach of the covenant good faith and for dealing i think those are wrapped up and in the same on follow up and and those matters would go those pages nine of fifteen of our customers in virginia by that time by by july eighteenth i'm sorry had been switched over and were no longer speaking to us in virginia we were obviously trying to sign them up ourselves because we could deal directly with them in virginia that was four days before we sent the notice of default and some five weeks before we terminated trend as mr chambliss pointed out we actually terminated trend on august twenty seventh and that was about nineteen days he'd been able to take the stand we knew those things were in place at the time as to the mr chamas argument in good faith and fair dealing up obviously and in our view he's got this backwards the fact that the jury decided a good faith and fair dealing claim against my client after the kind of rulings that the trial judge entered on the generic contract breach of contract to the whole thing and the trial judge already told the jury that in essence that we had wrongfully terminated on that basis we'd have to sustain it on the renegade pricing it was going to be very difficult to get a jury to to agree that trend acted in violation of a covenant of good faith and fair dealing when the judge already basically told the jury trying to done right by using generic contracts so the whole thing was tainted at that point i want to go back to something judge callahan that you mentioned very early on i agree that under four zero three the trial court has discretion to say it's too much time the trial judge may have brought discretion burden because trent prevailed on that motion in limine and shifted to trend to show that there was no prejudiced by excluding the virginia evidence with the power of the virginia evidence and the fact that the jury ruled in our favor the judge upheld it on injunctive relief and there was a finding of clear and convincing evidence of malicious intent to deprive us of our rights in virginia there is no way the trend can show that that that this was a harmless error ruling on the trial courts part that your time's expired thank you thank you for your argument a good job in your brief sometimes that i think we're pretty focused on but i think you know the position something relative party so i basically thought i would defer to my colleagues in terms of it because if they had questions in light of separate issues there we had to damage claims that were excluded primarily the jury was allowed to rule award nominal damages one was on what's called product exclusivity the right to promote exclusively new products the second was on the bad service claim were trend alleged at last fall's as a result of the bad acts by gain tax the jury found in favor of trend on both of those issues liability wise and as to damages judge andersen excluded the testifying witness mr on a must to testify about damages under gobert for both of those claims  and if there is a very exhaustive order by judging andersen following the dog or hearing it some twenty pages long if you follow it plus the briefs specifically when you look at the product exclu claim the analysis that was used by mr on a mr product that's seventy was very similar to the analysis that will you it was used for lost profits on damages which judge anderson found to be reliable and i would saying with respect to product exclusivity the second argument i'd make on damages is under the paul services lost my argument there is really a seven zero one argument as opposed to a seven o two argument there was a motion in limine argued at the beginning of trial in which judge andersen precluded mr animist from testifying under seven zero one and said you can only testify under seven o two as an expert witness you can't testify basically as the owner of your own business his ruling was because your opinions are based on more than your personal except your personal knowledge and perception and therefore in precluding that if you look to the the bad service haul damage analysis that is all mr ana misses perceptions of his operation of his business as far as the other three dams where he went outside of his records if you will went to the f c c records the texas lottery commission records and things of that nature so under seven a one mr on which should be able to testify as to the hall last damages and nothing f