contract and some business towards i beg the courts patience with me as i try to work through some of these issues actually it's very interesting ok well and in fact honored you know we do have an unusual situation i call these cases business divorce and often times the emotion that ranges with the parties is really typical of even a family divorce it seems and that's what we have here we have parted years is longer than most marriages it isn't that you're on it and in fact you know these parties going along really well and over that twenty years they develop what i would call a book of business and i think this is really important it's critically even  to the h t t p or the honolulu data entry appeal and that is the relationship between these parties developing associates and h t t p was not one of employer employee there's not a principal agent situation here or contractor independent contractor situation these parties were equal in their contractual relationship with their written memorandum of the overall relationship of the parties that's absolutely true of course later on the priest documented one aspect of the relationship and that is in the payment it's called commissions and i believe we don't with this is officially in the brief but i think it's important to underscore again relating to the relationship of the parties commissions is a word that was probably not the best choice back in two thousand and five when they started using that word because commissions imply employee employer relationship or a principle and eight in principle an agency relationship which we did not have here rather we had two parties both on the contracts with the customers so with equal rights to the revenue from those contracts for example just by way of example in help important this is if one of the parties h t t p for example had committed a critical error that caused liability develop associates who was just as much with potential liability as a steeping because they are a contractor on the contract and would have been sued they would have have the same why billeted that's not the situation where you have employer or you or other types of relationships so in this case we have two parties with equal rights in the joint contract this book  acknowledge there's no question but that h p had a different financial interest in the book of business in fact percent versus fifty percent but the book of business itself was equally was own jointly between the two parties now when when each v p the principal mr now pushed the button on the e mail terminating the agreement essentially what he did by eliminating the revenue sharing between these parties he's actually user or took the book of business to fifty percent ownership the d p had he took it away from the bill and associates in and took it to himself and from august  that happened when he terminated that happen on august twenty second two thousand and twelve from that day forward he stopped paying the revenue split between the parties so he took for happily but with respect to your client where did the district court go wrong you're absolutely i appreciate that your honor the district court went wrong in who very specific facts the partial settlement agreement was a document that was created during litigation it's very carefully crafted and it's very carefully crafted as a shield and not a sword the specific language of that agreement found that somewhere in the language of the partial settlement agreement wasn't implying non competition clause but non competition and the way the district court read the partial settlement agreement would be using that document as a sword and not a shield the document itself has very expressive language expressing the intent of the parties that it's a shield and not a sort now the district court so the district court read into it some language that is in completely inconsistent with the party's intentions under the document itself so on the claim that h t t p has i believe it's their third contract of the partial settlement agreement the district court mis interpreted the contract itself but past that eight h t people also left the district court with a problem  had failed to produce any discovery relating to their damages in this case until the third day of trial and when you don't associate subjected to the evidence that  people seeking to admit on damages the court sanctioned h t t p and said we're going to stop any further admission of evidence on that subject and so consequently h d p was not able to invent not produce any evidence of their costs there of we double costs associated with the work that they were doing so that left the district court with a problem it found that to de vaughn associates had breached the partial settlement agreement as with respect to one contract the north dakota guarantee in the title contract and it found that the billing associates would have to pay eighty five percent back to  that's no longer the question the question isn't one of what was your gross revenue eighty five per cent the question is what was your last profits and this was a lost profits claim richard contract we should have gotten the policy work from north dakota and we didn't get it so we are entitled to recover our lost profits which would have been eighty five percent of the gross revenues last of what i'm costs and so your argument is that not very i believe very settled area of what you would you just circle back around then you say that i thought you said at the beginning or somewhere toward began your argument that the reason the costs and other information wasn't put in was them the court sanction i believe it was a third day of trial when they finally produced their evidence of damages in discovery the court's ruling was i'm going to stop and not let you produce introduce any more evidence damage evidence so they have mr natha testified they had some documents that mr natha put into evidence none of those neither the testimony nor any of the documents that were put into evidence identified the avoidable costs it would have cost h t t p to do the production and that he couldn't put in any more because the district court for included two things number one the district court precluded them from introducing any further evidence on the issue of damages as a discovery sanction number two that they had not produced anything in discovery and they actually produced nothing up to that point in time on the avoidable costs for the work that they were doing that's just simply nowhere in the record and so as a result when the district court wanted to to rule in their favor on this breach of partial settlement agreement the court didn't have what it needed in order to award last problems so what's the remedy if if you're right absolutely if the remedy is really simple it's in the home were the omar versus america number investors tells us that the remedy is nominal damages if i believe that first of all the third can't count for future partial settlement agreement just simply should never have been found against my client i understand that but past that o'mara teaches us that if you're going to find that there will a breach of the partial settlement agreement the remedy is nominal damages of dollars ten dollars i don't know what that would be but nominal damages and in this case the district court awarded eighty five percent of the revenue which i can tell the court was over one hundred thousand dollars that's actually been paid to keep up to this point in time so certainly nothing like nominal i believe in the record at the time the briefs were filed the number was estimated to fifty seven thousand dollars that number is updated with the actual payment of over one hundred two thousand dollars why why wouldn't the remedy if you're correct be to go back a remained to the district court leaving it at eighty five percent which was what the agreements but making any appropriate adjustments because there is no evidence in the record nor can there be because of the district court's order well thanks i'm right but it's not like that that doesn't mean that that they're that they're if if it's wrong that the district court c open testimony as to what cause well the just record could change the ruling on its ruling because the court said look you as a as a penalty for failing to introduce or to produce your damage evidence enduring discovery i'm going to not allow you to introduce any more evidence on this subject at trial that's the ruling of the court are you or are you objecting to that as a sa that's what i was asking you why if if let's just say that you look at this and say well it was an error to gross revenues because of normal lost profits calculations it's remain and to the district court to determine the appropriate breach of contract damages would include appropriate you know adjustments reductions based on costs then the district the full eighty five percent right there there's some inconsistency there when you want to say the remaining time i would your honor that's fine thank you very much very good all right so in mr july hundreds arguments he primarily i'm addressing the issues of commissions and denial of the award of attorney's fees mr  concluded is that the vision of revenues between h d e p a n d b it was controlled solely by the agreements between the companies themselves and it also found and concluded that these that the obligations of d v h d e p include payment of commissions as specified in the two thousand and twelve commission agreement neither d b a nor h t e p appealed to the court's determination that the division of revenues was controlled solely by the agreements between the companies themselves that is the controlling point on this issue it is so in so you you it brings you automatically back to what is the proper method of interpret in the agreement of the party and did the court make the proper findings i would also point out that if there's absolutely no legal reason d b a cited the law and there's absolutely no legal reason why two parties in that situation cannot between themselves agree to anything they want to agree to with regard to how what rights and responsibilities they share under those contracts that's basically what they did they had their own separate agreement who does what who gets paid what they entered into an oral agreement by the name very nature of that oral agreement they subjected all of their rights to an at will terminations at any time if they wanted a different agreement they should have made a different agreement that's not what they did and it's really not the place of the court as you understand is to rewrite the agreement to to more generously benefit d b a then what the parties o agreement provided so going back to the issue of what is the what did the agreement the parties provide this is where we disagree with the district court we disagree  and i think the way to analyze it isn't two steps the first step is under the oral agreement itself disregarding the commission agreements was there any reason to believe that the parties intended that following terminations of this at will arrangement d b a would continue to receive commissions and i think there's a clear answer of no there is no facts to support that the parties never discuss the question and the court district court ma finding or conclusion that the terms of the oral agreement itself required payment of commissions post terminations the only way the district court got to that conclusion was partial writing of the agreement between the parties most of the part most of the agreement between the parties was oral but in two thousand and five they reduced a part of their agreement to writing  i thought you were referring to a two thousand and twelve yes if they stay started did it first in two thousand and five and then they did it in two thousand and twelve again no they didn't change the terms at all in two thousand and twelve the two thousand and twelve quote commission agreement reads exactly like the two thousand and five commission agreement all they did was change the exhibit that's attached because the exhibit provided an updated list of the existing contracts under  which d p a h t t p was already paying commissions to d b a so it really and in fact it's one of the reasons why i think the this district court made a clear error of fact because it things first of all the district court found that although and i'm quoting here although it did not supplant the oral agreement and quote the two thousand and twelve agreement quote impose the specific obligation that h t t p pay commissions to d b a and quote under the agreement and then proceed to hold that terminations didn't relieve h t p p of that obligation you're reading where this  that's the first one where he basically says it didn't replace but it impose this obligation and then the second finding continuing a little further down is that  these commissions were bargained for and paid in recognition of d b a sales and marketing efforts in establishing various accounts as well as some level of ongoing work for the accounts so i think the only way to read those two thing  you read those two findings together the only conclusion you can reach is of the district court determined that the two thousand and twelve commission agreement sensually amended the oral agreement between the parties to convert this from a situation where ongoing services are provided in exchange for payment of ongoing commissions into one in which future commissions are going to be paid in reward for past service that's essentially what the court is saying here these commissions were bargained for am paid in recognition of d b a sales and marketing efforts in establishing the various there's no evidence that there was any intent to amend the party's oral agreement in that regard the only evidence when when when this updated commission agreement was behalf of h t p s response was he would sign it because it was this a den of culture the two thousand and five agreement that's the extent of the discussion between the parties and you can't take that discussion  and correctly reach a determination that now for the first time an agreement which had been it at will continue in service continuing payment of commission agreements has turned into one in which the commissions have become an annuity that are going to go on in perpetuity or at least until the customer contracts expire there's just absolutely no evidence to support that and one point two million dollars five percent and hopefully with time permitting i'd like to turn to what i thought was an interesting issue in the case and that's the issue of defamation and that is an issue where we think the court gave it not only short shrift but there was error in terms of the court's decision let me turn to the argument that was made by opposing counsel about the breach of what's been referred to as the partial settlement agreement the record is absolutely clear th this agreement which was entered into between the parties after the litigation was filed was intended to do several things but the most in here this is the partial settlement agreement was signed it was it's referred to as the december and twelve it was not described as a sort or a shield it was entered into by the parties after that was efforts to try to resolve things and the core principle here is you don't go and the other guy with existing business the agreement his absolutely clear on its face that you don't go after an existing client an existing business and e g t north dakota guarantee and title was an existing client it was existing business there's ample testimony and exhibits on what that was and the court found that it was a breach absolutely a per se breach of that agreement there was no confusion and that it was also a collateral beat breach of the north dakota and  agreement because it required that the quote title team provide the exclusive services to that particular client so i won't take more time on that i think the record is clear now there's been obviously question court in arguments by counsel that the eighty five percent is a product of an unfair order that somehow connects with a sanction there was no sanction your honor your honour's the records clear what happened here is that we submitted evidence on the totality of h d each piece damages as a result of what we characterize as just wholesale interference with client relations it wasn't on this particular client and we put on our evidence and judge curran determined that some of it was new enough that they gave the opposing counsel time to rebut the opposing party had the opportunity to have their expert look at that data we never were precluded from putting in evidence about what were the costs to produce the end the g t work so that's just totally wrong but turning to the issue of was this calculation right and i would submit to the court it was and for these reasons this business was taken secretly by d b a unknown to our side until well after the fact and they perform the work for they meaning d b a perform the work for north dakota when the judge made the award of the eighty five percent there was still an existing ongoing contract with andy g t and in the court's decision judge current specifically said that page thirty three should d b a not want to continue doing the work and let h t t p perform the work and we're actually the people who do the work we do the abstracting they can do that well they didn't so there's nothing unfair there was no sanction there's nothing here that somehow created you know some inequity the the facts here in terms of the equities were litigation was filed partial settlement agreements were signed to try to stop this kind of stuff they breached it and they got punished and we think the measure is one reviewable under clearly erroneous in that it's absolutely appropriate here because how does one ring the bell when they perform the work wells down to it if we agree with you that there was a breach of contract yes when we look at what is normal standard for breach of contract damages and that's basically compensation commensurate with loss law which is pretty typical and is the actual loss eighty five percent how can it be eighty five percent when in fact if you were if you were the one normally performing that it would be eighty five percent minus x whatever x might be that's true so why should eighty five percent because in your honor after the fact to try to go back and reconstruct part of the work was already done by d b a the future part of the work wasn't done so that could have been handed off and it could have been done by the e p if they chose not to do that they were getting d b a and i think when you look at how do we try to reconstruct our damages at trial we had simply invoices from a third party who was not a very willing witness at trial and so that was basically what the court went with that doesn't really make a lot of sense maybe when you have a damages claim say well it either damages expert or get an accountant to say they still looking at records before and then their cost of time and other cost of services this is a rough fair estimate of what would be understand acted so much my concern here is we don't really i hear your rationale of why it went down this way but i can't quite glean that from the findings of fact i understand your i think that if i could because i will run out of time and i want to be responsive but i would leave it that we think that the  record explains why the judge did what he did given the circumstances we did put on damages as to the totality of what we thought we were damaged as a result of the interference from across the entire client base and i think it was enough there but with your permission i don't have more to add on that would i be allowed to address defamation because i'm afraid i'm going to run myself right out of time talking about the say four percent i agree with the court's point i think this is an interesting case the defamation claim was dismissed by the court with about a page and a half with conclusory statements that there were opinions and it focuses on what we refer to as the may thirty one twenty thirteen letter  sent to all clients and since i have limited time and since we brief that i would like to just hit a couple of the high points it is a day novo review we think the beginning in the ending place where the court didn't go as  which then this court back in one nine hundred ninety set forth a three part test and you know co in terms of looking at exactly these kind of publications and the the trial court did not go through any of that judge her and concluded that what was set forth in this letter which we consider to be horribly damaging went to every single client was opinion there's no effort to go through the threshold analysis about whether what is stated here is in fact not opinion or even if it is opinion it's not it's no longer a bright line test to call it opinion and it's not actionable what has been said here is that it's a letter from what they describe as the partner team so it comes unlike many of the cases including partington where you've got somebody looking at how the case was tried bugliosi wrote his book and commented on what went down in the trial here we've got an insider quote partner they describe this is a partner who is writing to every client and this letter was and was moving forward in terms of six months worth of preparation it was part and parcel of taking business from t p talking to other customers about how to get business away there's admissions in the record that this was all part of a pattern of conduct that snagged business while these parties at signed a partial settlement agreement they were in litigation and the things that they said and which go to the heart of a title business is that this part of the partnership which it's not a partnership but they describe it as such couldn't shoot straight they committed errors which they described as gravely concerning and my associate had a really good metaphor for that this is like going to a doctor and having a doctor say i found a lump now we could all say that could be so what could be whatever the doctor follows up by saying i found a lump and i'm very concerned or gravely concerned it puts a different totally different cast on it so this is information coming from the inside that is absolutely objective it's not hyperbole and it is measurable we know when we looked at the record there weren't errors in fact why this came up is that part of the pattern of conduct by d b a was to go to customers two months before the letter went out and ask them do you have any errors and they didn't find out what they found is what they complained about was one customer they claimed there was lack of quality control the quality control was to be done by d b a not h d e p another customer said no worse and then the last one was a few errors out of two thousand transactions a day it's normal to have a few errors the point of it is the letter is repl with statements that are objective they talk about cutting off all communications to them by h d p we have an admission by one of the key witnesses for d b a that that was not accurate so i would simply say because i know i'm out of time at this point that this issue got no attention by the court it certainly didn't get through the threshold analysis and again i think absolutely it's an important determination we tried to find if there was more ninth circuit law that would flesh this out i think it's an important decision and we believe that we did actually submit proof of damages in terms of drop business because of this letter me to go over well you have a little bit of time left to your patience with i want to first address mr morse's comments with respect to the the went to great efforts to delineate the terms of delineate the terms of duration of the written contracts versus the oral customer contracts and how that all work and so when we look at this is from the excerpts of i'm quoting now continue to pay such commissions for the duration of such contracts including all renewals the court found that was the duration of the parties agreement and based on that the court ordered each d p to account for the revenues under those joint contracts very specifically according to the duration of those contracts even including the oral customer contract i'd like to address the with respect to the partial settlement agreement back to that issue very very briefly mr o'toole described that they were never precluded from introducing evidence of damages but he didn't tell you what evidence of damages he actually introduced as to their avoidable costs what did it cost a g p to do the work that was never put into the record and that's why the court reached for the eighty five to fifteen split which as was acknowledged as being a penalty in violation of hawaii law it seems like the most appropriate remedy is the this is an issue for nominal damages and matter should just be reversed and direct of the judgment be entered for nominal damages on that count three for breach of the parcel someone agre that because it was said because they didn't put in the evidence or is that the i i couldn't find anything in here referring to a sanction expressly and i saw him a little confused as to it seemed fairly fair for the district court in the absence of anything else to say ok that was so long so we can split it this way i'm sure is one is not penalize ing a party split whatever what you want but but this becomes a penalty because the amount of of the amount of the damage exceeds substantially exceeds what their profits would have been if if eighty five percent is their gross revenue and they're doing all the work that can't be their last promise not possible and mr nath testified at trial that overall they had a fifty percent profit margin but that doesn't help either because you've got to get to what was the actual cost of production and the lost profits come from the cost of production that was never put into evidence at trial and so to do a do over on this it seems to me would be unfair to my client who has has done everything exactly right according to the rules of evidence and we've participated in  in the truck trial transcript why did you do this because why don't you send us a twenty eight j letter that gives us the citation that i'd be happy to do that and then i have another question about the defamation claim yes please check only the statement in the letter that says we have learned from certain clients that errors in the reported data from h t t p have occurred why isn't that a statement of fact it could be verified one way or the other as opposed to puffery or opinion it can and it was and what the control court found which is subject to clear error review is that that same was true but indeed there were clear errors  or there were critical errors that were found in fact the problem with the entire defamation argument that you've heard in the briefs and you've heard on all argument is they skip the issue of falsity right that the test is fault in defamatory they skip straight to defamatory the court found that specific claim was indeed true in fact the court says similarly and then on page thirty six it's the excerpts of record piece ninety one similarly there was evidence of some errors in d b s expression of great concern is again only opinion so the truth was there was there are thank you thank you your honor very much all counsel for your argument it is very interesting and link the