setting we try to make it as much like a regular court hearing as possible and to that in we would appreciate that you would mute any devices that you have available or that anyone else in the room you you're both familiar with our time clock you have a yellow light two minute warning read lie please conclude your argument we have read the briefs and record excerpts we may not well we may need thank you judges they please the court my name is george gibson and i represent sanchez oil and gas corporation in this appeal from a summary judgment that we granted by district court judge hansie atlas  to lay out our arguments and then i'm happy of course that any time to discuss with the judges any questions that you have of the summary judgment from which we're appealing as to primary parts one is an analysis of sanchez's summary judgment which was denied and then the judge that was addressed cresses motion for summary judgment which which was granted were healing from the of the summary judgment to crescent and judge atlases opinion which is actually quite narrow in terms of the reasoning for why she ran a judgment summary judgment to crescent the st thing the judge at was did when she looked at the claims in the case as articulated in the pleadings and the motions and as your honors i know are familiar that there was quite a bit of discussion over whether or not sanchez had that crescent which was acting as the provider of work on these rigs sites and the n s a is very clear about the broad nature of presence obligations they had an obligation to make sure that those oh workers were properly vetted that they were paid that they did the work that they were supposed to do and a number of other requirements that are in the m s a and one of those requirements was cresset would make sure that the workers are consider independent contractors under the law as to sanchez and that really gets to the rub of this particular case because one of these workers mr langan file the lawsuit under the fair labor standards act claiming that he was not an independent contractor and that therefore he was ineligible or receiving day rate for his pay if he was eligible for overtime he the reasons that that judge that was gave or granting crescence motion for summary judgment  premised on a couple factors that we think should be overturned one is that the judge found that she was not going to look at sanchez's claims under the obligations such as under thirteen dollars of the m s a that crescent would ensure that its workers were independent contractors and she would only look at this as a claim for indemnity under a provision called fourteen  contractual construction all that could only be applied when the terms are in conflict and we cited two cases that discuss that in order for those terms to be one to be ignored and the other to be applied they have to be in conflict she primarily based this on be the case out of the deepwater horizon lawsuit which had to do with the definition of a vessel and whether or not the bessel owners were allowed to participate in the class action and that case defined a specific term governor under a general term however in that case those terms did in fact conflict there was a conflict between us and so that case really is an instructor we believe that it's the royal caribbean case that we believe so this case finally she or also she even even if we were  to assume without admitting that it's all under fourteen dollars that the whole case should be analyzed for fourteen dollars we believe the crescent loses per couple reasons one is the judge found without much analysis whatsoever that there is a condition precedent and there is a number of cases that talk about the standards for binding a condition proceeding and this doesn't need it there are no words in here that such as if sanchez for such claims it includes in connection with a settlement and there's no conditions in that section in the next section eleven dollars it discusses that  president it's not worded as a condition there's no ifs there's no provided is i believe it's a covenant that's that's what i would assert your honor but furthermore even if you discontinue read it what it says under obligations whatsoever and so in this that's exactly what happens is that crescent refused to defend sanchez president rejected b indemnification demand it and so therefore the the language here shows why prior consent is not required or necessary question about the there they say th but i can't tell you for sure that they well but they didn't at the time is that yes judge that is right what judge one thing i would of well i presume i wasn't part of the case then but i but was i understand it that it was a confidential settlement and and so sanchez did not notify them because crescent had already rejected any demand or offer to take to defend or indemnify sanchez they've already rejected that and the other thing i would say crescent nowhere says we need to know the details of the settlement so that we can either consent to or reject the settlement they don't say that at all no they don't talk about a condition pursuits they don't say evaluation they go through a series of different documents that they say sanchez should make sure they look at and this is all friend in terms of to make sure that your settlement is reasonable as runners i'm sure know that allowed to consent or not consent to the settlement at all so it's a your decision will please state succinctly what the parties will go to trial on if if we were breached its contract to make sure that lancken was an independent contractor we will end and they were required to pay him an importance with the law we believe there would also be an issue as to whether or not they wrongfully denied indemnity in defense of sanchez from the claims that were brought by their contract by the person that they had a contract with they had a written agreement with mr lang and  implication that what's really driving this is the attorney's fees that were and of him defending the lying in suit so would that be subject to reasonable list review by a jury yes judge a book or whether or not fourteen dollars is a viable claim for sanchez and we think plaintiff judge atlas we think got that wrong the the other thing is that i believe that sanchez also has claims outside of it even if you found that it is a condition proceeds we think it's not but even if you did there would still be breach of contract clause because there's a separate obligation under the contract to insure that lange and is an independent contractor as to sanchez a end and independent contractual obligation by crescent toupee mr lang in accordance with the law and  they apparently didn't do that and so that would be a separate aside from any indemnity obligations in any conditions pursued so that there would be a separate breach of contract law about judge atlas  there was a lot of discussion over whether or not that was actually pled we believe it was but at the end of the day in her opinion she actually found that well she'll just do the analysis assuming that those other reach of contract claims it please the court this is a case in which this court is being asked to unwind the years of litigation in holdings leading to the sound rule of law that indemnity that indemnification agreements are to be strictly construed so  not to unfairly shift any obligations in a way that the parties did not intend crescent drilling and production as a stepping company did little more than process the payroll of independent contractors working on sanchez oil and gas sites sanchez's own their form their master services agreement and govern the relationship between the parties they had in their forum a specific provision that governed indemnity and that provision required crescent to inde sanchez only if crescent by labor the fair labor standards act which it never did sanchez a settlement point that has to be disputed i mean that's not really that's not a that unusual and that for them to have a provision that would say that one party would would and deny the other for a violation no that is not uncommon but what sanchez did in this case is they  did not make and they had control over their form in their language they did not say if sanchez is sued or if someone makes a claim then crescent should indemnify or has a duty to dim the buy that's not what it says it says specifically that crescent challenged him of five and has a duty to ensure that its employees or that it's individuals are in fact  compliance with the law i'd like to go specifically to the argument that was raised with regard to the question of with regard to the question of the general contractual provisions this court should should affirm summary judgment denying sanchez's claims for breach of contract based upon those general contractual provisions sanchez's claims under those general contractual provisions as the district court noted were not raised until the summary judgment briefing sanchez improperly claimed that crescent groups those general provisions of the contract at that point in time the no time earlier that late claims since it wasn't complaining it's wasn't contained in the complaint violates section eighty two of the federal rules procedure which required sanchez to identify the particular contractual provisions alleged to have been br sanchez told the district court and crescent that its claims were based on fourteen point two and the district court accepted sanchez's representation as noted by this court in the different case district courts do not abuse their discretion when they disregard the theories of liability not present in the complaint and raise later in summary judgment there is no basis for the argument that sanchez should have been allowed to amend its claims to a certain new breach of contract theories st of all sanchez's passing reference in really a footnote at the summary judgment stage to amendment was not a proper way to raise that issue for the district court's consideration as noted by this court flagship credit corp such a passing reference simply does not preserve the issue for appeal it differently chris may request made in a perfunctory matter such as in a footnote like we had here are insufficient under brightest versus the government of turkmenistan also a th circuit opinion even if a request were to amend had been properly presented it still wouldn't it still wouldn't matter because there was simply a lack of showing of good cause there were no new facts that had been developed that would have warranted that amendment and in fact at that point in time discover had already closed and they were we were at the summary judgment stage as this court found in  i the denial of leave to amend is appropriate where the proposed new claim is not based on new facts and the claim could have been added earlier finally any amendment to add these new breach of contract theories would have been futile and properly denied and a president as brenna even if the general contractual provisions had been properly pled summary judgment would still be proper because the specific epilepsy indemnity provisions section fourteen point two do over the general provisions sanchez's general provisions do not speak to indemnity but instead talk about labor costs and expenses compliance with the political law and contractors not being deemed to be essential as employees now that was a that was a language that sanchez had in their agreement and that was language that crescent was entitled to rely on as sanchez was the party that was on the well site and had the ability to control the details of the work here disputing who is paying him as he was i'm sorry was paying him that is correct or on a cross or what president was the payroll processor i mean but for the question of if there wasn't back later a breach case or excuse me there was a fact later a case filed by mr lang against crescent as the court is aware now they could have had a breach case but that case still would not have been contemplated by the language in their own agreement because their own agreement has the specific fourteen point two indemnity language well i don't i don't it seems to me fourteen  i understand the argument there i'm not sure i understand why that why those wouldn't have been alternative claims well i think that goes to this court's reasoning in the case of royal caribbean  no they're not in conflict though it's more like the specific and the general well i do think the specific versus general is what royal caribbean sought to address in that matter you had the specific in that matter you had royal caribbean who technically could have fit into two categories of the settlement class and as this court said to read one and not the other would would simply read one to be a dead letter and in that case were kirby and sought to fall into categories one as being a service provider in the gulf and there was another category that said spoke to the issue of vessels and whether or not those vessels were home ported in the pool in the gulf of mexico there was a conflict in that case because the specific applied because they were in fact vessels that were not home port in the gulf of mexico so by virtue of the specific being a to address very very specifically in that matter royal caribbean could not fall within one of the settlement cases i don't want to waste all your time but just for the sake of argument you know having having crescent bound to comply with the fairly well with all of the things that are specified in thirteen note i'm not sure that the i'm not sure that benefit indemnity is what i'm saying but so in a sense if if questions breaching the contract in general that leads to one set of remedies which is a lawsuit can claim a damages on the other hand if you're breaching fourteen two it doesn't really help present to say that it has to indemnify you see what i'm saying so it hurt you more under fourteen dollars than a breach claim would under one of the other provisions well i think either way under under those provisions there still has to be a breach and there's been no showing by sanchez in this case that there was in fact a breach of any of those provisions there was they settled the claim the underlying claim and in fact they disputed liability in the disputed which would have been disputed the fact disputing the fact that he was even an employee engaged in conduct that met the requirements of the economic reality as under the f l a say which is the test that we're familiar with on this score and so that if if that and in parish the economic realities is what we have been told to examine and whether or not a safety safety issue none of those issues that they pointed out go bear directly to the economic realities of whether or not someone is actually an employee and i'm happy to go through some of those economic reality factors and show how it is that that crescent did what they were supposed to do which is the contract did not reach the answer to that because judge why i don't think it's a contested fact to the extent that the issues that they raise in their brief are are are issues that under the hasi indicates this court has already said where someone or party speaks in inconsistent with their prior statements that is a sham affidavit and that's what a lot of what their evidence is in trying to say that he was in fact an employee of crescent as just that they they contradict their own prior statements on those very issues the contract simply required that precedent comply with its obligations under the law and present did that it didn't require any specific conduct if sanchez wanted that to happen they certainly could have and should have provided for that in their  to step in in defend against his claim present decided not to do that and so sancia settle and if that it itself didn't violate fourteen  this case speaking to the st question that was raised liberty still versus guardian title addresses that very issue in that case it had nearly identical and given the language that provided that no payment compromise settlement a approval in that case the court held that the indemnity horse right to approve any settlement before it was entered was a condition preceding to the indian the obligation since the indemnity failed to satisfy the condition preceding know and no indemnity was owed again significant in that case is similar to this case is the fact that the court expressly rejected the notion that just because a party on the front in may deny that indemnity would be owed in that particular case it still had knob legation under the written word of the contract to present as a condition preceding would you give me the citation please yes you're on the citations that is liberty steel company versus guardian ti that's your best case that's the case that's most most directly on point to this particular issue  your honor i want to wesson a condition well i don't you can use your time and your honor i would like to address that condition preceding issue to address that question for the court in what was raised in argument sum judgment we believe should be affirmed because sanchez failed to satisfy the condition preceding to its right to seek indemnity sanchez didn't give crescent notice as required prior to the settlement and an opportunity consent the settlement that language was very indemnifying party shall not be unreasonably withheld delay it goes on to state that only if and that's the language the court was focusing on earlier if the indemnifying party unreasonably withholds or delays its consent in it addresses this very point that the court has raised including as a result of its belief that it has no indemnification obligations so our berry issue was contemplated in the language here so including as a result of its belief that it has no  crescence crescent previously refused to a demo five simply is not address it is already been addressed by the court in liberty still and the language of the contract requires otherwise sanchez argument with regard to sanchez also argues with regard to the issue of whether or not there's prejudice required and i'm happy to address any questions the court has on that issue or i can move on well i do want to and i do want to hear about  at the time of his past so there were no findings this is no it is a state didn't pursue it it state did not pursue it your honor and there was there was no finding at the time of the passage that he was in fact an employee of any party whether be crescent or or sanchez prejudice yes your  raised that argument at the district court so it hasn't been preserved for appeal under flagship credit score versus indian harbor insurance company even if it had been raised the requirement to show prejudice is limited to the insurance context as an eerie guess we conclude that texas courts would not apply a prejudice requirement outside of the insurance contests the case sanchez relies on their brief on this particular issues a p a j vs hanover case in that case explains that the precious rule is based on the bargain for exchange under the occurrence based insurance policies and relies on texas insurance or order the other case advanced by sanchez the james construction case is a substantial compliance case so doesn't it specifically address the issue so it's our it's our contention that under the law in the state of texas that there is no presence requirement outside of the insurance context so that argument simply  crescent believes that this court should a firm summary judgment denying sanchez's breach of contract claims based upon the other con contractual provisions because they simply were not raised in accordance with the rules they also simply were not breached and the court did look at that issue of whether or not the other contractual provisions were in fact bruised in this case there was no finding that he was that mr lang was an employee of sanchez or crescent the other general contractual provisions are  ensure that none of it sub contractors we deemed to be an employee of sanchez i'm paraphrasing the allegation and so just to point out in response to argument it  in there is a specific reference to thirteen point one in addition to references to fourteen two now judge atlas at one point i just want to point out because went through the factors i was prepared to list out but the judge ordered it it was that judge atlas found that sanchez has presented no evidence that crescent failed to comply with the evidence that that crescent had failed to comply with the up o s a in addition to the fact that this was a defense and indemnity obligation and that langham had clearly made claims that fell within the four corners of the limited only to matters in which crescent has violated the f l s say and it does not and they don't have the obligations do not apply if somehow sanchez has breach steel case which is the case that counsel primarily relied on in judge atlas to rely on this as well we think if it actually demonstrates the problem with their client in this particular case the specific contractual language contained language indicating a condition precedes it said the obligation was quote subject to conditions close quote stated there in that son and fifty nine the opinion and so that's completely different from this particular case because that actually had language showing that there was a condition proceedings when you look at the language  of there is no such language indicating that there was a condition proceedings baps at most it is an agreement and i want to reiterate my last few seconds yes we completely disagree with that's further shown in the letter that i referenced to judge jones earlier which is twenty dash two thousand and thirty or dot seven hundred and six in which pressing claims one crescence position is it