my name is james d binocular please the court and i represent you each measure valley holdings the plaintiff in appellant in this case to say that this case had an odd procedural history of the trial court would be a little bit of an understatement but i want to get right to the heart of the substantive issues in this case if there are questions about procedure from the panel up a glad to take those there are three points i think that are central to this appeal the first is the contract claim a breach of contract claim which is count one of the complaint the second is a fraud claim which is count two of the complaint and the third is the issues surrounding  limitations of the contract consequential damages limitations and a merger clause so i'd like to talk first about the contract claim and backing up a little bit all of these matters are reviewed in oval by this court this is an appeal from a summary judgment on these issues there are also construction of contract issues which are to novo review for this court the first point is with respect to the contract this court has the power to enter judgment in favor of my client on the contract claim we didn't file a motion for summary judgment but the authority cited it's in our brief and footnote for the reply brief the yellow book case makes it clear that notwithstanding that we didn't file a motion for summary judgment if the facts are pretty clear and they are clear at this court it can enter judgment in favor of our client that's what in my favor my client that's what i'm asking that this court does covers one of those but not both right no it covers both ok so that's when you say that you've got a breach of contract claim and that district court had an idea about what was or was not ambiguous about a contract we should be considering c yes you should there are there are three parts to the to the contract the first the p s a the second is what's called the a r l l c it's an amended restated limited liability corporation which was part of a company agreement which was part of the closing documents and attached the p s a attached that a o l c r two documents one is appendix a and the other is exhibit c and those are central because it's apparent on the record that the court didn't even look additional prole evidence will and decided the contacts on ambiguous meaning the p s a was unambiguous and i think and didn't look at those other documents is that what you think happened no i quite frankly i don't know what happened i know that it is not apparent or disappeared from the judge c support your breach of contract claim well in exhibit see the whole point here was that somehow the contract didn't go to the issue of supplemental reserves it didn't go to the issue of whether the target age maybe you can tell us then what document or documents in the record if any clearly reflects the parties understanding that the purchase and sale was conditioned on their pre service spain refunded after the contract went into effect is there anything can you give anything that you complained to that says sat i'm sorry you know what i did i didn't quite get your question ok i'm sorry what document are documents in the record if any clearly reflects the that's the base case model and if you look at the record at page three seventy five and you look right up in the in the upper right hand corner the document states i mean this is a pit spreadsheets a little hard to find but the document states that the middle reserve account of closing five hundred eighty three thousand dollars ye point eight three million and then it says x or g idaho x or g is entitled to ten percent of that so you could i think be clearly to the same five hundred eighty three million five hundred eighty three thousand this ten percent  point eight three million yes right yes so you're relying on those two things but that is that's not quite the same number that wound up i think the numbers might be off by a few cents but the the number of the reserves five hundred eighty three thousand eight hundred sixty eight dollars or whatever the number is is is not disputed at all i mean it's tempered and then it's ten percent of the a total distribution which is five point eight million last year thirty thousand foot level question there's a there's a minor standing of the chronology is  think that was not hidden and i think everybody knew that and there was consideration additional consideration paid for the reserves correct then the reserves wound up showing up in late june and that's the part i think your plan says wasn't disclosed it was not disclosed  right so so i have a question about that that was it was a half a million dollars more that the purchase price was increased i'm sorry what was the increase in the million dollars in the in the purchase price ok there's other testimony that that i read about is so distributions come from rubies and it really renewals to the members including the age so when mr eisenberg was talking about a distribution to the target she was talking about a distribution from his l l c kulis really couldn't affect the time that it was paid right it was coming from it's like a refund that right no he has it was twenty seventeen then it was going to be twenty fifteen but then it came early an eighty nine i want just want to get both of your if i could interpretation the r five ninety five shows that the projected net cash and i think this document was prepared by your team and mr carr clueless that he didn't know about it but your is one of the documents that shows the projected cash four hundred twenty fourteen was three hundred eighty six thousand then it jumped up and twenty fifteen it was projected at one point two million and then it fell back down in twenty sixteen to seven hundred and six thousand receive the reserves is that right it was exactly right you're ok that's your position i've got that and i'll hear his take on that in a minute but i had that question from the record thank you i have a question about how your fraud claim against car coolest different from contracting for just a minute because what i want to do is talk about these these facts having your time you know that that's ok first june fourteenth twenty seventeen james carr kulis who is the president of the i  would be released on june thirty two thousand and fourteen now up until this time everybody had thought they were going to be released in two thousand and fifteen mr carr kula said city thing would be post closing mr carr colas head had negotiated an increase in the purchase price based on that post closing sale when the reserves would be in the possession of the age target at the time of the closing that's what the record in three nineteen he asked in this same document he asks e not to tell anybody about the release of the reserves including people on his own team now these people on his team are responsible for updating the due diligence in the sale so nobody on mr harkless is team knows about this mr eisenberg through his word doesn't tell green about the release and lets green believe that the reserves would be released in two thousand and fifteen as they had discussed let him believe by saying nothing right leads him to believe that that that is and as i asked him in his deposition did you and green believe at that time or did you and have the agreement at that time the twenty fifteen would be the release of the reserves said yes and that's when a court and the car cool step in the record at pages one twenty seven one twenty eight kar coolest lies to his own team about the status of the reserves that's in the record in an e mail at page three twenty one he tells his own team that there's nothing going on one of his team members has i heard there's going to be a distribution of seven hundred  dollars which would be the fight eighty three plus a normal distribution carcasses that's nonsense as i going to happen three twenty one that's at page three twenty one of the record i'm just going in alphabetical order here so this is the fifth point eisenberg confirms that the reserves are going to be distributed to members including the target yates on june third two thousand and fourteen there's a schedule he sends everybody an email he says the money is coming that's in the record of page eight sixty one june thirtieth twenty fifteen the reserves are paid to fagan as your honor noted as part of a preexisting agreement where the money just gets flushed out of an account and goes right to and fourteen two days after the money is flushed away to fagan mr greene sends an e mail to mr karr kulis attaching appendix a documents in the deal closes sometime in october if mr green finds out about it and says james carr calls what happen to the money the june to july two e mail is in the record of page eight sixty two these facts are undisputed i don't think there's any dispute about these e mails and what happened was met with mr karr cool said in his deposition i think what's important for the purposes of appeal as it relates to these facts is because this is a repeal for my grant of summary judgment and these facts are to be viewed in the light most favorable to my client who's been on movement these facts are presented to a jury i don't think anyone  reasonable jury could doubt that a fraud has been committed here so what's the difference to you if you if we were first on the fraud but not on the contract well the fraud claim carries with it certain consequential damages including punitive damages if it's a contract claim i think the contract legitimately would would bar those and i don't think they'd be recoverable under the law of new york or the law of montana but for purposes of a fraud like this yes punitive damages are recoverable and there are other consequential damages too and we should have an opportunity to show those two i mean what is it conceivable that you could lose on the contract claim that went on the fraud thing i don't think it could be i think if we want to know the fraud claim i think you know the thing about this this argument about what's a fraud was a breach of contract well if you commit a fraud that's also a breach of contract i think you breach the contract but just because you breach contract as mean you committed fraud in this case there's been both you know there are various ways to breach contracts in other words there are you know and you can commit a fraud and breach the contract but you've still committed a fraud right now we've taken you over and your five minutes totally disappeared and but we will give you a chance to respond thank you appearing on behalf of the i probably you know each parent and james car cool us not as there is the factual narrative we just heard wrong it's incomplete but not i would not say that i think that mr certainly it certainly seems like some sort of misrepresentation well your honor let me let me focus the issues for the court there are really two issues before the court here this morning did the court below err on procedural grounds to dismiss the breach of contract claim that's a fundamental pressure hold issue the second is was the court correct under new york law to dismiss the fraud claim and on that issue i really asked the court to like your honor we believe that ultimately on the breach of contract claim we have solid legal defenses as well as factual some defenses would be mixed questions of fact and law in this case what the judge did had he followed rule fifty six off we believe could be justified i cannot represent to this court that we filed a summary judgment motion and we believe that ultimately we have strong defenses and that and the appellant let me make a point here it's important to get this on the table here right away it is a bit paradoxical that the  here criticizing the district court for so it's fine take imposing summary judgment when you know motion was pending and now comes before this court and ask you to do the same to my client tempting because bath so can i just ask and i'm really trying to get my arms around this because you know hindsight's always twenty twenty but our exhibits what i'm calling a and c are they part of the contract yes and how's the contract not  at least ambiguous all the corps correctly found that the contract is unambiguous well that's my question how is that possible if one looks at it and i don't want to review the sites that i just went through with opposing counsel but it seems to me there's a very strong implication that his team was expect mr green was expecting five hundred eighty three thousand dollars and in fact paid consideration to receive those reserves so what is your best response please my response your honor is that again you have to look at the law though so we have to bifurcate we have to look at whether this is a breach of contract claim which we recognize there is a breach of contract if you look at the allegations of the second amended complaint all of the allegations just like condign corp all of the allegations forming the basis for the fraud claim are what they rely on for breach of contract tiredly the absolutely your response your legal response very well aggressively i think  they have no where in this case reception of the contract new york law is clear the stable vs delman case if you look at that case what the party was seeking was reception of a contract arguing that you duped me into this contract that's the decision in a case that involved a sophisticated contract sophisticated parties entering into arm's length negotiations represented by counsel that bargained for and limited their remedies and so i'm focusing now on the fr claim the damages sought and the breach of contract five hundred eighty three thousand eight hundred sixty eight dollars the damages sought in the fraud claim five hundred eighty three thousand eight hundred sixty eight dollars they are precisely the same damages the in all respects this case follows what judge hellerstein in that case the plaintiff dying core alleged that g t e at every turn deceived them about what they were receiving and to get up and say we grieve that it should be five hundred thousand dollars not five hundred eighty three thousand dollars in damages and then your briefing said well you didn't plead that in their time to come back as they were then we should have been given a chance to amend it we weren't because really the court we framed this issue so this wasn't live a gated you're on i don't know what he's going to say he may i won't speak for mr binocs but well this is your last chance at the microphone so i want you have a chance to respond your honor i believe the proper disposition of this case at the risk of having a district judge very upset with me for back i believe the proper disposition of this case is a rematch and on the contract claim now i do need to get back to  and and positively which is the other case they cite in each of those cases the court below adjudicated a motion for summary judgment that was presented to it in this case no motion for summary judgment was filed on the breach of contract claim and yet appellant has before this court now asking you to impose judgment as a matter of law even if the court were inclined and i don't believe that would be correct cause of action in situations in which sophisticated commercial parties bargain for and limit their remedies and if i come back to where we were at the very beginning i when i asked is the story that i just heard correct you said yes but it's incomplete there are more facts and i'd like to hear what they are because i'm tell i hear more your clients in big trouble ok the additional facts that are not fully developed have to do with what happened in that interim between july second and august first closing and that is you have a sophisticated party he gets no response to an e mail and point for so i saluted the e mail say it was an e mail that transmitted this appendix a and yes and we have never disputed that mr green believed that the supplemental reserves would come in two thousand and fifteen that's on reserves that's with that theme that we're talking about is to confirm that the appendix a was accurate and that it was based in part on an anticipated receipt of supplemental reserves in two smells trouble sometimes the lack of response is ok we're fine right this july second e mail which is i believe your honor something that a fact finder would have to adjudicate when are you going to read the words please confirm that this schedule meet your expectations and we can discuss the liquidations but when we discuss the matters later this morning i believe that's right your honor ok so please confirm suggest that maybe a response was expected right and then you don't do anything to emphasize to you that we're based in that in this case there's no dispute that new york law applies this court is bound to apply the laws of new york the law of new york is very clear in a long line of cases that you cannot read characters as a breach of contract claim by simply stating that the party never intended to perform the contract you call it fraud is it your contention that the law of new york helps your contact or are we just focusing on fraud now we're focusing on the fraud claim on that point your honor yes correct we're focusing on the fraud complaint and the law of new york will also be beneficial on the contract claim in some respects how so for example on the limitations of remedies club the lying on the right ok so the breach is a separate issue i will point out that the appellate is relying on the material adverse effect of contention that term is defined by the contract what some lay person says about it is irrelevant to the material adverse effect is defined right in the purchase and sale agreement and it says a material adverse effect change in the business assets or financial condition of the projects or the project related to these taken as a whole they are worth in excess of one hundred million dollars five hundred eighty three thousand is less than one half of one percent but this was an amount that mr carr kulis thought was significant and he went to mr green an additional compensation negotiated  not involve a valid fraud claim under new york law i'll mention the other three claims though i don't think they're before this court under new york law to state a claim for constructive fraud you have to show a fiduciary or special relationship the same as with negligent misrepresentation that cannot exist as a matter of law in the court below is correct and it's dismissing constructed from negligent misrepresentation finally on unjust enrichment new york law it is very clear that where you have a valid contract between the parties you cannot go outside and seek and i'm just in richmond claim so we're really focused here your honor i can i can see to this court and at the risk of  judge below being upset with me on the record saying that we believe procedurally and her was made below but the proper result in this case is to take this case back for a breach of contract claim these parties negotiated a commercial contract they cannot now come in and say yeah but it was from new york law is very clear judge heller stein goes through a very very careful and good explanation of why in a commercial context like this you cannot allow a party to say well you didn't intend to perform the contract and therefore i really want to sue you for fraud and i guess so but i mean why do you have to if there isn't any fraud why do you have to tell people don't say anything and why do you have to you know when they're asking questions why i mean he you know not go she added for extra money because if you got the extra money and it came in twenty fifteen as expected the coolest never would have been twenty fifth feet fifteen if you got there were service could never have paid this other entity right correct i mean but he couldn't legally pay this out there and to take before the contract was signed i guess there was a security agreement in place that all of the payments that were to go so it's but are again what you're asking me i have to ask you to look at new york law i understand judge fletcher i understand the court's concert with the conduct of mr kirkos but these were sophisticated parties that bargained for a commercial contract represented by counsel and it is the contract claim that they should be permitted to try to prove everything they claim as forming the basis for the breach for fraud is well because what you're saying your honor is that what he's saying is he doesn't intend to perform the contract new york law it's very clear that that's not a sufficient basis to convert a breach of contract claim into a fra thank you would you put three minutes on the clock please thank you a couple of things i want to talk about new york law but i want to talk about first all of the things that went into this fraud that are not part of the contract what seems like that's what he should talk about because  on the contracts how contract is a broken promise a fraud is an intentional misrepresentation if you represent at that closing that you have five hundred eighty three thousand dollars that you know you don't have that you've asked somebody to hide that you've paid to another creditor that you induced a purchase price for in excess of the original purchase price didn't tell anybody about it and told everybody to keep quiet about it and then it closing you don't call it material sounds as though your remedy least according to your adversary is rescission well yes yes yes you've got i sounds to me like fraud but is the remedy anything other than rescission under new york law i don't know of any case the damage that that says that the only remedy for a fraud is to rescind a contract there are damages that go along with a fraud that have nothing to do with rescission and in this case risen would do no good the egg is cooked this is scrambled you're not going to rescind this guy from i understand that i mean that in the very first paragraph we talk about rivera first paragraph of the opening brief it talks about those those arguments we don't develop them in the brief that's correct all right now can i talk about you know new york law for just a second  and i direct the court to pages thirteen through i think seventeen of our brief because i think we answer the questions pretty well there but i just want to read one one part of  there is no authority that we are required to follow in support of the proposition that a party who has perpetrated a fraud upon his neighbor may nevertheless contract with him in the very instrument by which of which it was perpetrated for immunity against its consequences close is miles from complaining of it and bind him never to seek redress public policy and morality are both ignored of such an agreement can be given effect in a court of justice it simply is not plausible that you can have contracts will immunity and then with fraud that's just not good public policy and that's their argument their argument is well you've got a contract and therefore you don't have a right for fraud so mr clark was could go ahead and do all these things that he did just put a limitation of damages or a merger clause in his agreement and just you know just like this and walk away from it that's not the law and it shouldn't be the policy we don't ask that your honour's enter a judgment in favor of my client on the contract claim send the fraud claim back to the trial court for for a trial