reilly for pruitt health the judgement in this case is contrary to settled law in three respects st on contract damages the district court misconstrued the contract and deviated from black letter law requiring caroline to show that it likely would have reached st productive use of a contractual condition to future subscription payments before recovering those payments as damages the court conflated liability with them edges and improperly precluded pruitt from challenging caroline's ability to reach st productive use resulting in millions an unwarranted contract amaj is nd on pre judgment interest the court allowed three million seven hundred thousand dollars in contract interest despite its own construction but the contract did not authorize it here the court also allowed interest to become pounded monthly even though the contract says nothing about compound ing rd the court disregarded settled georgia law by allowing stubborn with to dismiss damages of two million three hundred thousand dollars for nothing more than breaching the contract and by refusing to instruct the jury that a bona fide dispute as to damages precludes fees under the statute the court improperly took this issue from the jury and because it is such a unique and important issue of georgia law focus georgia supreme court repeatedly has held that a mere breach of contract or a refusal to pay for that suit is not sufficient to award fees this is not a loser pay statute and it has never been so construed per the court of appeals in georgia if a genuine dispute exists whether of lawless fact on liability or amount of damages fees are not authorized and a genuine or bona fide dispute is a reasonable question of long or a reasonable issue of fact even if it is not ultimately accepted by the trial court or jury despite this law the court failed to accurately charge the dre by removing the issue of a bona fide dispute as to damages the court recognized this critical issue at the charge conference stating this is what we call in the judge's circles reversible error if i'm  the court actually acknowledged that the law was on pruitt side but refused to charge based on its factual conclusion that no bona fide dispute as to damages existed because none was communicated to caroline prior to suit st the finding that a bona fide dispute does not exist can only be made by the jury nd the law does not require the communication of a bona fide to speak before litigation but only the existence of such a dispute georgia courts regularly consider evidence of communications and events stave off a client for some of his business and am i and i just missing something or no i wouldn't say you're missing something your honor there is some language in a certain line of georgia court of appeals cases that does talk about the issue only of liability and doesn't address the issue of damages or in some cases even suggested it spewed as to damages and is insufficient the leaves are cases that are in a line where the defendant changes it story on liability at trial gets all the way up to trial and then concedes on liability and tries to dispute damages to avoid and awarded fees distinguishable line of cases from the situation that we have here and there are also a brand of cases called the so sue me cases where there is a defendant who acknowledges it's liability all along and says if you want your money you're going to have to sue me for it and then all those one word is the brown case from the georgia supreme court fit in your analysis so the brown case judge or scanlon is simply not apply to this case in the brown case the georgia supreme court the sole subject to being penalized by the award of fees whenever it loses its case so brown didn't address this issue of a bona fide dispute as to damages versus liability and the cases that i  upon which carried on realize these changes in the story on liability at trial cases are easily distinguishable so to your question judge martin we believe that the georgia supreme court's precedent on this and the court of appeals cases that actually address this issue are clear and are consistent with our position but certainly if this court has any question about this important issue of georgia law you have the authority to certify it to the georgia supreme court and if you see a conflict we we are jew to certify the question is that this is judge newsom just a sort of put a bow on this i agree with judge martin that there are court of appeals cases going both ways supreme court dicta there there are victims and then there are victims from the u s supreme court where as we're here we're doing we're sort of making every guess why wouldn't we say there are victims and then there are victims from the georgia supreme court and judges scanlan says it seems pretty clear what the georgia supreme court was not even presented in the case in the brown case and so while there may be dicked that could be read out of context that focuses solely on the issue of liability if the issue of damages and at this beautiful damages wasn't in the case then it's it's not the kind of victim what this court ought to give any deference to because of course courts only decide the issues that are presented to them in the cases that hand then it was a very narrow issue that was presented in brown and it was is clear what the georgia supreme court case you're referring to i might have just missed it no your honor there are a number of supreme court cases including the general refractories case two hundred and forty dollars georgia two hundred and twenty eight dollars that stands for the proposition case does not warrant an award of fees under this narrow statute goes all the way back to the st manganese case and one hundred and seventeen georgia four hundred and so our position is that these georgia supreme court cases which remain good law demonstrate for just a moment to the interest issue there are two fundamental issues with the judgments interest award st it was a compound interest which is not permitted by the contract and nd the contractual provision didn't allow interest at all because it doesn't apply to lost profits damages i'm just a quick question but your compound interest argument can you tell me is there a place other than a footnote in your trial that you raise this to the district  we raised it explicitly in the footnote in our trial brief prior to trial judge newsome we we believe that we we adequately encompass the issue in our pretrial or with the statement that normal damages principles apply a trial as the the district court held in its summary judgment order and the issue was fully briefed by the parties in the post trial motions and it's important to remember here with this is an issue of law it's a pure issue of law it's not dependent upon facts or the development of the evidence and it's a nine hundred thousand dollars issue so it's an important issue that the court can and should address here we do believe that we adequately raised it but even if one  inclined to question that the court has discretion to consider the issue and because it's a pure legal issue and such a significant issue we think that it's appropriate to do so the nunes case and the georgia court of appeals reversed the compound interest judgment as unauthorized under substantially identical language to our language in this contract and under georgia law you just can't get the interest on interest without explicit language authorizing it so that's a fundamental principle of contract law and indeed here we think the to prove it on this issue based on the construction of the contract that interest is only available for late amounts which the court itself ruled here these were not late amounts and that there was no invoice for these amounts but on the  certainly possible for the court to just deduct that amount from the judgment however here it's intertwined with the issue of attorney's fees and the reality is that with the nine hundred thousand dollars issue on the interest compound being alone that in  of itself demonstrates a bona fide dispute as to damages and so we think that remanding for a new trial vacating that both of those components of the judgment and remanding for a new trial would be appropriate under the circumstances expressly quote a jury may award attorneys fees if there is no controversy as a liability even if there is a bona fide dispute as to damages and we fight maybe five other cases that state is not being reversed so what i heard from pruitt and this was in their briefs as well is that these cases are distinguishable because they involve right at the trial when they conceded and that distinction is objective lee false daniel himself in that case contested liability before trial during trial and even on appeal so that the defendants in the kroeger and the cases that we started so have no other answer and that means that when when proof i mean prove making a legal challenge to the jury instruction and saying it is legally incorrect that a jury can a to the species if there's a bona fide dispute as to damages that is clearly not georgia law and then you get to the georgia supreme court cases it's not just brown but it's also the couch case in which the georgia supreme court has said and that's pretty powerful evidence the the fact of the matter is georgia courts have repeatedly awarded or allows the award of someone with his misdeeds even when there was a vote if i just viewed as a liability as to damages and in fact the supreme court of georgia has done that in the forsyte case that we stated that case you can read it the court affirms the dismissal of plainness damages claims he loses on damages and yet it  larger point here is that what proof is sort of making it sound like is that this district court instructed the jury you must ignore damages when you decided prove stubborn to to just but but that's not true what the court did is it simply of discretion now the destruction's issue here is particularly correct because the fact is that true is literally put on no evidence no evidence of a bona fide dispute as to liability or damages prior to care and i'm suing and it's no longer disputed that that is the question is about a bona fide dispute before the lawsuit and proof put on no evidence and that it didn't put on evidence of communicating a dispute as to liability or damages and it didn't put on even evidence of a secret dispute inside its head that it didn't communicate that say well we didn't know what the damages were when we had and we couldn't believe that caroline was claiming such and such for damages no evidence and remember the jury instruction is not decided until after the evidence is in so so we get to that point and then there are some basic rules basic rule number one is that the jury instructions should be tailored to the evidence and basic number rule number two is that even an allegedly iranians jury instruction is a cause for reversal unless there was prejudicial harm and so yes it is true that in georgia a jury and it is it is uniquely for the jury to decide and the other thing about that is this rule in georgia that the jury must decide it is a long standing rule it's not it didn't come up in coming to and in fact the daniel case again that's the one that affirmed offered verbatim our jury instruction the day about a count council i'm sorry i'm just going to stop you if i can this is judge newsome of speak only for myself i'm i'm a little bit more troubled on your side of the the with the compound position on the substance of the compound interest issue i realize i raised the fact that there may be a forfeiture but if we get to the substance of it what your position is and the way i read georgia supreme court cases going back some time i what what is of interest to you so hackford raised the issue below we would argue that the language in our contract which applies to any late amounts means interest on interest which is what our expert testified fact question depending on the language of the contract and the part of the case they cited now they also cite the news case and it's very important here that the new case impose interest unquote past due fees those those factual and contractual interpretation issues because of the waiver but you know at the end of the day if the waiter's clear i mean to challenge compound interest in the pretrial order introduce evidence of campaign interest they did not raise the challenge in the motion for directed verdict and i will prove have cases of course where your court has in its discretion addressed a wave issue those are all cases of none of them are trial cases they are summary judgment cases and even one of those cases the blue martini case says that your th circuit is more likely to discretionary review a waive issue when it happened in summary just a judgement rather than after a trial where there's more strain on traditional resources to go back and and where could in fact issue so you know this is not an issue of general import it's a contract specific issue it certainly doesn't shock the contract with a conscience because georgia law permits georgia law permits contracting parties to agree by contract to compound interest and in fact office interest rates much higher than the one in this case and that the statute for that is  seventy four to be you know this isn't a due process or a constitutional challenge as it proves cases this is a challenge that could have been argued and should have been argued at that all in the district court  based on this contract language and the parties understanding counsel judge a scam on what is your response to mr riley's point that yes it was raised in a footnote in the trial brief so the trial br straight math and so no need for new proceedings in the district court it would simply be an instruction to drop that amount from the judgment and i don't  it says nothing in fact pruitt itself moved pretrial to exclude all evidence of the reasons is terminated so that to turn around and say that the is that the court is the reason he didn't do that  you know i've i mean to say there is no evidence of a bona fide feud before the litigation there is no evidence what happened was the most classic stonewalling you can possibly imagine they declared pro declared they would not proceed with the contract or pay anything further without offering any reason for why either the congress allowed it or  had done something wrong caroline sent a letter and says you can't do that you will all fees in the contract pruitt ignored that letter ignores emails and phone calls and during sure of your period a period where after the way it's also crystal clear that that send a on the insurance issue that an invoice that says that with capital letters at the top invoice for the damages amount would also have been futile they've already told futility doctrine doesn't apply to contractual notice that requirement and that and that's a truly baffling argument of course it does i mean you know fire is one of many cases unifier cases a case where someone says call demand is not required when you are you know that they won't pay that and i will say that the point of the invoice is not to trigger interest that's a circular argument the point of the invoice is to get p and so if they were right that well it wasn't futile because then you would trigger interest that's like saying well every proof of demand is is if you don't because see one way to i mean that that's not the point the point to get them to pay there's may award interest on a breach of contract claim it may order it and then seven for two says what's the interest rate if either the georgia legal interest rate the fall of seven percent or the interest rate in the contract and so this is just a prejudgment interest claim and it's a stepparent category of damages than the entire amount we didn't we didn't we weren't awarded something beyond a reasonable value the contract we got the entire value the contract as a contract damages and then in addition we got pre judging interest and the reason the interest rate is high is because the parties agreed by contract to that interest rate thank you you for the appellant pruitt health let me address st this interest issue and counsel for paradigm just said during the course of his argument it's just straight math and that's the point when it comes to this waiver question fundamentally it's just a question of math and it is a question of georgia law about whether compound interest is allowed or is not allowed and it's not something that is a question of ambush or surprise that this that that they did not know was at issue during the trial everybody knew it was an issue and it's a pure legal issue that can be decided by the court and can be corrected by the court and on the question of  adequately raising it right that's right your honor our point is that we did adequately raise it and we did so prior to trial and we did so during trial and everybody had every opportunity to address the issue and that the parties fully briefed the issue  the district court decided it so how did you do it during from the so i'm clear i know that judge martin suggested earlier and she's got a better handle on the record than i do that you cross examine genworth expert but when the expert gets up there and starts talking about compound interest in anybody ever raise his hand and say what's he talking about everybody knows this isn't permitted and here's the reason why here's the issue with failure to object to caroline's experts testimony on this point it is how he did his calculation there's no dispute about that he used compound interest we cross examined him on the point that he shouldn't have used compound interest because nowhere in the contract does it say anything of that compound and in fact this news case from the georgia court of appeals at three o seven georgia at three hundred and fifty five reversed the judgment for compound interest as an authorized under substantially identical language but we didn't object to the witness to the experts testimony on this because it is how he did it it was legally wrong but it was the basis for his opinion so it wasn't inadmissible it was just incorrect to do it that way which is why we pointed it out on cross examination so that's that's how we raised it at trial and how we again raised it and we didn't we didn't raise the rule fifty motion at the conclusion of the evidence again because it isn't a question of the sufficien the evidence it's a question of is it proper permissible under georgia law to award count compound interest under the circumstances under this contract language or not and then we did very clearly raise it in the post from others briefing and everybody said everything that they needed to say on that issue show that this court would not be going out on a limb by deciding the issue and of course has the discretion to decide it even if it worked that the issue had not been adequately raised in the trial  again the to the question of how much are we talking about here this is a this is a nine hundred thousand dollars issue just on the compound an issue for the interest it's a very significant issue so moving on to the attorney fees question the cases that are relied upon by paradigm from the georgia supreme court not one of them deals with this question of a stubborn bona fide dispute one of them has to do with the availability of the statute to a sovereign immunity whether sovereign immunity bought a claim under the statute that's the couch case that cites brown in a footnote and then the forsyth  action there was infact no damages claim in the st five county case other than the thirteen thousand six hundred and eleven dollars can claim so there was no reason for the court to be talking about this very issue of the difference between a dispute as to damage feud as to liability and the daniel vs smith case the georgia court of appeals case that they rely on has to do with the allocation of fees among different causes of action among separate claims and that was the holding of that case is that you have to allocate the fees to claims which were successful versus claims which were unsuccessful not the issue that's presented here and in fact daniel was  cited by the court of appeals in andersen versus taze which we include in our brief which reiterated the law that attorneys fees are on authorized under thirteen thousand six hundred and eleven dollars if the evidence shows that a genuine dispute exists whether of law or fact on liability or amount of damages or on any comparable issue and there was evidence here of a bona fide dispute as to damages we introduced evidence through the cross examination of car  stop now and to rest on our briefs on the other issues i'm also happy to answer any lingering questions that the court has the point that i was just making was that georgia law is clear that you can't dispute damages through cross examination of witnesses horten and french cases make that clear french be delish on particular is a very similar case where the court overruled a thirteen thousand six hundred and eleven client because damages were disputed a reasonable person could calculate the damages differently and that's exactly the case here they hired an expert who did a thirty page damages report that relied upon various assumptions including saved expenses and the discount rate to use for discounting to present value of all of these things were assumptions thank you got your argument thank you and that's one of my colleagues has another question for you i thank you that concludes our arguments for this morning so they reconvene tomorrow morning at nine a eastern time