good morning may it please the court and paul shark izzie from the law firm of tanenbaum helper in syracuse in her street and actually joined by my colleague today amanda leo i first want to thank the panel for granting the request of appellants to have this oral argument  i want to focus the oral argument on one issue an issue that is being raised only by appellant flix international logistics han kong limited  flix international logistics and that is felix china but i want to focus on flix hong kong and felix u s and the reason i want to focus on that is because i'm going to ask this court respectfully that it reversed the district court's dismissal of flix hong kong's claim for breach of the loan agreement and instead direct the judgment be entered in the amount of three hundred thousand amount of the loan the reason for that is the court below found that the payment obligation of flix us was excused it's a little unclear whether it was based on frustration of performance or frustration of purpose but respectfully it was clear error by the district court to find that flix hong kong had either frustrated purpose or frustrated performance there is nothing in the record about the conduct of felix hong kong let me let me elaborate just a little bit the i'm going to start first with the frustration of purpose issue which was which was raised and was b parties there's the purpose of the loan was set forth and you can see on a zero zero twenty five the expressed purpose of the loan was application of f and c bond there was a three hundred thousand dollars sure the loan agreement that i'm referring to is at a zero zero twenty five in the first appendix and if you look on that page you'll see the purpose of the loan of the three hundred thousand dollar loan was application of f m c bond the funds were to be used and if you look at a four three one lines nine through fourteen defendant way who was the person operating flix us said i said to her that this is a very new company and we have no financial reports whatsoever provide to provide i need some of capital money to deal with the insurance broker because the agent said if you have this kind of large sum of capital it will be easier to get the f and c approval for the license so that three hundred thousand dollars was obtained from  kong actually only seventy five thousand dollars of it had to be used and it was used to get a letter of credit that supported the bond so the purpose of the loan which was to obtain a bond w used for ongoing resources of the business of felix us during the one year period however there was testimony when no it's on and the reason i say no is there's nothing in the record to say that it was done with the consent of the lender why the only basis that i can see in the record is there were communications first of all no consent of the lender was needed really i don't think  as to how the funds would be used it was a three hundred thousand loan for a period of a year but then and i think the issue comes up in exhibit h in the special in the supplemental appendix felix singapore and was also the general manager of felix us fail and there's discussion between regina and amy way the controller flix us about what should happen with the funds but the lender was flix hong kong and it was in fact the district court below that emphasize that because the district court said felix singapore had no basis to sue under the promissory note it wasn't a party to the loan agreement so again i asked the court here to search the record and respectfully if you look through the record the big argument that's raised is that there was diversion of business such that felix us might have some difficulty repaying well first i'd say that if you look at that eighty three zero one use it raised you the issue that is raised in the brief and it's discussed in part in the discussion of the parties as to whether or not there was frustration of purpose and frustration of there's a question as to whether the record and this was specifically presented contains any evidence vance on frustrating the contract and so therefore the issue generally was are huge frustration purpose right and for and also frustration of performances is one of the issues that that's addressed in the app pelleas opposition to go chapter and verse how does that help you how does that help me help you if you didn't raise i would say that the issue of whether or not the court below committed clear error in finding an affirmative defense of frustration of up it was just simply a mistake thank this loan agreement was sufficiently definite to exclude any parole evidence regarding the intent of the loan and i think on that that the trial court was absolutely right this loan agreement did not have any specific and date and specifically in the loan agreement itself it says subject to future negotiations and clearly judge kogan reviewed the law and in held that we're material term requires future negotiations that contract in itself is not admissible so that is not a forcible rather so that opened up the issues regarding parole evidence and what the intent of this loan was  here regina che the principle of of felix singapore testified that the loan proceeds could be used in fact a temporary temporarily lay out duties and expenses and cash flow i don't know here's how it does it does only peripherally your honor only to indicate that there is a plethora of testimony regarding the intent in the use of these loan proceeds were to be used for the for obtaining the f m c license and the n v o c c license this testimony by mr cunningham was who's felix us as consultant with regard to the licensing that the company f us had to retain and restrict the three hundred thousand dollars for at least the year in order for the license to be granted and that's at independence at page three sixty five so that  i submit is the evidence with regard to the loan between felix hong kong and it applies to felix one kong and felix u s but this is only one of the various arguments that duty action with regard to the breach of contract action the lower court held that there was no breach because of four particular reasons not just the one that my adversary cogently submit the first one of course which is  not addressed in the brief is that felix singapore was not a party to the contract through a loan agreement the second is that any way cannot be held personally liable for a loan executed between felix hong kong and flix us the third reason we've already addressed which is the the parole evidence regarding the purpose of the loan and the fourth reason is the undermining the frustration of purpose argument that  considerable testimony was had during the course excuse me of this for the bench trial and clearly that that evidence is undisputed there you know once amy way as as manager is controller of felix you started disagreeing with her partner or bow the the way in which money was misspent or mismanaged regarding renting an extra office renting an apartment hiring possibly incompetent person now when she started complaining about that that was the trigger for all of the events that followed including the beginning of the diversion of of all of flix us his business which is also on the spewed in fact misstate testified and admitted on their oath that they did in fact systematically directly intentionally they virt not only all of the businesses from  felix or felix china which was one of the top customers but also all of the business that anyway had poured into the joint venture from your own separate company for merica they diverted all of that within a e is the forty million percent shareholder of felix singapore felix singapore is only important by felix hong  this eight to ninety one to two ninety two and eighty four fifty five to four fifty seven and a four sixty that is testimony regarding him meeting held in taipei day to day operations of felix us by virtue of his relationship with felix singapore and its principal shareholder regina today so with regard to the breach of contract was no breach of fiduciary duty by miss way the the first is first of all there was no there was no evidence of a breach the testimony in this beautifully indicates that miss way acted in good faith at all felix us and did not personally profit from many relationship between between the joint venture partners there the court also correctly held that there is no relationship between way and felix hong kong because their relationship was one between the lender and borrower and in closing i would indicate that the district court also correctly held that  counter claims on behalf of miss way were in fact properly granted because there was a plethora of evidence regarding that the version of business and the the loss of miss if i may let me start first with the diversion of business the diversion of business as testified to by ms way at a seven one two line sixteen and seventeen the the entities that she identifies that were engaged in the diversion of business were flix china flix singapore owned by mister and in part and sky and she was on to describe that regina gave some warning to this guy who were pew to change the relationship with him and she says and then felix china stopped giving felix usa a total of sixty eight customers business was diverted and so forth now it's not exactly the missing eighteen and a half minutes of the watergate tape but why wasn't judge koch well within his right to find that the relationship changed and the version began as a direct result of his meeting in taipei a which he now and the others who were present and people were quite unhappy about when it happened with respect to mr pugh that meeting happened in november two thousand and thirteen the testimony of ms way was that the diversion began on april second two thousand and fourteen that's it for eight four lines seventeen and eighteen that is a huge gap in time in the interim and moreover the testimony was primarily about mr hayes instructions i think to make a link back to flix hong kong where you have the testimony expressly and in each instance if you look at all of the record cites and pages thirty eight to forty about the diversion if you look at the transcript it's all about sky left felix they were the operator and they were the people who carried it out that's i  that's true but you have to figure out which is the entity that is frustrating the purpose and if there is no link to it and even if and there is i would respectfully submit a state court action families us to do anything when you singapore owns eighty percent of it there is i mean it should be pretty easy it's not and the reason it's not a couple fold first for felix us to get rid of the two insist or effect anything it would need to have a us citizen or a license person is felix us to be able to continue the business that person was ms way and ms way separately brought an action in state court where she raise issues concerning flix singapore and mr yeah so look if there were breaches of duty those things are being handled you know you may worry about whether whether you're and this area company can continue doing business but if you're if is going to want you want to court to say it right yes and that issue is be come to court when you can just say it in the boardroom assuming these companies are organized and some regular basis they weren't that that the legal basis of frustration of performance was met here and that's the excuse that legally the court below relied on and your notice to respect all of these separateness of all of these companies none of which are anything more than something in somebodies imagination for the purpose of saying you're not responsible for the diversion but we should understand that they really are nothing for other purpose i would say that flix china publicly held company and operates that way and i would say that the court below drew upon that distinction in its determination that flix singapore can sue so what's sauce for the goose should be sauce