provision to be tied to how much in fees had been paid at the time the contract was cancelled as opposed to the fees paid under the contract there are three important facts that we believe th arrange to provide payment if someone is to win the billion dollar prize fact too that the discourse missed was that the contract provided for a contract feet of eleven million dollars that was derived from the contract and to invoice is that were attached to the contract that specified the total amount of the feet third that fee was then paid in two installments according to those invoices one point one million up front and nine point nine million in february of the following year the contract contains a cancellation provision and there is no doubt that yahoo cancel the contract in january of the following year and that cancellation provision provides for the ability for yahoo to cancel get a refund but then have a cancellation penalty they have to pay my client significantly that penalty was phrased using the following language a cancellation penalty of a percentage of the fee will be paid to my client will be paid now the issue here is what is meant by th word of the feet from that cancellation provision we would submit the only logical construction of that provision is that my client would get paid a percentage of the total contract  fee eleven million the district court and yahoo claims that's wrong it's however much they had paid at the point they cancel adding a temp or limitation to it so that they would read it of that you would get a fifty percent in this particular case because that was the cancellation fee fifty percent of the fee paid to date would be paid to my client we believe that the language in the structure of the parties contract really the interpretation we offer first the structure this was a somewhat unusual cancellation provision because it allowed for a full refund if they cancelled but then had an actual cancellation payment to my client two payments so it would be the timing really only matters to that second payment is made but the cancellation penalty has a predation of percentages twenty five percent if you can so already on fifty percent and  seventy five percent so the cancellation penalty does go up over time but what the district court added on top of that was it's not just the penalty goes up it's also derived off what you've paid so far but the language of the provision in no way imposes a temporal limitation on the word feet and it uses forward language you will pay this cancellation penalty after the refund now the only way that language can work that you'll have this mechanism we refund and they pay is when the possibility that the amount they owe us is the cancellation penalty is greater than the refund and that happens up until they make that second payment they do a one point one million dollar payment but the at that point in time under our interpretation the cancellation penalties always going to be higher than the amount you pay to make that final payment and then it will be lower under that scenario the language works will be paid if you adopt yahoo like the district court's interpretation the will be paid language is meaningless it's always a hold back of the refund because under yahoo's world it's always a percentage of whatever they've paid so they'll never be a  yahoo is paying us more as a cancellation they'll be what they paid us the language would read under their view that there's a cancellation pillowy we give them a refund and we get to keep a certain percentage of what they  that language is not in the contract and there's no temporal language instead it just uses the word feed now the contract uses fee and fees and contracts the somewhat intermittently the agreement in unfortunately there's no defined terms that clearly statutory construction there is in this case there is a way to divine see versus fees versus contract fees the way the parties work because there was the possibility that there could be a greater fee than the eleven million well right clear to me that any of those were truly systematic and coherent iran or i in in care i will agree there doesn't appear to be a master design for how they're using fee fees and contract fees in that sense except in the sense there is never the words used paid to date anyone or a temple limitation on any of the contracts of fees so the cancellation fee does not say we get a percentage of the fees paid to day it says the feet and the only see used in the contract is the contract fee plus any additional amount owed so if in fact the parties were attempting to limit the cancellation penalty to a tim paul impatient you would use that language to make it clear you would not use the language the fee because that's the contract fee and then on top of that you have the structure of the provision which says that the see the cancellation fee will be paid which clearly allows for a situation where the cancellation fee would be greater than the amount that we would be refunding them that's the only way it works what the district court did was it kept adding as yon doesn't as brief the cancellation penalty of fifty percent of the fee paid to date or at the time you cancel that language keeps getting added to the cancellation provision which then imposes that limitation on it now if you take a step further with yahoo's interpretation you get into the land where you find absurd results so for example on feb fourteenth according to yahoo of two thousand and fourteen the cancellation fee is five hundred fifty thousand dollars but on feb sixteenth two days later even under yahoo's interpretation the cancellation fee is eight point two five million because a nine point nine million dollars payment would have been made on feb fifteenth this court recently issued a decision called jacked up versus sara leave from judge prado on april twenty fifth two thousand and seventeen where he talked about constructions that seem to make no economic business sense that there's not a seemingly rational reason why you would have that disparity between feb fourteenth and february sixteenth it doesn't seem to make sense makes offers little rationale that the parties would tie it to the amount paid by a specific date because those could float furthermore the parties did include a schedule for the cancellation fee depend upon when you cancelled twenty five percent fifty percent seventy five percent so there was clearly an intent that the cancellation fee would go up the closer you got to the target incidentally turn of a forty cancel your appears to be no intent that the parties want to tie that to when payments were made to the invoices and indeed if you if you logically take it out you won't know the total amount of people that entered the contest until the day before the tournament actually literally starts and then you would invoice that amount and he would be doing thirty days you would even have that amount due until after the tournament ended and so under yahoo's scenario that the cancellation fees could even be different after the tournament because he said this is only go here so you know were there was it was staged in those two payments there is work to be done even though you agree to it yahoo has to come up with the rules for the contest and the promotion and do it in so you have this two tiered payment system of them some money upfront and then the remainder paid on february fifteenth it wasn't literally before the tournament but it was closer in time we could cancel up to fifteen minutes before the first game so the time for which they could cancel ran the entire scope of four they paid one point one million till they paid the full eleven million during that time you know literally sixty minutes before that first game on tuesday yahoo called so we don't want to do the promotion honor that that plays into the fact that my client has to arrange for underwriting behind them to have the players and so those individuals in connection with us have to commit capital early on you have to have the money ready to pay before the tournament starts we're required to get that and so the notion of the cancellation elysium closer to the toyman is we've locked up that capital for longer periods of time that's why the penalty goes up over time if you cancel literally if you had a change of heart eighteen minutes before the for the opening night tipoff that that's part of it we've committed the capital for the slow period of the tournament keep in mind the contest was over this particular case by early round two everyone was out so your capital is really during that run cancellation can they would be based on the full on a lot of million dollars that's pretty pretty specific it is your honor was not ever denying or withdrawn by yahoo it was removed from the contract not because they disagreed with the amounts but the testimony was because my client didn't want the specific fees in the contract he would be providing to the underwriters so there was never a denial that that's not how it works they just agreed not to include the specific amounts we would there's but there's no email track of afterwards saying no we don't like that or we've we've backed off from that or we think it should be the amount paid and you can see it's a significant difference the parties would have really addressed that and it was removed at our insistence because we don't necessarily tell our underwriters the total amount of the we're making we negotiate with them to pay them for free and keep it yes well it's a it's as close to a smoking gun as you'll get the smoke has cleared a little bit because we took it out but it it clearly lays to rest this notion that yahoo thought it was tied to how much they paid because then you would have games point i mean they could avoid paying that nine million for a while to see how it goes and they would they would never have an upside of the cancellation fee and so you have this notion that it doesn't seem to with the parties drugs one last issue i want to dress in a few minutes i have remaining is there's also a limitation of liability provision which the district court judge used to say here is proof in that language is that the parties liability was limited to the amount of fees paid by sponsor here under the district court in yahoo continually remove the word here under and substitute in effect the amount of these paid by sponsor should have been granted in yours you know we argued alternatively but we do believe the contract is clear that that this court could reverse and say that the district court was wrong to deny our summary judgment and render on that ground that the contract provides the cancellation fee in the amounts that we say we have argued in the alternative to the extent there is some dispute there is an ambiguity regarding the word feet and regarding the word the amount of fees paid by sponsor  under we think the extrinsic evidence which we've submitted clearly shows what the parties intent was but at the very least there would be that dispute in it but we have asked that we think it was clear thank you i appreciate please the court thomas patrick lane on behalf of yahoo a pleasure and a privilege before the court again this from yahoo's perspective is a straightforward as judge of have found however if this court does decide to look at extremes of evidence there is a whole host and wealth of evidence related to what was happening in the negotiations between the parties in the fall just before the contract was signed and there is the email that was referred to by morris of the time however she did not sign the contract nor  involved in the end negotiations the person who was was notified and scheduled for deposition but s c a decided not to take her deposition and there's an e mail on the record  as with respect to the clarifying language of cancelation sub to in her e mail to s c a clarifying language for god in the cancellation fees and exhibit a section two k in the event the contract is cancelled yahoo should get back all amounts paid as ca subject to these cancellation fees these fees five hundred fifty thousand dollars in addition of that in addition to forty two k in section two i would point the court  comparison to him i learned calling said about there being no temp oral constraints on the invoices section one of the contract says and it's very fully earned on the specified due date that's extraordinarily important language for the court are not fully earned launch but after the cancellation letter that went from yahoo to s c it so not only do we have three different sections that judge of connor a lot of on in terms of the past tense of fees paid but we also have at the very beginning of the contract that fees are not that have been raised some by a ca some by yahoo during the course of summary judgment he did not specify specifically call out paragraph one however reading the four corners of the contract  in addition to the paid references throughout not only the contract but the two exhibits attached to the contract and this section one where fees are not fully earned until the due da i think makes clear to this court that it was on him big us that yahoo is is not should not be held responsible for a what is now characterize as a four point four million dollar feet under and ca's analysis or explanation of the contract and yahoo cance the day an hour or a minute after the contract was executed yahoo somehow would owe two point seven five million dollars that is not a reasonable interpretation that's what they came out from that's what you're from yahoo senior marketing that you are correct your honor a judgment you avoid got well if we're going to if we get to point where this court terms that the contract is ambiguous and the court wants to look at an extensive evidence there is a whole host of expense of governance that contradicts that separate apart from is baton not being a lawyer who is involved in drafting the contract separate and apart from her not being the thirty six witness on damages there is an uncontroverted affidavit who was our attorney that you referred to earlier by who was our attorney negotiating the contract and there is an e mail which i put into the record a little bit earlier where she specifically is talking about fees to be paid so the whole of the extensive evidence i think contradicts ms baton as email she was speaking of course with s c a ship conversations with them but she was not the chief negotiator and evidence consideration position i think there's a variety of different e mails different documents different drafts and different testimony that contradicts  first raised in january of twenty thirteen i believe it was i'm sorry it was january twenty seventh two thousand and fourteen his first phrase there it was reiterated in  our answer affirmative defenses and counter claim interestingly on the merits but tiny email she was deposed in the case for us even though she was not thirty six on damages she was never asked think the court does not need to get to extremes of evidence i think judge o'connor's decision i think the court can rely upon the four corners of the agreement itself where in addition to section one that i've pointed out to the court that these are not fully earned until the due date there is also of course section four whe remain explicitly set as excluding the indemnity obligations of this paragraph or b where each party's liability in connection there with shopping limited to eleven million dollars and other than both by sponsors and i know there's a lot of discussion in the briefing by a ca that this is not reasonable because yahoo could somehow get out of the contract by nothing i think i think that that paragraph is a red herring in the interpretation of the cancellation fee provision because that it's obviously referring to  not to not to somebody canceling the contract before it goes through its limitation of liability and in the context that you know it refers specifically to somebody not  collecting the prize or something you know some other breach like that or somebody suing for fraud or would whatever i don't undersize i really do think that judge o'connor go a little off track in using that casting  back to interpret the cancellation provision or your honor i respectfully disagree and let me tell you why because not only does it appear there but it also appears in  to the contract which repeatedly refers to these paid i'm not yes but you know you everything in a in a contract like this is going to depend on how much one party is paid to another so that when that in this context it means after the after the contract has been performed and somebody sues you a third party sues then you're not going to be you know if you have a cross claim against the other you're not going to be liable for more than eleven million with respect to that particular paragraph your hon cancellation fees which is what we're really dealing with here touquet says cancellation fee is upon noticed s c a to be provided no matter the fifteen minutes prior to tip off of the initial game guy who may cancel the a general provision which is unusual canons of interpretation overcome with by the specific which is the cancellation fee provision that's what i was saying it was a red herring because in exhibit b we also see where it says excluding the indemnity obligations of section four b other than the party's obligation for payment of the prize amount in the event of a valid verified winner of motion the party has liability the other are limited to the amount of these paid by a sponsor here under and i think looking at the four corners of the two exhibits on the contract but the parties clearly meant was that yahoo's liability in certain stages was limited to the amount of monies that have been paid that's also consistent with section one that means ca could have a new form of cancellation fee plus consequential damages or incidental damages up to one point one million is that would that isn't that the logical extension of what you're saying s c a could sue us for their actual damages which were forty four hundred dollars well no i'm just saying hypothetically the extension of what you are saying is that one point one million was parties agreed quote limit of underwriters an additional half million dollars seven hundred fifty thousand or something by the time that you cancelled according to your interpretation your backward looking interpretation of the part mutual limits of liability they would they would have a very strong argument to close to cancel out your one point one million altogether but you're right there was no good that is respectfully hypothetical upon a hypothetical and it's based on your interpretation of the party's mutual limitation of liability general but s c a never placed coverage with anyone nor could se a place coverage with anyone you know what i'm saying i'm talking about contract interpretate based upon a very realistic potential hypothetical which to me suggests that the parties did not mean to tie their mutual limitation of liability provision to the cancellation per that's all and i respectfully disagree with your honor in light of their language that  repeated three times actually i think four times in light of paragraph one related to monies paid which is what judge o'connor ruled in addition to that in terms of the numbers that we're actually talking about separate apart from the expense of evidence and there is an e mail in the record which i've cited which talked about ten percent of the contract feed we have cited a variety of cases to your honor related to an reasonability and i'm certain when you've got a forty four hundred dollar expense which is all that's in the record that s c a laid out forty four hundred dollars and varying times during the course of this litigation they have sought either nine point nine or four point four million with one point one million in the bank and i would suggest your honour's in terms of whether it's midwest continent continental or the other cases that we've set forth there's no scenario under this contract or yahoo's liability would be zero  saying that in the papers as s c a did is simply false there is liability there and it's limited under the three terms of the contract to what yahoo paid and it paid it upfront dismissed our breach of contract claims which are the two that were appealing to the court in terms of the performance claim the clear evidence is that as ca as an insolvent corporation never could have covered they didn't you cancel how can you sue for breach when you cancelled because they did not have a form of the contract but that wasn't clearly wasn't why you cancelled you can't because you got because yahoo got a better deal with berkshire hathaway and  yahoo paid less in the end and became a co sponsor of the promotion to we may have paid less in the end however we were not the sponsor of the promotion in and of ourselves which was the whole point of contracting with s c a and trying to get to market first which in terms of a promotion like this the key is getting out there in the marketplace first as far as the second breach of contract claim is concerned  us during the course of discovering that s c a never could have lived up to the promises it made related to liability it never could have covered the debt related to liability and had no intent  doing so so suggesting that the official rules should have been presented earlier they should have been signed off by the each on s c a and under the four corners of the gree argue about that there is a provision of texas law that you if you breach of contract you can't sue for performance is that were you doing here we are not suing for a specific performance with respect to   for breach right but we don't it's our position your honor that we did not breach the contract we complied with the contract the party that breached the contract as a judge upon or i believe  are entitled to a refund of the five hundred fifty thousand he also found that art to which contract claims which we've now appealed that the court correct he found that they did not have merit and we disagree with him on that point i may please the court let me just address the issue regarding the emails and the attempt to distance themselves from this but time who was their corporate representative in discovery they respect her don't spend too much time on it because  language case not a emails came i agree or honor except to the extent that yahoo wants to claim that in the course of dealing with us they communicated something different than what the contract means and by citing some e mail from  tide which they said was at the record six three a day i curse look at that e mail it is consistent we've always said which was yahoo was concerned they didn't want to have to if they cancelled us keep what they've paid us and have a cancellation fee and they tempted to clarify that we get back our fees right and then we pay the cancellation fee right if you look at that e mail it's very clear that that's what they intended and i'll point out that it was missed but tie from yahoo inserted the dollar amounts in that email and simply to us so that is the predicate by which we say that the provision in the cancellation provision must work as percentages of the overall contract fee that  said i do agree that that what the biggest flaw in what judge o'connor did was he attempted to use the limitation of liability and really overlap it on the cancellation fee in a way that the contract does not suggest and it made it sort of a double reduction overall liability is reduced to the total amount paid on that date and then the cancellation fee provisions further reduced which you get and there is no evidence in the contract or the structure of the way it works that that's what the parties intended the cancellation fee is within a provision dealing with liability and indemnification and what happens if someone doesn't get paid on the claim other some libel too resulting from the cancellation provision obviously deals with what happens before you get to the contest and they stand alone we attempted to do was to construe them in a way that they were consistent and that they're both tied to the contract seat limitation of liability is limited the total contract fee of eleven million dollars the cancellation provision is a percentage of that eleven million dollars depending upon when you cancel and we thought that harmonized both provisions although we've never agreed that the liability provision somehow construes or comes on to the cancellation provision itself with respect to the other arguments they're also irrelevant that somehow this isn't a reasonable fee or we were insolvent or we tried to lure them in none of that goes into the actual interpretation of the contract the only evidence that was put in the record was the cancellation provision was requested by the underwriters who were going to have to commit capital we would have to pay him a fee to do that and what would happen if yahoo wanted out before the contest and that's was the origin of this particular provision and they obviously thought the amounts were ok because they suggested those amounts to us with respect to how we got here at the end with respect to the rule sixty eight motion i just do i respond to one comment the reason why he was talking about discovering what happened is because the claim for a refund was member of alleged insult the close of discovery when they admitted their petition and even then that's the first time they raised the limitation of liability provision but they never added a cow or a claim for a refund he says well we did at the very beginning the letter they wrote to us at the very beginning from their in house counsel demanded all the money back and said we breached it the notion of a refund only came in their summary judgment motion were part of their prayer for relief among the myriad of relief they asked for they asked for a refund and judge o'connor in his memoranda opinion didn't order a refund he just said this is how i think the contract works