good morning your honour's my name is peter scott i'm here on behalf of apex abrasives may it please the court briefly it might help to understand that the material we're talking about is industrial start then talking about the contract interpretation which i think is the primary issue from which the other areas assigned flow for the most part the district court interpreted the contract between the parties as having an unambiguous le having no minimum purchase term and made a number of decisions about evidence or decisions throughout the trial based on that interpretation why he did it and then when he finally wrote up his session and i don't know whether whether there were drafts from the defendants or not but he also made findings about modification your honor i'm not aware of any written decision by the judge or in some oral findings on about modification which i'll come to the principle point about the interpretation issue is that we agree that contract is unambiguous we it doesn't say if they feel like it it says they will purchase a minimum amount and it specifies so if the contract does has a have a minimum purchase amount is it your position at issue still remain for trial because there's an argue that it was  conduct modified it i think that's the issue that could be remaining for trial you're not arguing that you're not you're not arguing that the remedy for us is to order judgment in your favor you're arguing that you should be able to was not served your honor because throughout the presentation of evidence the court excluded testimony on pretty admitted evidence for claims that are in the final pretrial order asserting that they were being offered despite efforts to the contrary to interpret the contract that he had already ruled contained no minimum purchase term so as a consequence a significant amount of evidence was not accepted by the court it was submitted as an offer of proof and you have those in the record the difficulty though your honor is when the court got around to talking about modification what he said is the contract term for purchase minimum might have been interpreted and applied differently which certainly sounds as though there is some suggestion of ambiguity there so all of the evidence that was excluded because the court believed it was being offered to interpret the contract and it was not come back to that was so but under your theory and let's assume we agree with you that think evident that the contract contagion minimize purchased or that evidence would also be relevant wouldn't i'm sorry which evidence your own the evidence that the evidence about t negotiations and everything else if if we held is a matter of law that the contract has a minimum purchase term and the exclusion of this evidence would be appropriate would it not it would not your honor for two reasons under the mercury systems case all of the start with the last one a party can't tortious lee interfere with its own contract can the problem your honor is that in the facts underlying it of course those are alleged in the compel but no i'm just a very simple use sued the other party to a contract and claim to torturously interfered with the contract if it's black letter law that a party can't tortious lee interfere with its own contract correct my expectation honors that we would have had to make a choice of remedy at some point before you may have had to make a choice of ramat your argument i thought your argument and tortious interference was that tortious interference was with other alternative sales the in could have made because they were spreading these rumors that you c produce and so on so the there were two aspects to that your honor during the contract term prior to terminations for breach customers were being told material was not available when it was after the contract was terminated but by  i was first obligated to purchase the minimum amount they were secondly obligated then to market that material in a workman like manner tell me what contract was torturously interfered with the contract between w g and ok and  and i ask you again then to respond to this it is the law in washington montana i'm sorry and on everyplace else that i've ever looked at that one cannot tortious lee interfere with a contract to which one is party so therefore didn't the district court correctly dismiss the tortious interference claim there was no finding as far as i'm concerned as i can recall your honor then and i'm not asking about findings if you're only serious that they tortious lea interfered with their own contract then surely the district court was correct in dismissing the tortious interference claim was it not i don't believe they were correct because after the contract was terminated and judge breeze on asked me who terminated i'd like to get to that as well i i what i was saying was that i understood it was a second theory of tortious interference that's out with the question and then you said to me the only contract that was interfered with was this one so there may be two theories can you identify another contract you think was tortious leader feared with tortious interference with not with the contract with the client that outside of this contract when apex when to sell the material to existing customers after terminating for breach then w g i came in and started attempting to undercut and sell in the same place that is that in your complaint it is your because all i see in your complaint is a tortious interference with contract claim i don't see a tortious interference with prospective advantage or anything else well i'll let the  tricked let me ask you about fraud what's the evidence of fraud well we need to break this down between pre contract and post contract activity the the fraud claim and the negligent misrepresentation claims are based on representations that were made to my client before there was a contract before there were any commitments to a country they were told that the market works and would absorb the twenty thousand tons of  kind of representation you know which is you know somebody is estimate of a market which you go into your own kind that can give rise to a claim if somebody gives you their opinion of the market and says i've done research you can you belong and that your honor this isn't just somebody who went on to google this is a company an international publicly traded company that occupies  demonstrate for example that they didn't do the research they said they did or that the research was fraudulent research and then what would have to demonstrate yeah i mean if they did the research they said they did add it in fact showed what they said it showed but it was wrong would that be a function misrepresented i don't think under those circumstances but where they knew the market wasn't going to absorb that amount were they so you would have to demonstrate that that they either lied about having ascertained this so in a freshman fashion we alleged i'm not sure that research is the term i well by i gather that that what they did is they claim to have done some market research and found out that there was a market here they misrepresented the status of the market and they failed to acknowledge that they were simultaneously working to obtain a mantra even though not always they knew that it one that they they had facts contrary to what they were saying they knew that if they were able to secure a source what you're really saying is that we wouldn't have contracted with them had we known the real truth right yes is that a fraud claim that one did that this record said what you're really trying to do is take  negotiations and leverage them into a fraud claim and you can't do that under montana law was the district court wrong about montana law what he said is i'm not going to allow any information that's offered for the purpose of interpret in contract that's in writing well but if he she said more he said that he said you can't bring a fraud claim based on pre contract negotiations and i disagree with your honor the surat case is the one we rely directly to the subject is a contract that's what your art says doesn't the fraud relate directly to the subject to the gun owner here it does not really it does not the contract has nothing to do with the construction and permitting of a mill capable of producing what the subject of the contract is the production of conductor of the garnet is the subject of the contract is not production of the guy it's a the sales of the ok fair enough the mill isn't there there's no nothing to sell they built the mill based on representations made before  contract they spent a million dollars or more of investment capital to prepare a mill at that point and course is hypothetical if w g i had walked away and apex was able then to go find another buyer we'd have a different set of facts but you are you contending you constructed the mail not in reliance on the contract there was no contract when the mill was constructed and so that done if you would somebody came to you and said there's a big market out there i'm not going to deal with you i don't have a contract with you and you constructed a mill and a basis of that representation and you're claiming that you're entitled to recover from this rot there was a promise of a contract they were working together so it it was the promise of the contract this project has to have a net present value of ten million dollars or more they then sent a letter that said we've conducted a viability study and that's why i was focusing and the project is viable taken to mean it's worth more than  that to go back to judge her sons question the when they gave you that study they hoped it up it wasn't true it wasn't a real study they just made it up to fool you the evidence is that prior to the signing of the contract w g i entered into a contract with a third party with what a third party you've seen the evidence in the record v v minerals out of india for sixty thousand tonnes it turns out they were negotiating with the whole time and over there is that all of it is that evidence that the viability study is a fraud again we don't know your honor but i did the problem was you don't know you can you can argue you spoke lesion issue that separately but this is not a motion to dismiss this is a this is in effect the fifty b motion after motion for summary after summary judgment was it so the question is what is there in this record that shows us that there was fraud well the things that i've identified in the initial one hundred very short question technical question you voluntarily dismissed your tortious interference claim that's true or so your argument on tortious interference has to be the district court reinstated when the court vacated all prior rulings on all issues but didn't the district court say it didn't reinstate it after the fact or oh well i thought he said it right after the fact i thought it said that the pretrial yeah i'm not that i'm aware of your honor i'm sorry what i don't recall that i don't run i thought  if you one ideally what you want to win what happens we have another trial i think that's what we're facing are going to be the third preparation for a trial and as far as i'm concerned we haven't had thank good morning marshall nicholson on behalf of w so could you start with what i think is the eight hundred pound gorilla in this room how in the world isn't his contract unambiguous and has and did what he was supposed to do arc the question front of us is whether he got it right and so you don't have to defend him ok defend the words the words seem to me to unambiguous lee require that your client purchase a minimum amount now the contract may have been modified by conduct there may be all sorts of other excuses but if i'm starting down this road at step one can we all agree that the contract had an ambiguous lee has a minimum purchase requirement the only argument that i would make with respect to that your honor is if you look at article three of the contract it's called the mineral distribution rights and that's the head and the way this was set up is you can argue that it's minimum requirement or you can argue that it's the mineral distribution rights in that the first five thousand tonnes of the first year is absolutely the right of w g i and then they have a right of first refusal of any tonnes after that and for the second year it's ten thousand so i think when you look at that language of mineral distribution rights and then you look at paragraph four point three and four point four which set out how this is done then you can a given that yes why shouldn't we send this back for a trial on the contract issues it's it does seem to me that the judges argument that it was modern judges conclusion that it was modified by course of conduct is at least open to factual dispute is it not we do not believe it is and here is why all the undisputed facts in this case demonstrate the course of conduct and when you look at the u c c and what it says with respect to a course of performance it is that the agreement of the parties with respect to the transaction involves repeated ok janelle's for performance so so yeah i'm familiar with that so when i want to understand the what happened here what happened here is in the first year under the contract at that point yes that did not occur i mean when you look at the evidence that they have argued that they objected because one of the keys under the u is that the parties must object or have an opportunity to object and object so the other party with knowledge of the nature of the performance and an opportunity for objection to it accepts the performance they did not object in two thousand and ten as i see your entire case is really based on the notion that they didn't object in the first year when you ordered less than you should have correct ok and my question is is that a nuff after all i'm i've got a contract with someone they don't comply with the first time through i say i'll give them a second chance but the second chance occurs and they don't comply with again and i terminated that's essentially what happened here i think it's a little bit more than that because the first year they didn't comply the first what we're looking at is that april e mail which was excerpt of record page one thirty three and that is the proof that  apex offered as their objection so this is an april of the second year so they didn't comply and in this event don't understand i mean this is a different kind of mean ordinarily i would think that the kind of thing that the u anything about but but the thing is i mean obviously there were sitting they would have thought a right to sue you for not in compliance for not producing not buying what you were supposed to buy so why did they have to complain to you that you didn't buy when you at least within the statute of limitations what's the function of a statue of limitations on a contract if you can't sue on it for noncompliance within the limitations period because the u c c says that this is what's going to that you're going to buy a certain amount within a certain time period and you didn't do it i mean why do they have to go save you you know you can do it you didn't do it for that what's the problem what why do they need to to complain rather than sunia within the the correct statutory time period because under the u c c thirty dash one dish two of five says that if your merchants and there's no question these were both merchants this is what happens between merchants and if you follow the question is whether or not they had to complain and mediately where they could wait a while to see whether or not you would start you would start fulfilling your obligations and they did the latter and so the question is whether there's no doubt that they did complain at agree about all the undisputed facts ok i'm trying to figure out what the legal consequence of those facts is and what you're saying is the legal consequence of that them not complaining earlier about you know fulfilling the contract is that the contract was modified correct and what was it modified to say it was modified that there was no minimum requirement of them i mean there are other problems here with regard to what the record is because of the way the record was made when she was on and with the district judge having ruled that the contract meant the opposite of what it actually says and therefore i keeping out of the trial record a lot of facts they want to put in regarding that might have gone to this question of whether the contract was modified and and possibly the pre negotiation of the pre contract material i don't know about that but also the district judge as i understand it refused to let them put in evidence of capacity and then said that they didn't have capacity there's no question that they didn't have the capacity to produce timely they could have gotten it and he would let them do that because he kept saying it doesn't matter it doesn't matter if this is an m p it was contract well so he was not letting them try the modification question for most of the trial even if i accept what you are saying about the contract is that there was a minimum contract that the undisputed fact of the earth at the end of the trial but in the middle of the trial he kept cutting off the evidence the evidence that was offered with respect to  the non waiver was the three drafts that were made beforehand and capacity evidence and and he said doesn't matter what your capacity is what matters is what you produced and so on but for waiver the capacity i don't believe your honor is a material fact wrong because what you look at is what did the parties do during the time period and was there an objection and i go back to this april e mail that i talked about where they don't say you're not producing the memory you're not buying the minimum so they don't say that why aren't you by minimal what they say mister gene nelson says is that obviously we both agree that garnett sales of a pick product must be increased to for apex sustainability but they don't say so by your minimum what they say is as i explained we want to be very clear in your suggestion that apex sell independently of w g i apex will find new customers but we're mindful of the sales agreement between w g i an apex the sales agreement specified minimum tonnage of garnet to be bought and sold apex has produced garnet purdah product in excess apex but accordingly apex does expect to make its best effort to sell product and apex continues to make its best efforts to supply so what do we have a debt we have an e mail in september two thousand and eleven right yes that's the notice of and you're argument that that's too late yes because we've gone for a year and a half of this period of time and gene nelson testified when he was asked during the trial you didn't insist on the minimum zakk correct and he said quote a x chose not to go down that path so they chose not in the first year of the contract to complain about it and that you look you may have a may have a great argument on modification my question is why is  why is it as a matter of law that it's been modified because we don't think that the that any of the facts are in dispute and if it's the facts aren't in dispute then it is a determination as to question when a lesser judge  a little confused in this case the district judge granted a fifty b motion for it in effect did he do it at the close of all the evidence or before before all the evidence closed all of the liability that evidence there was one witness who started testifying on damages only ok so he in effect he did it at the close of the plaintiff's case on liability yes and he asked both sides are you done with your liability witnesses and the response was yes and so then he  ruled and now we're now i'm looking backward to things that he excluded from evidence where any of the things that he excluded from evidence things that would go to this modification of the contract issue i don't know your colleague says yes because i can show that we were really adamant that the only reason we would do this is if you had purchased the minimum and that's in the contract so if if the contracts clear and it is a minimum judge didn't think so you see even his findings it seems to me really in the contract so it seems to me his findings are totally worthless to at least agree with that his findings with respect to the modification are worthless no i don't agree with why because i think that the evidence still is in the record that's a different point but i'm ask they have to be as a matter of law don't take well here it's a matter of law if there is no issue of fact and with respect to the admission of the evidence that's certainly a discretionary as to whether or not if he's ruling on the right premises but it was really not the wrong premises that's the whole problem here he was ruling on alternative premises one of the plus and for most of the trial at some point he seems to have shifted over a bit but for the most part he was insisting that you couldn't put on anything that went to the even at the at the first pretrial where he made the initial rulings discuss modification and discuss that that this contract even if you accept what plaintiffs are saying you know i don't  that point yes your honor if you find that there was an error of law here by the district court with respect to the rule fifty b motion then it would become you would have correct one last question with the judge's ruling and put side to us interference or second with the judge's rulings on the tort claims just a follow on from his finding that there was that there was if there wasn't a contractor to make minimum purchase or did he did he make a separate analysis of those two it claims he made a separate analysis and if i can speak to one i want i think just just really that's all i thank you your honor what i had asked the court to look at as well as the evidence pertaining to allegations that the apex product was having difficulties they were working continuously with to resolve issues that we believe were not significant and should not have impeded the purchase requirements are in the contract so under the industry's case they were there were other reasons for withholding there or the other limiting find in this case that you couldn't fulfill the contract there may have been evidence that you couldn't and maybe a question for the jury but the judge didn't find that he did your honor he said it was the record was clear that at no time apex could have produced the material they were required to produce to satisfy the purchased that i'm trying to figure out whether that's the basis of his ruling as opposed to something he said well we think it's material to the question of whether there's a performance score you know a modification the company was ready willing and able to perform at all times they just didn't get purchase orders and i do lack ask you to look at exhibit five twenty six i have a record identification it's at one sixty eight in the second volume of exhibits and it's an e mail that came right at the beginning of the very first contract year and understand of course that shut down during the winter the contract year is about five months of production six months of production and in that it explains exactly how the process will work and it it coincides perfectly with the agreement they send a purchase order my client lets them know when it's ready they arrange for shipment they take it away there's no modification the evidence in this wasn't allowed in and no testimony was allowed on the subject but paragraph four point three of the agreement for shipping coincides and can be read harmoniously with three point one they send a purchase order we fill it we let them know when it's ready they arrange to ship it there was no modification or change the only thing that happened is my client withheld terminations for breach and tried to work the contract out midway through the second year realized that wasn't going to happen and terminated for breach you pretending that there was no modification or change is a matter of law or that there's a fact intentional modification or a waiver of these of these two that's if if it didn't affect it we could just decide as a matter of law now i know it clearly affected the record thank you