discuss with the court this afternoon the first of which is the interpretation of the non competition provision in the distribution agreement that's exhibit c to the distribution agreement that you are not to compete with with game tech during the period time the trend was being paid for non competition it was being paid to phase out compensation of ninety percent eighty percent seventy percent of the commission otherwise due to it for the charities that were in place as of the expiration of the distribution agreement so  the larger the commissioner compensation payable to trend why should we be surprised that and why would it be illegal to have a non compete clause that would be coextensive with the territory over which they were granted the privilege of representing games that the entire southeast it wasn't any neighboring there i think if i understand your question your honor i think your question goes to the territory issue of the non compete genuine as opposed to the tidewater basin area operating if you were operating at dairy queen in norfolk and then we had a non compete clause to cover the state of virginia i still think that's absurd that i can't run a dairy queen  winchester just because i used to operate a dairy queen in norfolk because those are hundreds of miles apart a completely different market but but your client your client have the right to develop a client base throughout the entire state why going to be unusual why is it illegal to own that they should have a non compete clause for the same territory for which they had come the the non compete should be looked at least by arizona law and at least three different categories one is the territorial restriction of the non compete what is the geographic area in which this non compete is placed for the both national first no your honor trend was a kentucky limited liability company with its headquarters in austin texas its only business was the business of distributing bingo and virginia after the kentucky territory was severed from game te as i don't think you understood what i was trying to find out that i'm not asking about state of incorporation of where the activity covered by the contract yes i mean asking whether both in tech and trained gaming both to business in one way or another with one company or another nationwide and not just in virginia the answer that question i believe is no as to trend trends only business was distributing electronic means go in virginia after kentucky was severed some relatively short period into the four year period of this tribute an agreement game tax a publicly traded company that i think has  to a small town they'll often have a restrictive covenants so that they don't set them up for practice and then have them leave and take his patients with them and leave the medical group set up on his own at strong public interest if what they're doing is neurologist and found out of the state or at of the town or if they're running the one op ed ophthalmologist out here it doesn't look as though there's any public interest except him providing perhaps that the most competitive environment for him go distribute i think it could be categorized in three different ways your honor one on one end of th non competes that go to traditional employees such is insurance salesman's for other folks that have territories and at the far end of that continuum is the doctor case that you're talking about where there's really a very compelling interest to make sure that citizens receive medical care and arizona has a really surreal when you worry about making a man on able to earn a living and that's something that the courts have considered in many of the restrictive company cases yes here you're dealing with corporations not individuals so it's hard to see how that would apply you're dealing with on one hand a publicly traded corporation on the other hand a limited liability company that consisted of a couple of members of that liability company is the corporation a limited liability company is a legal way of that cousin to a corporation as opposed to a sole proprietorship or an individual  but i think your question goes to work the public policy here and you addressed it in part by is this just an anti competition non competition public policy and that would be our my response to you all if the agents can easily and quickly twist the business away at which their customers away and that the it seems to be with this case was the case is say that the employer has a legitimate business interest in protecting its customer base and therefore if it has a narrowly drawn restrictive covenant it will be enforced because it means yours strikes me is totally i'm problematic for the reason the judge by being raised in his question basically they get paid for not working for three years yes your honor and i'm not at the scope of the activity  basically calling on customers or devoting their names it's hard to see where there's anything and reasonable about that as goat is the only thing that's that strikes me as even arguable and i'm not sure if the the problem th issue that i'm arguing scopolamine while the territorial scope is in is by definition on the one compete the territory is the state of virginia if that's where they were free to sell before that's what they were free to sell before but by by practice and by the four years of their efforts they were service seen forgive me if i get the number wrong fourteen charities i believe that were located in the tidewater basin which is all within a twenty mile area of virginia and additionally the fort lee charity which was a military to the non competition agreement if somebody was never a customer before could it but they were in virginia that wouldn't prend be free to call upon them to look at them is and not be in violation of the competition agreement trendsetter has no game tech says yes me the words that you rely on for the no answer of the now answer was the testimony by stephen iran a mess that he understood that non compete to be throughout the territory of virginia since the territory of virginia and that what's this within the territory but then it goes on to prohibit activities and  within the territory but say that all of virginia for the term of the phase out payments let's say that three years now what is it that they can't do in the commonwealth of virginia for three years they can't call upon  influence to list it or attempt to call upon influence or solicit any customers of game tech or fifth or anyone else in any way in doing the same for any reason all up on customers to infect us for any reason whatsoever yes whether it's so that if somebody was never a customer of game tech it looks like there's no twisting problem no application of the covenant because even though it's the activity is within the territory it's not a prohibited activity  my wrong on that i'm i'm missing some words here no i think you're asking me what's the no part and i'm answering i'm responding to you and i mean as far as time of holmesian bad man here and i'm in trends position and i read this to see what i can get away with well i can solicit game to customers how side of virginia i can try to twist game to customers in vermont or anywhere else i want to go maryland i can customers out once the three years is over during the three years within virginia even though i'm bound by the covenant with him virtually the only activity that i'm not allowed to do is try to twist ga and i would submit because i'm certain opposing counsel will point out the trial court and post verdict proceedings issued an order in which he said that the jury found the term quote customer of gain tax in quote to mean the charities that rent place cessna september twenty eighth of two thousand to those charities that were being serviced the last day of the of the term of the distribution agreement and judge holland also then said in that order and i still find the same my argument is not concerning i think i'm stuck with the factual finding that customers of gain tech pursuant to that non compete  the twelve charities in place as of september twenty eighth of two thousand and two that were using game tech equipment that trend then put onto the team to manufacture my argument concerns the language of of customers of game tac when it says for any reason whatsoever and therefore what is the problem with the problem with for any reason whatsoever is it says you can't you can't literally and clearly contact a customer of game tech to sell paper bingo products you can't contact a customer of game tech to sell why is that unreasonable i mean once you're no longer  distributor for game what is the end reasonableness and game saying why does the if are not working but stay away from our customers why does game tech have a legitimate business interest in prohibiting trend from time tackling a customer of game tech for the purposes of doing some sort of business that game tech doesn't do game techs so business was electronic mingle products period game tech had no legitimate interest in protecting its customers from somebody soliciting them for girl scout cookies or for the sale of cokes or cigarettes or for the sale of paper bingo products or other things of that nature one trend develops things the game to have now because if they are contacting him for purposes of paper bingo products which would arguably be which should be permissible because game tech has moved no legitimate business interest in precluding that activity as long as trend doesn't then cross the line and get into electronic bingo products it should be fair game why i mean if i'm sewing electronic bingo products i have a very strong a business interest in my salesman not going to my customers and think buy the paper big go products for me it'll be cheaper the customers will have more fun to remind him of when they were kids playing bingo for the four years that trend was supplying electronic pingo products there are other suppliers of paper pinko products each bingo gain that takes place with thirty or fifty or sixty people in there as the electronic component that some players use and has the paper products that other players use that has the gifts and novelties that you win when you get you know the lingo diagonal all of those were sales activities that had nothing to do with game t throughout the four years that trend was the distributor there were other folks selling them those products game tech has no interest in protecting its non electronic bingo products but the non compete is broad enough to prohibit that it's not narrowly drawn your argument would be far more powerful if what tech was trying to do was either refused to make the post terminations payments to you it was bringing some other kind of court food against trans to prevent them from going let's say into richmond and trying to sell products of whatever nature related to bingo whether they were electronic or paper in a completely different market absolute flagrant violation of this agreement and the only way that you can win on is to get the whole agreement tossed out am i right you were you've got a tough position counsel i'm sympathetic to you are you are right and that characterization particularly after we've had a jury verdict and a jury determination there were many issues in the years that led up to the litigation about why trend did what trend did but sitting here today i can't argue that a jury there's been a jury finding that my client breached the contract and interfered with contractual ations here john and so we have to conclude that the agreement should be totally thrown out because of that phrase a pretty good competition in other i'm telling you yes i'm telling you that is a that it's a matter of law that the law should be enforced impartially as opposed to sympathetically and that the  policy there is if a employer overwrites a broad non compete their stock with that language if they wanted to bargain for and get the broadest protection possible in their non compete they're going to fall or live by that language and the argument here is while my client is unsympathetic the language for any reason whatsoever encompasses a whole lot more than electronic bingo and if you look to article three point the agreement you can see that if game tech wanted to write a provision that was limited to electronic bingo they could do it because the last sentence of article three point three defines what competition is and it's doing anything having to do with electronic bingo products that's not the language it's an exhibit c i have thirty seconds if i could hold those for s that i was going to make and that is that there was an elephant in the room with this restrictive covenant and that's that it was highly compensated for not only was it highly compensated for but it was negotiated in that way by a very experienced business people and in addition to there being an elephant in the room if i can really butcher a metaphor there was also a rhino rhino in the room in the sense that which did leave a lot of room left for the and that's that's that this was a not a covenant not to pete to compete but an anti piracy provision as the court has recognized and that i want to make contract expired fifteen customers fourteen in tidewater and one seventy five miles away at fort lee the contract was written with the word territory there for two reasons originally the territory was to find more you mentioned you know it was a kentucky and virginia and trent gaming had the opportunity to expand across the state one of the reasons that they didn't is the reason that we allowed the contract expire they really weren't accomplishing what we wanted but the other reason that the territory was put in there was to distinguish it from the other forty nine states were trying again we could still do business as you know from our papers and mr chambliss mentioned we're in thirty eight states we do business with this trend or did business with this trend in virginia we did business with its parent company in texas where it was our largest distributor and the other states were wide open there were discussions that the trial record is full of testimony about there were discussions about the parties doing business in other places when they put this particular restrictive covenant together the intention was to define the customers within a defined term or to my right in thinking that under this deal trend gaming could've gone over to the maryland side of the border between virginia and client was that it was meant to deal with virginia only the only issue of dispute was mr meyer we said look i was talking about customers our existing customers in virginia he said i wanted it to be that you would stay out of virginia altogether or honest wouldn't go for it and what we settled on was a non solicitation provision involving the customers in virginia so there was no testimony your honor to answer your question that they couldn't go what about what about the for any reason whatsoever language did not include non tech products well there was a dispute between the parties but let me start out by saying your honor that neither one of these parties has ever city was the products the reason it doesn't say electronic bingo products there is that if you look in section one point one of the distribution agreement that this restrictive covenant is attached to  it says the trend gaming is getting an exclusive distributorship of all of our electronic video bingo and similar products but they're also getting the first right to negotiate for any other products that came tech develops later so if we had developed a whole tabs or whatever other gaming product might be available in virginia and legal in virginia for charitable purposes trend had a right a first right to negotiate for them so you don't want to define it so narrowly but the testimony by mr meyer he was if you want to go in and sell sell sort of pop paper products or whatever so so be it but i agree with your honor's argument that we could lawfully have precluded trent gaming from going into those halls at all for any business purpose while we were paying them this rich compensation for three years because somebody who gets the toe in the door selling paper products or something else has every opportunity to say you know if i cut my paper products so that they're ten percent of the cost of the electronic thing or products maybe i can switch a number of people away from electronic to paper products that you don't want your competitor who knows these customers this well to get in the door for any reason whatsoever and because this is a non solicitation provision which under arizona law is viewed much more leniently and is considered much less restrictive  then a covenant not to compete whether we read that broadly ordinarily it's our position that that was entirely lawful under the circumstances and we done something really elementary here my only experience with being go through this is a little kid and adopter now at an ink marker rather than a chip so that you make a permanent mark on that piece of paper and the difference is that i thought i chipped my it's product is a computer that will allow you to play arguably up to a million screens at a time although the states regulate it to like thirty or sixty you can play a number of different then go cards all at the same time in the computer will track them for you so what do i have in front of me i have you have something that looks bigger than m blackberry and it is a it's a handheld unit like an old texas instruments adding machine type of thing or something and on it is a little like trying to a computer screen that automatically shows you the card that is closest to you winning if you've bought say ten cards and it's automatically tracking where you are as the reader up front says that ball is sixteen or tenth way more expensive than little kids bingo but i guess if somebody can play thirty or fifty cards or whatever at twenty five cents a card it starts going to be real money that's you know it's purely a question of how much you want to spend but it's also regulated by the states because it is for charitable purposes so people aren't going out and spending thousands of dollars a night they're spending smaller amounts of money so i've talked about the elephant in the room i want to say one of the thing and we mentioned this and i think it was in a footnote and i think this is a very important point because mr chambliss his argument in his papers that  he didn't really have time to get to was that the jury should not have been given the question of the reasonableness of the scope now that we've been talking back and forth about isn't this reasonable under the circumstances because it's footnote in our papers it says in some instances however a promise to refrain from competition is a natural and reasonable means of protecting a legitimate interest of the promise arising out of the transaction to which the restraint is ancillary in those instances the same reasons argue for its enforceability as in the case of any other promise what we have here for is a compensated separately compensated for promised it happens to be a measure of a restraint of trade because it prevents trend from walking into fifteen halls but that's no different than any other contract that obligates a party to do something or restrains a party from doing something this particular clause because of the way it was drafted as a non solicitation agreement and because it was compensated for i suggest should never have been submitted to the jury on a restraint of trade jury instruction it was during stretch and thirty two was irrelevant we believe that the jury should simply have been asked to decide what does the covenant mean and has it been breached and the only issue that we think the jury needed to decide was was this an option or not and the jury did the side that question asked for a new trial not your honor because i want might be on the other foot otherwise i mean we did argue you know this is a non solicitation provision this should be treated differently and when you read the cases the gann case and the hillgrove case that we've cited in our papers they don't really get to that issue they do say something that's compensated for is treated much more leniently they do say a non solicitation provision does not contain the same types of problems that we see otherwise and it's not judged as necessarily unreasonable the standard gets very relaxed then when you look at the restatement contracts section that i mentioned to you this comment our view was this is just a simple promise that's compensated for and should be treated simply as a breach of contract and in fact this jury did decide this was not an option therefore you had to adhere to it mr honest and your company and to you breached it three here are the damages there's nothing here to set aside or send back to the jury at all but if the court disagrees with me on that we don't believe that it would need to go back for a jury trial at all the first question it would have to go back for is on the judge to consider what i raised in my rule fifty motion before we put it to the jury which is isn't this covenant on the face of it and forcible could a reasonable jury have ever determined that this was a was an unreasonable on and forcible covenant and because i raised that on rule fifty and of course the judge did need to consider it because the jury went my way i think if this is going to go back it doesn't go back for a new jury trial it goes back for further findings and consideration by the judge because the judge sat there and heard all of the evidence and not only do i think he could rule i will leave he would rule in that regard and the reason that i believe that is because he ruled on our permanent injunction motion and he found separately on that motion that this was a reasonable and forcible covenant he cited both the jury's findings and his own findings in that regard to margaret in detail i went through everything about he did all but rule in my favor on a rule fifty motion and that's just because you didn't have to because the jury went my way so i think that you know we're going through almost a pointless exercise in sending this back to judge holland i think this court obviously can state as a matter of law ignore it are i'm saying that it's an error that doesn't make any difference i think all it was errors and that to the jury because i don't think it was fair or just send the case to the jury on the question of was this an you want to affirm right exactly i do i keep getting confused by your argument going to i'm sorry i thought i preface this by saying you were saying the judge made a mistake against us but we want anyway so it doesn't matter exactly my point was simply and i didn't this clearly enough what i said was if the court disagrees with me that this doesn't need to be sent back then it wouldn't be sent back for a new jury trial that would be a tremendous waste of court resources and money it would go back for the judge to make the findings necessary but i don't think it needs to go there i think it stops right here i just don't presume to tell your honour's that you know you must go my way and i'm saying if you're if you're thinking something different i do not agree with mr chambliss at that this means a new jury trial it means the judge who's made all these findings already simply needs to be reaffirmed them and say look there's there's no credible evidence to send this to the jury the no jury could sustain this  on these facts i think you would say your and you would have been entitled to summary judgment had you moved for one and you're certainly entitled to judgment as a matter of law after all the evidence exactly i think the only travel issue of fact was that option question and the judge found that as one of the reasons why he didn't grant summary judgment was mr round to saying it's an option he can either take the compensation or he can take the customers the jury decided on that i don't know how i could've gotten summary judgment on that that was kind of a back and forth thing the jury went my way i think the rest of it there's really nothing to to litigate at all there are a couple of other issues in the case i see i've got about four and a half minutes here or that i would like to mention just briefly good findings on that on the post trial motion he said first of all the jury was free to reject the testimony of even her honest about customer expression there was absolutely no evidence there that these twelve or fifteen customers were likely to leave in the next year or in the interim in the three year period they could have been there for years they might be there for years afterwards furthermore our expert stephen clark said i'm not basing the damages simply on these twelve customers the trend he stole from us those twelve customers represent slots in being go hauls the st mary's food bank has tuesday night every week a certain crowd comes on tuesday nights because that's their social night for bingo if st mary's hall decides at some point they're not making money i'm going go or they want to do something else to raise money another charity comes in maybe it's the local high school band on that tuesday night but we have that spot  that thing go haul our equipment goes into that hall on a rotating basis that slot guarantees us to a reasonable degree of certainty that we're going to continue to get that revenue even if that particular charity leaves so that's a tremendous advantage to us it's i could never say it's a guarantee of an income stream but it's the closest thing to a guarantee of an income stream because the big a haul owner is making sure he's got that hall filled with some charity every single night and we're the supplier of the products to them that's what was so valuable and that's what mr clark was basing his damage claim on finally on the the issue of the punitive damages  there was a good reason i thought that the trial judge or judge holland did a tremendous job of summarizing the evidence that the jury found of actual malice and as i understand mr chambliss his argument it's that well the mere fact that there's an intentional toward doesn't mean that there's also malice i agree with them but what we had here was secretive conduct that was not disclosed to us reparation a cumulated your competitors machines and somebod basement exactly the distributor of the distributor we were paying eighty five percent of the salary for mr delaney they moved the stuff in there they had mr delaney go out and sign all the customers a new two year generic contracts that would allow them to bring that said essentially we need to break up the because trend it's uncertain whether you're going to be able to survive game tax loss to when it comes there already was a pending lawsuit between the two of us over this this ridge in your relationship so we want to break up the in case you are kicked out of there and trent gave it to him there's the guilty conscience right there and as judge holland said no honest explanation for what they did or why they did it was never offered in th courtroom i find evidence of malice as did the jury that's a credibility determination that's a weighing of the facts the termination there's certainly enough evidence there and we suggest that that shouldn't be disturbed either can i answer any other thank take one minute three very quick items this was not a sale of the business the charity contracts that trend had were assignable the distribution agreement did not require require the assignment to those contracts there was no sale of business therefore the cases that talk about non competitions ancillary to a sale of business are not a political the law in arizona seems to be very clear on this and that is reasonable less of a non compete as a matter of law for the court to decide that when the center case might see the judge erred in submitting it through a jury yes what does it matter if it matters because we don't know what for any reason whatsoever means sitting here today we don't know because the jury certainly doesn't tell us we tried to have jury instructions that would be submitted for the jury to answer that question once the judge said i'm given this the matter was that we should have gone to the jury which just figured out what it means outside reach of that phrase they said sadly what the plain meaning in language is candy bars coke machines cigarettes novelty items any interpretation conceivable prohibit you from selling picks competitors electronic bingo machines to game takes customers from virginia well you look to that point your client was going you look to that language does for any reason whatsoever mean parent quick meant when an article three point three if they wanted to say limited to electronic lingo equipment they could have what does this a potential ambiguity around the edges matter when game tech was at doing what under any interpretation would be prohibited by its own agreement i think your honor you said game tech was  game tack is stuck with the distribution agreement in the exhibit see that it bargained for and signed for years earlier and they bargained for and agreed to an overbroad provision and as a matter of public policy that overbroad provision should not be enforced why should my client as i had met under these facts not sympathetic but this court should make a decision about the over breath of the language us to whether on the basis of whether my client a sympathetic or not the court should look at the language for any reason whatsoever and give it its true meaning i have nothing further any questions