it was removed by the defendant the federal court and proceeded for a trial on the kalak claim so mal fadi and his firm bore the burden of establishing both the contract a breach of that contract and damages i would like to begin as a threshold matter with the question of whether or is there is deference to fact finding it's a very material consideration of deciding this appeal we brief extensively that there is no dispositive decision in the circuit but the th circuit and the th circuit have been clear and unequivocal that the ordinary deference to fact finding and the clearly erroneous standard under federal rule fifty two dollars not be applied to the fact finding by a successor judge on a cold record which is what he recovered your client was given the opportunity to recall  true we had that right both parties agreed to rest on the record but the question is the scope of review in this court governed by a clearly erroneous standard and the rule fifty two dollars and it's not because that is in to your honor waiving the right to call additional witnesses does not mean that there was a stipulation that review on appeal would be subject to a clearly erroneous stand that they're just not the statutes aren't really  materia and that has not been a consideration than in the th circuit where basically the court specifically and then statically and i can recommend that the court read it found that the reason for the rule whether it's reviewing an exercise of discretion a fact finding with a deferential view to the trial court does not have a rationale with the trial judge the and the answer is that the factual record this is not support under settled appellate law in the new york courts and echoed in the decisions of the federal courts and in this circuit of applying an expired contract to the parties informal continuation of dealings under the new york cases it requires that the services and the transaction be substantially the same  well it applied to well it expired judge i'll tell you this it expired because it was not indefinite it was not an exclusive agreement to have forced to pay a fee schedule under a prior agreement that was applicable to a labor or litigation attorney would require a new contract or an affirmation of the old contract to apply for the new transaction but  i'm open ended and particularly when you're dealing with the broker then the agreement does not events and intention that it's some type of exclusive that will continue as the other unrelated transaction and you shouldn't find that your honor it expired when the transactions for which the compensation was made for a labor attorney and a and a litigation attorney concluded but let me move to the right that happened within months of the original agreement compensation was paid there was no dispute and the parties fortuitously reached want to reach out to one another to use services again that agreement was not agreed to apply a perpetuity in the extensive negotiations with the parties regarding the fee compelling evidence that they didn't deem themselves to have a fixed obligation contrary because we have testimony that it pertains to the search of the health care i understand you're on it that's why let me concede this point if i may respectfully let's say the parties had an expectation that the fee agreement would continue to the new transaction that health care attorneys who are employed who are compensated who are whose fees were payable to the meltzer firm the fee agreement here is contingent upon of employment of these ten dollars attorneys they weren't the paid in that they kept in sation the calculation of their compensation what occurred is that the we say at the insistence of the seller the firm are made intact their compensation was paid by the current augustine firm the thieves went to the current augustine firm the employees that not become attorney employees of the melt of firm instead what the one melts a partner acquired was a new jersey law firm subject to two million dollars of bank debt and leasehold that you please ok it was a sale of a business it was not the engagement of the employment of that attorney in paying compensation if it was a sale of the business the defendant is this entitled under the statute of frauds but beyond that even if the statute of frauds in new york in new jersey did not go up and it did not entitle him to compensation under the fee agreement because the fee agreement was calculated to employment payment of compensation jersey law but that he was really an attorney placement because the only asset the company had with the attorneys in their business and so it was a group back with the plaintiffs affiliate the equity partner mr hyneman and therefore felt with the green tell us why that kind of the finding was impermissible because it is settled in this court as it is in the state courts every other district in the us supreme court that a judge cannot rewrite a contract and the contract was for employment and compensation and receiving the benefit of employment compensation the benefit here of a forty thousand dollars sale recognize the two million dollars this ability of the current entity intact it's why the fees had to go to the current firm or there would have been a valuable preference and the individual purchaser mr hayman would have been libel builds their services to two hundred thousand dollars each we retain the profits and the benefits that is the way the fee agreement goes when you deal with the head under when you buy a business that's saddled with two million dollars of debt all the fees are retained by the failing entity whose life fix is extinguished within eighteen months of the melt so firms didn't get that benefit you cannot reasonably apply a contract that says if you employ an attorney by saying  the meltdown from paid only forty thousand dollars because there was two million dollars of debt it could not build the fees that these attorneys it could not earn any profits it would it was entirely dependent upon the success of that firm which  is that your that is correct and the fee agreement even if it's found to have been adopted as a new contract of the current transaction did not apply to the acquisition of a business that leaves us under new york and th court's precedent in saying that compensation under the new york telephone against jamestown case is reasonable value it's not expressed contract which you can apply the contract methodology and using reasonable value there was no evidence of it in the trial the defendant was the can a claim plank that's had the burden and shows to rest upon the fee agreement to get a four hundred thousand dollars windfall on a forty thousand dollars transaction it doesn't fit as a sale of business it can't be applied whether or not you give deference to the findings it was certainly not the subterfuge to frustrate the brokers right the compensation in a rose because the principle of the seller refused to allow his employees to go elsewhere perhaps he wanted it as a going concern so would pay down the bank that and the lease that so he would not have or whatever the reason was it didn't fit the transaction that occurred if you find they're entitled to  imply contract that pay reasonable value must be dismissive cellular proof or a mandate for a new trial on reasonable value which will be a fragment of the forty thousand dollars purchase price and sir only a bare minimum to set  percentage of the four hundred thousand dollars plus interest award based upon employing attorneys who weren't employed paying them who were in paid and receiving the c s from their services which were never received at step thre may please the court i'm randall racey from the barton law firm i'm here for the appellee mr mel said he doing business as management recruiters of union county i was in this the same business because supported the sale the decision of mel to live to acquire this practice group by means of a stock purchase was incidental to the task  chose st of all mr my friend mr cleek is incorrect saying that the seller mr shopper refused to was employed to go elsewhere those employees were not intended servants they weren't bound the term contracts they could have gone anywhere they wanted and even testified at trial that she and the firm considered just tiring at least some of the current augustine lawyers directly instead of buying the stock and all of the libel vigilant with it  that testimony was not only plausible but quite convincing that the reason that they chose to go with the stock purchase because the mr shopman was the main rainmaker for the firm who was leaving and that he had established a lot of  goodwill with the current augustine name so the only way they could keep the current augustine name with to keep that by by the by the way they could do it is buying the business right and isn't buying the business different than hiring attorneys  contract law of what the fee agreement actually means he looked at the plain language of the words used in the contract and the contract provides that the fee placed in c is payable even if the attorneys being placed are acquired are hired indirectly through an affiliate mr judge hurley made careful well supported factual findings that in this context cited a lot of the question is it looks to me looking like the sale of a business not for hiring of attorneys it was current augustine was purchased by mr heymann and a bit of a red herring and a normal placement of attorneys nothing's paid upfront cost of the transaction is zero so to claim that this is a windfall for two hundred thousand dollars plus on a forty thousand dollars transaction is beside the he was acting as and one of the definitions we cited even just even includes an example as a matter of feeling can be a member or partner he's literally a partner of this firm under under at least that definition i think all the definitions  stock through equity partner came before it was decided that mr hayman would do it mr hamon did not present himself after the purchase as the owner of the firm the website of corn augustine was amended to a as of council but it didn't then if i'm as an owner having any management role but said mr significance of that because i did the purpose i did is whether he was acting on his own as a claim or if he was acting as remind me of how the others compensation procedure was structured all of the attorneys were the only partner of the original chronology stane was mr shopman who left  different than having three or four attorney council within my own or any other law firm as here with their own payroll their own telephone their own email their own billing their own direction of staff their  retention of fees none of which are enjoyed by the law firm in this case the the essence of the transaction sale is compensable under the fee agreement because the formula doesn't fit it's not c but there was no subterfuge or effort by the meltzer firm to avoid the payment of a commission otherwise do that could excuse compliance under the brokerage principle frustration that arises in this court as much as the stake or what's you had a legitimate reason for wanting to have the transaction go down as it did that was quite separate and distinct from your fear range with this contract with your contract but what exactly is the relief you want from this court do you want to not be obligated to the defendants at all it goes two ways one of which is because if you find it was a purposeful agreement of the parties to provide reasonable compensation to the management crew to sperm for a service that was the sale of the business they're not entitled to because they're not licensed and the law of new york and new jersey both require that license they don't have it so one of the sure hands are on clean and that's all right let's get past the statute or for a well that's it affords is not barred simply by unclean hands it really requires a very high level of misconduct to rule a party to stop this entitle to raise it but even if it is i'm asking this because there is no question in science or stand it but that they found the firm that would fit with what your objectives were and brought the two together they thought when they st did that that it was going to be an attorney placement all the reasons we've been discussing it was instead a purchase of the business and so you say it falls outside the contract and so now what i'm asking you is assuming for argument's sake that we were to agree with you it falls outside the contract what we want to hear one of two the st is under the new york court of appeals new york telephone the constraint of towns case if they're entitled to an implied contract  if they were a trial it would be what would the reasonable benefit the there was a forty thousand dollars consideration if you view that from the city what attorney was a hired one while you could apply the i suppose you could apply a twenty percent  subject of understanding of the parties it's a contract formation is the objective manifestation of the conduct that rats actually in their writings so even if she hog harbored a belief that it should apply in some fashion all that would get them is quantum or with underemployed contract so that they would either be dissin title because they don't have a license if we are a stop somehow from raising that then in effect they fail to offer evidence of it if that is not the end then there could be a trial to determine the reasonable value under an implied contract under the it was a waste master i'm trying to remember there was such a welter of cases i went through in preparation but one of the and it's not in the record if they mistakenly chose to rely upon express contract in the fee schedule to claim one hundred thousand dollars and say the reasonable value was one hundred thousand dollars and there's no what the residents then knew that they didn't meet contract to get into that they had faith conduct of precluding the performance of a broker and the record doesn't show that here something very disquieting about your client securing the benefits of these attorneys but because of the vagaries of new jersey law and sadly achieving it through a purchase of a business rather than through the placement of the attorneys so extensive that the parties did not contemplate that possibility when they st contract it but the plaintiffs nevertheless put the group together i'm just trying to find out what you think what you think is judge the point is this trouble whatsoever concluding that these people then let me explain the let me give the answer to your question the difference is that this firm acquired as a as a partisan stock came with a two million dollars or more indebtedness that means all the fees had to go into the firm not the melter firm or there would have been a preference there would have been liability so what happened is it isn't as though the meltzer firm took the transaction business decision but judge you can't st of all this wasn't tried as an equity case it was tried as a contract ace and judge hurley found that the fia greenman was a continuing contract that applied and it doesn't  run into the waste miss the case i finally of the rights in which he rewrote it it says if you employ and you we will pay twenty percent or eighteen percent for group hires based upon compensation which goes with the traditional notion that if a law firm hires an attorney they pay him and they bill his services i think the old ropes and gray formula used to be two dollars and a half times the salary i don't know what it is with overhead today we don't have a we're a small firm we don't do that type of analysis but the point was the fees were not built by meltzer they were not recovered by meltzer they were paid to current they went to pay off ernst and obligations and that's why the firm foundered because once marking this record we didn't take them on there was an affiliation they had to the fees had to be payable to them the firms couldn't merge because it was a jersey firm none of the economic benefit and what there is evidence is that they were brought back you know the portrayed themselves to the outside world and as affiliated together and that you got the benefit of both the sperms now which was what what your  no joint collections none of the indicia of of being employees and profit earnest for them else a firm if you're wrong and finds it unfair in this record and determines that the recruiter somehow should be excused from not in effect the most they could get is a retrial for reasonable value and that district judge can examine the equities and decide what the economic elements of the transaction are and what is reasonable compensation but it's not the schedule fee agreement because that assumes that you hire ten dollars tourney's you pay their salaries you build in services and collect the fees separate books here no collection of fees separate telephone they are not listed on the website they're not listed on the letterhead none of the profit making elements of the contract is there if you genuinely feel that they're not but that if you decide this matter a lot they're not barred by the statute of frauds and the barred by the express contract and their failure to offer proof of reasonable value than the most are entitled to is to persuade a fact finder what that reasonable value is but it's not four hundred thousand dollars thank you thank you very much