preclusion apply here but does the fact that the first litigation was an arbitrary have anything to do with this why are we in the middle of that corporal stop well your honor it's an interesting question the answer is there there were two separate s request either other cases in which the equitable stoppel was simply about litigation and nothing else well your honor not really that we've found and i think the interesting thing here that typically an equitable stockholder you have a case where one side has a peer your knowledge to the other in this case the contract was on the table for all the parties to understand it all the parties had attorneys all the parties had a  should not have been really to gauge it was it was incredibly inequitable to assert the astop will in that particular circumstance and again typically you don't see it arise in these circumstances where the parties were on equal footing these are certainly sophisticated companies that were represented by counsel there were appraisers involved at the arbitration level and what we centrally so i was an attempt to relive  in in this case what had happened was the twenty year mark there was an issue of how c p i consumer price index portion of the lease would apply to the lease and certainly from f c p as perspective for cities perspective it would go along as it's always gone along what was why wasn't the c p i already accounted for the fact that you were going to measure at the twenty year mark the current seventy five percent of market where it would be it would be seventy five percent and then you keep your c p i add on to basically even it out live years that that's how the contract was written well i think surely and i'm following you i we understand that part right you know come up as an issue and in fact the way this contract was designed was that there was a twenty five percent discount on the minimum rent portion which is essentially only part of the total right and then the c p i was allowed to continue in a different way to look at it you're like that's not the question the question is what's the thera market it's always a twenty five percent discount on the fair market value add so it's a twenty year period so this question still is what was the fair market val nature of the contract over we're not here during the first twenty year period how often how often did you get to adjust the c p i was it every thirty months every thirty months or ok so every thirty months over two hundred forty so that is that it adjustments my math right yes your eight adjustments a nd did they get did you get the maximum six point two five every time yes you know him ok so that would which was a cap by the way right right but that's you know well in excess of twenty five percent out it's about roughly about two because think arbitrators said i told you that he was looking at all our economic terms correct and what happened in fact was the arbitrator threw out both sides appraisals picked his own appraisal number it seven hundred fifty thousand is what it ended up being and then said that's the number that number was never appealed and that number's sets what the minimum rent is the question then became of how do you start c p i running on that does it you what standard he was applying and he applied it i e all the economic terms and that's what he decided i understand that under california law you can't litigation it's just that a declaratory judgment doesn't preclude you from getting damages friend sample but that legal rolling is binding so why isn't that legal ruling about what the fair market value is binding here fair point and nobody is contesting what that ruling was it's sort of apples and oranges we came into court on dec relief in the second action saying there's an issue of how c p i applies post  determination of minimum red so in other words it actually doesn't matter what the arbitrator had decided whether whether he decided right was a million dollars or a dollar we would still be here today because the issue becomes how do you apply future  i on to the minimum rent is it let's go back to let's go back to what you submitted to the arbiter of the third time and i have here it says the arbor title will make his decision with regard to the fair market rental value and ask the arbitrator to set the amount actually payable not a component of the amount to be payable on no your honor no because there were there were three elements of the contract there were there was c p i was one element minimum rents and there were two other elements pass through rent an additional rent so minimum rent is actually just a subset of the rent as a whole well what did you mean when you refer sinus the arbitrary will make his decision with regard to the fair market rental value of the premises payable at the commencement of the first offer what did you mean so i payable so what what was decided and what was intended was that that is the fair market rental value of the premises was determined to be market rent so if that answers your question it is it is market rent but then the market rent is subject to additional element it's not it wouldn't be the amount  would we assume that that would already account for any pass through rent but then taken on if we were if we if i went out there and i wanted to take over this lease and you and i decided to negotiate what the space was worth today i'm like i'm not going to say your problem why didn't you why didn't you already account for that when you when we negotiated the the rat well again you know that that's exactly right we we never appealed and never contested the finding of what the minimum rent was we simply as a minimum rent at the time of the renegotiation of this was to be seventy five percent of the commercial value of the commercial valuation of the lease property you simply disagreed as to how much that commercial valuation was that's why you can go out and get some and get some appraisers but that that commercial valuation should have included any pass through that you had received in the previous years from from l a and it should have a count for for inflation  including inflation that would be well above the cap of a six point two five percentage other words you're going to say you know when home depot says wow that's a whole lot more than your charges twenty years ago civil duff we've  inflation right and now the property is worth a whole lot more take it or leave it because we go and rent it to lowe's for a really really really good price and i want to reserve a couple days for about a year but yes that that's right we didn't contest what the market rent was at the never what you're going to add to c p i that feels like that's double counting your honor because that's what the contract calls for it's it's well it's in a contract where which what paragraph is a call for that section section four point three this is this is kind of the irony of the whole case that the issue  on on summary judgment was that somehow the district court felt that the rent was set artificially high in fact in section four point three it very clearly states that the adjustments are made on a rolling thirty basis every thirty months right knows that it continue but the quick question is what's the baseline this is why i keep disputing the way you're presenting this because the problem isn't what's going forward the problem is what's going on they are trying to take everything from the front to back into the baseline it's exactly the opposite in sense that one of the issues that came up in this is represented very clearly in the transcript is that you don't take the minimum rent and then the doc from it future projections from from day one and is simply every thirty months gets recalculated home depot on the other hand says there's a total reset to zero at the option term of c p i so actually no matter what had been decided at the arbitration and this is this is what makes the case interesting your honour's no matter what had been decided we would still be here today we would still be in court today arguing about how c p i applies after minimum rent was set at whatever number it was looked at when you look at the comps which is what should have happened and what in fact did happen at the at the arbitration what it isn't is a factor that you take and deduct from the establishment of what minimum rent is or should be  percent and that's certainly well within what i'm sorry that's forty five thousand dollars a month yes and that's only a forty five thousand dollars for every yeah everyone ok and forty five thousand dollars is how much how much above ok so the money the monthly rental on it was going to be what about seventy thousand dollars or so across the top something like that and you get another forty five thousand dollars onto that yes ok well that's not that's not two and a half percent that's that's more like something five it's actually it's added on over thirty months you're that the forty five thousand added on over thirty nine so it's actually a smaller percentage per month and was that capped at six point two five percent it was or so in fact without the cap it would have been much much higher and so the cap good morning your honour's may it please the court all of the arguments made by first city on this appeal come down to a single refrain and that is they lost in an arbitration that was decided eight years they intentionally withheld they intentionally withheld it very very clearly because either they knew about it as they claim all through the time of the lease they were asked think that that the fact that they claim they knew about it and they didn't present it when they were directed to do it is itself proof that they intended the consequences of their actions which of course opportunity already said that it includes all economic terms that was another legal ruling in the case and so on when he decided what the issue decided was that all the the economic terms argument we made and for reasons that are still unclear the district court decided not to grant our motion based on race judicata the court did not explain its  it could have been and more likely they were not they didn't think of of of being specific about it all i can say about that your honor is that  it was as your honor noted approximately seventy five percent of the rent they claimed was due run through the numbers for me i've i've got some i've got some  so at that point do we get to add anything further to that we get to add if you're still going to pay a percentage of your sales yes ok so that's still added on is there is there pass through yes ok so if elad but that would presumably would be contention is the sixty two five forget the percentage forget the pass through that's good for thirty months and then and then we and then we recalculate the c p i capped at six point two five percent correct  ok so is the first cities theory that you have to add another forty five thousand dollars and change every month to the sixty to five going forward from this point from february of two thousand  claim to be able to compare apples to apples the arbitrator directed the parties to submit their appraisals considering all economic terms of the lease and it was clear that those economic terms is one of  are the party supposed to take into account four point four and four point five and what the arbitrator said is no you need to take into account all economic ter first well he was asked a question and a very narrow question he said well the answer is you don't just consider four point four and four point five but you consider all of the economic terms in fact in the request for judicial notice including the transcript of the hearing which we think was improper but the transcript supports home depot not first city on page forty five arbitrator says and so my conclusion will be that with regard to paragraph four point two the subways the mutual intent of the parties was and the appraisers are directed to determine the fair market rental value of the property to be appraised taking into consideration sums payable as additional rent pursuant to four point four and or sums payable as percentage rent pursuant to section twenty five of the subways and then home depot said i was going to say i wouldn't want even though we have couched the issue in a narrow fashion i wouldn't want the appraisers receiving the narrow determination to somehow lead them to conclude that they are not to take into account other factors will give it my best if you have a property and the rent is calculated at say ten dollars for minimum rent and then five dollars for these add on say passthrough so the total economic package is fifteen dollars then you have another property same exact same kind of property and for those two properties say twelve and a half but the five five dollars from the allens would be taken into account not necessarily reduced on a dollar for dollar basis and they went into that but would be taken into account when you look at what the rent for those properties is what the fair market value and so it would be ten dollars on or twelve and a half dollars on the one property reduced by some factor that takes into account that i must be right but i can't quite read the numbers on the arbitrator clearly understood that and there was no question that the arbitrator lowered the of the fair forward why does it mean going backwards i think he was talking going forward another whereas clearly in figuring out the fair market value is you have to know what the rent is accounting for and whether there's other things going into the rent so with  a lease for x amount plus y in g has a higher their rental value at that point than one that doesn't have the x and jane right so but the going backwards is a complete fabrication it does not follow the terms of the lease the real point here is the first city had its day before the arbitration it then had its day in court it then had its day on appeal and we're now eight years down the road just whatever theory whatever legal theory is appropriate we think precludes them from going forward at this point and rehashing this poor c p i provision fair market rent there needs to be an end to litigation there needs to be an end disputes that has a clear mandate we think for this court to rule in favor of home depot ok thank you very much thank you to be a million doesn't really apply i think the issue here really is that the court is uncomfortable with the fact of if you add to this the additional forty five thousand dollars after the arbitrated amount was set to points to that one  contest and it did not appeal in fact the finding of the arbitrator as to what the minimum read is the only issue here is the issue of do you add c p i going forward to that minimum rent so the court m saying it's going forward it's not going forward you are trying to take not the future c p i that everything that's a key merely for twenty years you're out of the court the court may or may not be comfortable with that but the other side a bunch of comfortable i'm just disputing what you're saying to it at least that's a fair way of looking at it and i don't know why we're trying to shove it into the second of all stop a problem well i would agree i think the issue was is absolutely different tell me why under california  right taking into account all economic terms no the that what was decided the arbitration is what the present day minimum rent should be woods again if that if that minimum rent was set at a dollar or  thousand dollars it would not make any difference at all in terms of residue to kata to how you apply c p i ok i want that i want to make sure i got the numbers right you left me with some ambiguity when i talked so the minimum rent that was sent by the arbitrator was court has to understand that there are many aspects of the of the lease that carried forward in that manner for example the pass through provision also carried forward it was not zeroed out nothing was erode out everything continued to pass through provisions continued that was minimum rent plus passed through and it's no different here it's minimum rent plus c p i right the quite the question is whether you get is whether you get to add some other factor for c p i in the first month of the renewed lease or whether you have to wait thirty months before you start getting the next c p i and that on and what that amount is because and that's why it's not raised judicata people would argue that you start out with first month at zero we would argue that you start out a different number so that projects into the future and the difference your honor and that's and this is a lot of equity that to put on our shoulders is a ten million dollar difference so you have to look at that the minimum rent that was set at the arbitration we do not contest that number we believe that because the arbitrator threw out both sides appraisals he looked at the contract himself came up with a number that he believed was was fair and accurate which we accepted was not appeal that number was never appealed the issue would have always been how do you then moving forward from that number tack on the other elements of the lease pass through and in particular here c p i and that is tell me  many elements of the lease that moved forward in time they weren't zeroed out that the whole argument here is that we should be allowed to go to back to the district court what does it mean then to say that all the economic  work going to the fair market value it seems to me that the pass through oh i mean i think this is typical of leases is that if the airport ra the landlord's red and he can then raise your right correct backwards yes it is it is you can think of it as different columns so you take your minimum rent car you add your pass through column you add your the whole idea of looking at all the economic terms is simply looking at them in terms of setting the cops not in setting the minimum read itself that the good reason resubmitted the transcript is because it makes that clear as day the arbitrator was absolutely focused on what comps you look at so you look at all the factors in doing the cons but it's not a dollar for dollar deduction and once you set the minimum rent you simply add on all these other factors to it is how the contract was constructed all of the elements of the contract continue forward and that's the fundamental disconnect and that is why there was not a residue dakota there was not a waiver those were those were you just  certainly should be a very high level of discomfort with finding a stoppel of an issue that was never intended to be resolved at the arbitration wasn't resolved at the arbitration and that my client you have a right to go back into the district court to get results how does it