next decade were suddenly do now and that this liability was literally millions of dollars and in fact an even larger award was entered against them for prejudgment interest because under the theory that they had defaulted the interest rate went up to an amazing fifteen percent which is a pretty good rate of return these days and so it eclipsed and is even larger than the principal amount so there's no doubt that this judge was entered under one singular theory that is  sion of promissory notes to the present due to a default in fact we complained a judge do about the interest she says that's the interest rate provided in the promissory notes if there's an event of default and what your complaint i don't guess if there's an event of well and our view there is no language that you can point to in this promissory note that would lead to a conclusion that there was a default the pretrial order identified two fact issues to be determined by the jury one is whether we had made our payments and that was where we stood at the beginning in the end and now is we back we made our payments under the node now it's a blue note so you know we made payments during the first year and then you get a recess for like twenty five years and then you make a big payment at the end but the second fact to be determined in the pretrial order by the jury a factual question is whether we had disavowed our note now that's nowhere in the promissory note but that was their theory so you know they are has both theories think you're arguing that there was no default there was no default that the only way there could be a default was if you failed to make a payment because the only obligations in the promissory notes there's only two obligations one is an obligation to sign some related agreements ok that's in there so i would be back in two thousand and five when you signed it after that literally the only obligation there is not an obligation to insure a collateral to do anything your only obligation is to make payments when they were due we made the only payment so our fact issue that we put in the pretrial order was whether we made payments and so mr of a too low the trial lawyer stood up in front of the jury a very critical point of the trial come back to this and made the astounding statement of jury we did not default because we made our payments now that may not sound like a very exciting defense but that's the defense we asserted in the pleadings in our opening statement in the rule fifty a motion in the rule fifty or say something bad it's a promissory note you either pay it or you don't they have never been able to point to a single senates in the promissory note or any agreement that says this refers to disavow for any creditor to ever say there was an event of fault other than pointing to something in the note and those two courts we cite them in our brief and they both say you know unless something is listed as an inventive default it's not an event or a default in those cases they specifically handed down a decision in which they said we strictly scrutinize default and acceleration because they are drak only and they are so hard yes that's that's a little bit different than the question that you really are using is more absolute than that which is that you you would don't have entities which tory breach in promissory notes and so i'd like to ask that question to be answered do you have any not just a promissory note it was actually a bond a government bond in that case but they said when you have a schedule for payment of money either you pay the money or you don't pay the money we're not going to get into arguments about somebody said something i don't like so i'm going to construe it as  court when the pretrial order was entered the question of law not a question of fact the question of law that was reserved was the court will determine what actually constitutes a breach of the agreement so judge do as you would expect a judge who will i know you've written about this that you know when there is an unambiguous instrument before the court of sapir question of law to the for the court to apply the meaning of that instrument to the  theory we made payments which we prove their theory which is their disavowal but the court's going to reserve for itself the legal question of what constitutes a breach of these agreements so the the trial starts up and david plasty you know the default by the investors that is by molly hamrick or beverly myers and he said absolutely not i have not seen any events of default by them i see the events of default by the partnerships because they went unsolved and i should stop for just a second and explain that if a partnership be faults normally you turn to partners and hope partner flyable but here there's an assumption agreement where millennium specifically agreed that the liability of the partners for the partnership would only be the amount of the subscription note and when this was due so both the amount and the time of payment were both tied to the subscription no money agreed to that and they actually filed a judicial admission mean they were brief in this and they said yes the assumption agreement supercede partnership loss of joint and several liability imposed on the partners the assumption agreement controls mr plasty no was being cross examined and having to admit particularly between sophisticated investors about millions of dollars at that point millenniums counsel stood up and checked it in to judge whether there's an event of a vault or not that's a question of law for the court you shouldn't be cross examining this witness on that point are darg you with that in the pretrial order we didn't argue with it we simply limit our questions but you mr witness you have not seen anything that you recognize would seem to be the perfect setup for rule fifty a motion the pretrial order reserved to the court the question of what actually constitutes a breach of the nodes during the trial of the witnesses the judge decide that's a question for me what actually ruled the judge ruled and she made her ruling and don't let her get away from this because she runs from her ruling she said there's been evidence of disavowal and that could be an event of default so she accepted the legal notion that disavowal could be an event of default so we go forward with the rest of the trial we were up we lose we lose a very particular reason ok these were sophisticated financial ladies who are claiming that they have been defrauded into this in the jury found that they were sophisticated and they knew what they were getting into no frog they also found that we had breached these agreements for why well during the trial millennium would i mean frankly they pulled a cheap stunt where they put turn to the back of an agreement where it says you know after to accelerate it it says i mediately due and payable and they would read that to the jury these are immediately to the payable after there's acceleration because there's been an event of default n agreement ties that default to the subscription note that's incorrect the assumption agreement says that the timing of the payment is reliant on the subscription note except as otherwise expressly provided in this agreement that said you are to ninety eight and then if you are to ninety nine the assumption agreement says a default occurs if there is any failure to pay an obligation that is owed under the term key note and that makes it immediately do this court does not need to get into the subscription note at all the supreme note only limits the amount of liability each of the individual partners have under the assumption agreement to what the agreed to in the subscription note but it does not control the timing regard there was also some one thing that did not come up during the appellant's argument is the waiver question between rule fifty eight and rule fifty b i think an easy way to think about the waiver question is that the argument  evidence would be sufficient for the jury to find liability because the issue should be decided as a matter of law those are different issues quite frankly those are fundamentally different issues and it's very similar to the against go daddy case that's controlling precedent in payable so this point we have there's no dispute there is testimony at trial that falcon is insolvent so there's no dispute about that at this point the debt owed by fell is immediately due in payable in full to millennium under the assumption agreement at york to ninety nine it's a paragraph titled section three a default exists if there is a default in any obligation that is owed under the terms you know that is the obligation that immediately due from falcon to millennium and under at york to ninety eight paragraph one point four the payment timing is per the subscription note quote except as otherwise expressly provided in this agreement and the section that i just mentioned your two ninety nine paragraph section three is that express provision in the agreement that the obligation owed by falcon to millennium is immediately do so the  partners individual partners the appellant's o the full amount owed the full amount of their debt pursuant to the assumption agreement to the assumption of correct and the assumption agreement of course turns on the terms but the assumption agreement says that the partners can pay but one point five then says their obligation is at the time that their underlying subscription notes or  fail i mean are do but the first part of one point five if you're looking at it says except as otherwise expressly provided in this agreement i'm i'm getting that and i'm trying to find that the provision one point that section three which is the one you're relying on right that's it and ninety nine so section three correct so you're saying the except as otherwise provided in we're now just talking about the assumption agreement correct that you're saying that the one point five which ordinarily says you don't have to pay until there's an acceleration of your underlings of scription no it's preceded by the language except as otherwise provided and you're saying that otherwise provided is section three the appellants vidual towns shell shell default on the payment of a subscription note and of course there's can't be any default on the subscription note because the subscription note hasn't come d shell without notice or demand become immediately due and payable i think you've got it and so you're saying that there modifies the one point five payment time correct it is modified and it follows that the only reason that provision would otherwise meet  you know at the end of this there's no need to turn to the subscription over the parsing of that language and there's no need to really even turn to the assumption agreement or even waiver and i think the court can kind of affirm on this basis alone response how would they deal with the time of payment provision in the assumption agreement where it says the time of payment is when the notes are due look at their brief they literally will not touch section one point five time of talks about the participant not not the partnership only talks about the participants literally the word partnership appears nowhere in that paragraph the word is not there at the beginning of the agreement it says participant is  investor the partner the partnership of the partnership and this is saying that if a participant defaults if a participant defaults then it due and payable there was no event of default by the participant and this is why their own expert did not even recognize you you agree that if the participant that would be the investors had defaulted then their obligations could be do immediately and you're saying that they didn't default provision where if they default if they default like on their subscription note or if they become insolvent if they the participant does this if they the parts of does that then that their debt is then becomes due and payable under the assumption agreement but it goes back to valet have to engage in an event of default and that is why the motion for judgment hit the nail on the head but you're saying that they had no obligation to pay any of these  additional expenses that have occurred because the i r s challenge or because of other things and so you're answering on that is that the participants not only didn't default on their original know but they didn't default on the on the assumption agreement either correct or on but if they had defaulted on the assumption agreement then you would agree that that would have exhilarated their obligations yes ok when this court looks at events of default it states this court has held under brown vs of emco that acceleration is an extremely harsh remedy you suddenly i mean think of any of us who have a house loans or or car loans if the bank suddenly calls and says yeah that hundred thousand dollars a year well in your house well this is california so i guess i should say if that million dollars that you owe on your house it's you know you're going to pay it off over twenty years it's d next week i hope that's not inconvenient for you to pay as a million dollars and that's harsh this court said that's harsh every court that has ever looked at it has said this is harsh except judge do so so this put the the subscription i mean the original notes off the table for a minute your position is that the only other alleged defaults against your  investors was or that your investors committed was that they didn't make these interim payments that were requested by the partner to help make things so bad in your position is that there was notes or actual default by not giving us these supplemental payments that you should have made us when things went south keep in mind your honor there were only two questions of default in the pretrial order that were tried one is whether they defaulted and payments under the subscription note and two is whether they disavow their obligations now we never thought there was an event of the fall but those were the only two events of default tried with a court reserve aid for itself the judgment as a matter of law as to what w constitute a breach i realize i'm out of time if i could finish one thought judge do ran from her own ruling this case was tried just straight up like it expect they submitted and what they said were unambiguous instruments and the court said in the pretrial order it was going to rules a matter of law on the notes seven months after the trial she then decided actually you know i think the jury decided that you lost and so when you argue that you were to default you you you confess that the jury just got to decide whatever these notes meant me and yes going with question so we're really focusing on this one point five exceptions otherwise of where we're trying to do the right thing we're all trying to get this right but except as otherwise provided in this agreement so then we go beyond down to the agreement section three and so we see what are the except  provided here's the other things that the participant has to do with number one if the defendant if the participant defaults in the payment of the subscription oh yes you're saying on equivocally they did not default in the payment to subscription  because their payment wasn't due for another twenty years second clause or if the participants default in any obligation assumed by them under this agreement you're saying there was no other obligations under this agreement and so there was no default and then it says or in the event they become insolvent or him or can't pay debts when do and you're saying none of those things happened because the participants here are solv they didn't feel to meet any of their debts they didn't do things for creditors and so forth so basically you are not disagreeing with what your opponent says that there could be things that could accelerate their obligations but you're saying we agree we will look at section three every single thing that section three requires of us there is no default is that a sum ation of your argument and i'm sorry it is not because the  look at two possibilities of events of default you're looking at possible events of default or not never submitted to the jury ok so you're saying we got to narrow this by what was the way this case was tried and that that puts us into a morass because this case was tried half a dozen different