from what was going on but now it's your turn so i'll call the next case into the shoes of his ass and where the bank and to enforce the guarantee against the co guarantors just as the bank would have with respect to the full amount of the deficiency subject only to offset a reduction for to account for his contributed share as one of the  because the h and m parties already went to final judgment on another claim for breach of that same contract and didn't secure this relief but irrespective of that the settlement agreement which is really the focus of this appeal just doesn't obligate mr crotty personally to secure th releases it just doesn't say what the h and m parties and the courts below say it said third agent is not entitle to attorneys fees for a variety of reasons most particularly because they failed to do so legally or factually sufficient evidence the minimum evidence necessary is the texas supreme court put it to establish a right to fees under the standard they're articulated in el apple and in long vs script written as time allows and subject of course to the court's questions i propose to address the issues in that order or certain aspects of them at least and then leave the rest to our briefs the first issue whether mr mr karami can pursue his claims as an ass and he itself breaks down into into three sub issues in the first of those you would think would be pretty straightforward that is whether a co guarantor can ever purchase a debt and enforce it against his co guarantees as a legal matter rather than an equitable matter or whether he is relegated simply to equitable rights and s contribution i say straightforward because the dallas supreme court in the one thousand nine hundred seventy wyman decision and then the two later decisions that are published the byrd decision eleven a decision also expressed like the guarantor can go out and purchase the debt and if force  against his co guarantors going to force it greater amount than what he paid for it well and that raise that leads us to the second question the question is what is the measure of recovery when he's allowed to do that is the measure of recovery the amount of the debt or is it simply the amount that he paid to secure the assignment and this is where respectfully we believe that the courts want to stray below they gave lip service to the holdings and burden lavander that mr crony could as a  and a but then they say he's limited to a right of contributions soley for the amount that he paid to acquire the assignment of the debt respectively that's just fundamentally wrong because what that does i'm sorry to say if that's what you get from reading the briefs at least our briefs because our version of life is quite different on the first premise there and which is the second issue that i talked about earlier we do not believe that mr brawny ever undertook to secure the release his of these  individuals from their guarantee the issue and that's a good answer if in fact that's been terminal and is out of the case if mr prady did undertake to secure the guarantees release of the guarantees and did breach that and he never did secure the release of those guarantees then we may not have a lot more to talk about on this first issue but in fact something that functional happens is that he enforces the law enforce the guarantees against them yes that's that that's his goal and because that's what that is that in fact is what burden lavander say they say that in those circumstances lavender in particular says the acid he steps in a coherent or their steps into the shoes of the bank in that case the court may recall there was a one hundred thousand dollars cd which secured the debt he was allowed to recoup that and not apply it to the debt he was allowed them to go ahead and apply or seek recovery based upon the and i said i'm quoting here from burden lavender the unpaid debt the note the total liability the jointly owed him out now there is a place where there's where the bird case injects a point of confusion at the very end of the bird case they calculate the amount of mr bird's liability based upon what the milnes partnership paid to get its share of the note but if you go back in the opinion you see that that was actually the total amount that was owed so even though you used the term paid in that to calculate that it's really the same thing and if you look elsewhere in the bird opinion at least three or four times the court draws a distinction between rights of contribution and rights as you don't become the original creditor just because that you have gotten an assignment and i think you're out of the court and lavender speaks to the very same thing and says when you become an ass and he you don't take off you guarantor hat and put on your ass and he had to use the old time worn metaphor that we all heard you wear both hats and the way the lavender court dealt with that was to say what that means is not that you then are simply relegated back to rights equitable rights of of that guarantee so your reduction even though it's predicated originally on the total debt has to be reduced by your contributed share you can only recover three quarters of it now there's an unbruised issue that goes to the to the issue in bird there as well where the bird court they looked at it from the other direction instead of saying you reduce it from the top they said you can only recover from your co guarantors they are proportionate shares now lavater the matter math works the same way in other and briefed issue though is what's the effect of his earlier position saying that there really is no deficiency at all can he now come in and assert the deficiency that the bank alleges when previously in this case he said there wouldn't be divisions your honor i believe that that would be a point and it's an evidentiary point to which raised under fifty one point zero zero three that's an affirmative defense that was would have been raised by the h and m parties and as well we think it was not the bankruptcy court says it was but in the end the bankruptcy court says because i'm finding that mr prodi has improved his case i'm not going to reach any of the affirmative defenses so they never did i don't think there's any question that there's no judicial a stopgap thing that bankruptcy court position isn't your issue to which you're about halfway through time actually sort of a prime it precedes this issue that we're debating because if you lose on the second issue whether or not he personally guarantee the release we wouldn't be dealing with this that's true and that's the reason we began our briefs with the other but we felt we needed to i'd love to hear of the moving to that element be i will maybe start for me in the in the stipulation of fact by him in the order that he said here's who the company is well he doesn't say here's where the company is what he said what i think there's two things about that stipulation first of all you have to read the language carefully secondly you have to read the entire prieto or as you would any other agreement to understand what it means it says that the print that the that definition or that that definition controls throughout the pretrial or in fact there are stipulations throughout the first all over of contested issues of fact and law that if that initial definition were to control couldn't be stipulated to be in dispute because they would have been resolved by that but then it seems to me even if you're right all you've established is there is there is ambiguity we've got to remain for a fact finding as to what the parties intended if you agree that that definition at the outset is inconsistent with a later definition but your position has been there's no ambiguity at all just because two parties disagree about what something means doesn't mean it or not because two parties you're actually agreeing with them in the preamble statement the position you just stated as well that definition would include in my but elsewhere you're saying three point two has got a different definition does end of an article for has a different definition and if the court reads the settlement agreement carefully threw out again as more yet in the other texas cases say must be done you'll find that almost without exception not standing that definition appearing in the preamble the word company means circle sherman and only circle sherman we've given examples in footnote four it happens to be footnote four in both of our briefs the reply in the initial brief which shows that if you read that as a matter of common sense the term company throughout has to mean only circle sherman now so we believe that but that in terms of the way the settlement agreement works it simply does not obligate we also believe of course as we've said in our brief that that the obligation to secure release this is not absolute there are conditions to do it one of them is that there has to be a third party investor the other is that the the release has to be done through a refinancing or a sale of a hotel neither of which could happen at the point at which mister mr brawny became had possession of the bank's guarantee rights so we don't think in any in any event there is an obligation on mr peroni to secure the in state court the h and m party started a claim for breach of contract against mr parady and in that they included every breach of contract they included the repurchase obligation so he later got partial summary judgment but they also explicitly alleged in that very the bank case stays in one place and the breach of settlement agreement stuff between mr piron e and h and m goes over into the severed case we contend that when that severance happened the entire breach of contract claim would over in the sever case there's later issue and all the other stuff stayed in the bank case again we disagree but in fact even if that happened don't really matter it changes the rationale but not the result and the reason is that within a short time after the severance occurred there was a dismissal without prejudice of all the claims in the bank case the severance the breach of contract case against mr pranita continued for another couple three months during that time obviously those of claims that have dismissed without prejudice could have been brought anywhere certainly they could have been added to the case against mr peroni the severed case so even if they weren't already over there they sure could have been at that point the case all say that all claims with respect to a particular legal relationship including a contract like this should be brought at the same time if they do you ask us to do what relief you want from issues i would say but i would say that it needs to go back on informed basis on this issue of race judicata there's a point that the courts below seem to get tied up in what happened at the bank case and i want to make clear that we're not relying on the bank case it's what happened in the part of the original breach of contract claim that mr that the parties did and we have another piece of proof which is not in the appellate record because it was not before the bankruptcy court but it is something of which this court can take traditional notice particularly in a race judicata context three weeks purana not having secured the releases from the guarantees they went to judgment after having filed that the judgment rendered relief only on the issue of repurchase and denied all other relief so we respectfully submit race judicata part that claims now counsel first thing i want to address is counsel's argument with regard to burden lavender with regard to the assignment of the bank's note and guarantee  first of all the representation at the bird case was anything other than the judgment based upon what was paid by the nelms parties  in this representation of the case clearly in the per case the court said that that party paid half of what was owed on the judgment and then wanted to assess damages it did so based upon that amount of payment so if you're looking for a case that stands for the proposition as we say it does that you only figure damages in one of these equitable contribution cases with co guarantors based on what was paid the bird case is it in texas lavender isn't it and the reason for lavender not being it doesn't say one way or the other the reason it doesn't say one or the other is in the lavender case there was a cd that was used to secure the debt it was one hundred thousand dollars there's no reason in that opinion and there's no explanation either to think that the bank would release  hundred thousand dollars security for anything less than payment and so there you have to read between the lines and in lavender what was paid was the debt so that case can't stand for the proposition of whether or not you can assessed the amount of contribution based upon what was paid versus the amount of the debt now the reason i mean not you you really are arguing council both that trial and i was the trial counsel for our side in this case and as you may have seen in the precinct and in the field records and other things i've actually been counsel for my partners in this case since two thousand nine so i know all lot about this both factually in terms of what's happened but as well as what the law is in fact in that the bankruptcy court here i'm the one that promoted the idea of the limitation  uncovered it was the language in byrd that talks about that doesn't change the status of the relationships of the koger in corps with each other then what happens is you figure damages based upon equitable contribution so just because you can buy the end you have standing because it's been an assignment to you and so in theory you stand in the shoes of the bad your recovery is a limited by equitable contribution and so the all that those the bird alive under cases really stand for with regard to the ability to purchase the note is you consume because you purchased it it doesn't really say what you consume for because that's that's the requirement of mortgage notes as they have to be given back to the borrower but there is no effective difference here because that's what contribution is going to apply to both scenario any difference whether it gets the nod or not because equable contribution applies and what the bird says if you want to look at how to figure out how to determine damages is it says that you cannot have a the part of the agreement prefers to the meaning of company well the the stipulation in the pretrial order as we all know controls what happens at a serious undertaking to stipulate to something what's going on here is that ferrante at trial apparently didn't understand the effect of the stipulation that's the only reason that his contest issues of law and other issues of fact that he didn't stipulate to are in the pretrial order but the actual stipulation of fact says not just oh yeah by the way the agreement in its opening paragraph says that this is a definition the stipulation goes way beyond that the stipulation says that the is the settlement agreement as a whole in the settlement agreement is defined the company is defined to include peron  there is no doubt that that's what the stipulation says any argument by opposing counsel both at trial and here that it mean something else flies in the face of the paxil language and so it's stipulating to a fact and i'm going to trial binds you to it i've cited cases in in the brief about that which is your best case do you think entered it controls the scope and course of the trial and it binds the party to that stipulation so what what prawn is trying to do now is he's trying to get out of the stipulation is trying to get this court to it doesn't say as a whole right which you just inserted sorry i'm a little under the weather so i'm having some trouble focusing on the settlement agreement defines all of defendants collectively as a chain and all of point of z's and circle sherman as the company clarity in that language but you work with the settlement agreement say oh these are enough there for us to say you are correct and that priority is individually liable yes if you look at the settlement agreement de says that the following link which from a prior court order and then after that it quotes what that language is and that's the only reason that there was a different mention of what company  addition three point one that hey the following letter provisions are meant only to go to explain that who the members of h and m and on circle sharman are that's trial that there was going to be a separation parties and that was the intent to have there be no no authority in circle sharman no profit and circle sherman and so forth for h and m but yet still have responsibility would fly in the face of the section three point one that says that there are each of them is not supposed to be responsible for any losses of  if you look at the overall agreement there was a lot of references to the company opposing counsel argued that common sense would dictate those only refer to two circle intent in trying to separate the parties is that company responsibilities also belong mr prado in mr aziz why would they have written the in the drafting explicitly personal guarantee as to your membership interest but then referred to the company only when it came to the guarantee i'm sorry i'm not sure what you're referring to isn't it true that the person there was a personal guarantee for as ease in your client yes as to the investment the membership investment but then when you get to the guarantee portion they clearly knew how to write that language that didn't well the the contract is inconsistent in that respect and so that would lead me back to my argument i've mentioned if the contract is ambiguous in your view that the extremes of evidence comes into play not only not only did mr pariah state in his testimony in the trial that the intent the agreement was the parties are supposed to separate he also it was shown in going trial that he took full advantage of the losses that were passed through especially in two thousand and eleven one hundred percent to him so as of two thousand decided that in the first instance because you're seeing the district court the bank sequined the discord essentially did conclude in the event of ambiguity this is that the bankruptcy court concluded in a fact i remember that those i o u s that the contract then would obligate him as a result of his benefit of the agreement to be bound by the obligation to release the  value being saved but each in him and his two thousand and eleven tax return to be at three point five million it says that mr pryor consistent with that had stated in the circle sherman bankruptcy that  the value was three point five million it also talked about how the misreporting had taken the stance in state court that the value of the property at foreclosure was three point two nine million and the court in addition found that in the testimony of the expert witness to mr prodi a trial was was not to be trusted dropped in a footnote so if you look at the facts on that issue the bankruptcy it's picking up basically where things left off on the issue of deficiency if there's a remain and there's conflicting evidence although there was some there was there was one appraisal by mr probably there are other proposals by the other side there's conflicting evidence on the issue of deficiency the courts that it didn't decide it so yes that would simply have to go back when i was ten and texas law is that his actual fair market value that there's no deficiency if there's a fair price paid by the bank and where the foreclosure was in so far as the deflated prices paid at foreclosures that's not good enough you're looking at the actual fair market value of the property at the time of foreclosure that's correct well and that's an affirmative defense there has to be a motion made and raised by the party  deficiency is sought seeking to raise that issue that in fact there was an under payment of the fair market value at the time of foreclosure was greater than the amount paid willing purchased it would pay to willing seller as we just talked about yes ok and there's just not there's not definitive evidence on that point its strong statement about extrinsic evidence already haven't been looked at to resolve any ambiguity inconsistency i understand that the judge snyder made that comment but but but in there is if the court simply looks at the settlement agreement itself and i that's what i think you're talking about not the deficiency issue but the settlement agreement what the meaning is looks at the settlement agreement itself as well as the pretrial or will find that  definition is simply that that extrinsic evidence doesn't say what the conclusion that was drawn before says full and just goods and you came up with one of the best examples which is if you look in the settlement agreement itself  article two the settlement agreement says that's the sort of place where the company undertakes to repurchase the membership interest of the h and m parties and it's again it's the word of the company and yet at the end of that article there need to insert and it's a specific guarantee for as ease and karate if they were already included in the company and that obligation under who sued to be so it would have been no need for that separate guarantee so the parties themselves i submit notwithstanding the definition in the preamble they understood that the company for the most part rep referred only to the referred only to the circle firm of the company and we've seen this several times throughout their talks about membership interest in the company capital a member or membership interest with respect to the company all referring to the company as circle sherman so again under more yet if you look at the entire contract you will see that company mean circle sherman almost exclusively and particularly in th section where it's redefined does not include mr peroni very briefly following up on judge hogan botham's question in the lavender case i think i believe the court there specifically went on to address this issue of  conflating equitable rights and legal rights when it says therefore when bunch acquired the note from hibernian he stepped into the shoes of hibernia having the same rights which hibernia possessed and that's tempered later on by the fact that the a has to honor his own contributed share but he gets to sue as hibernia would on the amount of the original note and in fact even in the lavender itself right after it does that calculation they say birds contributed share would be one