breach even if you know in my opinion no i did not see it in the transcript the result though of those breaches in it doesn't matter if the breach is material or non material it doesn't matter to the agree a breach is that it's a matter of right behavior is we're disagree with what the sec has indicated in their brief that in order to terminate the leaks the breach should probably be material but in this particular case what is more material than rent in this case there were two that there were breaches of sachs's obligations under this release of record keeping that they didn't keep accurate records in the normal course of business to track all sales to from or upon the premises than those are breaches and every one damages is it has been set forth not only in the close of the civil code section three three six zero it are also i've been embodied recently in the kathy jury instruction three six zero and if i may just read that to the court for a moment i think it's a with respect to the issue of nominal damages because it doesn't quantify the good the degree of breach it says if you decide the defendant breached the contract but also the planet was not harmed by the br you may still award him nominal damages such as one dollar and makes night sweet versus johnson and a vienna bursaspor lock for those six for those conditions and they don't judge whether or not the breach was in the aerial i'm sorry i missed what you three six of rights the effect of this is that when sex did not end here to their accounting responsibility on the lease is that interfered with the right of the hagans to receive rent it really supports their abilities to know whether rent is to be paid to me it should have been evident this lawsuit was filed on december nineteenth of two thousand it should have been evident in the trial court at the time that this lawsuit was filed based upon the causes of action that were set forth in the pleadings that the hagans may be able to show breach of duty but they may not be able to show peculiar a loss and that's the problem that we had in this case because the reason they couldn't show period loss is the sole party that was responsible for preparation of documentations of account the fact they had exclusive care custody and control of those records and they're the only party and the least that is obligated to produce those records to track net sales that would rise to percentage rent the particular sections that are at issue in this case in the contracts are section six point three and seven point one what they require is that sas has to maintain full and accurate books of account to determine with certainty the sale of all merchandise sold and upon or from the premises the duty to maintain these records i submit is absolute essence what happened here since there were two components are right in this goes to your honor's question one was the minimum run on your basis and in this particular case the evidence showed that the hagans actually did not charge market value for rent because they wanted to believe that there was an upside of getting a share of the net revenue and they were entitled to three percent during the first not only after airing the fact records when they were when they were sachs was willing to pay in a long time and that's kind of an interesting concept that's was willing to pay it on december sixth in december of two thousand and two the rant was for over  insufficient to track the amount of sales and he also found that in one thousand nine hundred six there was a tax had reached the minimum set of twenty million dollars in the hagans word title the three percent over that it was about seven or eight thousand dollars sacks chose to ignore that finding he also found that there were deficiencies almost every year that he audited of about a half a million dollars not until mr o'brian their expert in this litigation conducted his own audit included in two thousand two did they then tender this payment and this payment is interesting it was fourteen thousand one hundred fifteen dollars the payment arose out of this litigation to mean that payment is an admission of breach and to me the payment also shows that if this case had gone to trial damages could have been awarded and the reason for that is that fourteen thousand one hundred fifteen dollars came out of the discovery in this case if the case appreciated one of two things would have happened they would have had to admit that they owed this amount of money in turn hagar's would have been the prevailing part in the litigation or it would have been found by the judge or jury based upon their own experts fin the complaint went further than that i think it was an effort to truly try to define what records are this says have can we really audit are you really keeping your bargain because sex never kept separate books of account and i think the multiple breaches that have been earmarked tell us that so it wasn't just an issue of terminations i don't think that that's how the litigation started it started the two contests the findings in the audit on  and as i indicated i think that it counsel for sachs's is correctly stated and kind of misconstrued our point we're not claiming that we were entitled based upon the breaches it hand to terminate the fleet that would have been a fact but what we are saying is that when we showed that they did not maintain records for three years that three months within that thirty six month period they were missing the point of sale documents were not even a vailable until october hundred ninety only gave it to us for thirteen months and were entitled to thirty six months at a minimum you never tracked employ sales mail sales never track crossed or sales you never had maps to show the historical outlay of the of the registers all compliance in the future your honor that's one of my biggest problems with the court's ruling the answer to that question is no we are under right now as we speak undergoing another audit in new york so if you've got nominal damages real estate i was for boulevard in the heart of early hills and april of one thousand nine hundred have you contract with what you perceive to be one of the top high end retailers united states acts and you enter into a long term lease that potentially has fifty five years for but listen your honor you're right i'm not going to sit up here and say that after the granting of taxes motion for summary judgment based upon that they're not going to be doing the prevailing party i think it's pretty obvious that that's what the court's going to have to conclude and word indicate if other rights are involved these other rights are factors which must be considered in the term and whether the error was reversible and basically if there is another point scenery loss for example a material breach of the contract coupled with the fact that no damages were awarded that that's an exception to the general rule and i think that this case falls squarely within that there's a few other issues i'd like to address because these were raised by sas in their very first one is the issue of under section twenty one point one of the kinds of arc where they raise the issue that look before you go in our brief and i think that the other two reasons are really mr fuld was a report that was prepared in addition to that the lawsuit you cannot have any more notice in the suit itself and the court has no other questions i'll reserve the remaining three more in your honor the question of the notice and your provision goes to the heart of the case even as it's been conceptualised by counsel this morning section twenty one point two and what i think is important here is the act has committed no breach that would permit them to default is defined by twenty one point one and what twenty one point one does is two things first it's just as to rent that's a separate category and rent is it's a default and then it's any sale year to comply with any other provision default and the material breach five year lease the county in this incredibly complex it didn't want to have the landlord coming into court every time a single document got lost or two figures in a long line in an accounting  sheet happen to be added up incorrectly so you have a provision here which is standard in these types of leaves as which says there's no default or material breach of unless there's the notice and an opportunity to cure and it goes on to say that twenty one point one b talks about the failure to observe any other provision in this lease it deals with the entire universe of possible alleged noncompliance with the terms of the lease and it's just that there's not a default or material breach unless and  in the commercial context that we have here you don't want to have a landlord coming in and filing suits under a fifty five year lease involved incredibly complex accounting provisions for something that is by definition and a breach that has been deemed by the parties to be non material but that's totally inconsistent with their reasonable commercial expectations it does it doesn't make any sense and california law makes clear that provisions like this are absolutely the less or came brought a lawsuit for damages got a jury award for damages and the california court of appeals a button but never filed the notice that was required into that lease and the california court of us overturned that the judgment and said you have to enforce an unambiguous provision like this it's a condition to bring the lawsuit and there are no damages it's clark versus tidewater he's been on the books in california for years it has formed the settled acts that commercial expectations of landlords and tenants throughout the state everybody least is against that and it is the control of law it is what this lease was patterned after and it isn't forcible we don't think they're not compliant with respect to the loss of the three months worth of register tapes twenty one point one b goes on to talk about that it says in the event it's quote now if however the nature of s and reverse engineered because the actually the originator of the computer program had died during the incident they reversed engineered it and they determined that each and every component that was required to be tracked under that definition itself in the lea in fact tracked and then to test it further they took the actual paper records from one thousand nine hundred ninety two thousand and one and they got them all to reconcile to the numbers in the landlord sales reports which are the basis of there wasn't  track that but the lease is just the opposite the lease the promise of that argument is that there are certain kinds of goods that are always west door goods and they have to be credited to the west or no matter where they are sold no matter where the run up in the lease is just the opposite and the trial judge recognized at least that just the opposite he said there's a gaping hole in the market he said there's a gaping hole in this least that's directly merchandise it all seems to be driving this and if you look at their expert report the cantar report is based on was exclusively on the notion that there are certain goods that had to be credited to the hagans because they were they originated in the west or even if they were run that sales and had failed to keep all the documents that were required the judge addressed that very clearly as well he said they get everything that was required under the least what you're complaining about  although on another level it doesn't matter because reviews independent certainly would have been preferable if the judge would have told everybody what he was thinking but i think the judge made it very clear to all arguments that their core theory this theory about cross or sel needed they had the actual underlying register tapes for each and you have to remember only talking about three we're talking about calendar years ninety six ninety seven and ninety eight they had all of the register tapes the underlying register tapes for the entire three year periods up with three months that were lost and they had no difficulty estimating what the expired that one other point i wanted to make very very briefly their assumption that nominal damages would necessarily make them the prevailing party is absolutely totally inconsistent with controlling supreme court and ninth case is that under the remedy provisions under twenty one point one and twenty one point two they didn't comply with the notice and your provision and that is a definite that's part of the definition of what a breach is and they can up to the far copy take it is the check and balances the court indicated the problem here is that they didn't give us those intil they didn't even find them in till two thousand and two when you receive them into almost a month before the actual motion register receipts are a specific item that you fit within to be within the least section six point three requires them to track all sales at the time that the sale is made the only point of sale records are the the security for the accuracy of the hard copy and in this particular case and even have them for ninety six ninety seven ninety eight and only provided to us from tobar nine hundred ninety nine through december of two thousand the complaint extended the time for the recovery through december of two thousand when to give it to us for thirteen months they were required to give it to us for thirty six another example crossed our sales their own expert found fourteen clearly from means if you take it merchandise from the watchtower and you ring it up on the store you're not accounting for the west or a portion of that merchandise that should have been credited towards the hated and that's the problem here for all the reasons that have been discussed both by counsel and myself it seems that there are material issues of fact in this case and because of the potential forty five year term that remains on this lease i would urge this court to send this case back