novo i believe it's important to set up the legal basis on which indemnification clauses are construed in new york law under the law very clearly the language must clearly fifty fifty this ok so so you want to with those principles in mind the washington post what's unclear about the sentence that's the key to this case in the section eight of the agreement to a twenty six in addition your in y show extend to the to the deductable under our errors admissions policy with a row without regard to judgment or settlement why is that unclear it's unclear for a lot of reasons you want to first of all every case that it allegations without regard to judgement or someone doesn't accomplish and of course it would say for example that your indemnification applies to claims or allegations that would say without regard to judgement or settlement furthermore if you want to look at paragraph seven point one remove the attorneys fees remove the attorneys fees but the based on their analysis of what the standard for application of attorney's fees were the case was dismissed the case was without merit the case was thrown out o it's written as mental gymnastics so the first sentence of paragraph eight point one says that with respect to breach that you indemnify us with respect to breach the breach is if your written composition infringes on another musical composition that's not the case so there was no breach which says that applies to protect to breach that result in a judgment or settlement and it mentions unemployment's your client or someone someone situated bringing a composition or a literal song or whatever to warner and some third party says look a this is plagiarized this is my song suze gets a judgment which would be presumably against both your client and warner presumably but here here again very important and i will have a limited amount of time it's very important for me to say you have to look at the three sentences in context first sentence says that it doesn't mention without regard to breach it says without regard to judgment or settlement it doesn't say without regard to breach it would be very easy for them to say this is a breach if there was no breach is the hoster because if you're going to hold someone liable for regard to breach at all and then the third sentence is very crucial also the third and says where the third sense say that you will have the right to if one of the two receive notice of a claim against the other and to retain counsel of your own choice and your sole cost and expense you cannot reconcile the third sentence with the first two because if the third sentence meant that you have that you have two but there's no circumstance retention exactly on a provision in the policy that applied during the time of the litigation in the district court and up to the ninth circuit do you still maintain that there's a difference between retention and deductible and how the district court in a footnote said there wasn't any absolutely that's another problem that we always how is it different than a retention induct when we submitted a declaration of ties cycle in which the district court completely ignored and it was inappropriate to consider the policy with the retention language without considering the declaration of mr saddle you can't just consider one side's evidence and not the other and with three d answer judge droney yes that as mr sagbo says in his and his affidavit a deductible is one in which the insurance company insured pays from the beginning whereas a retention is payable by the insured by the insurance company from day one and they have different consequences and all of that is explained once as though it just means the insurance on the hook for paragraph thirty eight the consequences of those two different the retention of the double and by the way deductible is in quotes in paragraph and in the second sentence it's not if there's a reason why it's in quotes it is just inappropriate to have to read this all together warner knew how to write language in their contract that says that the indemnification applies to claims or allegations and paragraph seven point one and something completely irrelevant the last sentence they also say in paragraph a point two they don't say it here and there is no case that i have found which applies indemnification requires identification without specific language saying that you will provide indemnification for claims or allegations not this mental gymnastics that is going thank you your honor may it please the court with all due respect to mr bush we are reading the contract as a whole there are three key sentences in section eight point one and if we read them all well all right no i don't i don't think that's correct your honor if you are referring to the third sentence in section eight point one each count so would bear its own cost cost in the sense that my client is paying our want is cutting you attract right there they are paying my firm to represent them but they were and you are saying that the next provision me is that if that means if you lose the case your reading of that is that this provision applause if you get a judge and a judgement in your favor the second sentence says that regardless of whether there is a judgment or a settlement mr pettibone has to indemnify warner up to the deductible up to the amount of money that warner itself would have to pay before its insurance kicks in so what we have here is if the if there's a lawsuit and it is proven very or somewhat  tortured reading of that of those two sentences and where it seems to me you fall off the table is that under new york law if there is going to be own of the test in a third party indemnification case is not the unmistakably clear standard that is the test in a first party indemnification case in other words where there is a litigation between two parties a defendant  plaintiff and the loser is saying and them to the winners saying the loser has to pay this is a third party indemnification case and the law is very clear the cases are lunar and the pern of both parties cite to them that say that the standard should not be confused in a third party indemnification case for the first party indemnification case the standard is simply that it has to be sufficiently clear in other words it's the same standard in the third party indemnification case that's when you're three and take away that there is no question that even read it ten times and cond of understand your position but you know i spent a lot of time with this language and i kind of see what you mean but i don't understand how any reasonable council can claim this stuff is unambiguous but if you're on it would permit i could explain it and here's the problem that your approach  leads to you get a suit from someone who is sort of dissatisfied with the success of this property the royalties are generating and you can get you know we see these from time to time you  like that and then all of a sudden on language that seems to be not anticipated your co party or the artist is stuck with enormous legal on here well your honor if i could say two things first of all there's no way to read that second sentence without it meaning something and mr bush has no explanation for what the words in addition or without regard to judgment or settlement means in that second sentence i mean well it's our judgment against you well your honor when it says without regard to judgment or settlement what it means is that he owes the indemnity it says your indemnity and it says in addition your indemnity show extend to the deductible without regard to judgment or settlement mr bush's argument is that well if it doesn't say breach there has to be a breach but it's clear that without regard to judgment or settlement means without regard to a breach that causes the judgment or settlement you take that right from the first sentence which talks about a breach that results in a judgment or settlement so the only way language at all costs expense create an automatic ambiguity under the circumstances you're reading the third sentence your honor because we're talking here sole cost and expense well warner hired its own attorneys fees because it was a defend hard to own attorneys because it was a defendant but with the third sentence is talking about is a suit where only one party is sued not both so it says each part to be notified of any action against the other brought with respect to the song but that's talking about is when one party let's say mr petit bone is sued alone and warner is not warner may have an interest it sees in the case president kept kept up to speed on what was going on with this litigation it was mr pettibone and mr bush who by agreement were the ones who were leading the defense we were present and we worked with mr bush  throughout my client could not retain mr bush because mr bush is consistently adverse to my client we could have used mr petit bones attorney my client could have if there were no conflict but mr petit bone insisted of the fees that were submitted to the district court were i forget what the exact number was your honor but it was somewhere in the five hundred thousand dollar range and the meter continues to run well we had it we had an appeal in the ninth circuit which i primarily argued and mr bush argued the the attorneys fees part of it so did the half a million dollars include the ninth circuit no your honor that was before them and second up in the ninth circuit i don't know exactly  would i would i don't play games with me how much that prosperity hard to warner for the ninth circuit piece of this litigation i would believe the fees were somewhere in the hundred fifty two hundred thousand dollars range but i don't i don't have the exact number ok and what's what if you run out far in this court today i don't have the number you're on i would i would i would imagine that at the district court level we spent less than one hundred thousand dollars because we were able to get the case dismissed on the motion and what about getting you here before us today well we had to write one brief and what my rate is your honor what i can recall is exactly what the discount that we give our client here is we're talking about a million dollars in legal fees roughly i think it's a little bit less if you were to include everything including this is this appeal and this and this case but we're supposed to be looking at this clause to shift a million dollars in legal fees to an artist who's looking for five hundred thousand dollars  that the claim had no merit correct you on it but the basis of the claim was that it was mr petit bone who had committed copyright infringement and warner was necessarily drawn in and that as well if he had won i mean if you had lost the case warner would lose money he wanted would lose fifty percent of the royalties stream i'm told we well we would have lost whatever the damages were in that case for copyright infringement and mr pett even would have had to  royalties from what you called it was a money maker for both of you absolutely you know you know for our cause like this to generate that result on seems to me  if we're talking about fairness the court said look if you want to talk about unequal bargaining or fairness the if the indemnity were had reservations as to the scope of the agreement he should have insisted on a different indemnification clause or refused to respectfully disagree with that position because i don't doing my job asking you a few questions and i have to ask you yes as you said mr bush assisted you in the litigation in the district court and circuit did his client seek indemnity from you for his fees we worked i would say i worked with mr bush in the in the district court mr bush took the lead in the district court process as representing warner and madonna participated in the defense we gave the lead to mr bush there when it came to the ninth circuit i took the lead on the argument because we were had to overturn or get the ninth circuit not agreement provides for that well not in this circumstance because what the indemnity is talking about in sentence one is did mr pettibone breach his reps and warranties his reps and warranties include not committing copyright infringement that was the allegation in the district court lawsuit that mr perry byrne had sampled copied from a previous record so that was the rap and warranty that he was alleged to have breached in the case now we proved that there was no copyright infringement the second sentence is the indemnity that mr petit bone provides to to warner again because he is the one who has the who brings the song to warner in other words so warner if mr perry bone is going to be sued for copying so is warner if mr pettibone is found to have copied well warner will be in the defendants see as well and if pettibone is found liable warner will be position that they did not do all caps the amount of attorney's fees you're entitled to ask for correct john under the second under the second sentence and i get it thank you very much you want to wash yes it does a few things u in the hearing before the district court the district judge said he's read the section eight point one one hundred times and he can't figure out what it means he said that and it is true it is written as a riddle and it is impossible to make mr pettibone is unfair to make mr pettibone figure out what one had i truly believe in my heart that warner wrote this ambiguously on purpose to try to use this very argument if there ever was a lawsuit and i can tell you if you look at paragraph seven point one the last sentence there was language they knew it but they didn't write it here they route they wrote this gobbledygook that you can read a thousand times and not figure out what it means and very importantly it is irreconcilable that third sentence mr kaplan says that the third sentence only applies where one party is sued but guess what if you look at the first sentence also the first sentence could be one party being sued dead it does it does it does not fit and if there is no way for m petit bone to ever not ofis then that third sentence becomes irrelevant meaningless and that's not the case and a good yes so i mean we agree with you do we vacate the decision and send it back evidentiary proceedings or do we reverse it and say you win the latter and this is why because of the court is the court was correct when it says in the law is very clear that in order for there to be a fee ind unmistakable clarity it must clearly require indemnification from its language in conflict context it must be sufficiently clear and unambiguous and it must be strictly construed and there is no way this language fits within that within th ose legal principles at all and they could have written that it applies to claims and allegations easily they did it elsewhere in the agreement they didn't do it here and that's the key and the first and it says breach and as far as the second sentence is concerned  it could mean without regard to either a judgment or settlement it could mean that they're holding the fees pending a judgment or settlement there's all kinds of things that this could mean to mr mr sag low in his declaration says it so this language with out and i i'll say one last thing there is no case that i have found where a court has required some to indemnify someone for claims or allegations without it saying that and this doesn't say it thank you thank you both we will reserve decision we are going to take a brief recess the next case get ready folks and then we will come back and hear argument in night first amendment versus donald