a settlement in escrow agreement entered into in october of two thousand and nine the party specifically agreed that those agreements represented the entirety of their understanding with regard to the purchase of the card by amaranth with payment t the limited scope of the agreement as your argument certainly in the briefs has invited us to do you know i think the answer to that is first part the limited scope provision and that recital that you're here discussing says it's the disputed items capital d defined term disputed items and then the additional matters also capital way defined term additional matters which really is  the reference is the paragraph six of the settlement agreement which is the paragraph that deals with the payments to be made by america and the delivery to be made by debbie as packaging and even in that paragraph there's an incorporation of the specifications from the first shipment but i think the parties did a little bit more than that which is they also entered into the escrow agreement and at the same time and actually it was just emirate and of us packaging went into that escrow agreement and so if we look at that agreement and you look at the recitals within that agreement and so if you look at paragraph a of the escrowed raman it talks about what happens that we had the settlement agreement that was between the three parties highpoint m rat and ws pact and then you also had this escrow agreement just between them or act and packaging and so they were the party set forth in those recitals what was taking place and so in paragraph ok it says there was a settlement agreement that settle the dispute that escrow agreement and it again specifically incorporates the specifications from the first shipment and this time it actually says yes packaging is to print the cards consistent with those pesky occasions so then we say where do we get the specifications for the first shipment those are found in the invoice of july seventh two thousand and nine that was sent by packaging to amaranth with the first shipment so when that first shipment came out in those in that in face so we take a look at last at this point but ok what i'm wondering is if the settlement agreement were intended to replace or supersede the preexisting contract between highpoint and debbie as packaging wouldn't we expect to see explicit production standards in the settlement agreement  especially given the security flaws of the previous runs of cards i mean at this is really you know well go ahead well i think it's just the opposite that the parties chose to simply reference the prior specifications and they do so very specifically in both the settlement agreement and the escrow agreement saying you're going to print them exactly to the same specifications as you already sent the cart and so i don't think they were obligated to go and print that out and put it in the agreement in order to have something that is an agreement that says this is what you're selling and i think it's the integration clauses that sort of settle that for us as they said  look at the escrow agreement we're defining what happened between the parties who are saying this is the entirety of the agreement between packaging for the purchase of cards the payment of the expecting at delivery of those cards and i say there's nothing else outside of these agreements that governs that particular transaction that they're trying to memorialize here in these agreements or that's the universe of the agreement then if packaging delivers defective cards then they're in breach of that agreement now ultimately as the district court pointed there may be an issue of fact for the jury to decide whether or not the cards were defective or what exactly the security standards were but it doesn't mean that they get packaging kits to incorporate terms and conditions from a prior agreement with a different  highpoint to limit the claims of amoret for breach of this agreement that's before us mr swimming could direct your attention to paragraph five in the settlement agreement and specifically to the have to say the way this is documented it's a little odd where the settlement agreement becomes the contract and the provision of memory of cards looks like an obligation to supply cards but in this last paragraph there it begins in their sole no liability for the card shortfall i read that as implying fairly clearly that ephemera had in high point don't give that permission then w g has an obligation to ship the twenty five million cards is that how you read it yes i think that's right it's certainly how i read it ok then could i ask you what we've been told by the ws in its brief that your client cancelled the third and fourth shipments that were covered by these documents can you give us some guidance both as to including where it is in the record as to what happened to the second third and fourth shipments that were contemplated so that the shipment numbers are starting to beginning are a little confusing because they was really a first first shipment that was in two thousand and eight that every kind of two thousand and nine and that's the ones that which we claim are defective and right notified those were delivered to you they were delivered to dubai and they were discover to be defective the series ends and so then when no further shipments when the shipment arriving with defective the next obligation was for emerick to deposit funds into the escrow account to trigger the obligation to send the third shipment well since we had defective cards that ws packaging would not replace that never happened and that it never went forward from that point so that's where things correctly ok so if we go back to what it is that the packaging is arguing and this limited scope provision that your honor was asking me about is what they're really saying is that this recital in the settlement agreement that says that the transaction is limited in scope to these disputed items in the additional matters they're really saying is that trumps the recital in the escrow agreement that says that these this transaction or the documents involved in this transaction govern both settling the dispute and the purchase of cards by m or at and the sale or delivery and payment to ws package that's not the law and that can't be the case and it's in part because the recitals with in the settlement agreement were never incorporated into the document whereas the recitals in the escrow agreement were specifically incorporated but paragraph five be escrow agreement to be substantive and so i still read the settlement agreement restriction to be consistent with our argument which is that the additional matters are still an obligation by debbie as packaging to deliver not on defective cards however is packaging some argument fails either way because if that's in conflict with the recitals in the escrow agreement that are incorporated be incorporated now substantive provisions control they trump those provisions and that's what it comes down to i think that ended up being a lot of discussion both at summary judgment and briefing about whether this was a manufacturing contract or a delivery contract and i have never really understood that distinction made by  expecting because i think the longs concent still says that if you're delivering a specific goods and you know that there's a specific purpose there's an implied warranty that we fit for the particular purpose and it's up to the packaging  implied warranty on the law and that never happened because instead they said these agreements concert the entirety of their understanding and so i was ordering coffee mugs implicit is that they won't leak they hold liquid i'm ordering scratchcards implicit is that they're secure you can't read underneath the scratch layer with a flashlight and now in this case it was also explicit promises that they would be secure and couldn't be candled as the industry tournaments and so this idea that despite the parties putting into their agreements very specific provisions about what it is that governs their agreement that ws packaging wants to bring in limitations that r at never negotiated wasn't a part of didn't know about and it was never referenced in these agreements the escrow and settlement agreement which of course the easily could have said these are the terms and conditions to to this deal none of that happened until it's cooperate to get into this agreement and impose those limitations on them or at is inconsistent with the agreements of the parties entered into so the last part of it is that i think even if the court gets to that point in which they make a determination that the letter of denver cation with highpoint does actually impose terms on to this transaction between and us packaging i think that statue imitations was misapplied if there was a very specific language that gave two conditions precedent in which they would trigger this short stature with patients one is completion of the services  certainly never happened and the other was delivery the delivery of the products there was never a dispute that this was always a twenty five million card order and never delivered the twenty five million cards that condition precedent that april of two thousand and nine the kind of generic agreements and say but that's back before the settlement agreement when you've got you know some sort of three parties in a line in your party was not dealing directly with the us correct at that point c morning please the court my name is guy temple i represent the appellee ws packaging group the appellant has made one point in their briefing the case before this court that we would agree with and that is that it is in fact a straightforward contract fortunately their contract is not with my client ws packaging now the district for before october two thousand and nine that's clear and obviously there was a lot of distraction in the case from attempts pre settlement agreement to to to to overcome that problem before the settlement agreement but with the settlement agreement you've got a direct contract between your client emma right there is a direct contract between  packaging and highpoint the three parties together in the settlement agreement the question is whether or not that replacing completely unwound the previous contracts and what so you looking at the settlement agreement there is no indication within the terms of the settlement agreement that the parties intended to completely unwind those previous contracts so you have what do you mean unwind what you have purchase orders from emirates highpoint may of two thousand and eight for these carts you have high point turning to ws packaging and issuing purchase orders for the cards in two thousand and eight and again in two thousand and nine with carefully negotiated terms within the letters of indemnification that became part of those contracts between highpoint and ws packaging and then you have a settlement agreement that on its very first page is very specific they did is limited in scope so here the parties have been dealing right or sometimes have paragraphs five and six to perhaps you could address the point concerning the escrow agreement imposing an obligation and what's implicit in per gram five that your client is is agreeing to supply twenty five million cards directly to memorize i think if you read paragraph five the last one to section five last paragraph there that you reference that high point in m or at may provide b s packaging permission to ship less than twenty five million cards if you read that in conjunction with the very first recital of settlement agreement which is that the us packaging agreed to sell to high point twenty five million quarts the parties up front note the fact that they have these direct contracts ws packaging to high point high point two m or at and so later it was there that was the old days right that's but then at the settlement change to the green seems to change everything because them or at least as i read that paragraph at the end of section five can say no we don't give you permission to have a shortfall therefore there's an implicit but i think fairly clear obligation to deliver twenty five million cards so the fact that i'm i'm listening excuse me what am i missing the fact that emmer out could grant permission to ship less than twenty five million or organize permission or deny permission doesn't change the fact that ws packaging obligation and contract was too high point to ship those car customer and route is the one that is dealing then in fact with their end customer sabbaths on a telecommunications company in dubai they're dealing with the end customer and are aware of perhaps new reasons why they might want less than twenty five million carts i think that last paragraph of section five contemplates that amoret had some control over dictating shipment of less than twenty five million cards because they were the ones dealing with the end user in the middle east but ws packaging agreement is to ship carts to high point and i think if you look at the limited scope what emira act the theory they advance is that the parties intended to create entirely new contract would express that by saying this settlement agreement is limited in scope to a dispute and a few additional matters if you accept that argument the parties somehow memorialize their brand new contract by calling it magic's the idea that the parties having dealt together for a year and a half reach a settlement on a few issues in dispute and then decide to create an entirely new direct contract cut out the broker and memorialize that by limiting the scope of the settlement agreement and then putting that new contract into a paragraph of something titled additional matters which if you look at those additional matters i references the numbering of the cards in paragraph five the reason that that twenty five million dollars short or twenty five million card shortfall was significant was because that paragraph five addresses the manner in which the car it would be number that was part of the issue that had arisen was sequencing the cards the way that the cards were serial numbers when they were delivered in boxes so that the serial numbers could be checked against the database of serial numbers and so section five talks about numbering and then finishes with ws packaging can ship less than twenty five million if the end customer or high point directs them to do so and then paragraph six which emira that heavily relies on is creating some kind of new contract discretion whether to manufacture cards what standards there would be or would absolutely not they were to manufacture cards in accordance with their contract with high point printing which was memorialized in a quote two quotes that incorporate protection standards including securities and the escrow agreement references the this specifications but actually the the i think if you read those in their entirety the purpose of that reference in both the settlement agreements and the escrow agreements is that emirate now has the ability to and the requirements of the obligation is on emirates to provide some form of certification before those additional shipments are released one of the things that is noted in the chip parties joint stipulation of facts is that emirate directed these cards to be submitted for testing prior to shipment and so ws packaging in this settlement agreement just said ok and customer of high points you need to give us the authority to ship these before we ship them you have the obligation to to say that you know that that there are good too to be shi but the the idea that that somehow provides the new contract terms it's incorporating those standards that are in the party's original contracts which are referenced upfront in the settlement agreement and the escrow agreement going to the integration clause which counsel for the appellate reference in the escrow agreement just like the settlement agreement it says that it is the entire understanding of the parties with respect to the matters there in the settlement agreement lays out its express scope which is the disputed items and some additional matters and then the escrow agreement within its scope is to provide a form of releasing funds presumably because m rat wish to have the funds delivered directly ws packaging instead of continuing to go through their broker well you know there were things in the settlement agreement were not express give to the recital provisions in the settlement agreement with respect to the recital provisions of the settlement agreement i understand the case law on weighing operative provisions over recitals when there is some form of conflict and i know the appellant has raised this issue but read together as contract principals would require there is no conflict between the recitals in the settlement agreement and the remainder of the settlement agreement the recitals lay out the scope and then the additional matters and there's nothing in the remainder of the settlement agreement to say that that that scope is not actually appropriate in fact you read together a reasonable interpretation is that the settlement agreement was the parties agreement to resolve these few matters and then to set up a new schedule for shipment of the carts the parties ceased shipment briefly while they negotiated the settlement to make sure that they had the sequencing and the numbering issues resolved and then they had to set a new schedule by which the cards would be shipped but again i would state that the one time that all the parties signed on to a agreement together highpoint ws packaging and m rest there is an opportunity for them to spell out if high point is out of the picture if the contract is now directly between ws packaging emirate and i think the theory that i am right advances is that there was a new contract created inadvertently by the settlement agreement and i don't think that you can read a reasonable interpretation of the settlement agreements so you have any intentional creation of some new contract so going back to the relationship of the parties i think it's important to note that the reason that we are here is because high point the party with whom both sides contracted is dissolved they're out of business in two thousand and thirteen the contract was between emirate and high point between high point and ws packaging this emira trying to fit in some sort of breach of contract claim because they are not able to pursue recovery from highpoint but as the district court noted the settlement agreement is is clear in its terms that the parties intended to limit its scope now the next argument that emirate makes in the alternative is a third party beneficiary arguments and they note that they are a beneficiary then of the contract between ws packaging type i don't know that you need to spend a lot of time and sure enough you're on least for my purposes well i will briefly address then the breach of warranty claim as well that am rat's ass for review of the warranty claim that they brought forth was dismissed for the same reasons that the settlement agreements claim for breach of contract cannot survive and the third party beneficiary claim cannot the breach of warranty claim cannot there is no warranty within the settlement agreement between us packaging and emira where it's not a contract for the manufacturing of the courts and to the extent that claims any warranty stemming from its role as a third party beneficiary that warrants it is time barred by the letters of a democrat between ws back to high point because remember it stands in high point shoes the last point that they discussed in their briefing and it came up in the district court's opinion i want to touch on this is this notion of a unilateral contract existing between ws packaging and m or at this was not a claim that was ever pled by  in either their initial complaint or in the amended complaint but it is something that they raised for the first time in summary judgment briefing and so the district court addressed that cla arguments is that somehow a few statements made by us packaging regarding its abilities to perform the job created a unilateral contract despite the fact that there were still direct court noted a very specific factual representation from a manufacturer to the customer in that case the specific representation was i believe regarding corn within twenty four hours likewise the timber land case that emirate relies on involved very specific representations regarding the tonnage and hauling capacity of a locomotive in contrast here in order to support a claim for a unilateral contract emirate cites statements from ws packaging that they could quote do the job and that they could do the job better than a previous prince or that m right had used in  the just report properly concluded that no reasonable jury could find that a unilateral contract existed based simply on those statements particularly given that there is no reference to those representations in the purchase orders from memory at the high points and then you know that the focus of emirates briefing is on disputes of fact related to representations or direct contacts between the parties but i would point back again to the settlement agreements when the parties came together and spelled out where they stood they had the opportunity to note that the relationships had changed or that there was now a direct contract between customer and manufacturer and they did the exact opposite the language of the settlement agreement in putting the limitation of scope on the very first page makes clear that the parties the you know the the language of the settlement agreement regarding timing of deliveries replaced entirely the parties earlier contracts just does not comport to the language of of the settlement agreements that payment are my clients contract was with high point and if yes then what about after the settlement agreement though that now you've got your bypassing highpoint in agreeing or will will handle payments through the bank is the escrow agent right correct so you're going to get paid that way right right by money that amerada deposits with the with the escrow correct and again there are specific obligations in the notable that that credit was going to high points and not to enter at for two hundred seventy five thousand dollars there is no argument that that that credit was not properly issued and then there is a specific obligation that negotiate the terms and conditions of this job with high point that yes packaging is in the printing business they understood the nature of this kind of contract and so when they enter into a contract with high point they had a high point agreed to these letters of indemnification that spelled out the parties obligations and conditions of the game orders and they did that twice and highpoint signed off on those the argument that  and highpoint excuse me and now i am rat argues somehow that ws packaging did away with all of that in the settlement agreement and created an entirely new contract just in that it did tional matter section and i think their argument is really that a contract was created inadvertently by by the language and that's not an argument akin to his kill so i had understood the or even a little differently which was you know since rather than an accidental contract the documents essentially reflect what was understood between the parties which was that high point was going to drop out but that the b obligations would run directly between u murat to finish the deal and yet there's no language within there that high point is dropping out there is reference to ws packaging issuing credits directly to highpoint there's notation that the contract is between ws packaging and high point in the very first paragraph of the recitals again if the parties had intended for this to completely unwinds previous contracts they certainly had the opportunity to do so the language indicates an intention to do otherwise and that's reflected in the limited scope the court has it exactly right that the documents suggest that high point was stepping out and i noticed that debbie aspecting ignores the escrow agreement entirely in its brief if you look at page fifteen of its response br it kind of talks about how we say that the entire agreement is between those two agreements but then immediately ignores the language of the escrow agreement and just goes back to arguing the language in the settlement agreement but if you look at it you've got a high point who as the middle man had paid some money back in zero eight to ws packaging so if they're going to be out what you have to do you have to give some credit in some way so packaging gives that credit to highpoint highpoint in turn gives the credit to emma and that's it that's the end of the high point obligations under these agreements there's none further now emma with its credit has a new payment schedule and is ordering these car packaging and then that's reflected in the escrow agreement and so when mr temple was asked you know what are the obligations of the packaging he never got to the final obligation which was to print cards consistent with the specifications from the first shipment and deliver them to em or at on a schedule in exchange for money that's how we contract for buying stuff and that's what they've done and so if you look at paragraph two day of the escrow agreement mr temple characterized at saying it was only emirates obligations to inspect the cars to see if they were consistent with the specifications now that is what the settlement agreement says but it's not what the escrow agreement clause and with paragraph five of the escrow agreement it says this agreement together with the settlement agreement and schedule one so you had the settlement agreement that set out the recitals it is what happened in the past and it goes back to the quote is intended as a complete statement of all the terms in arrangements among the parties with respect to the matters provided for and supersedes any previous understanding so that we say what are the matters provided for go back to the packaging they have to be done to the specifications of the first shipment and they didn't do it they breached when they sent us defective cards and is entitled to have it state court what they're actually at seeking to do is to say that the parties intended to amend the agreements between high point and that is packaging with the settlement agreement that's what they argue in the brief and that's what the district court found but that's not supported by the language of the documents and there's nowhere nothing in the record that there was packaging sites to that there was any intent to amend those agreements by these agreements or incorporate terms and conditions from that indemnification letter with highpoint which that is packaging testified in this part of our statement of fact