is american commerce the canons of construction and construing contracts have been developed to ensure that we have consistent and most importantly predictable construction so that parties well drafting contracts may rely upon the clauses and words which are used in the contract the overarching canon of construction which must be followed in this case and indeed takes precedence in all contract cases under wisconsin the provisions contained here in which would mean the entire contract i would note your honor that one of the things that was argued by the defense here is that if they had intended this to apply to the entire contract they would have well i agree with you that it sets the floor but your last phrase or your out of it said you said once the product begins meaning being mined and of course the clause doesn't say that it sets a floor not condition not triggered by once the products are being mined but triggered upon the passage of the anniversary date of the effective date of the contract i think it makes perfect sense that they put this clause into paragraph six because it has to be coupled with the actual production because that's the credit that the mining company that casey gets if they have any actual production royalties paid so it does have to be coupled into paragraph six and it is in fact modified the actual production royalty that is being paid so it makes perfect sense that it would be in that specific paragraph  so the owner gets some press payment when the contract is initially signed act now a year from now they get a year from the sign and they get the seventy five thousand dollars now at any point during the first year the second year the third year when the when casey begins its mining operations then they have to pay forty five thousand dollars now you are correct that they will get a credit for that while tea to be paid against th the next royalty that is due now out the the other question would be then your honor is if there is not a minimum if it is not a floor of seventy five thousand dollars why is there a terminations clause because if there is a terminations clause it is there to stop the annual payment of seventy five thousand dollars otherwise under casey's construction and the district court's construction they would never have to terminate they can just stay off the property they have no obligation they would never have to pay another dime now that's where we get back to the common sense interpretation of the contract because it is undisputed that one of the well the bundle of rights that the lessee obtained in this lease was to go into that property there were buildings on that property they could have tore those buildings down they could remove the topsoil built berms around the property completely alter that property now under their position the landowner gets paid nothing more and then at the end their position is that all of the payments stop when they terminate they could walk away well that would make absolutely no sense that this entire bundle of rights was obtained for the grant payment of twenty thousand dollars consider paragraph two of the contract is under spirited that one of the other bundles of right or bundle of the bundle of rights that the k c obtained was to unilaterally extend the contract and under paragraph two it's provided that after the initial five y term the lessee as long as it fulfills one of four requirements the lessee has the absolute right to unilaterally extend the contract one of the four requirements is paragraph two roman at for number two roman it for as long as the last c is used to utilizing access roads to the property for ingress and egress to adjacent properties operated by the last see the contract can be extended indefinitely by the last c without triggering any payment beyond the initial two thousand and twenty thousand dollar initial royalty creditor the subject property does not have to be in production for them to travel across the subject property to  service adjacent property so no production royalties are paid to be able to extend the contract indefinitely without any payment to the last or is not a reasonable commercial interpretation of this contract now the other two roman ats well one moment it says as long as they're in production so then the lesser would be being paid stop being paid the production royalty but the other tural monette's also do not require production that's if the wash plant is operating or if they're basically keeping a scale there which they could be doing to measure the transporting that again would not be reasonable for the less or not to be paid anything for the underlying is important to note that the payments are not sequential both the district court and k c for arguing then the district court found that these are c quantrill payments another one works one triggers the next and that's absolutely not correct the payments that are under the lease there are actually five different types of payments one is the initial royalty credit under paragraph three and that is triggered by the execution of the lease another is the paragraph five that is triggered by the commencement of minor cory operations another payment is the production royalty under paragraph six and that is triggered by the scaling of product as it is mine and leaves the property the fourth is the annual minimum production royalty and that is a floor of seventy five thousand dollars and that is triggered by the anniversary date of the effective date that's the only triggering device in that clause the fifth peramivir the payment is the thirty cents per tonne transportation payment under paragraph seven when sandstone or rock is transported across the property from land situated off the property that clause just like the annual production royalty has a triggering event that does not require the commencement of mining operation on the property or that production royalties be pig these are not sequential payments they are payments was with specific triggering events but it clearly was requested that's undisputed that they requested the payment i will reserve the rest of my time for a rebuttal please shortly counsel i think your honors may have pleased the cork apple e's because alan casey proton's asked the court to affirm the summary judgment entered by judge crocker in the western district of wisconsin based on a few facts that are uncontested by the parties and the plain language that we've been talking to talking about in paragraph six well as a broader reading of the entire contract that's at issue now there's no dispute in the case that apple has never mind any products there's no dispute that they ever commenced minor kor operations under paragraph three and there's no dispute that any production royalties as defined in paragraph six ever became do no as a result of those basic issues involving the clear language of the contract no minimum production royalty could have come due the argument to the contrary it will at the lower court was called untenable by judge crawford because it doesn't flow from the plain reading of paragraph six and it disregards other sections of the contract operations before you start getting items that are actually produced out of the mine and subject to the weight based requirements on the issue of the right to terminate appellant's argument as it's been presented at the district court and on appeal is that they are entitled to a five year and a per year payment for five years of seventy five thousand dollars per year regardless of the facts that develop on the mind or in the party's relationship now if that's the case and that is what's been argued and what's been briefed to the court that does overrule the right to terminate under paragraph two that lessee has as well as the right to terminate under paragraph or teen which covers a number of issues including impracticability zoning and licensing issues including the c a p and that process that has been briefed to the court as well as other issues without saying anything about whether those  whether those royalties or whether the yearly payment could continue and stead in paragraph sixteen the contract simply says that at the time of germination anything that's been accrued to that date must be paid so the argument that we would go beyond that and make this a yearly guaranteed payment can't co exist with those provisions now looking at paragraph six itself i would take issue with with a couple of the rules of construction that we talked about i think the hummel case and to fail and which your side in the brief both indicate that the plane an ordinary meeting is what to governors in fact to fail which is it was constant supreme court case in two thousand and thirteen says that it's the duty of the courts to apply the quote literal terms so we have to look at and be guided by the language more so than the context and here the language tells us exactly what to do now it's critical in paragraph six to know that the word mind is used four different times in a mine is defined in paragraph one to include a number of operations including aquarian processing crashing manufacturing washing removing and selling rock products and so the that sets out the production royalties are tied to mine you have to be taking rock product out of the ground moving then set up in paragraph six and again and paragraph nine and then apply the weight based measurements and when we get to after we get past the timing requirement of weekly payments in the third sentence or paragraph in that sense minimum is used as an adjective it is describing the amount of production royalties that would be paid and described them as the minimum the floor that would be paid after production royalties begin and looking at the fifth and of paragraph six they were they emphasized the process for a calculated a minimum production royalty and integral to that process is the actual occurrence of production royalties as those maybe pro rated versus the effective date not set and established by the effective date of the contract and they're referred to as a catch all of the language in this whole apparatus doesn't make sense it's not a logical reading of the contract if the parties intent was to create a guaranteed yearly payment which of course it was not that intent the intent was to have a phased contract and have a minimum production to protect against slowdowns once operations have actually comm honor there isn't some testimony cited in the party separate judgment briefing between the parties i'd be the trust the trustees do contend that they made oral requests for the minimum payment and i think that is actually  it simply makes no sense to place this in the force and of the six paragraphs now what's left is assumed by judge trucker's reasoning is that it would be illogical to put it here in a situation where the minimum production royalty could actually precede production days it's not a logical placement for it and under the argument that's been advanced by appellants the minimum production royalty logically has to proceed production rictus because it starts accruing on day one after june twenty eight and twelve in this contract to sop and that doesn't square with the placement of the notwithstanding provision in the middle of the paragraph wholly dedicated to production now that reading a paragraph six is further validated by the other provisions in the contract and i won't belabor those because counsel and i have this book about them but the temple is stand hoping to fail decisions all indicate that among the basic rules of construction applying the plain meaning we also have to ensure that nothing is made meaningless or superfluous in a contract and that everything works together in lessers and express reason not to do so now here we have the sequential payments and simply  as i read paragraphs three five and six and i'm struck by how sequential they are and i think that is the takeaway that judge crocker had as well and that structure of the lease plays out and informs the party's intent as much as any specific words and that the same thing is true with the right to cancel and in fact this contract was cancelled and twenty sixteen following the downturn in the market which is one of the expressed basis for termination under paragraph fourteen and there's been no suggestion that that terminations was improper one additional piece of the contract that the also informs at applebee's reading a paragraph six paragraph nine is specifically referred to the royalties payable under paragraph six and seven and again that's validating that paragraph six is a paragraph about royalties not about a yearly guarantee of the state and with that there was a reference to paragraph seven and discerns discussion that of that is opening argument paragraph seven hasn't been an issue in the case i don't think any reference to appears in any of the briefings but paragraph seven creates a a possibility of if there is a scale or if there is a any equipment on the property and sand or rock products from other property is transported across the prussians the trust property that there would be a payment can put a condition on and so that makes that point about the ability to continue somewhat of a moot point because the less were also has the right to terminate the contract under paragraph or teen if the if the process is not there's also significant argument and especially the reply brief by appellants that this is somehow an unfair contract and the way the contract played out it didn't work out as a good deal for either party a napoli's agreed that there was going to be this process for pain apple lease put in the significant amount of money that they lost because no rock products were ever mind and adult appellants had had their land under this contract although not being actually used for any purposes during this time but the issue is not the fairness of the contract it's the clear language and the context of a business agreement matters but a number of the decisions cited you fail decision look at the issue of whether it's a rational agreement for the parties to make now under the facts it may not have worked out the way that either party intended at the outset however it's a rational agreement to enter into to say we will pay you as the project progresses as we generate revenue will pay you more and it's i think we need to be mindful of the fact that there is no floor on the on the production or oh sorry there is a four on the production so that some of it is rendered as mere surplusage but that's exactly what's happened here to the clerk very clause in question under the district court's decision and under the argument by casey the clause in question has to mean something the parties would not have put it in there unless they wanted it to mean something if it doesn't mean what he says it means it means nothing undisputed it is at the time of the signing that the anticipation was that if you ever went into production there would never be less than sixty five thousand tons of rock or sand i'm sorry per year that was mine so this quote is this would completely nullify the effect of the minute annual minimum production wealthy paragraph six defines production royalty that production royalties are only paid once production is commenced and production is only commenced when rocker products in this case sand is removed from the property and crosses the scale therefore their argument goes the clause because it's located in paragraph six has to be triggered by production there are two fatal flaws to that argument the first is as we've covered the n u a minimum production wrote the is expressly the plain words of the contract triggered by the anniversary date of the effective date and which was june twenty eighth two thousand and twelve but by definition it is axiomatic to say that the annual minimum production  is not paid for a product that has been scaled removed and from the property in fact it is the opposite it is a payment that is due because sand has not been mined scale or removed from the property if there is enough sand mined scale to remove from the property the annual minimum production royalty would never be paid the annual met on production royalty is plainly not based on production it is based on a for a minimum number of seventy five thousand dollars casey cites paragraph nine as proof that the annual minimum production royalty is based on production paragraph nine clearly does modify both paragraph six and paragraph seven making it clear that the production payment or the transportation payment occurs after the scaling a curse once again paragraph nine obviously does not modify or have any effect on the annual minimum production royalty clause because again it is axiom that the payment under the annual minimum production royalty clause is not being paid based on removal or scale it's the opposite finally casey had argued that the annual minimum production royalty clause is not mentioned anywhere else in the contract and therefore it must show that it doesn't apply to the rest of the company and it isn't an import well it actually is mentioned in paragraph thirteen paragraph thirteen is a typical commercial lease provision that says if there would be a mortgage payment that wasn't being paid or a tax payment or some other lien that isn't being paid casey to protect its interests could step in and make that payment and it specifically says let's see shelby title to credit the amount of any such payment to reduce any regular or minimum royalty payments or minimal royalty payments so it is mentioned elsewhere in the contract the final question is it's undisputed that they had the right to do all these things under the lease if they had done the tearing down the buildings and and tore up the land case will be taken under advisement or 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