case number one five cash for one h two allied directing v united states steel corporation or arguments not to exceed fifteen minutes precise mr christopher open minsky for the public good morning may please the a chapter eleven or who are you representing exactly the trustee your the one who under the bankruptcy plan the litigation was carved out in the allied is in executives correct you're getting your instructions where if you know you're correct your honor ok i am here to address two issues that we believe were improperly taken from the jury i don't intend to address the basement concrete issue although seven hundred thousand dollars it is much less than the first to wish use and we believe the issues you will state in the brief i'd like to focus primarily on the statute of limitations claims in which our claims three four and five were dismissed and if i have additional time get to the manufacturing service agreement which was decided on summary judgment we believe the court heard in three material respects in dismissing these three significant claims that totaled in excess of thirty million dollars number one we do not believe the court properly interpreted the operative agreements number two we do not believe the court looked at the evidence in the light most favorable to our why the nonmoving party and then number three the court didn't recognize that there are distinct differences between these three claims claims three four and five and hence the accrual dates that apply to each of the three net quit while the court believed that the three year schedule started on january of zero four and the project should have been completed by january of zero seven we believe that was incorrect we believe the evidence the overwhelming evidence and certainly the evidence looked at most favorable to allied would show that the three year schedule did not commence until july of zero six three years ran to july of zero nine in these claims were hints timely what is it that you think happened in july of zero six that caused that to be the beginning the notice to proceed was issued the notice to proceed was in evidence it's a memorandum that was issued by the project manager tony though which gets to the central issue there are two documents into actions that must take place before allied kin can start we believe that the court misconstrued and in fact ignored one of the operative documents there's two documents the so called a ip or the settlement agreement is the document that says any work that the corporation releases and authorizes for disposition will be made available to outline that's this so called internal corporate resolution there's no question that happened in zero three however number one that's an internal document but more importantly that does jim it does not address the start of the project or the duration of the project in ip the settlement agreement says the projects will be awarded and performed by allied pursuant to the fair of this contract it's the fearless contract that is the second document that was ignored by the court if you look at the fairless contract in particular section three and it's interesting the lower court references section three but never close the language u s steel references section three but never quote the language section three requires very secrecy of what section three of the final conform specification and what is that she's mean what year was that like i'm looking at the one nine hundred ninety two specification is that what you're trying yes it's called the ninety two or the final conform specification if you look at section three of that time schedule it says work on each phase shell begin within five days after allied has received notice to proceed and then will be worked on a continuous basis for three years the court ignored this second document that paragraph that you sort of alighted over which is two paragraphs down work on each phase of the work be completed within three years after us as has authorized allied to begin work right so the authorization you're saying means it has to mean notice to proceed correct it obviously the third paragraph refers to the first paragraph were were given notice to proceed and then we must proceed within five days we must complete in three years after we've been authorized the authorization is referred to up above it has to mean that it has to be internally consist the operative settlement agreed you know three in the ninety two specification was negotiated between the parties council i thought as i understand your argument you're saying that the a cruel for the delay claim occurred at the end of the three year period correct now why why is that why didn't the accrual occur when the first delay happened happen we address that in the brief your honor in the issue in the nuance of construction litigation is this when you've got an extended contract period three year period if you are delayed in month five and there is a four day delay that doesn't necessarily mean that you're not going to may be in day in construction often times there is float in schedules and or work can be accelerated or work can be compressed and so it's very frequent in construction litigation that schedules need to be adjusted and there's just because a delay happens in day one month or year one doesn't mean you're going to overrun the date ok and then for count for that removed facilities clam it looks pretty clear to me that they didn't remove any facilities until two thousand and nine is that correct precisely you're ok the fundamental difference here is the judge conflated these issues and thought they were all schedule issues claims four and five or scope issues when did u s steel remove something from our scope and as your honor is indicated the removal of the facilities didn't even happen until nine ten eleven what about count five year ownership what do you have after june july of two thousand and eight that occurred that would make that timely in two thousand allied own the rail in the non ferrous under the terms of the specification and so it was in allied column up until two thousand and twelve u s steel asked us steel because there is both an operating facility in a a decommissioned facility so with regard to the underground non ferrous and the rail a determination needs to be made which rail totally services the dead the syllabi which is needed for the live facility we needed that determination so we went to u s steel in two thousand and eleven and said we're ready to remove this rail that we own we're ready to remove the underground first tell us which can be removed which has to stay we weren't given that determination we believe that cause of action didn't accrue until two thousand and twelve when they denied our ability to take that it never existed before i want to go back to count three about the delay address that precisely ron is the court knows the evidence needs to be looked at like most favorable to us with all reasonable inferences alex theory of the case the facts in the contract show knowing consistency the court was conflating us still we believe is attempting to conflate two separate issues ownership scrap with schedule delay on the commencement issue under scrap ownership the final conform specification provided that two things happened in an allied on the scrap one the asbestos had to be completed in two allied had to commence work in any possibility we showed that through certain preliminary work we did we commenced work and hence we only use facilities for purposes of the ownership claim schedule and the other hand says under section three the basic dismantling work does not start until we're given a notice to proceed and we were given the notice to proceed in july the best analogy your honor would be i offer to paint your house on the inside and i say but i'm not going to patch the dry wall i'm not going to move the furniture the owner then says well can you do that patching can you do that for her removal it's an extra we do we do that for a couple of weeks and then we start what i'll call the painting a month later clearly the base to go painting is what we were given a month for did we do preliminary incidental work at the owners request that was an extra yes but that's not the base scope dismantling for which the three year schedule applies and in fact that work was all done pursuant to separate purchase orders and so there's no inconsistency there's no dancing we did preliminary work it us deals requests on an extra basis as a predicate distorting our work now part of the confusion is we need to take a look at what that work was a major to understand the statements by grant raymond that he says that it was all released authorized a november seventeenth two thousand and three what is he referring to he's referring to the corporate authorization the problem here your honor is the i would seem to be the to proceed language also says after the notice to proceed allied will be authorized to proceed i think the unfortunate problem is there is the word authorization in these two different documents but there are two different documents so what mr raymond was testifying to was that the corporate authorization authorized and released all these facilities galley that's a fact allied agrees with that that happened in november of zero three we didn't receive this separate notice to proceed until facilities before the buildings could be dismantled number two there were live utilities running through all these facilities they had to be taken down and number three they were hazmat and as best as that need to be removed none of those were included in our school work they all had to be done before out light could start shipping pin in july and so they asked ally to assist in connection with this work to allow allied to start and if the court looks at the evidence that we summarize all of the evidence is consistent with that there was an established demolition plan that was issued by us steel in january before shortly after the corporate release that says it's going to take us about a year and a half to get these utilities removed  utilities are finally removed u s steel then applies for a building permit not till may of zero five and they say we're going to be starting soon ally then has to apply for the d p s best as removal permit which it does  six and says we think we're going to be starting in june of zero six ally then starts the day that they get this notice to proceed and in fact the kick off meeting for the  held two weeks later in august of zero six it all fits we would contend there's not one shred of evidence that's inconsistent with this theory of the case which we believe the court did not focus on how to how does the ninety two construction contract article three apply which says in three point one should contractor be delayed by owner which it sounds like that's what you're saying that there are all these things that the owner had to do the re y owner will at contractors request extended by written order the work schedule was there any extension by written order of the work schedule there was not but there did not need to be in this ensure honor typically in construction contracts you seek an extension of time or written extensions time to avoid or do avoid an imposition of liquidated damages by the owner where the owner will say you're beyond your late there was an acknowledgement here this was allied problem so they didn't seek a formal extension because there was no contest at the field level that allied was being delayed that provision allows our like to seek additional compensation in two thousand and eleven you were still requested allied your claim for additional compensation that was not denied until two thousand and twelve we believe although we think at the earliest the statue of limitation of law is at the conclusion of the as planned time period in july i believe more prop really there was no breach by us deal until it denied payment that it owed under article three not until two thousand and twelve so net net this was these were compensable delays us deal requested a claim and we submitted that claim they denied it and that's what led to this litigation now i wasn't given an opportunity to get to the manufacturing service a green but i see my time as  good morning may please the court i'm michael gladly and on behalf of united states still corporation we're asking this court to affirm the district court's rulings in three respects granting us still summary judgment on its manufacturing counter claim granted u judgment as a matter of law on counts two three four and five and finally granting us deals motion to amend the judgment to correct a career clear error of law and damages after the trial was over could you address the problem  yield on that question right that is correct your honor it is true that the there's two key provisions at issue in the parties but two thousand and four aoki that go to the very heart of this summary judgment issue the first one says quote in consideration of allies agreement to perform manufacturing work at allied facility in youngstown ohio u s steel shall pay allied nonrefundable advance payment of ten million dollars it goes on from there but the parties in the next section stated us still would recover the m f g advance payment over the hundred twenty month term of the agreement through discounts on the manufacturing work now allied to briefs fail to quote or mention these two critical provisions let alone address them the summary judgment record your honour's was what language refundable supposed to refer to that if it's not really refundable it's what is so it's nonrefundable but it's  e and i guess my response to that is a few things it could have been non recovery or nonrefundable in the instance that u s steel had not performed this is nonrefundable in the same analogous situation if i go buy a house as the buyer and i give a nonrefundable deposit of one thousand dollars and i don't perform the seller can keep but if the seller doesn't perform the seller can't say i get to keep your nonrefundable deposit it's for the protection of the seller it doesn't allow the seller to breach and then keep that nonrefundable amount let me ask you what is it that u s steel was performing here what kind of manufacturing work was offered to ally for it to do there was no manufacturing work offered your honor because the simple fact that u s steel was in constant contact with ali when is your manufacturing facility going to be ready and it was never complete in fact as we sit here today through the bankruptcy proceedings it never got complete so to offer any would have been legit was it supposed to be what was allied supposed to be manufacturing it meaning factoring in fabrication of certain steel products that us that was going to offer them work to do they built they're building this facility that will allow them to fine you say kind of what it is that they have that they would have made it two types of things it's machining and fabrication of steel that u s steel would produce and then have allied manufacture and turn into other types of products ok the summary judgment record established  three things in uncontroverted fashion first u s steel paid allied the ten million dollars payment in july of two thousand and five no dispute second allied never completed construction of its manufacturing facility s steel never recovered any of the ten million dollars that it paid in advance through discounts pennsylvania steel for manufacturing work to allied wear or was this something that allied was supposed to know what u s steel one that allied to manufacture the the parties agreements made clear with the type of the being a factory work that would be subject to being requested from allied but because the parties from contact us still knew the facility have proof of what kind of manufacturing work it would have offered if it had the opportunity duty is that does the u s still agree with that if not what's your basis in the law for why no the appropriate remedy for  return of i don't know that i mean it's very confusing to me sure you're on it it's it's nonrefundable but the next paragraph says it shall be recovered through discounts on advance payments and the best case that i can point you to in this regard is a pennsylvania supreme court case called moss or company versus cherry river boom it's remarkably on point and in that case mossop a cheery river one hundred fifty thousand dollar advance payment that was to be recovered through discounts of one dollar per tonne on bar purchases before moss or was able to recover the entire hundred fifty thousand dollars they ran out of trees on cherry tree whose property and so the butts of any supreme court said that the advance payment had to be returned because that advance payment was to protect in the event that the buyer didn't perform not the event that the seller couldn't and that had a nonrefundable language and i don't remember the specific i'll be honest or out of the case if it says nonrefundable the case make a big difference to put in the contract that is not refundable let me let me give you at least there's some ambiguity as to what that means or let me give you a second case that actually does deal with a nonrefundable advance payment that's so roof trading versus g e fuel cell company and that deals with a nonrefundable advance payment that was deemed to be recoverable and not kept by the party receiving it just because they didn't want to perform  the district court rejected all its contention that you could call the manufacturing payment nonrefundable and then just say we don't have to do anything and we can keep the ten million dollars that was our odds litigation position by failing to complete the manufacturing facility and b failing to give adequate assurances to us steel the district court that i have repeated its obligations the district are also purposely rejected olive's related arguments about other consideration through the satisfaction of this gross margin commitment what alex arguments miss in that regard is us steel bargained for discounted manufacturing work in addition to these other elements so we believe that the ten million is not part of the sixty three million is that correct the ten so the way the party set up their agreements a little bit confusing is so you are still promised and so we have years ago now apollo strain and so yeah there's there's ten to contracts in this case so it can be i'm sure a little bit overwhelming on first blush but what the gross margin commitment meant was u s steel would give allied one hundred fifty seven million dollars worth of work over ten years forty percent margin means at all it's going to make sixty three million dollars the parties agreed that the ten million advance payment would count towards that sixty three million dollars i believe that was your question but yeah so does this mean then that instead of getting sixty three million allied is only going to get fifty three million well that would have been the case except for the following the record established that u s steel it turned out gave allied far in excess of sixty three million dollars i believe it was twenty million dollars more than the sixty three million so whether or not you count of the ten million dollars allied got their gross margin commitment i would like to turn if it's ok your honour's to the question of about directed verdict judgment as a matter of law on counts three four and five and i guess i would start with the fact that this court does not need to consider the propriety of that decision alan has waived its right to appeal the district court's determination directed verdict by failing to address all of the bases for the district court's ruling well but the district court didn't give any explanation for saying i agree with all of us steel's points there's zero analysis that the district court and i and i think this is what you're going to but to put in context that for all of the reasons stated by u s steel much will fifty motion at the end of plaintiff's case i'm going to grant this motion in addition to making that statement she did lay out three of the specific reasons in her opinion in order and stated unequivocally that all of the arguments have merit and those three arguments those alternative bases that were set forth in her opinion were the fo first the district court identified allies failed to provide written notice related to its count three delaying disruption claims and your honor that's what you were asking the stroke olinsky about on the ninety two construction contract the provision that says i believe it's  section three or three point one that you've got to give written notice if you're going to make a claim for delay or disruption and that's what judge leroy found that allen had not presented any evidence of giving that written notice and therefore those claims were barred that was on of so you're saying that the reading of that provision three point one is that allied has to give notice yes alet us to give notice in the event that they want to seek an extension of the three year schedule that was running and if it says owner will let me let me turn to contractors request extended by a written order and i thought the owner was us still my reading this going to owner is us steel but it has to be at contractors request and that's our it's requests now i said then but there and then there has to nothing in the record that suggested that allied made any request at all and there's certainly no evidence that was submitted that you are still granted a written order extending the time for this performance secondly the district court mentioned that  one of the alternative bases was the failure of an ally to put up any admissible evidence of damages on their council three the measure mile issue with mr gleason who was excluded at a trial dogbert motion and third the district court noted in her opinion an order allen did fail to put forth any evidence that it generated scrap which was a quote requirement of the parties two thousand and three and two thousand and four d s a before they could own the facilities the buildings the railroad track the basements they claim to own so for all of those reasons all of those reasons did they apply just took out three or they have playing to four and five for the first two apply to count three failure to give written notice is a delay and disrupt right the failure to put on damages of their delay and disruption relates to count three and count four and five are covered by this notion you don't put on the evidence that you generated scrap i mean what might make or did allied do any dismantling they did well then of course they generated scrap right i mean what else are they generating generated scrap they got that scrap your honor it's on the remaining things they're claiming that us steel took back that they weren't allowed to dismantle the buildings that were still standing at the n l itself but wait a minute we own those but the problem is the party's contracts on equivocally state you have to generate scrap have to take down the buildings before you own and that's when he can retire where do you get that and which contract and which pr shirt that is in two contracts two thousand and three a i p and if you give me one second i can give you the section of i believe it has to be seven but i want to make sure to be seven thank you in order to own it that's correct or wrong and in fact mr raman testified as to what it means to generate scrap and he said it means to tear down the building that's a prerequisite to the ownership this notion that allied is put forth  court improperly incorporated by reference u s deals arguments on these alternative holdings is also without merit in this court and united states v holland said quote to the extent that holland argues that the district court committed legal error by incorporating the government's brief by reference his argument must be rejected and that's what judge leo i did hear i want to wrap up on this very quick into the consequences for their fair to address these alternative holdings or are quite clear him averse a city of dearborn heights and a litany of other cases we cite including white oak property development state if there are alternative bases for district court's holding and appellant only addresses one of them all of them are waived there's a lot of ground on the statute of limitations that i would like to cover in but with about a minute twenty to go i'm going to i'm going to focus on two or three things first one i'd like to address is mr opal and he said that it was unfortunate quote unquote that the ninety two specification used the word respect it's a post trial fabrication that should be rejected but is language in the ninety two specification hard three work shall begin within five days after allied has received notice from us still to proceed and up above in the provision you pointed to your honor points out that we've got a three year schedule running from the release an authorization and and here's the fact of the matter there is no such document in the evidence of evidentiary record al i did not introduce any such notice to proceed there is no such thing and then there was no notice to proceed ever given in like a little document like a little certificate absent an r c the document that mr ogland may briefly respond to the question so the there's there's one technical issue with that i think we can point out in our brief is that mr news though was a us still witness that allied called out of order during their case in chief and on the record the parties looked at the record the trial record were not a single time in al its case in chief not once if this is the document that is the be all end all but the trigger for the statue of limitations of cruel i don't know why it wasn't brought up can they change their theory on appeal if they have a new theory that's a good theory and they were after reading a bad theory before i think that we get it's all going to the statute of limitations is same issue that was raised here i think that there would be a waiver issue if you don't make the argument on in the district court now sometimes you get into gray areas you know there's one of the cases we cite that already talked about two point two zero seven one but not to seventy two it is that way if i don't think we have to get there though on this one because there is simply no let me hit this last issue first when i use the word unfortunate about the word authorization what i meant is that part of the that it created part of the confusion the word authorization is used both in section three of the a p he says that there was no evidence in the affirmative case in chief a notice to proceed i was i right or wrong that's wrong so what is the f evidence that you would point is the evidence  precisely the testimony of allied president testimony of their superintendent gordon lindquist and that memorandum we do acknowledge that mr newsom is testimony keamy in  sequence but we're not relying on his testimony for this we're relying on the document and the testimony of our people and under section three it requires receipt this must be credited if it's not july if it's not th july sixteenth memo by tony knew so what is it there has been no other notice to proceed offered us still claims we changed our theory we have never changed our theory the document that started this was the november two thousand and eleven claim that you were still requesting we said and they are exactly what we're saying here the claim started or the job started with that notice to proceed we had three years in the complaint u s steel claims that we  released we said that the complaint we said in the claim and we said it throughout the case it is always been the allied theory now let me get to the issue of the emmis a we believe this should go to the jury the court indicated is judge merit has indicated this was a and unfortunate quilt work of different agreements that have to be pickier read together this is the paradigm case for it at a minimum two reasonable interpretations that should go to the jury the issue of having a nonrefundable advance payment be refunded and a minimum smacks of an ambiguity you're looking at the evidence not light l plea there's not consideration given by your side there was a wealth of consideration given your honor if you look at the agreement as a whole you were still got three aspects of significant consideration number one we reduced our claims in excess of one hundred million dollars for this is the number two for the ten million dollar advance it served as a dollar for dollar reduction they order sixty three so we're giving us that ten it reduced it to fifty three the dismantling advance reduced it to forty three and then we had to do forty three million dollars worth of work so you're talking about general consideration but the particular paragraph dealing with this nonrefundable advance payment says in consideration of to agreement to perform manufacturing work at allied facility in youngstown so are you saying then that the consideration is simply a promise oh i agree as to perform manufacturing work as opposed to actual performance of manufacturing work yes you run around for this reason dovetails with your theory must read this is entirety at the inception of this deal us steel said we'll give you sixty three million twenty and twenty mil in cash forty three you'll work it out you were still didn't know if they would have one hundred fifty seven million in work to generate the sixty three million in profit so they said instead of just dismantling what if you do agree to do other things like manufacturing like said well we don't have the syllabi built we're happy to do it in case you don't have enough we'll do it so that language was put in there we don't run from that but what happened is it played out very differently than anyone expected they had not only one hundred fifty three million dollars worth of dismantling to generate the sixty three in profit they had in four years instead of ten so by the time allied even got to the construction of his building the profit gross margin commitment had been reduced had been made and so we performed it as it played out we generated the thing that we should reverse the summary judgment of this issue but the district court granted and we believe if you look at the entirety of the ten page agreement you come to work conclusion for two reasons number one if you look at the fulfillment language this is all structured around one hundred sixty three mill of work hundred fifty seven to get to sixty three it says after one sixty three mill is reached all bets are off ten million dollars rides on this issue yes your honor ten million dollars and so number one we believe if you look at the entirety of intent was you can give us work was manufacturing a possibility yes but it was just that it could be manufacturing we're dismantling they gave us it not receiving that have anything to do with the bankruptcy yes your honor but when u s steel attempted to enforce that agreement to put my client into bankruptcy now no getting to the to the interpretive issue number one we believe that one sends us still looks at has to be interpreted in the whole in the whole was once you reach this sixty three all bets are off and it says once you reach sixty three u s steel has no obligation to give us any more work of any touch of any nature or type it identifies then the options it says allied can complete any work it is then doing and it can enter into a new voluntary arrangement which it did us deals interpretation not only ignores one hundred fifty seven in to make sixty three but it also ignores the ten min of the ten year term because us deal is saying this is separate and is and apart you could have made this sixty three we still get our recovery and so in other words even after we've gotten our sixty three mil for one hundred fifty seven us steel is turning this into print potentially a three hundred million dollar deal thank you for your argument that i have a sure question would you address the waiver point with respect to the statue imitations i think frankly we don't believe there has been a waiver we acknowledge the case law there simply was no articulated basis for these other rulings at a directed verdict on summary judgment the court identified an oral ruling which is entirely statue of limitations court indicated that time i will give a further ruling outlining my ruling you have that ruling it is entirely statute of limitations and the last sentence does say that and the mare that us still is right on the merits on these other issues saying that i find merit in their arguments we believe doesn't constitute a holding a ruling she in one sentence at the end and for all the other reasons of us deal it should be dismissed but if that your opponent cited this case u s b holland how would you address that i don't i don't recall that case to be perfectly honest your honor but i know the cases we've started stand for the proposition that of course we have to address an alternative holding if it is articulated no alternative holding was or to kill aided the court said the statue of limitations resolves all three and that was the only basis are we supposed to guess at which of the arguments us steel raise she's granting and on that on so you could you know if you really want to protect yourself you would address our well it was it was not only all but there were multiple parts of those and in fact the uncertainty is highlighted by what played out the judge alluded to three other arguments of us deal but doesn't address them at us steel in their brief phrases six arguments so who knows what the rationale for the court but in fairness to  court they raise those we believe they were never raised by the court we addressed them in our brief and if if the court reads the brief it will come to two conclusions number one there's no merit in in any of these so called alternative bases they were all addressed at the lower