facility in reno nevada and that's why we're here today unless the panel desires otherwise there are three things that i really want to focus on today number one the contractor failed to follow relevant contract provisions and the district court didn't require the contractor to adhere to those provisions number two certain breaches of contract that were found by the district court and that this report found number of breaches by the contractor would not be appropriate so we are sitting in the you know rather precarious position because somebody has to be able to challenge the fact that the ninth circuit appears to have made a mistake trying to apply state law our supreme court nevada will never address what a federal the contract was violated that in fact the district court was obligated to award damages to levittown against the contractor then the offer of judgment becomes clearly in applicable under existing law the kelly case  kelly case decided by judge reid in nevada says that if there are any award at all then the federal rule applies it's cost shifting only and not attorneys so the first focus is why the argue for any kind of modification to that case even though frankly it's pretty clear should be modified let me go back to the first thing here the first thing that the contractor did was the contractor accepted nine million dollars from  other to build a building it went in there and said we have expertise we have experience we are excellent contractors we are not the low bidder interestingly enough and we will go in and build you a fine building a fine warehouse has to have a flat floor that's what this case was about the trial court failed to appreciate and apply certain contract provisions and the reason the trial court failed the specific reason was because this truck court came into the case predisposed to believe that nothing  contractor does has anything to do with design on the third day of trial third day of four weeks he stated and this is that excerpt of record you know the trial transcript page three eighty eight you are attempting in this case to prove the contractor is bound by more than his contract the way i started out this case was thinking the decision a lot of the state of nevada was a case i lost in one thousand nine hundred sixty eight before that about a supreme court called home furniture vs brings out all the state of that principle the trial judge had represented an owner just like me against a contractor just like me and that supreme court said you lose because the contractor did everything right you should have sued the architect you know our case this trial judge tried the case from day three on predisposed to believe that if anything has to do with design that falls on the architect and engineers flap not in the one thing that right or wrong i mean  pointed out that was a requirement of the contract was to supply an experienced installer experienced was defined in the specifications specifically at section one point five and a quality assurance experienced installer must be used and that means has completed concrete work similar in material design and extent to that indicated for this project and whose work has resulted in construction with a record of success in service performance the second portion of specifications talk about experience part of section fourteen twenty again an excerpt of record seventy five seventy two he defines experienced as five such projects minimum the contractor in this case q and he hired lucky concrete to do the concrete work some contracting and lucky's testimony is going to is undisputed they only worked on two forced slabs in their entire the entire time that this superintendent was there in twenty years and all of those to one of them resulted in curling our problem your honor early that means at the end of this case at best lucky had a sixty six percent failure rate three times they've done it twice they have failed the court never address he supposed to choose the next according to anything other than the specifications in the contract documents for choosing the mix of which there were some then when you answer them specifications in the contract documents and answer is yes he wa notably the specifications in the contract are not sufficient to design the mix there's not enough there that's why but he was also supposed to submit it to the engineer and presumably it was the engineer will question why in fact the other things well the engineer was supposed to review the mix review the submittal and the contract specifically talks about what the engineers review responsibilities are under three point twelve point ten of the contract three point twelve point two in the specific language of the contract so that it's a limited concrete contractor the industry recognizes that the concrete supplier and sub contractor are the ones who take minimal skeleton to specifications knowing that this fine this whole concept there is no steel in this the experienced installer also bears on the responsibility of the contractor to review the plan and specs for any errors or omissions the one piece of evidence that the district court did exclude was a memorandum engineer after the problems arose said in my thirty years of experience i've never seen a slab without steel how could they think it wouldn't curl your honor the experience of the subcontractor should have been i've only poured two four slabs in my entire career and one of them failed for curling should i mention this to anybody or not and we contend yes the law is very clear you need to bring those things to somebody they don't have to specify the steel the contract was that was the material supplier we don't have a contract with a material supplier the sub contractor had a contract with material supplier he went to the material supplier and they went to an engineering firm to design the mics they took that mix and that was all contractor sub contractor material supplier and and material suppliers lab and design so your position is there su well actually it's same issue in this state didn't have the experience the other and you're saying he didn't have the variance because the numbers never seen a cement without  inforcing and he showed this said something well now which kind of the coin you want actually it's the same coin your honor let me explain i explain he did not have good experience with unreinforced what's he did not have he had bad experience with unreinforced la he was an extremely experienced contractor who could say i've done it for years but your design won't work you understand that word we're going to basically i know you're asserting that this is a breach of contract but much of damages for them he didn't explain why he just basically said well if you didn't do your job right in doing joint filler those joints what a failed anyway if they would have failed anyway you're off the hook there's nothing in the contract that says you're off the hook if you don't put joint filler in if you don't put if you don't repair the bullet holes in the floor he didn't find the fifty five thousand that we found but he found seven hundred twenty and he said you don't get anything for the hours and the contract doesn't say the depth of the hole means you don't have to fix it the contract says you have to fix it he didn't give us criteria for applying attorneys fees to this case yes with regard to judges and i'll just point this out it's absolutely ludicrous of the judge could say that we brought the case in bad faith when the contractor's own expert identified the subcontractor as part of the faith that's what's going to cost us to fix this this is for the second issue was trying to recover a thing that wasn't a basis for rejecting and i sounded off well we certainly figured we could recover our own our own repair costs were significantly greater than their repair they're looking at two point two two point five million dollars in damages which take a one point five million dollars settlement and that's not the total damages your honor that's the repair contractors in addition to that the cost of moving the conveyor alone which no one in court disputed the testimony that it is too low to do the work no one disputed that the cost of moving that and no one disputed the cost was four hundred thousand dollars were not closer to three million dollars the whole point your honor is that the point the first offer was made it was made at a time when they the contractor had eight hundred thousand dollars in their pocket from the sub contractor and they were offering was basically four hundred thousand dollars that's what they were offering when they came back and offered one point five million one point five million was after we have taken all of the experts depositions and discovery and their own experts had pointed at them their own experts reports and said our sub contractor made a mistake your honor it's hard for you to understand how the district court could possibly conclude the baby factors that it was that  without getting reimbursement well and your honor i think our point is that under this contract the sub contractor who supplied and installed the concrete had significant response to the ice mr you made that argument i guess estimation i disagree wholeheartedly with many of the characterizations made by counsel i don't think that they are supported by the record or any fair reading of the record or any fair reading of of judge kagan's findings and conclusions of law i think this case ultimately ultimately became nothing more than a shakedown by the owner of its contractor trying to hold them responsible for damages that were caused entirely by the owners own defective plans and specifications with their i mean you know what you call a shake down him in and the only question that we have as i see him is whether the contractor should have been hailed as a man or a logger contractor was released as a matter of fact and then the second at ten thousand feet looking down at the case but but the reality of this case was slightly different the owner worked hand in hand with its design team from the very beginning of this case to blame the contractor and they levied one allegation after another at the contractor for causing the project to fail i think they did so because they didn't demand the same insurance and performance bond guarantees from its from its design team that it meets the current record you had in the book we were the deep pocket and we were the deep pocket target and every time we addressed one of their allegations of defect or breach and disproved it they simply shifted their theory to another alternately after we've gone through a litany of maybe thirty of these kinds of things they tried to shift the entire contract if i understand you correctly i don't i don't think that's what he said at all i think i think what he was saying is well if the certainly under the contract if the sub contractor knew and spotted a design flaw in failed to bring it concrete who was the sub contractor on the case is the most experienced contractor in northern nevada has substantial experience with tilt that distribution centers all over northern nevada there was no evidence introduced whatsoever during the trial that there is any kind of material difference at least in terms of what a contractor does between a concrete tilt building that has rebar mesh reinforcement through the floor and one that does not the only difference between the two is that the contractor does not have to put the steel in during conk during construction but the manner methods and means of of placing point in finishing the contract are precisely the same we followed those to industry standards unquestionably and they were or you know it it's it's kind of a convoluted question but the but the bottom answer is no the concrete that was provided that the mix the proposal the middle that the contractor was was required to give to the engineer for his review  to provide appropriate concrete that doesn't have characteristics that are inappropriate in one respect or another assumes i mean that's obviously a relative term appropriate for what appropriate relative to the plans and specifications the concrete we submit it complied in every respect and it certainly performed in the field specifically that advertised in the proposal that we gave to the engineer and i tried to point out my in my brief and as i think all the testimony from all  experts during the case was the engineer of record has to review that proposal not just for compliance with the plans and specifications but also for unstated design objectives and goals like his aggregate interlock load transfer system which was stated nowhere in the contract and there was never any evidence presented that any contractor would have any idea what that design system would be how it would function what its tolerances are would be what what factors would go into deciding whether the concrete would perform no your honor the first offer we made was one point two million which was the entirety of the settlement that we had procured for marc or subcontractor and an additional four hundred thousand dollars which they rejected and we made that offer your honor early on in the case when they had first to raise some of these issues that we had not had a chance to test through further discovery after the settlement discussions broke down we mean that as a formal written offer of judgment and then we went into the discovery into the very very conscious of the reputation of this company and he knew he had an unsatisfied client he didn't feel responsible for it nonetheless he tried to write i'm asking you this you were not marching into the certainly maintain in bad faith i think trying to lead some of these contractor breaches causing this floor system to fail we're definitely in bad faith and proven to be so i think alleging that the contractor somehow h design obligation than the engineer of record was in bad faith and utterly disproven by the evidence and they they were undaunted by that i think that was in bad faith i think the district court found ultimately that lever time maintain their action in bad fa and that they rejected the settlement offers in bad faith because the contractor legitimately did try to make reasonable settlement offers to say judicial time and resources the expenses of the parties and the well risk there might be some liability on some of these the case for a finding of nominal damages then that is technically a judgment in favor of the plaintiffs therefore federal rule sixty eight applies which therefore directly conflicts with the state statutes and therefore trumps that and so we don't get the things it's the litigation at that point he knows who the responsible parties are and he's intentionally choosing to ignore that simply to concoct one theory after another to try and hold our feet to the fire for something we never did wrong and there's a limit  eight first of all m r o says that the delta airlines reasoning that defines how federal rules sixty eight applies doesn't apply in diversity cases that right there i think is a very interesting feature secondly when you start getting into the analysis of whether or not federal sixty eight conflicts with the state rules i don't think it does i think federal sixty eight simply says one it defines the procedure for making an offer in federal court there is no other secondly certainly two things is it going to abridge the rules enabling action by abridging the assumption of right that would otherwise be available in a straight line is it going to encourage form shopping and under those that analysis in this case i think it shows there is no direct conflict you wouldn't need to apply for all sixty eight you can apply the state rules still in force you can still apply the federal rule in the state rules because they don't they're not mutually exclusive it's specifications that stood in that it got the stamp of the engineer approving that this will work for my design and they followed through from there there is no evidence that what was provided did not meet what was stated in the lying on this design and i need a larger aggregate less shrinkage i need these things to make my design work then i agree q and b would have to come up with another mix but the mix they provided the engineer one of those baby factors is that then again the court can award attorney's fees here we're looking at all of the factors taken into consideration there is no indication that judge changes did not review each and every one of those factors and in his discretion point five million dollars on it was made approximately a month and a half before probably lots maybe two months before all of the discoveries had been completed and we were just headed into a court trial all of the experts had continued to say exactly what i said earlier which was that even the expert report presented by the defendant was that their own subcontractor was responsible for mix issues and didn't satisfy the next issues so here we are looking at that saying look we know our damages are going to be in excess of what we're going to be lot and you're right your honor at the time that it was made they were not as significant as they were after discovery but at the same time at the same time we were being presented with our own expert's report and then being told that in discussions there experts were looking at it and no one was coming is the contractor responsible for the design at that point how is the thing in a stand up that's a problem the problem your honor is that if you look at the contract that's exactly what the contract since it says that for one particular area it says for those items where the architect specified something contractor is to go out and blame that the submittal with the stamp of approval that the architects not going to review it for any extensive analysis says that in three point twelve point ten and what happened here was the district court had its mind made up that whenever they had an obligation to notify the owner that they had a bad experience with floors that had no steel they had an obligation to tell and so general in general knowledge everywhere and i don't know you know  contractor all of this is true to the contractor has experts at his command by whom plans can be inspected and passed on or has large experience and presumed competence or holds himself out to have such a one last question broaden the contractor's responsibility i don't hear about it and that's what the ultimate finding wants but it was promised from day three on i'm looking at three point two twelve point ten the owner of the architecture of the entire country rely upon the adequacy accuracy and didn't specify to the contractor or performance of just criteria so therefore they quit relying on these facilities i guess running there's also the problem though is that everybody knew that the contractor because when you again when you look at the way this contract reads in the various provisions cited in the briefs if you read them consistently through and that's realized the cia contract is not brand new the general conditions have been around for a while and you have to read the whole contract but when you