it please the court i'm david moore my claim is that carl this case is about that coast claims that it was lied to about the quality of the products produced by the peacocks when we were in the bet co purchased the peacock's company and the fact that the customers that bet code acquired as part of that process were also being lied to by the peacock's by among other things in the district courts words essentially making up shit if it's of analysis out of whole cloth the case was pled in contract and in tort bet is for a particular significance is this court knows under wisconsin law because of the role played by wisconsin's  version of the economic last i heard about this case is not fundamentally necessarily about the economic loss doctor the appeal is centered on the contract claims that were raised in the complaint in our position in general borrowing the words of the of this court in the harley davidson case cited in the briefs is that the court should not in the course of analyzing the nature of the cause of action that were played in this case quote to drown both contract and tort duties allowing recovery in neither contract nor tort case  later then was changed to wisconsin and after that there were two motions for summary judgment decided one about three and a half months before trial in two thousand and fifteen and a second decided a week before trial the subpoena all concentrates on the ruling primarily in that first summary judgment motion and in in light of the result of those two motions for s judgment there was a trial but the trial was limited to the relatively narrow issue of the a becher's claims for breach of the duty of good faith and fair dealing so we have issues here that are centered on two general areas of the asset purchase agreement referred to as the a p a in the briefs we have a one year limitation on actions it's a limitation that expressway does not apply which is to say the one year limitation does not apply to certain types of actions and it that includes actions  intentional breach ten point zero five eight uses the word intentional misrepresentation he referred to uses the phrase intentional breach that's one part of the asset purchase agreement that is of critical importance for purposes of this appeal the other part of the a p a that's important is section four point one nine hundred and that is the section that says and i quote that each item provision is amplified a few paragraphs later in section four point twenty five which says and i quote the representations and warranties contained in this article fo do not contain any untrue statement of fact of material fact or are meant to state any material facts necessary in order to make the statements and information contained in this article for not misleading to ask you about another provision in the contract ten point zero six you have available yes this one actually looks pretty coherent you stand to me at least and i'd like you to help me with this because as i understand it the principle protection for the buyer in this deal was the five hundred thousand dollars promissory note to deal with claims that might arise of th released voluntarily early correct that's right at a discount rate and then the parties understand the buyer shall first seek recourse against an offset of the promissory note and shell only pursue its other remedies against seller in the shareholders in the event that the promissory note is depleted since the buyer released that promissory note voluntarily why doesn't that bar all these claims i don't think that's what section ten point simply withhold there is nothing there that's not what it says it says it shall only pursue other remedies against seller in the shareholders in the event the promissory note is depleted wasn't depleted here it was released your client or gave up the only cash available to it so the court is suggesting that the that this paragraph amounts to an effective release upon a time paying the proceeds of  and why do you reach that conclusion in a of a badly papered but complex commercial transaction with counsel on both sides because i don't think that the that you take your money out of the promissory note and you can't commence a lawsuit without first taking the money out of the proceeds of the promissory note but that does not limit you're remedies once the five hundred thousand dollars or in this case with a discount was paid that's what i'm suggesting you do understand the court's position i disagree with that interpretation it is not an argument that was raised  to the best of my knowledge by the court or either side in the course of this case and i will concede the point that there are parts of this contract that require  interpretation if you well you know one thing i just want to clear of you think it was defrauded yes and that seems to be what products are being produced are up to spec after the closing occurred bet call learns that in fact these products are not up to spec that they're not being tested properly that they're being mislabeled and again in the words of the of the district court that the picaxe mr peacocke had been fabricating certificates of analysis out of whole cloth now to the extent that what vet co knew or didn't know was relevant that co didn't know that you clearly didn't know it until after the closing took place too the problem is you think you paid too much i'm sorry of harm the evidence of harm is that we step into the shoes of this company which mr peacocke is running for the first here and including during the time when the promissory note which court referred to was paid we discover that while there are no third party claims that we're we are putting out a product that says that there is a quantity a count of bacteria quality of bacteria is not true if you were representing a class of customers that would be a pretty strong claim how do how do we measure how does anybody decide attack should go from you know peacock to your client and in what quantity in this case it was necessary for better or to remedy the production problem that  what was related to the mislabeling problem what did becker do you had to go out and purchase bacteria that was could not be produced in this plant and to put it into the product so th t what was going out the door was actually correctly labeled we're down where do we find this in the record it it is that the court you the court  we said and we were prepared to produce evidence we did in the course of it of summary judgment to show the difference in price based on the formula that we used was used to determine the purchase price for this company based on cost and revenues so it was a matter of taking the additional cost doing a mathematical calculation on it where do we find all that in the record it is in the summary judgment and not certain that i can provide the court with the precise page i would be happy to do so if the court would like i much was it was about sixty thousand dollars a month and the difference in value was approximately three million dollars based on the calculations that we were prepared to present and were not permitted to present at the close of the third day of trial because the court held said looking at this particular paragraph of a contract i think you have to have third party claims that have already been made against you in order for that provision of the contract and there added i'm sorry and there had not been your head not what it what had happened is that karl came in and realized that this was if i grant a phrase that a ticking time bomb customer no customer had discovered that this particular product which is bacteria was not up to spec so that co if you felt it had a duty it did have a duty to to produce what it said it was producing it didn't get it if it wasn't producing this so it had to bring it up to spec it at atic that caused the substantial cost and that is the representation of damages that we were not permitted to put in because of the court's interpretation that there must be existing third party claims as opposed to merely a clearly defective mislabeled price well the good part of the possibility i suppose is that there wouldn't be it claims maybe the customer wasn't harmed so there wouldn't be any claims that it's possible but but what company can as a matter of law as a matter of conscience convince me i'm so operate producing a product that's mislabeled and intentionally mislead at the stage that becker discovered this but damages becomes a problem what he proves do we have to prove that the measure of damages but we never got to the point accept to discuss the fact is is damages based on third party claims alone one party makes a third party claim you have to defend that or is it based on the reduction in value of the company which requires a formula n which we prepared at some at some length to show how we calculated the original price based on an income analysis the acronym used in the accounting industry ask you a couple of other questions the on this one your argument that fraud claims were not barred after one year i looked at your reply brief where you address the defendant's waiver argument yes i have to say look if i were the district judge i'm not sure i would have detected use arguments of yours it took you several pages to piecing things together in your reply brief to our unit you didn't waive it i guess which is what's your best shot that that a busy district judge would not just have to read between the lines i'm not  your summary judgment brief we said mistake notwithstanding any investigation made by or on behalf of any of the parties here to the results of any such investigation and i was standing the participation of such party in the closing other than fraud or intentional misrepresent what it was that even refer what ten point zero five a says is that i know what you want it to mean i just want you to explain how you get to that meaning from this language well it creates an exception for fraud  intentional mr pretty exceptional to apply them to what i'm sorry and exception to what an exception to the one year limitation which appears at the end of the sentence which is the words shall survive the closing for one year from  survives where does it say the cause of action it says it says other than fraud or misrepresentation and then you read also in temp point  notwithstanding anything in this article ten nothing shall prevent the parties including the one your limitation nothing here him nothing here in which would include the one year limitation now who knows what he refers to your inner first article town which is in the first two line of the of the paragraph so nothing here in the shop prevent any of the parties from bringing an action based upon allegations of fraud or other intentional breach of an obligation or with respect to any party in connection with this agreement so i think him point zero five to the extent there's a difference between the two subsection sub he is at least clearer than court today i would like to address the two arguments on appeal the first being that the district court improperly dismissed on summary judgment the intense don't breach of contract claim that that co alleged and  the argument that the court misconstrued the duty of good faith and fair dealing that was the one claim that actually was tried at the district court level and your honour's have touched on our first argument which is that the  that the that go waived the argument that the ten point zero five a does not bar count three of the amended complaint which is a breach of contract if we get to the merits what do you think ten point zero five a and that exception for other than fraud or intentions representation what do you think that means i think it means that it would be not a breach of contract  think it is very in artfully drafted your honor tar it mean yeah i think it would be it eventually gets a tort claim but i appreciate the court's pointing out that the time limitation really refers to those r contract being signed which would give rise to a for although i think that the a p a makes distinction between reps and warranties that are contained in the agreement and reps and warranties that are or actions misrepresentations made in connection with the agreement and we went through that argument in our response brief i will agree that this this phrase that you point out is very hard to have to reconcile in the context of ten point zero five we think that first of all that argument should have been raised at the district court level to be fully evaluated i would direct the court as well to the record at one o  two which is a ph fifteen of the summary judgment response that mr moore referred to their argument on summary judgment was you know this language may bar claims other than fraud or misrepresentation brought against the keychain for breach of specific representations and warranties contained in the terms of the a p a if you look at count three of the amanda complaint the what they are alleging are breaches of reps and warranties contained in the asset purchase agreement if and if it's understandable the district court and our my client would read that statement to m we agree with you we agree that these claims do not exist because a ten point zero five and then after the district court ruled on summary judgment noting that a backhoe had conceded this argument after the court you know said they failed to raise any argument on that point it would have been prudent at that point for bacco to move for reconsideration or move  correct the error that the court misread their argument instead beko did nothing and we proceeded on to a trial on one single issue so there's a lot of things we are going to shoot this if we say because it's everything i'm hearing here is the this didn't plead it didn't put their case before so that they would win on or at least have a chance of winning and the other thing is to my look at the men see we're not only that but they were assume for purposes of argument here that the just her core improperly just missed their claim on summary judgment and they should have been able to try the case when they tried their other implied breach of duty claim what would have happened the court considered all evidence regarding what happened after the asset purchase agreement was signed when my client malcolm peacock was offensively the president a and the evidence what came in the court considered at the record is full of factual findings by the court the court has already addressed whether four point one nine which is the basis for their intentional breach of contract the court has already addressed the facts surrounding that provision and what the parties did with respect to four point one nine so if the court were to remain in this case back for a trial on intentional breach of four point one nine the evidence would come in the same the court has not found evidence of injury or harm tobacco arising from that breach because you closer or didn't complain correct your honor no they were with that argument first of all at the end of the trial in the courts oral ruling the court asked are you prepared to put on evidence of the damages and i believe the response from mr moore was we are not at this time  and that would be found at the record in the transcripts starting at the appendix seventy honor page appendix sixty eight the court said i will hear briefly from plaintiff if they believe they have damages they can show that a right directly out of sales of product with inaccurate certificates of analysis or product before acquisition or post acquisition mr jackson first replied on the issue of week on the issue of can we introduce evidence about customers claims that they have made about defective products were not prepared to time and for that reason the court says i'm going to find no breach of the duty of good think we believe the court to search for properly made that ruling and that ruling should be affirmed they were running the plants and that i would refer to this court to the district court factual findings on what actually happened during that time period the district court found that the b never asked mr peacocke to give them information about the in this case the certificate of analysis and in fact ignored reports from their employees who raised this produced that were not actually based the court made specific rulings about malcolm peacock interaction with employees and found evidence lacking to show that mr peacocke had run this regime of no discussion or he was going to fire employees and that again is that the courts trial decision that record two zero nine  g thank you to more i'll give you two more minutes to make in response will respond as quickly as i can to the specific question raised the discussion regarding damages as it is at appendix forty seven eight forty seven which is the court's decision issued one week before trial the court understood what the measure of damages was that we were proposing at age sixty eight which is the court's oral ruling to which counsel referred what the judge did was asked mr jackson  said unless i get a question specific to whether there was proof of this of a rising injury that is such a third party claim and mr jackson truthfully said no we are not prepared to produce that what we had shown the court before was the evidence we were going to put on i think just the kind that the court expressed exactly right the intent of this contract was to contract around  initial ruling in the written opinion so one of months where it was we had the written decision three and a half months in the last paragraph of the written decision invited a second round a summary judgment