thousand and thirteen are refinery owned and operated by sinclair suffered a catastrophic explosion and fire in a portion of the refinery known as the number four h p f unit caught instantaneous fracture of a seven hundred and forty pound control that now that the cause of this explosion is not in dispute the control of it was manufactured from carbon steel and subject to high temperature high pressure hydrogen the valve was attacked over a period in time microscopically and instantaneously fracture department its lack of expertise in areas of engineering and construction and the fact that it was operating in exist and refinery it outsourced the engineering and construction activities associated with this unit to rd parties and shifted responsibility for the proper engineering destruction the number for h p s unit to its contractors an inventor and wyoming how baker immediately subcontracted one hundred percent of that agreement to m b builder which was a company that basically contractor for the engineering detail engineering perform for the for the iraq that unit sinclair entered into an agreement with specifically did not address the nd deposition and indicated in his order that that is an issue of fact or determination by the jury well you did not appeal that the striking of the attempt to change the deposition did you well your honor did you know you didn't know that we can leave there was you know that there was an order of stay were issued by the steel when the bell when the unit was up and running due to the temperature of the flow it running through the valve in the line broccoli five hundred and eighty three degrees fahrenheit  valve and the wind were covered with insulation so it would not typically be seen by anybody in the working in the refinery in a di specifications and it didn't it was a carbon steel valve placed on the stainless steel line and against the clear outsources responsibility to them and how baker aid b and matrix fact which which very should consider as opposed to the court determining as a matter of law that sinclair knew that this was a carbon steel but in any event  that remember sinclair didn't have the expertise in house and we're outsourcing this to two entities that they believed were experts in these matrix these were both naval ships claims in the court made a determination that there were no independent tort claims because of the contract and negligence plain and all claims for damages with respect to the independent duty argument your honor wyoming war recognized independent tort duties and commercial contracts  premised on duty separate and apart from a contract to further your honor with respect to this independent duty claim sinclair asserted that there was a n manufactured out of stainless steel instead of carbon steel mister president before you get too much further i need to kind of just back up about thirty seconds here and make sure i'm understanding what you're saying  let me put let me ask the question this way on the negligence claims and the independent duty issue why doesn't article one point seven in the e p disclaiming implied warranties how how would that allow for recognition of an independent tort duty for how baker to avoid judge johnson's analysis he interprets that to basically waive all negligence claims and all damage claims because the only relief that is a section and isolation because if you look at the remainder of the contract it is crystal clear that constant contemplate negligence claims isin player and i'm referring to article or twenty eight  being considered light of the contract now the court has flown out the negligence by under one point seven how do you ever reach a negligence claim as referred to well i mean h wasn't the court also relying on the limitations arising from the economic loss rule i don't believe so the economic loss rule is not a political because limit is limited to the facts under the warranty provision of article one found within twelve months the sinclair's exclusive recourse to the quality of the warped and release of baker from liability in excess there are white why doesn't that define what honor if this is correct how do you get to the negligence issues there are references later on in the contract or the damage issues that are referenced later on but as far as a breach of contract contract outside of this article one that sinclair claims were breached for example the duty to inspect the tiriel provided by ace but to the project to make sure it baker so can you just is the letter different for different defendants it absolutely is your because this section one point seven only applies limitations that are are set forth because if you read this contract in this article the only recourse employer has if a correction repair or replace if that's a problem response to the amended complaint says that that's part of your argument that the that is part of the argument your honor and here's my question could you help us through the federal rules of can grab onto to agree with your position not none other than the case law five all right so one other question on this which is you argued that the district courts consideration and resolution of the counterclaim issue because it wasn't replied prejudiced sinclair how was sinclair prejudiced because  performed no discovery on the damn cation issue all right so that that really leads me to my main question here it seems as though the arguments on the merits on this  involve a rather involved discussion the provisions in article twenty eight but i'm not seeing how discoveries would would would be making that much of a difference us it's in conflict ed as indicated judge judge judge johnson is analysis of that with respect to section twenty eight point three point one it twenty point three four really makes very little sense but importantly your honor the issue of whether there was a breach of this contract by sinclair is an issue of fact that should have gone to the jury sinclair basically was a passive party here all the work was done by  court's judgment to enforce the strong policy recognized in wyoming of enforcing freedom of contract and to prevent sinclair from order is simply unsupported by the record and so the result of that is we have a waiver issue d and the court is faced with the prospect of what to do with client clients i should say indicated that this should have been a stainless steel and trolled out with you in the proposal you requested a stainless steel val which proposal your honor effect i'm not aware of that and i'll leave that argument to be addressed by mister mcveigh as it would have been his clients to respond to that my client simply received  that judge mathis been raised for a moment ago about the indemnity counter claim and what discovery of any steps in clay are needed to make one this is a matter pure contract interpretation i don't see how any discovery would be relevant but more more critically if sinclair thought that it needed to conduct discovery well it could have simply mentions i think it's office actions who are summary judgment motion and then the district court would have been faced with that request and likely would have allowed that discovery so i think that you have to look at the record and what sinclair asked for and didn't ask for to law courts don't apply i think the better better rule is that courts don't apply a hard and fast rule because some good some do some some do and i would argue that that's not the best way to approach it where there is no rule in the federal rules of civil power procedure that expressly requires reclean of a counter claim in response to an amended complaint what we did do is provide actual notice that we were pursuing that by way of discovery responses after the last time that it complaint was served and back should have been did provide notice to sinclair that was an issue and so i think if that was a legit gym an area of misunderstanding then that should have prompted sinclair to pick up the phone or file something with the corps which never happened and you say discovery responses could you just point to something specific might be useful that is to know where that is yes your honor and and there's a plain sight to the discovery response i'd like to address in the broader context as i see i'm running short on time the is very important because if the court finds that the indemnity ruling should be affirmed then the rest of this goes away because if sinclair let's say for the sake of argument that sinclair clients for which they are owed indemnity from sinclair on a st party basis so i'd like to focus the court on that issue because it would be in my view dispositive of the the entire case against my and so we would submit that judge johnson's order is probably the best way to understand how article twenty eight works briefly on so it's no wonder that judge johnson didn't address that issue where sinclair essentially admitted to the existence of a contract between all three parties and you can love the district or into one understanding and then so you might be helpful if you could just briefly to help us understand the working relationship between your client and the i practical matter do they relate to each other so it's a practical matter john or i think mister mcveigh can address this with more clarity than i can but i will say this ace is what we would refer to as a parts broker we sized the particular bow and we quote a price we also call prices for other manufacturers so the interface that we have with  a relationship it's a contractual relationship that we also that they provide the manufacturing remanufacturing as the case may be with regards to control this particular situation like to point out that the court said ace also had a history with seem clear prior to this particular project which is very important to understand the the valve that issue so in two thousand and four there was a purchase by seem clear of this mafalda hydro cracker and that's important i understand that the hydro cracker  or whether they need to use it if you replace in order to do this new project in wyoming that was a hydro treaty or so the proposal that ace put together and understand that this history between he hastened sinclair that was always something done by engineers at floor or other places where they would contract and mister walters was clear in his declaration if that's the case they didn't look to ace to do this in a stuff that ace is a part of broke we don't engineer they don't provide metallurgy analysis of metallurgy or anything like that and it's important to the court understand that sinclair is a sophisticated purchaser in a highly complex and highly regulated industry they have the non delve a little duty to make sure that their parts that they order for a bus go into their process media that there is the correct metallurgy going in no where in the proposal that haste made to seem clear is there any mention that ace would you metallurgy or determine compatibility of the metal with the process media  that sinclair was ultimately going to use the valve for that is something that is completely within the purview of the end user and it has to be if you think about it because this in user has a sophisticated end user it is purchasing the parts passed in though what it's going to use the parts for a son the other hand would not necessarily know the specific and use of this product they might have some inkling but ultimately it's unclear that determines whether this particular part is going to be compatible with the process media that they're working with for instance there's no way to haste know whether sinclair was going to do work around this particular location we don't know whether sinclair is going to use this now this is an emergency backup have to keep in mind that this valve was sized by a and then it was quoted so when you guys through the program it was quoted to sinclair that is we put a quote to them and said  done now whether it's compatible with your process media that's something you have to determine through your engineer's clear if you don't want a carbon steel bow that we've quoted don't order are completely sophisticated operator of a very very complex and highly regulated industry and they have a nonduality duty to know what they're putting into a particular process media and as you judge mattson pointed out the p s s are as well and that's something that they have an obligation to do that would have caught any difference in the metallurgy that they needed but the point being that that's not a task ever proposed in reading the proposal throughout their briefing on seem clear makes the comment that somehow there was this guarantee of performance but they don't read the entire sentence what that what the proposal proposed was that ace would run the valves through the sizing program and that would determine the appropriate size for the control that metallurgy is never mentioned within the proposal nor would it ever be a never did that for sinclair they don't do that they don't have metallurgical engineers on staff to do that that is not something mister breslau also argue that there was supposed to be some kind of recommendation aced with regard metallurgy that to isn't a misinterpretation of the proposal the only turf or best recommendation was that ace would provide the best recommendation product liability claim but you can correct me if i'm wrong but it has to do with how we look at the f the two hundred and forty one so it it it seems that bows are standardized at least to is to what degree was f b two hundred and forty one dollars more of a custom made product or as opposed to being more of a standard off the shelf product and how would that relate to the product liability er mcveigh or no not to be you'll have to take them yes i am ok i like it or not you have a pending question no problem your honor and forty one dollars body that was sold here was a remanufactured bow that is a bow that was put out in service so off the shelf product it was a return to our facility and gonzales louisiana where they put into a boneyard and sinclair for reasons of economy likes to purchase repurposed valves that it's mouth that are remanufactured because they're less expensive than newly constructed valves initially in this case wanted to purchase an internal flandrau is about all that could be bolted into the circuit so if you needed to remove the is a sales representative independent sales representative so their own margins their own and it either represent other manufacturers when they came to ace they asked for an internal  there were no internal flandrau out in the boneyard so what was in the boneyard was a but went and and i would direct the court's attention to page fifteen of our brief which showed the difference between an internal and then weld flanges to it off the shelf carbon steel flange is what will the dimensions and they were given that another document which again said the valve itself and the flanges would be carbon steel missal of products liability claim the product liability claims should be dismissed under the clear doctrine mcglothlin this is the wrong product there's nothing defective about this product as applications they don't we're not a corrosive environment we sell valves into sewer systems water treatment plants chemical plants justification plants we don't do metallurgy as it relates to the not liable for the the many in which that product is used in the application is not a defective product and there is no product liability that should attach to this product it simply was the wrong product for with respect to mister breslin was attempt to avoid the implications of the firm waiver rule in saying he was prohibited from doing so by this day we know that's not true  responded to that motion they did not raise an argument at that time that we were prohibited from file that motion for reconsideration because of the stay they didn't raise it then raise that until we raise the firm waiver rule on appeal and moreover when judge johnson read it that order so they granted that order he did not say that that order was not timely or was prohibited because the state that isn't after the fact lawyer manufactured argument that you mister breslau was attempting to use the excuse the fact that for tactical reasons they did not appeal judge reagan's rule well never know exactly what those tactical reasons were it could be that they did not acting as our agent in conducting this but it's important to know sinclair never sued any of my clients for breach of contract as they disclose principle under an agency relationship not or repair experience and provide engineering support they indicated that they would provide guarantee performance in the application specified which are the process conditions that were used a few shows m that didn't have where was that in the in the contract papers the d contract papers on the proposal an order for each repair and a quote to