in this case are dispositive of three out of the four principal issues raised in this appeal at the time of the district court's decision and at the time of the briefing in this matter there was no clear substantive law in the state of montana that would guide the court in its decision regarding the scope of a valid choice of law provision and july the first two thousand and fifteen the montana supreme court issued its decision in masters group international versus comerica bank the comerica bank decision not only addresses the enforceability of a written choice of law cla provision it goes the next step and dresses the scope of those provisions and specifically with regard to whether a choice of opera vision contained in a written contract will apply to tort claims that arise out of that contract while the montana supreme court heard me stop short of providing a bright line test in fact they stated they were not providing a bright line test the comerica decision does make clear that in montana at present the general rule is that when sophisticated commercial entities agree to a choice of law clause the last elected in that clause will apply to all causes of action arising from or related to the contract counsel of course and ask that you all be prepared to discuss this fairly recent case one question that i have is  contract in question were drafted a number of years ago when this case did not exist under montana law does the supreme court's decoration of clarifications about its choice of law regime if you will relate back to the contracts that we're dealing with here in other words is it simply exposure toria what the law was but simply had been expressed or is this retroactive in some way that would be unfair to apply i think it's a great question and it is not one that the comerica court certainly in dressed although clearly the comerica court addressed a choice of law provision that predated its decision and that decision in the comerica case was dispositive in that case in fact it reversed a fifty three million dollars verdict and so to answer your question directly judge i believe the law would be clear if we looked at the comerica case and likely cases that would underpin the concept that you've highlighted the fact that that exact case address the contract that was earlier is somewhat analogous to this right i believe so you're on well i do you know of any cases where a contract interpretation the court said well it might this is how we interpret it today but that didn't exist before therefore we're going to go back to some previous law or does the court as a matter of law and contact interpretation interpret a contract as of the controlling legal authority at the time i'm not aware of a case that holds as as you just set forth basically that the law would not be retroactive essentially so i believe under the comerica decision which is of course our most recent pronouncement of the law in montana the law would would apply to the case as i think that's a great question that was actually discussed at some detail and what i will pronounce probably incorrectly is the piet boone decision which was cited by both the montana supreme court and it was i believe cited by the defense the defendants and respondents in their brief and that court essentially noted that it would be unreasonable to expect that sophisticated parties and that's what we have here would expect that the laws of multiple jurisdictions would apply to a conflict arising out of this out of a singular contract that it was simply a logical and that it provided for disparate results so if i understand your answer correctly you're saying that because you keep it parties are involved in this transaction that anybody would understand that the law changes you've got a lot of different jurisdictions jurisdictions involved here things happen the way it goes you take your put your money down you take your chances basically what they're saying i don't know that the court went that far believe the court simply explain the logic behind holding that for all disputes arising out of a singular contract certainly sophisticated business into a tease in trying to have a reason my expectation about how the contract would be construed or disputes arising therefrom and yet in this and i think that defend the respondents here i've cited in their brief the fact that the substantive law of the state of montana resolves the choice of law question and once the question has been answered then the jury instructions well nobody was arguing reply in federal common law here did they were there are you not always we were always applying state law so i don't what your has to do with it were always apply in state law the question is what what were the reasonable expectations here do we apply masters straight out in which case it's pretty clear at least in as you say three of the four causes of action about which law applies and what the result is at least as far as  pleading states is concerned what what we do with that retroactivity and reasonable expectations aspect again i have to revert back to the to the comerica case and the fact that it in itself applied retroactively if i could respond to a prefatory question that you've said that you asked where does erie come into this eerie holds frankly that a federal court sitting in diversity which of course this was will apply contracts actually has any good idea of how choice of law provision this isn't are made which is one of the more complicated procedural questions so we have i believe so and i think the case if i may again goes directly to that issue because it speaks not only to the sophistication of the drafter but also the problems with applying the language and focusing too closely on the language versus the overall concept and if i could quote to the court what i think is a substantive quote from the case provided to many choice of law clauses or poorly or hapless haphazardly drafted friends and often wholesale copied from other contracts or cases as such these clauses provide a very weak basis from which to safely and for that the parties did not contemplate not contractual issues under these circumstances slavish reliance on the wording of these clauses amounts to an unwise subservience to form over substance in this particular case the substance is that the clause which is contained within the contract that was agreed to by the parties clearly provides for texas law and i want to be sure we're not trains passing in the question was that when you had to shift get the parties that drafted the contract put in the choice of law provision whether or not it was boilerplate whether or not they properly considered it it was in there at the time that they drafted at the law was vague  unclear but has an enormous impact on the outcome of this case so the question is do is it fair is it is it meet the expectation of the party used to retroactively apply this law that's the only question not whether we're going to make up some new law that would change things and again i wish i didn't sound like a broken record i believe we go back to the comerica decision that was a premise upon which that decision had to re counsel assume that comarca applies without regard to the date when the contract was drafted assume that the meaning of comerica is think what it would be is everything is controlled by texas law and not just the contract claims tort claims and any other kind of claims in this case are controlled by texas law if you assume that that's so what survives is only the young cancian ability issue that is not barred by limitations what is not barred by limitations of comerica applies we believe that if i understand the question correctly we believe that all of the claims survive that the fraud that the constructive fraud or negligent misrepresentation and hence the punitive damages that is tied directly to that as well as the basic breach of contract provision you think nothing is barred by limitations of texas law applies correct so the two years statute would apply the two year statute for the fraud claim no because the statute of limitations in texas for a fraud claim is texas is governed by two years constructive fraud in texas is governed by for your statue of limitations so we've obviously argued that our claim of comps is both because the elements are virtually identical certainly so to that to the question then i misspoke we determined what it was would we leave that for the district court then you could although now that you have asked your question i believe i understand that the negative the negligent misrepresentation claim would be resolved and we would depending on the date of discovery we would be that claim would be just part of correct if you want to reserve the remaining yes i did thank you please the court my name is katie desoto and i'm here representing you to trucks north america with me as co counsel randy cox and i will reserve two minutes of my time for his presentation could you start out by telling us if texas law applies what claims are not barred by limitations if texas law applies claims that would not necessarily be barred by limitations would be the fraud claim i think i disagree with mr condor on his assertion that constructive fraud under texas law would would would apply and one thing i want to start off with your honor noting that and i believe just mccune you asked if the district court had considered this and i would direct the court to the  case which even after montana trucks raised the issue of texas law applying even after that they amended their complaint to once again at a montana cause of action and that's the construct of fraud and the nature misrepresentation after judge malloy issued his first a summary judgment order dismissing the claims and noting that the constructive fraud negligent misrepresentation claim was i believe he said it was suspect or it was is weak we did additional briefing on that and still it was a erted that the montana law applied so in actuality the lower court has never considered what limitations apply to any constructive fraud or negligent misrepresentation claims that's just just not an issue that's been made before the court  if we get back to the fraud claim not being barred the district court decided that it was barred under montana law montana supreme court decided the texas law applies to a similar contractual choice of law so the effect would be that it's not barred by limitations is there anything for us to do on that claim except remained that to the district court so that the district court can consider it without disputes with opposing counsel the less i understand what i'm going to tell me we don't believe that comerica controls this case really the comerica holding controls but under the holding of comerica we still believe judge malloy would come to the exact same decision and the reason for that  this ok tell me why fraud are you saying then that fraud would be barred by limitations i'm saying that fraud would still be considered under montana law not texas law under the holding of comerica are because because what would be considered because i think what you have to do is imitation is far or the substantive law of fraud i believe your honor that the fraud claim would actually be determined under cold america to be subject to montana law not texas law and because it would be subject to montana law the lesser statue of limitations would apply thereby making their claim time barred because of any party because i think if you actually read the holding of co merican it's not as broad as it may seem and i would direct you your honor to the actual language in the forbearance agreement and comerica and it states as follows what is a relation to whether michigan law applied or montana law applied it shall be governed and controlled in all respects by the laws of the state of michigan without reference to its conflict of law provisions including interpretation enforceability the liberty and construction now compared to our language and our agreement it says the parties agree that the law but not the choice of law of the state of texas shall govern the construction and enforcement of this agreement so a couple things to note one the language in all respects is obviously much more broad than the language that we have in our agreement so that's the first point to say that if i did say it's broad it's those more more words but that doesn't mean broader well i think you're out of the very fact that our contract specified but not the choice of law that anticipates that these parties understood says you apply texas law you apply montana choice of law and your honor i think that it dissipates that there would be situations which would not necessarily on its face but governed by texas law what's the difference between that language and the state of michigan comma without reference to its conflict of law provisions comma i think your honor when the real operative language is in all respects that's the that's the broadening language and what what does that get you well think your honor when you look at the law that is specially the law that the comarca court examined and relied upon in coming to its conclusion one of the common things that you see in all of those cases is what is the intent of the parties what did they mean when they drafted that that language and in fact specified that absent a show of intent otherwise and it's our position your honor that if montana trucks and u d trucks had intended for this choice of law provision to be as all encompassing as as as it  argued if they'd wanted to do that they would have said in all respects relating to everything that may arise from this contract you're hanging on in all respects yes now let's say you don't sell well let's say that we think that the clauses are materially in this thing which will even though the clause use more words and comerica then is there anything for us to do except a firm on the claims th barred by texas law which would leave one and only one claim fraud which we would remand to the district court i think your honor another thing that you could do is look at the texas law and say does it is it related to the contract because under texas test if texas law applies i think under the stier case you could still hold that fraud would not be controlled and i guess that would be our secondary position your honor other than that i think you are right i think that the the the fraud claim would go back to be substantively heard by the district court under the longer statue of limitations in texas and that of course that would apply to all of the claims that they brought what to what role if any does the concept that contracts are construed against a draft person apply in this case each had counsel but you're a big big company they're relatively small company do we construe the contract in any way more favorably to the non printable draft person or is that irrelevant in this case i believe in this case your honor may be irrelevant because these are two commercially sophisticated parties represented by counsel at all times and so i don't think that's actually a deciding factor in this case could you help me on the detail of this case i don't it'll come up or not on the continent bill or the aspect the justification for it was well it applies to both sides but it's hard to see what practical application there would be of that clause against the local franchise it seems like the only application or damages claims against nissan i think there are in theory there could be chance there could be situations where there could be consequential damages against nissan you do trucks as well but the reality of it is give me one ok let's say for example so if you look at the actual agreement there are a lot of terms in there about montana trucks will not defame on tanna trucks will take all steps to make sure that the product is put out in the most advantageous manner well let's say for example that montana truck said we don't like these on trucks anymore let's go out and defame them and all of the mean i think if we're going to expand the world of liability to anything that arises out of this contract which it sounds like under comerica that would be the analysis if for example they violated the agreement by selling additional trucks so they brought in a different dealer a right did that happen in actuality no but that's what the standard that we look at when we're looking at the contract language right so i think it unconscionable that he and i can address procedural and substantive unconsciously now  at the time of its execution was both procedurally and substantively unconscionable and the district court correctly found that they did not meet their burden procedural unconscionable it relates to the circumstances by which the contract was made substantive unconscionable a t relates to what the effects are the outcomes are i want to be sure i understand you're saying that nothing in this case would  provide a bright line rule and comerica specifically said you need to look at the facts and the situation of every contract so if that's the interpretation of comerica you determine that comerica does not require the application of texas law but instead allows judgment to come to his conclusion based on the language of the heart of the contract itself if that's the case then then you could affirm in all respects your honor and obviously that's what we would urge you to do so so bottom line is whether the parties actually intended for one state's law to apply to all claims or all causes of action however what comerica does not do is provide a bright line rule stating if you state the law of x related to this contract or whichever you know words that we use obviously the cases use a variety of words and terms it does not provide a bright line rule stating that if that is the case the analysis goes out the door for example i mean i would imagine that after the language of our contract it is still a viable and valid interpretation of the contract to say that the parties did not intend for the scope of law the scope of the choice of law provision to encompass and incorporate all tort claims so usually built without you usually the manufacturer or the national distributor wants the broadest possible interpretation of these choice of law claims usually it's really important to them that they not get home found in whatever locality the customer suing them happens to reside so i find it hard to believe that on behalf of nissan you're saying in this case you like the federal circuit court decision to interpret a choice of law provision merrily when comerica really doesn't give you much basis except that it says in all respects in this particular one doesn't say in all respects i think you just have to to the language your honor that seems like quite a negative pregnant to infer from the absence of the words in all respects well i think if you look at the cases that comerica relies upon every single one of those cases went back to the actual contract themselves and did an analysis of the language and so while it may have been in congress results in this case i think that's it i don't see anything in the language that helps you you're arguing not from the language but from the absence of language you're suggesting that the parties really mean that basically an international corporation means to limit the effect of a choice of law clause it insists on  and that yes that's what i'm saying i mean i agree there is nothing there that says but claims other than those arising out of the contract are subject to the law of the state where the dealer is located that's because it distinguishes things we use the term u d japan and i make just one point and that is to distinguish you d japan's situation from what has been the focus of the discussion for the last thirty minutes or so you japan is not a party to the dealer sales and service agreement so the choice of law provision and how it's interpreted from that agreement does not affect you de japan we do a traditional choice of law analysis with rich with respect to the claims against you d japan in his opinion said i mean he looked at it he said the most significant relationship is of course to montana  and because of that you know but for the contract we wouldn't have montana law would apply your contract does not in any way refer to texas laws what you're saying i don't have a contract all that's right  you with specific regard to the arguments raised by uni america there's no disagreement from the standpoint of montana standpoint of montana trucks that supreme court did not announce a bright line test what they announced was a general rule which is presumably subject to exceptions in the future but the general rule clearly applies to the tort claims that survive in this case the contract clearly applies to the what about pam that was interesting that is an interesting point it is a point now this is so assuming that all your arguments are right you could sue you the north america for fraud but not you did japan we would disagree and here is why we have alleged and alter ego theory against u t japan specifically that you need to pay and so controlled you d america that a contract with america is a contract essentially with u t japan we would we would suggest that the appropriate resolution of that action argue that you the america is under capitalized or something like that we have no evidence of that but we have to argue alter ego and what we do have evidence of to be clear is from the prior case that has been noted by both parties the pioneer dr matter we believe we have significant evidence which would not be before this court to be clear of of that alter ego theory and is it under capitalized like you have no evidence of alter ego theory because it's never come up at this juncture we do not however i should have looked at the scheduling order  its own usual to be able to prove alter ego theory except with very small businesses because the whole notion of corporations is that they're recognizable separate entities correct unless the lines are blurred as we believe they were here and the evidence we have was in fact developed in the prior case with an underage with a different entity piner dr same defendants  what the district court did as i read it that said it granted in its entirety the summary judgment in favor and that would have to be appealed so it wasn't addressed on appeal it would seem that that would stand would it not your honor of the summary judgment order granting the order granting summary judgment granted that order as to nissan diesel america specifically we consented to that order binding us for purposes of nissan diesel japan simply to conclude the case and so our position would be that that issue was never addressed and therefore that issue right but if you didn't appeal i mean i can't see how it's somehow a live issue because the district court by virtue of you wanting to get it up on a final judgment it binds them they have a summary judgment in their favor a judgment in their favor correct correct it does not address that issue but it doesn't matter because it's a final judgment is it not so i'm having a little trouble understanding what the jurisdiction would not ruled upon by the district court and that the proper resolution is that that claim should be remanded for further fact finding that we have here when i think we have your position in mind that's one thing yes i don't know what the procedure is under montana l under california law normally you'd have to get a judgment against diesel and then you would be going against its alter ego if you couldn't satisfy your judgment against diesel is that different under montana law and you just go directly against the alter ego from the get go candidly i did not come quite to address that oh i do if you i don't know you know i should i just thought i would ask that i believe i believe the analysis is like many things in montana law not entirely as clear as we might like and i thank you thank you for coming from montana area on the case of montana trucks versus you trucks and u d japan trucks is now submit it thank you