just by looking at the defendants three of affirmative defenses that they are certain as well as they are for counter claims mr i'm sorry to interrupt you but before we get too far into the substance i have just a couple of jurisdictional questions for you st notice first it does not appear that the district court entered in amended judgment order fifty eight dollars order after it calculated the damages in the post judgment interest it am i missing something there was an original judgment order entered after summary judgment was entered but then damages were calculated and i didn't see an amended judgment order but i want opinion but i didn't see it the separate rule fifty eight judgment order that amended one but if if we need it well ask for it but my nd and more more substantive question mr make is i'm going to ask you this as well mr harvey you were about to go into the counter claims in this contest the district court when it ruled on summary judgment addressed part of the counter claim in count one of the counter claims yes and said it was moot and then left the other part pending in a july hearing july th specifically two thousand nineteen the defendants indicated they were going to withdraw their counter claims but there was a cab yet to the withdrawal of counterclaims two dollars and three dollars and the court subsequent order reflects that that the counter claims are withdrawn and there's a kaviak that that the defendants may seek injunctive relief in the future if the escrow agent refuses to relieve the funds to questions one the counter claims were withdrawn there's no indicate that indication that they were withdrawn with prejudice is a simple withdrawal of platter counter claims sufficient for a final judgment for us to review and a at that really doesn't make count counterclaims two and three final impact our jurisdiction at all and again the strength is you get a preview i'm going to ask you the same question s they're your counterclaims thank you judge let me take the nd question st i do believe that the order is final i do believe that the withdrawal even if without prejudice makes it final i think the  claims have been resolved in therefore they are final they are not pending those two remaining counterclaims are not pending they are not what they are and pending but since it was it appears to be without prejudice there wasn't an indication it was with prejudice when that impact our jurisdiction i don't think it would preclude the court of appeals from reviewing the case in its present status i think that or claims below have been resolved as of right now and i do think the court can exercise jurisdiction over the matter what's the impact of the kavli at that the defendants can seek future relief on counter claims two and district court was attempting to do and i'm just trying to read into what it's attempting to do is it may prove it suppled it may exercise supplemental jurisdiction at some later point after it necessarily does because i do think all claims that have been filed in the case have been resolved and i do think that as a result of the district court's two opinions there are no pending claims below and therefore it permit courts occasionally do exercise supplemental jurisdiction after they have concluded the matter to deal with issues that do arise post judgment and i think that's the situation the three defenses that the district court identified were number one whether or not the defendants could contest whether former clients are entitled to refunds that's a rd party claim secondly to negotiate individual settlements again that's a rd party claim in the event a rd party filed a claim which it hasn't in this case certainly the right to participate in an investigation which relates to a direct claiming but i think the district court the right to investigate and in the context of a rd party claim with respect to the defendant's ability to investigate if they chose to do so in here they did not here is how i'd as we  invoked provisions for the rd party claims as well as the track claims so how can aren't they that the sellers didn't have the right to invoke rights associated with rd party claims because when we file suit we only file suit under the direct they asserted three affirmative defenses here the affirmative defense is that they assert it had to do with their lack of liability for their misstatements of their financial statements but also sterling had no right according to the defendants in their formative defenses to seek recovery from the escrow fund because carolynn bank according to the defendants in the affirmative defenses did not satisfy the terms of the so what we're saying is in order for there is no defense that the defendants could have possibly asserted that was not covered by count one of their counterclaim namely under the declaratory judgment act because what they were seeking the four counter claims that were certain particularly the st counter claim on the clerks or adjustment act they asserted all of the defenses they wanted also if you look at the alleged offenses that the defendants claim they are revocable you los those defenses really go to claims that would have been made by a rd party their former clients claims a defense a release a defense of voluntary painting a defense of statute of limitations at defense account yes we agree with st of all do you agree that your clients are not entitle to the escrow simply because you chose to make payments to clients  clients and here's what i'm concerned about i understand your position to be that these defenses of voluntary payment statue limitations on stated course of dealing and maybe i missed  one are still available to be litigated so that what we would foresee if if we remained to the district court on your theory concerning notice an is in essence that you in the seller's would wind up litigating may be the equivalent of a couple of one hundred of breach of contract claims involving the former or involving the client depend upon the merits of of the hypothetical breach of contract claims by the record that's correct ok and if that's right and everybody's limited to the two million dollars in the escrow yes if the district judge is right with no in the interest should not be awarded and wasis don't include attorney's fees it sounds like the two million dollars escrow could get  it we don't think so judge it's hypothetically possible we don't think so given the amount of our claim and given the fact that there is no prejudgment interests because the parties contract it for there not to be prejudgment interest and in fact the defendants have conceded as much if you look at the defendants brief their reply brief what they've said is on page fifteen of their reply brief that  they acknowledge that the s b a section eight point zero six does not explicitly address pre judgment interest there's a reason why it did these sophisticated parties decided that there was going to be an escrow account and if we wanted to put it in an interest bearing account both parties would jointly contact the escrow agent and say please put this in an interest bearing account the defendants never asked sterling bank to do it sterling bank never asked the defendants to do  neither of the parties decided to put it in an interest bearing account so we just don't think that it will the litigation or that the damages that defendants which face would blow through the two million dollars we think the two million dollars escrow is an accurate one and we think that it would be preserved there in the so let me if i could ask you this for judge focused also on the timing is of notice name that would require some investigation and it seems to me that that has to mean somewhere in between quote allegations and possibilities and knowing every detail of these potential claims  and so the phrase become aware looks pretty ambiguous to me can you help me out it is somewhat unclear i think it has to be read along with the provision of the contract that requires  nt what the district court said was when sterling bank went to the united states attorney's office with the northern district of illinois to report what it believed to be financial fraud as a financial institution that the united states attorney in its talking points that there were potential billing problems that the bank was in the early stages of its investigation and that there was a possibility of fraudulent conduct the district court seizes upon that date and says well you knew by that date and the answer is no we didn't because we didn't hire the forensic accountants until two months later i understand why it wasn't the november tw sir that's a fair observation i think at that point the bank did not have sufficient detail but it was close and so it gave notice investigation at that point and you had already doda fide your clients that they might be getting money back and you had hired a forensic accountant how can that how could you not have been aware or become aware of it at the point that you had completed your own internal investigation of the claims that that is a fair point if you read a where broadly but that still doesn't answer the question and it doesn't support the district court's injury of summary judgment because we do not lose our rights under the escrow and our rights and the remit even if the notice is beyond tonight and exam but that's a nd point and you've been contesting both and become aware of notice tricker as well as the waiver or forfeiture of your rights and on to reversed element to pick up on which hamilton was asking i don't know how you get around the fact and can argue that you were not aware or had not become aware at the latest that december th two thousand and fifteen memo where it says you've completed your own investigation judge saini i will not be intellectually dishonest with you if you read awareness in the plain meaning of the word then you are correct and just hamilton is correct by that november date we would have satisfied the definition of awareness that is correct might take but secondly as soon as we got the declamation notice on december nd when they told us we gave notice immediately within ten days and more importantly the defendants did not lose any rights they did not lose any protections and i certainly understand your reasoning for not wanting to say something but in terms of the contract it doesn't seem that there's any exception for that that's a fair point again i will not argue with the court  reaches a conclusion that awareness is that means exactly what one would think it would mean according to the dictionary having some level of notice rather than some level of certainty i will not debate that what i think then shifts to ok defendants what was the harm that you suffered certainly with respect to those claims that were paid you suffer no harm with respect to those but even with respect to the ones that will pay let's take a look at the timeline and here's ask for an investigation they didn't ask for a turnover of sterling banks records that they were somehow precluded from conducting inquiry into conduct which they already knew about because they originated it but more importantly that somehow they lost rights and defenses the defendants as we say in the papers could very easily have filed their own declaratory judgment act we know that because the st counter claim they asserted wasn't the one under the declaratory judgment act and so they could have come into state court and filed a declaratory judgment action they could have come into federal court and filed a declaratory judgment action saying sterling bank has placed a hold on this escrow we think it's improper we think they have no rights to this money we think that we have not engaged in any breach of the stock purchase agreement and we should be entitled to take one hundred percent of the escrow the defendants never did that they didn't do it in december when they were notified they didn't do it for nine months and two thousand and sixteen when they had the opportunity to do it and even after this suit was filed they didn't lose any rights or remedies because we are obviously going to immaterial point at the defendants irrevocably lost their right to participate in the investigation that had been ongoing for many months prior to receiving notice no because they don't get that right under a direct claim they get a right to investigate meaning the the right to ask for information from sterling bank if you look at the rd party claim provision if there had been a rd party claim asserted against the bank which there wasn't there never has been then they would have a right to participate as an insurer would but what the defendants are doing is they're conflating the rd party claim process with the direct claim process this is a claim by sterling bank directly against the for their inaccurate financial statements and disregarding the representations and warranties that they made to the bank so the only investigative right that the defendants had was to context only bank which they never did and ask only bank give us the underlying information that supports your claim against us under this particular provision the direct line provision section eight five c of the stock purchase agreement they never did and i'm arguing on behalf of the shareholders of a company called bamiyan services corporation that would defendants in the district court case below let me start by ensuring judge st eve question about jurisdiction st we  did not agree to voluntarily dismiss count one the declaratory judgment count it district court stated that dec count was because of its ruling that the  plaintiffs were not allowed to keep the amount in the escrow wasn't that just half of the count it looked like part of the court ruled part of the count was moot but part of it was still pending i believe that they have to look back at it your honor but i believe that the court ruled that the count was moot because it was deflected of with the judgment already rendered with respect to our cross appeal we believe that was timely because it was filed within fourteen days after the ruling on interest what about your other counter claims that you with true do you are you with drawing those other than the one that isn't right yet are you withdrawing the other counter claims with prejudice we did your honor ok so you did agree that you're not going to pursue those other counter claims  right to pursue those counter claims to the extent that right now to extent they're already right so the one that isn't right maybe you could pursue with the other ones you're a great you're not going to pursue that that's correct judge although obviously if this court were to reverse the district court we would want to be put back into that same position understand and you know mr mayor has the answer to the question about the separate r judgment following the withdrawal of the counter things i do know i do not know that answer the main issue to us in the case is that we think sterling is ignoring the structure of the process the reason why the notice requirement existed this is not in and then the th cation provision where sterling is just entitle to and then the fixation because they can point out a mistake was made or a financial statement was wrong they have to involve the sellers in the process of either investigating t claim if it's a direct claim or responding to the claim and fighting the claim if it's just their party claim for the purpose of minimizing the loss minimizing the loss to sterling which the sellers are eventually going to have to pay and that's why it's structured the way it is and how does what you get that instrument is a plain reading involving direct claims as opposed to rd party claims you get it from the reading of section eight o five c itself and what it says has to happen there has to be a thirty day period during which the and then the fine party gets to comment  on the claim gets to do some investigation into the claim they have to be allowed to do an investigation have to be given access to sterling personnel and documents you have have we did not ask for that until we got to this lawsuit that is dead is indeed our argument but the idea that we would now gather and engage in a fact gathering process no longer made sense once the employment contractors were paid in full well they had well took place were paid they were paid on december th or th two thousand and fifteen so four days after the notice was given and they had already been promised payment before that before the notice was given  before that's correct all the more reason your honor why the notice needed to have been given and august not december unnoticeably given in august it would have been a chance to conduct an investigation while people's mind was still fresh no been a chance to ask employment contractors whether they thought that the change which took place in two thousand and nine made any difference to them why couldn't that have been why couldn't those questions have been asked for example in december of two thousand and fifteen january t even those thirty days notice as compared to when litigation two or three were no five years later because they would have had no because they would the answers to those questions would not have given the seller's any notice to the to the point that it was a record lead forfeit because there was so much water under the dam i then it's not a fair summary yes yes your honor but we'd go a little further we don't necessarily agree that this claim has no bearing at all on section eight point zero five a realized that no complaint was ever filed no formal complaint was ever filed in court but the sterling is trying to have a both ways the reason they paid these claims is because it was a legal liability to do so in other words they feared that a suit would be filed so the procedures of eight dollars they have some bearing on this and it's not fair to say that we just have to treat this is just no complaint was ever going to be filed because if that's true was a gratuitous payment and there's no reason for it to be indemnified and you're still perfectly able to make that argument right yes you were able to make the argument that it was gratuitous payment we're no longer able to try to settle look claims or adjudicate claims or conduct a meaningful investigation at this point how does how does anything that happened in this case fit the definition of a quote action under the star purchase agreement we will c word action contemplates an actual case being filed or at least a demand being made and that never happened we're not aware that any demand was being made but the fact that no demand was made so our main concern with the way the process happened is it was there or not the claim was brought under subsection a or subsection say the whole purpose of the procedure to minimized both parties working together to minimize the amount of loss was forfeited and as a result the sellers were simply asked to pay a bill and not just any bill bill which included not just have never been paid and who may never be paid because we've been told by sterling that they have no present intention to pam they haven't decided whether they're going to do that or not you know mr make this kind of i ask you this is i say it was insufficient that was not detailed and clear enough so right correct correct if you look at it point five see it requires them to give all written information relating to the cla if on they have on that theory when they have been able to make that kind of a disclosure back in august before they brought in the forensic accountants if they're just getting geared up for their internal investigation you know there's a big difference between what they knew in august and what they knew in december if they told us what they knew in august we wouldn't be here now all they would have had to tell us is the same information that's in the report they gave to the u s attorney's office in august we contend that would have been a sufficient disclosure would have met the requirements of section eight point zero five c however when you get to december they know a lot more information have a duty to tell us that information now the fact that they know a lot of information doesn't mean they didn't know a sufficient information in august two thousand and fifteen they knew the basic facts they knew the amount that had been lost they had enough information to tell the u s attorney that fraud might have taken place that enough information to contact customers and tell them that they were opening an investigation to see if there was a quote unquote discrepancy that enough information to issue a document whole letter this may cause i want to jump to prejudgment interest for a moment a we disagree that where's the final not appealable judgment or well it's certainly appealable because we're having the appeal today so we understand that  but we don't think we have separate reasons for thinking that it done the occasion it's not required because we think there was wrongdoing judge same as question was if indemnification was required did you ask for it in our answer to that question is yes if the court comes to that conclusion did you ask my question is a little more specific did you ask for interest pursuant to the and damned if occasion provision in the contract not pursuant to illinois statute but whether we asked for it under the contract if we were title to it under illinois law because this was an instrument writing we think that the answer in a counterclaim were sufficient to constitute notice that we were requesting that indemnification were requesting and then the occasion under both illinois law and under the contract so the parties and this is this really comes down to a contract on a pre judgment interest question  and the parties set up the escrow they provide we can agree to put this into an interest bearing account but never did it well there's no interest available  should we just hold you both the year in action in that regard you said remedies are exclusive under the contract there's no specific provision for interest and while there was a ramp that would have let you get to at least collecting some interest  for the u s growth neither side took it well a few answers a st there's not really evidence about why interest was not agreed to under the contract but i don't care why just you know you could have you never did well i don't i don't know that it would have been practical to do so but the entitlement to prejudgment interest does not depend on whether or not the parties availed themselves of every opportunity to get that interest through some other means sterling has raised this is an issue that somehow becomes the obligation of sellers and because the sellers didn't secure interest in the esc argument they're the ones at risk we think the burden is on the opposite foot because we think this is a question of mitigation of damages a nd answer to your question even if the parties had provided for interest in the ask her agreement that would have only gone towards reducing the amount of interest that they were entitled to on the prejudgment basis illinois rate of nine percent the statute the contract rate of twelve percent if that was greater than had been provided in the to two responses to that st that's that's a correct reading the st response we actually allege wrong doing so under that section that section only applies unless wrongdoing fraud or criminality is alleged were and were in the st were intentional was yes intentional misconduct correct and that's what you think you've got here yes we do we think that the intentional misconduct was the the man the two million dollars we put into the escrow when there is no way that that was a reasonable or good faith estimate of how much was required for you talking about the original creation of the us are you talking about the demand for two explain that the demands included costs that they had incurred in addition to what they had paid out how could that be intentional if they had the numbers to back it up it's intentional because section ten point zero three says they don't get costs and it says so in unequivocal terms yes thank you thank you it is and was no no fees or costs notwithstanding anything here and to the contrary and the word herein is defied in section ten point zero three which i inadvertently jump to  mean anything else anywhere in the contract so it was not legitimate for them to add those fees and without those fees there's no way they get to two million dollars for the demand but the amount that they forced the escrow agent to retain even if you count all of the claims that they never paid and they don't have any present intention of paying you still don't get to two million dollars i also point out th we should have known that a covered prejudgment interest because the word interest is used in two other sections section eight three an eight six but those sections say nothing about forfeiting prejudgment interest and forever waiving prejudgment interest there's a case out of the district of new york the catchment versus helen of troy case and i realize it's not binding on the court but i think it's a very persuasive case because it considered identical language to this identical language and an identical figure to allow the escrow agreement to be dispersed and that cate's the court held that the can't be held to expecting litigation to come from it and realizing that they would given up the pre judgment interest in that litigation which could eventually happen if the plaintiff took the unexpected step of refusing to allow the dispersement of the escrow how it's very it was unreasonable to expect litigation it wasn't reasonable to expect a chain of events which occurred there's quite a few events which occurred it just record says you well you had ten days from that point to make your claim for indemnification again that wasn't reasonable that wasn't even litigation at that point it wasn't reasonable to believe that i believe they did i expect the numbers to be accurate as of the end of the work week sunday was two days after the end of the work week regardless of the fact that damian perhaps couldn't send the invoice for another couple of days because he didn't have the employee time sheets we think the word render is sufficient to capture the idea that the invoice that the invoice date would be the date at the end of the work week even if it wasn't sent for a couple of days after that subdivision for we think we clearly gave enough information for sterling to of understood what that expense was for but that's it's not sterling's complaint is that that's doesn't give enough information that's a discovery cost that's the costs of translating in a side a readable material i believe that does give enough information because it says low documents an image to work space i think sophisticated parties and certainly sophisticated litigators like mr harper's firm understand it that's a necessary part of getting copies and getting information in today's discovery environment and the district court i believe found that it was clear that those influences were for converting that computer data into i know that i kind of used up a lot of my minutes but let me take about two and a half let me st deal with this idea of the question a judge hamilton and asked and that was this idea of rendering in these invoices it was an absolute  violation of their agreement with their clients to put a date on a contract that was on the last day of the work week and they had been doing it the friday after the work week and mailing the invoices the friday after the work week and let me give you some in that so some idea of what that meant in two thousand and fourteen damian had a net income of one million one hundred and seventy three thousand six hundred and twenty one dollars their undisclosed live billet ease as a result of this backdating scheme was a one million two hundred and eighty nine thousand nine hundred and sixteen dollars we have this on not in our reply brief on page twenty seven so there undisclosed liabilities in this matter exceeded their two thousand and fourteen net income simply by the spectating scheme and the only reason they paid the customers prior to closing is because the customers who found out about it in complaint got paid secondly damien had a script developed that they asked their employees to read to clients suggesting that damien would discovered this on their own with this was their practice that they change so if you look at course of dealing course of performance it is pretty clear that they were in violation of their only form contracts which which they drafted and and it also violates the duty of good faith and fair dealing and here is the challenge that the bank has as a federally insured financial institutions institution we cannot assume that clients are not going to find out we have to communicate with those clients and let them know what we have to starboard as a result of our investigation otherwise we become a party to it and as you know as the court certainly has a way or under illinois law these clients have a ten year statute of limitations with respect to breach of contract so we don't know what clients are going to go through their records particularly in an economic downturn and look for accounts receivable look for monies that might be recovered here is the other point when we go to this notice question when you know that there was no irrevocable forfeiture of any right just by looking at again look at the affirmative defense that the defendants filed here the defense allowed them to challenge everything that sterling bank did with respect to the notice with respect to what it did with klein accounts with respect to information it gave to clients so with that affirmative defense alone they c seeking an order that the sellers were entitled to one hundred percent of the money in the us and in order for a court to make that determination the court would have to go through every single claim