briefing in this case is quite large there's a lot of facts in issues but i'd like to do today if your honour's will for a minute is to focus on two issues in the case in which i think there are very very obvious and clear issues of law errors and walks  me the first error relates to how the district court assessed damages for breach of contract specifically the trial judge concluded that the only recoverable damages in this case was the three hundred thirty thousand dollars fee for services under the contract rather than the twelve million dollars in lost revenues even though she also concluded that the twelve million dollars was directly caused by the breach of the district court reached that result by first concluding that the twelve million dollars  not constitute general damages and then by concluding that it was not recoverable as consequential damages either i want to focus today on the consequential damages holding in so doing the district court hearken back this is a bit of a look a law school class here your honors to the old law line of common law cases appear to my eyes by justice holmes and globe refining co that for consequential damages to be award the defendant must have tacitly agreed to pay such damages a case of breach that however is not the test today indeed even the older case of how the baby baxendale that we all study when we were one els about the crankshaft at a worse mill rejects that very strict for ulation of the test rather the test today your honour's is one of objective foreseeability at the time of the making of the contract in other words was it for seeable to optimum that the damages that b p suffered  here on the medicare contracts would result if a breach occurred we don't think that this is a difficult question to answer in the affirmative given the findings of the trial court made a that the parties have been gauged in a contractual relationship doing exactly  these actuarial services since at least two thousand and six two that up to me had total control over the bid submission process and three the mathematically direct and automatic relationship between upton's calculations as an actuary and the premium revenues that m v p would receive on the medicare plan s the second error that we believe is quite clear in this case is judge cons dismissal of the negligent misrepresentation claim as entirely duplicative of the contract claim but what i think i'd like to focus on at least first is consequential damages because i think the court this court has to decide that issue in any event and that if the court does decided it doesn't have to reach the negligence arguments that we make the district court held as i said before  actuarial standards in the contract under new york law lost revenues are recoverable as consequential damages under three circumstances and it is limited we can see that one they have to be caused by the difference breach to they have to be capable of reasonable certainty and three they have to be reasonably foreseen or contemplated by the parties at the time the contract was formed the district court here from the first two elements were satisfied where the district court judge got hung up on the third factor and that's where the crucial error occurs in so we ching the result the district court relied on the statement of the new york court of appeals in kent for one that there must be a showing that the particular damages were fairly within the contemplation of the parties to the contract at the time it was made that's where the error or a curse what the district court said is that ken forgot the comfort one court did not mean that the parties must have contemplated the injury at the time of the contract but rather the liability for lost profits over the length of the contract as the court then went on to explain the problem here is that optimum optimum did not agree to act as an insurer for m v p s health plan or otherwise accept liability for losses on third party contracts but in the can't for two case decided by the court of appeals three years later about whether a plaintiff could recover consequential damages relating to the buffalo dome stadium project the court of appeal stressed two factors one whether the damage is not the liability whether the damages were reasonable and i'm reading directly from the case quote reasonably for seen or contemplated during  at the time the contract was executed because meaning the injury damages meaning the quantity of money damages could be injury or quantity of money here it was the actual damage was the quantity of money the lost revenues under the contract and what the what the quirk the crucial error that the court made in which in that result is she missed the second or surely if the parties explicitly contemplate that one party is covering the other party for this kind of lost property then obviously you can get consequential damages but the rest of the task is or reasonably for seen as an objective foreseeability standard and i would urge your honour's to look at far worse in section twelve point four of his treat by the court of appeals and canford in ashland where he goes through the factors of objective foreseeability every single one of those factors were met here and the reason they were is because these parties knew exactly what the damages would be if there were a breach the damage for not properly taking into account the cautionary or the double counting the failure to double count under the contract meant precisely that b p would result would suffer damages under them to be contract which which is exactly what occurred of concerned about limiting consequential damages which i could understand the court might be considered this is not an actuarial assumption there it's not as if optimum thought that women at the age of sixty five are going to get more heart attacks and it turns out they get fewer heart attacks this was an on off switch they knew since two thousand and six that we only take my client only takes one co pay for each visit by a customer they've been operating that way and for some reason in two thousand and thirteen and breach of the contract they fail to take that into account that's exactly the kind of reasonable certainty that gets you consequential damages and indeed if you look at judge jacobson opinion in the traveller's case he talks about exactly that that was a improperly lumped negligent misrepresentation together with negligence and gross negligence there are no cases in fact there are many cases in our piece that say to the contrary that a negligent misrepresentation claim when a special duty exists and it clearly existed here is duplicative of a breach of contract claim obviously if that claim is reinstated you would have to remand to the trial court we think she made appropriate findings probably doesn't have to do anything else but either result obviously will get us rather than a three hundred negligent surely but it's a different species of tort it arises in situations like this where there is a special relationship between the parties where one party has special expertise and because of that special expertise has a duty to act i would refer you almost why we would treat it as something that duplicative of the contract your cases including a decision by judge carter have explicitly said over and over again that unlike negligence lights to do that but no that's why it's not sure how how a failure to disclose that they didn't perform the contract is a separate toward the contract did and that's exactly why the negligent was reputation claim lies your honor and i  would refer you to the j p morgan case from the first department or the for the first department said on a case against a broker you have a contract just like this to the client that the contract that the negligence claims were dismissed as  contract but that the negligent misrepresentation claims could not be dismissed because they arise out of a special duty between in that case between the broker and the customer i would say it's incredibly close like actuaries brokers have to get tests they have to get licensed there's no recognized claim for broker malpractise in the state of new york and that's exactly the situation of the actuaries here thank you issues that appellant's council has focused on you know we have as submitted a conditional cross appeal and we'll stand on our papers with respect to those issues because i don't think you need to get there i think this is  case where judge sanna's applied well established law to the facts of the case and i think her determination of the facts as they deal with the consequential damages issues are important because it was a four day trial and as your honour's are aware there was no integrated contract that judge santa spam to exist was on the basis of emails communications and conversations so i think she's entitled to substantial deference with respect to her decision that these damages the alleged consequential damages were in the contemplation of the parties at the time of contract were not that they were not right correct your adversaries just explain that one of the critical features of the calculations your client did over the years was to take account of the fact that they only had one co pay and that the failure to do so here was what caused these damages and so there was there was no judgement or anything else about whether  you should include included what you could have foreseen how could your client not have her seen if you didn't if you didn't treat these co pay calculations correctly it was going to be a significant loss to the i think there's a good question your honor and the issue is in connection with consequential damages whether the injury is foreseeable but that's not enough as the cases ma clear you have to have the contemplation that the liability for those damages was in the minds of the parties at the time the contract was entered into the canford court of the parties in fact they took over the language used in can for did the parties contemplate that the defendant would bear the heavy responsibility and it can't hurt it was  for damages over a twenty year period but that's the language that's picked up by ashland in ninety three and then again by economy another court of appeals case in two thousand and eight so the key question that judge sanest correctly focused on was what liability the defendant optum inside may fairly be said to have assumed consciously at the time the contract w and there was no evidence presented that optum inside or that the plaintiff considered that optum would be responsible for consequential damages this is one of those cases where it's a service provider providing services and the damages incurred are one step removed they're based on collateral business relationships they're not direct damages i take issue with my colleague about saying optum had complete control over the bid process judge sanest made clear in her decision final approval with respect to the bit process rested with m v p the appellate likewise setting of premiums final decisions as to the premiums that were going to be offered to the insureds rested with and b p the appellant and so the damages were incurred by virtue of those third party contemplated there is the two thousand and three master agreement here which did provide that neither party would be responsible for consequential damages that was the exact language there and the district court did not think that it was relevant here but let me ask you whether it is relevant and if so which way it cuts i think it is relevant i think it was excluded for purposes of our claim that that contract applied in there was a consequential damages limitation that should have been applied contractually operate the other way that given that it doesn't govern the dealings here and you have no exclusion of the consequential damages that in the absence of this kind of an express exclusion the parties would have contemplated that it does apply i don't think so your honor and this is why the parties have had a relationship and on a year to year basis each year entering into an agreement that was to provide actuarial services not insuring profit these are be the the plans after they've been sold just to provide actuarial services they were provided each year there was an s o w a louis prepared an s o w that incorporated by reference the master services agreement that includes of course the consequential damages limitation that's just evidence that the parties intended that some reason it never got signed but the parties contemplation was the same as it has always been we know the rate at which your client was to be paid under the two thousand and three master agreement and i ask this because i'm wondering if there's any difference in the payment amounts of payment obligations because sometimes that would reflect a different understanding the party that's going to assume the risk of the damages may want to pay more or less depending on that is there anything in the record on that there's not trying to because the two thousand and three master agreement was a framework agreement for a bundle of services that we would be provided so they didn't set out a specific dollar amount but the s o w did he set out the rates that were to be applied and in this case as in prior years those rates were charged and paid consistent with past practice and there was evidence on the record at the trial below that questions were asked about whether this was a loss share arrangement had that ever been discussed clear answer was no this was not a loss share arrangement there was testimony on the record about prior experience as to whether there had been profits or losses in the past and indeed there had been profits in the past greater than anticipated profits based on the actuarial bid that had been submitted optima never shared in those profits there was never that type of discussion or contemplation and the disparity as judge i see my time is coming to a close the disparity between the contract price of three hundred thirty thousand dollars and three hundred twenty thousand dollars and the liability that the potential liability of twelve million is so disparate that it also is an indication that the parties didn't contemplate that that liability would  and the only thing we've heard different today were that we've heard virtually the same thing is that didn't do the cut didn't perform the services properly and didn't tell us  about a new change that's all encompassed by what was argued to be and what was alleged to be a contractual obligation the performance of actually all services in a non negligent fashion consistent with the actuarial standards of practice so there is no difference between what is being alleged is a myth negligent misrepresentation and as breach of contract and for that reason  a decision should be dismissed should be affirmed rather on that issue as well so thank you first apartment the site there are seventy eight eighty second five sixty two exactly on all fours with this case the only difference is there was a broker and here it's an actuary going back going out to the consequential damages we certainly agree with the other side of the party specifically contemplate that they are they would be breaching party would be liable for particular damage then consequential damages can arise but that's not the whole test that's one way consequential damage if what you're saying is the test and just the mere foreseeability of the damages enough you'd never you wouldn't need to be in agreement no there has to be reasonable certainty they have to be calculated and it has to be in a context where in the particular contractual relationship it's not like the crankshaft case in the crankshaft case from last call the crane broke you don't know what the damages were going to be because maybe you had a spare crank maybe you had other ways to fix it then that's actually that's a less liberal standard than the standard today but we even meet that standard we knew anyone in this contract knew that if the contract was breached and the services were negligent performed the damages would be the loss of revenue under the  it's we're really dealing with almost who should have made that clear to whom and you theories this two thousand and three master agreement which suggests that what the parties contemplated was that there would not be  responsibility for consequential damages one to the other everybody would bear it themselves in the absence of anything to the contrary why should we assume that it was foreseeable that they would be liable for damages i actually think with respect to the two thousand and three consequential damages provision and that contract cuts our way what it meant is that the parties understood that under this relationship this contractual relationship there were going to be consequential damages and the district court held findings that my friend agree should be deferred to that that contract did not apply here there was no writing between the parties in which that contract applied and what it shows actually is the opposite the optimum knew that if there was a breach of their services the consequential damages what happened and that's exactly what happened here the burden on this issue the trial right you had to show that  they that it was foreseeable or that they had agreed to and we not only did we show up at the district court held in her findings that it was directly caused by the damage the goal was different from whether it was but she didn't say she didn't this or focusing it wasn't for seeable what she said is that the parties didn't contemplate that we would be liable that we would be liable if there was liability under the contract that's not the requirement i would refer your honour's language to do we need to sounds for her to make that determination or well that's one thing you could do i think if you find the appropriate reasonable objectivity test you don't need to do that i think the findings are there we manned would certainly be appropriate and  particular circumstances of the contract known by the parties should be considered if my friend's rule is the rule that the language and comfort too would be completely superfluous purplish i want to focus you on different language and that's from the new york court of appeals in bio economy yes the standard they say there is that look to the nature purpose of particular circumstances of the contract as well as what liability the parties the defendant fairly may be supposed to have assumed consciously that's one or two of why did the plaintiffs reasonably just have supposed that it was assumed so that means that what i understand the second prong here assumption was the length of the time of the contract the fact that this decision operating since two thousand and six the fact that the other party had complete control over all the actuarial calculations that it was hands off to our party as the discour e we could do nothing to change them the fact that they certified to medicare that their calculations were incorrect and the fact that we're not talking about some kind of an actual our prediction here we're talking about an on off switch they made just a very grave very serious factual error and not taking into account the cautionary gondar contracts and the services you pay a flat contract feared are you paying an hourly rate you know that's the problem we paid three hundred thousand dollars that's all we got back but my point is that if a party was assuming this responsibility you would expect that to result in some kind of an enhancement and feed it to account for the risk that they were assuming and i'm not sure that it was any evidence put before the district court that says look you know to just add up numbers people would pay x but if you're going to assume that they're liable given the kind of liability that could arise here the premium would be why and we paid why rather it is only necessary that loss from a breach was foreseeable and probable and what i would respectfully submit is in a contract like this where one party has absolute unilateral mathematical control over the profits and amounts charged by the other party if there are not consequential damages under a contract like that the kind of exclusive relationship that judge jacobs talked about in the traveller's case and i want more especially some in your honour's that no contract could anyone ever recover consequential damages and we know that that's not the common law of the state of new york thank you thank you thank you both will reserve decision