miss lawrence smith and i represent the plaintiff in a case below any appellate in this case national union fire insurance company pittsburgh national union was insurance carrier for a company by the name of trains montane products services and under a contingent business interruption policy of pay damages as a result of the event the subject of this case and as such it became subrogated to the rights of trans montana and steps into its use so for purposes of this appeal the rights and limit isn't a limitation is that apply to trans montane also applied it to national union the facts of this case is relatively simple trans montane had an exclusive were were from a with a basic fact you can certainly refer to them but why don't you move to your legal argument  the question for the court is the type of the damages that we're seeking or a cover the question is whether these are lost profits as it is that i just lost profits or are excluded oh yes there's an exclusion in contract price plus incidental consequential damages less expensive say so our contention that this is not a lost profit measure and in full support of that if you look at the seller's remedies this is a bar's r you look at the sellers of any under two point seven zero weight there's also a market value damage approach for the for the for the seller that's under section but if you look at section b it profits or but again with cement that these are two different elements in any given the reason we submitted to the us profits would be exclude in this case because it's difficult to calculate but market value in this case is easy to calculate and if you look at the contract itself under section eight it provides that the price which is the market in this case is going to be based on what they call the op that's oil price information service and that's on exhibit a the contract and the price though that exxon is going to sell it for to take the test l p g from point a to point b at point a they're going to sell provide the same amount of damage because if we cover we're not going to be able to go out and buy that excellent price we're going to have to go out on the market and buy it to market price which is our price and so  crops so if you take market value and subtracted from the lesser contract price it comes out with the same number as on the market value approach so that cynically i suggest the only reason that  circumstantial remedy so if what's the circumstance if if cover wouldn't give us any sort of remedy we're borrowing at the same price and so on and to say price what sort of limit is that if we you put the numbers to it it's the same limited his market value approach he just we didn't go out and cover because again this is this is a this is the appeal of a motion to dismiss there's no facts out there that will show that we could have gone out and cover that we could have gone out and actually even bought this and transported it to six month notice provision and there are provisions as to minimum requirements at seven thousand eleven thousand barrels a day there's a force was your clause in there  and in this case the force majeure clause is even not for the court's consideration because a court has to assume that it doesn't apply because it wasn't challenged there but the force majeure clause is what they asserted and they said  that that excuses their performance but it's even limited to instances that were beyond the reasonable control so if such a fire occurs and it wasn't beyond a reasonable control and they're not revenue and lost profit yes the last profit has elements of overhead innit so it has to look and see what the overhead for trans montane was involved or of trans montane suing exxon with their overhead that's involved in there as well too that's a more difficult accounting procedure to go through where the market value approach or cover easier to determine because you just look at the price that you paid on the market and you should tr so you take the opus number and you subtract from it the price that exxon was charging under the contract which is specified and the number you get when you do that calculation is called whoever whatever the amount is what do you think market value damage court justice grades us exact question right there at the end what is it called when you take the contract price that they were going to sell of that to the third party their revenue min us what they were going to buy it from us for the cost of their goods sold that is by definition gross profit your revenue less your cost of goods sold is gross profit up as the appellant set out in their brief as the definition of gross profits the applebee's position in this case is relatively simple you have to plead the facts which you will be required to prove in order to prevail on your cause of action in this case a breach of contract claim they simply have failed to plead to facts sufficient to prove that recovery under breach of contract case the contract clearly limits the recovery of lost profits whether those are called direct lost profits consequential loss profits or incidental loss profits is irrelevant it limits the recovery of lost profits the courts in texas have clearly upheld the limitations of remedies provisions and the apple ones don't cite to a single case that contradicts that proposition they cite to a number of cases where the courts are trying to factually determine whether or not a certain type of damages is limited in that case but none of those cases stand for the proposition that you cannot limit the recovery of certain damages in this case the recovery of all lost profits are limited next but they don't allege any facts to support a recovery under that you see supervision so simply throwing in the u c c provision does not satisfy their burden to allege facts that will support  action because the facts pled by the appellant do not support a cause of action the district court properly dismissed the case on a twelve b six motion and the court did that without prejudice which would allow the appellant to go in properly plead the facts that they could then try and prove to support a recoverable breach of contract claim they simply chose not to do that instead they chose to come here what's interesting is the appellant tries to say that simply because they have failed to account for general administrative expenses or overhead that somehow it takes their gross profit claim and turns it into market damages the fact that they have not taken the next step and deducted general administrative expenses from their gross profit to come up with net profit doesn't convert it from a lost profits cla it's still a lost profits claim and that's clear on its face interestingly the opponents cited you to the contract which doesn't establish the market price for the propane that they were supposed to buy and that's an exhibit  and they say the price that they were supposed to pay to us was the market price at the point of delivery for the month of delivery less some small discount ok so that's the market price not their contract for sale with a third party that contract doesn't necessarily reflect market price it includes transportation costs or a pipeline it may be for an extended period of time it may be a he we don't know that but what we do know is it's not a market price it's their contract with a third party for sale the market price is referenced in the contract if they had pled that the contract sets up the market price and our discount is the differential we wouldn't be here but that's not what they pled they pled for lost profits now they want to say that there under the u c c provision that says if the exclusive remedy fails that they can look to some other provisions of these d c first the contract does not provide for an exclusive remedy it doesn't provide for a remedy it's simply provides limitations on the types of damages that can be recovered so there is no exclusive remedy that can fail how do you determine market price at the time of the bridge well that are going to be laid as the plane is pointed out your honor the price for the the propane is the price of the average of the mean prices for propane as published in the oil price information service is o p s for amount of value and the propane for all publication dates for the month in which delivery is completed lest a product discount of point zero zero five zero per gallon so the contract itself sets the market price and then give their contractual price which is that small this count if anything that's what they're entitled to the market price as set forth by the contract less the discount which they want having to pay that would be inappropriate contract to sell that gas to a third party which includes transportation through a pipeline their contract for sale to a third party doesn't establish the market price for them as a buyer it establishes the market price for them at a seller at a terminal at a different location but it doesn't establish the market price for them as a buyer what establishes the market price for them or the buyer at our facility is the contract language that sets up the market price and then says but you're to pay a discount to market price to buy our product that would have been the market price as a buyer they'd given you a contract for sale for them as a seller so it be like a car dealership saying well i can buy cars for this price but then look at the retail price that i'm going to say itself because when i say well that's the market price that's not the market price for use a buyer that's the market price for you as a seller in the u c c provides that they're entitled to the market price at the place and time that they were to accept delivery and the contract sets that market price and gives them a discount so their damages if properly pled and the evidence supports that would be that market prices set forth in the contract less they are point zero zero five cent per gallon discount interestingly they also side to the u c c and acknowledge that the u c c itself does not even allow for the recovery of lost profits when you don't accept the goods or the goods are not delivered so even if the contract did not include a limitation on the recovery of lost profits the u c c does not even provide them that remedy because they didn't accept the goods so they can't recover lost profits whether it's they try and argue that we have not pled or demonstrated that they have an alternative remedy available to them and therefore this failure of an exclusive remedy applied that's not the way pleading is required if they were to establish that there was an exclusive remedy that failed and therefore they were entitled to some other remedy that's a burden on the plaintiffs to plead improve those facts and that set out of the mercedes benz case in that case the plaintiffs alleged enough facts and the defendant failed to specially accept to that remedy and the court then said that the defendant had waived that argument we in fact are making that argument were saying there pleading is deficient they haven't pled that an exclusive remedy has failed and therefore they're entitled to an alternative remedy set this case ultimately boils down to the damages that they pled to the facts that they have alleged and the facts that they have alleged is that their damages are the difference between the revenue they would have generated had they  tained the gas and sold it less the cost of those goods sold that they were going to purchase from us interestingly the case is very similar to the cherokee case which the appellant cite very similar set of circumstances the defense failed to deliver gas that the plaintiffs then said they were going to sell and make a profit and everybody including the appellant's agree that that is a lost profits case the court simply determined that in that case the lost profits that were limited were only consequential loss profits and the court determined that the lost profits that were lost were direct lost profits but they all still determined that they were lost profits that's exactly the damage model that the plaintiffs have put forth in this case loss of revenue because of a sales contract versus the cost of goods sold which again by definition is gross profit would you respond directly to what mr howard has said that what you're really trying to do here is to use the market price for you as a seller rather than the price for  difference in the market prices for what set forth in this contre which comes from the o p s minus the five cent discount that we've been told recovered does exactly what we're suing for that's the market value difference the yes yes and so what we've made is a half a cent a gallon taking it from point a to point b using our pipeline we get the discount and that's how we make our money so that's pure market recovery that is market value differential at a two point seven one three thank you or thank you mr smith your case is under submission