so our first case for argument nationwide nurses here said mr jorgensen good morning may please the court my name is christian jorgenson i represent the plaintiff appellant nationwide advantage mortgage company as the court is aware of this matter is before you cross motions for summary judgment the eastern district of wisconsin having found in favor of the defendant jessup mortgage mortgage company the parties in this dispute are sophisticated business entities they execute well i don't know nationwide doesn't sound sophisticated in the you pay bills without knowing what they are they executed one thirteen page contract in october paid bills right you paid these bills without knowing what they were you know what they were you would've paid your honor there were respectful is that true seventeen thousand trees over a period of four yes in your pain bills why are you paying these bills without food find out what they are now we took a sampling of to find out what they were they were coded entries you're on i don't understand paying bills with in october of two thousand and six they entered into one contract that was thirteen pages long that govern their entire business relationship it was entitle to correspondent under purchase agreement and it was governed by iowa law the purpose of the contract was to establish the framework by which the g s up would originate mortgage loans conforming to fannie mae standards and nationwide would purchase and ultimately sell those loans on the secondary loan market there was no time limit do that because we didn't know that because you didn't know i know you're paying bills with that and without knowing what they're for and when and whether whether the you actually owe them money and you said you for i would respectfully disgrace was nothing i would respectfully disagree in the extent that sophisticated and fees very very large entities with with billing that is voluminous and sent by  mae another institution that that sends it in such a way as to make it very difficult to look at large entities have lots of them lawyers have lots of electronic equipment they ought to be able to keep track of their bills and know what they're paying the bills for rather than losing hundreds of thousands of dollars your honor even if even if that got missed there was never a situation before that where there were such a gross of buse of a sponsorship before g s up so actually charging nationwide with having found out and discovering their wrongdoing had of their wrongdoing is an abuse of discretion by the district court so placing the burden of our discovery before the burden stuff not having actually wrongfully used r d o or our incorrect well i don't understand what's their wrong doing there wrong doing is continuously selecting the sponsorship of nationwide for the dio after the business relationship was over and after they were terminated that was wrongful you mean after the stop sign mortgage from j s well that was a result of us terminating the contract with g s f this all information your honor no i answered my question and what is your choice i asked you the g s if did you tell g s g s f couldn't use nationwide as a sponsor didn't use that language in its terminations letter know why i don't know it wasn't asked by g s f in the thirty six deposition i don't get that you wanted to terminate the sponsorship but you didn't tell him your honor the way this was looked at by nationwide it had never been in abuse there had never been an abuse of a sponsorship to the magnitude of g s you've never had as big an abuse correct and that implies you had little use when we performed the audit which is in our materials there was two other uses of the hundred and sixty correspondent lenders that this program was used when the audit was completed with fannie mae's help there was three correspondent lenders who were terminated that had used the d o system after they were terminated only three of that hundred sixty now they used it to the tune of a three for no we did not judge when that because it would have been not worth our while because the uses were so small and then they stopped using that after of course you already use it do i recall correctly your asking for that as a result of your decision not to buy mortgages from them you were going to permit them to use you as a sponsor we told them that they could not use our prepared terry information any longer that's in writing and they received it with determination of the kind what's the proprietary information are sponsorship on our sponsorship number sponsorship doesn't sound like proprietary information ok well judge if we look at paragraph nine of the contract it's written in such a broad language and that's just two of of the contract paragraphs that the breach if we look at paragraph nine and it says proprietary information showing a loo limited to way under right oh i'm sorry it's if you take a look at the opening three page twenty six judge i set that forth otherwise in our materials it's ok ok i said it for it's paragraph nine of the contract proprietary information shown clude but shall not be limited to underwriting processes and guidelines and just generally just generally systems processes procedures or practices now this is written in the broadest of language that we can now if that doesn't catch it as proprietary information judge then paragraph twelve certainly does encompass it because that's our in clause and that's our failsafe now paragraph twelve twelves paragraph twelve if you flip the page twenty eight of the opening brief your honour's it says g s f is obligated to identify and hold harmless from paragraphs nine and twelve expressly survive termination of the agreement under six and the program seventeen d expressly now as i cited in westlake investments b m l p management terms such as arising out of and correct judge they had to go on a computer and on the automated system manually click on the sponsorship of nationwide and they had to do this fourteen over fourteen thousand times for four years after they were terminated now they admit having been term and knowing they were terminated they admit having knowing there was no more business relationship they had mitt not asking our permission afterwards to continue to use it but now that you actually did tell them that you wouldn't sponsor them anymore that's proprietary information we told them in terminations letter which you did say spawn you didn't mention sponsor no nor do we have to judge how biggest nationwide of the mortgage nationwide did not that didn't i'd say don't sponsor any more which would be so simple to words but the company didn't for whatever cut reason the company didn't have to but at the end of the day your honor it's breach of a kind of wouldn't have this case if he'd said sponsor we probably wouldn't have a thousand of the of cases if within hindsight if they would have done something like this and i agree with you judge that that would have made things a lot simpler and we would not be before you today had they done i completely agree with that statement don't but they don't have to completely come out and say stop using our sponsorship they darn well should have known when the relationship is over you don't use the sponsorship that's common sense besides that but of course the contract talks about proprietary information and indemnity judge what's the private area about the word sponsor what could be more comparable terry other than your name i mean if you don't own your the it wasn't you're correct your honor it wasn't negotiated at the time of the original contract became up later why it didn't come up until later or why it nationwide did not offer its sponsorship until later or offer its underwriting ability i don't know for sure my i suspect is they withheld the underwriting ability of g s off until it started its relationship with g s f now that i only know from knowing my client so well that's not in evidence that would be my understanding is they were withholding that and it's also my understanding is when you write a contract in broad language with both of these sets of of paragraphs written this way so that it could involve we specifically so that you could incorporate terms in circumstances not specifically enumerated there and like these two paragraphs are written so that you know within a sponsor her not being a sponsor is not proprietary i respectfully disagree judge because under that under that definition in the contract that was written that's before your honor's it falls under there and even if it doesn't judge even if it doesn't it certainly f it proprietary information would these you know trade secrets that sort of thing this is just it this is just a a relationship between two companies one is a sponsor the  others sponsored so i don't see how it proprietary information causing braces sponsorship then we don't even need to get hung up on it and any more other than that we spec respectfully disagree and we move to paragraph twelve which is the general indemnity clause and there simply is no escape from that i mean that's our catch up i mean that's an action if they had to go on the computer screen and click and manually click there nationwide and grab it even though they knew they didn't have a relationship with them anymore but clearly that's an action and it's that clear any action or omission of g s up and they're liable to a sport and that question your honor i'm sorry you know there's stop selling mortgages to nationwide they like still having the sponsorship so they can get the deal so they continuously spons would figure well you know maybe nationwide doesn't want this to cancel us but then seventy would be the simplest thing in the world to say look gee s f now that you're no longer years we're going to sponsor you we're not we're not getting anything for that but that presupposes that they knew they were wrongfully using it and now fannie mae had to tap them on the shoulder and say by the way we just uncovered this by the way these people are wrongfully using you as a sponsor and we notice they haven't sold you mortgage loans in four years that that's what triggered it i mean all of the seven or eight different uncontroverted reasons why neither we nor fannie mae discovered their own authorized uses i mean that's why we didn't have them on the shoulder as soon as we did we have courts told them stop using our sponsorship and we remove ourselves from the website i mean there are only excuses well i mean you were on the website so we used you we had other sponsors that we could have used but well we didn't use them ok well thank you mr jordan's and your honour's can i good morning elizabeth neary on behalf of g s at mortgage corp i want to first address a comment now i have big nationwide i don't know their dollar volume but i know that you can't turn on the television without hearing their name i know that are an extremely large company the mortgage division is just one division of them but i don't know their their dollar value i want to start out by commenting on a comment made during the plaintiff counsel's presentation he ended by saying that they had other sponsors but they just didn't use them and he makes a comment in his reply brief on four separate occasions there is not one shred of evidence in the record on this case your honor that supports that statement when it's made in the in the reply brief there's no citation to the record and what it's and the reason there is no citation is because there is nothing in the record that says that she said only use nationwide it's simply not of a true statement i wanted to comment on that i also wanted to comment on the use not only in the presentation but also in the briefs of this being a wrongful use by self and there's language throughout throughout the briefs of it being wrongfully of some supposition that names that she has said must have been angry about terminating that this number to access the system they input information about a perspective by our borrower and then they have to choose a sponsor during this time period there were they had eight to twelve sponsors to choose from and the testimony  during the depositions disclosed that that wasn't a name that was a number that was chosen until nationwide withdrew its number from that system they did have permission to use it there was nothing surreptitious nothing sneaky about this and they had the commission until in fact it was withdrawn and they didn't have to ask additional permission once the contract was terminated what about to be the other sponsors does it pay them or does unless that company's sold mortgages to nationwide and that makes some some logical sense your are however gee assaf was unaware that those sponsors were being charged for that service it was completely unaware and that was the only evidence that was before the district court needed no nationwide had to pay for that in may that's correct they didn't and the reason they didn't is number one nationwide never told them nor did any other sponsor and number two when they were paying for these reports they weren't getting them for free they paid fifteen dollars every time they they received a report they paid and throughout this entire period they paid what they were required to pay each and every time they used it it made no sense to them your position because of some they should have to pay the remaining twenty plus dollars that's was notice to them that you were doing i mean fifteen dollars to cover the whole fleet right apparently not and again that was not known to my client until after nationwide made them aware and when they when they filed this lawsuit they did not know that but it but it  g s that was paying fifteen dollars yes i just found a huge they were paying fifteen dollars for each and every report and then n s f and then their nationwide page twenty dollars yes and to follow up on your question your honor if i'm understanding it correctly nationwide didn't know because they received statements every single month from fannie mae and those statements not only identified the amount that they that they were that they owed excuse me but the identify the user and they every month they claimed in their depositions that they reviewed those bills they put their stamp of approval on them for payment and they paid them so they didn't didn't didn't damages in this case eventually they did do it but they didn't do it as they went along and they're now trying to hold shia separate sponsible for their own lack of due diligence and lack of proper monitoring of their of their bills really this suit is about nationwide attempting to seek compensation for its own failures for its failure to include a single word about the deal in the contract which has been appropriately described as the  the only witness grimmy between the parties in the entire business relationship between the parties there's not a single word in the contract that talks about the deal they failed to advice she has self when the t contract was terminated as your honor has appropriately pointed out they failed to advise and don't use the d o anymore because we have to pay they never told them that they had to pay they'd fail to advice g s f excuse me they failed to remove their f excuse me the the deal contingent upon sale of mortgage loans to fannie mae keep in mind your honor that the contract itself doesn't require g s have to sell one single loan to nationwide nor does it require nationwide to accept or purchase one single offered loan it was the framework for the way in which they could sell but it doesn't require the sale  nationwide at all and there that the most other i think glaring failure is that failure to adequately review its monthly invoices and it's a big company like nationwide hers small know it's a small company i don't know the an employee's they have a local or their main office in brookfield wisconsin i think they have less than thirty employees if i'm not mistaken they do have branches and those branches are one two person offices throughout the united states ok thank you thank you with regard to the breach of contract claim nationwide has yet to describe to us how a sponsorship constitutes proprietary information yes their name is proprietary to them but it's not proprietary information it's a name as i indicated everybody in this in this country knows about and the number is not proprietary it's a number that was given to them by fannie mae in order to allow mortgage brokers to access the system and even to expand the examination beyond what is written in the contract i would say is is is an incorrect thing there are no ambiguity ambiguities in this contract it's an integrated contract which says in writing this is the end our entire agreement in any changes that would be made to that contract would need to be in writing so they but yet  they urge the district court in order to score to expand its interpretation of that contract and that would be an incorrect to do all the defined term proprietary information which is contained in the contract comes clause this means that she has step would have to indemnify nationwide presumably from a third party action based upon acts acts that were performed by a cell and if the examples given in of law things that third parties might want to sue nationwide for in nationwide would then be able to expect indemnification by t s f it has nothing to do you can't cherry pick words out of a paragraph and turn them into something they're not it doesn't say that g s f is responsible for damages to nationwide for anything it does regardless of whether it's related to this agreement or not and i think it's been well established that use of the d o is not related to this agreement then we look at the end just enrichment claimed by as i've indicated already and i think we've discussed this already to some extent the court first of all the court's decision  this matter is to be given deferential treatment because it's a it's a decision in equity and the court made some significant findings that are worthy of that differential treatment such as g f g s f was not aware that the reports it paid for also had in the company cost to sponsor it did pay for every report it received it never saw nationwide invoices jeus up never saw nationwide in forces or fannie mae pricing schedules there were testimony by the officers of the corporation that they were shocked to find a seller because it didn't make sense to them that somebody else would be paying for reports that only they would see it is completely within reason that reasonable person would come to that same conclusion it's also the west found by the district court and is an contradicted that and it and that nationwide was provided information regarding the charges any on a monthly basis and i won't believe at that point further other than to say even their vice president said at her deposition shame on us for nec and not conducting an audit soon refused to sneery to the choice of law  i have some concerns about district court's decision to group this under under wisconsin law parties agreed it would be iowa iowa has a very  broad interpretation of what just wrote yes i'd be happy to address that your honor first of all the language in the contract which was written by nationwide was very narrow when it came to the choice of law provision it's stated that i have one last shall apply to this agreement it didn't say this agreement in anything related there too or this agreement and anything dealing with the business broader business relationship it said this agreement and that was the language that nationwide chose wanted well or they're suing on this agreement though i think well there are to the arsenal in on this agreement and with regard to the breach of contract claim that district court in wisconsin did apply iowa case in iowa in fact the palmer versus eunice's case states that unjust enrichment is indeed not a contractual claim and so it as a result of that the court felt that it was  was not by owned by the choice of law provision in the contract because the he specifically found that this contract and apply furthermore the court determined that and i choice of excuse me with regard vs wisconsin law they were substantially similar and when and when the laws are substantially similar between the two states the form state law applies and that's why the he used wisconsin law the complaint by nationwide is that when you list see elements listed in the case law under iowa law it doesn't state that you have to have knowledge or an appreciation aspersions has to whether in that that's legitimate but i have two comments to make on that one is in their statement of facts that they assert they had eight to twelve sponsors so that's a fact that they assert there was no nothing in the record to indicate that they did not and with regard to the g s out that she a step had eight to twelve other sponsors that they could use and didn't use you know as i indicated before this assertion that only nationwide was chosen is pulled out of out of thin air there is nothing to the record to to substantiate that and further that the statement that nationwide could not excuse me g s f could not identify those sponsors is also a false statement they were never asked that question the reference to the record is a question by by counsel which is preface by saying even though you can identify him can you answer this question in my client answer that question they were never asked to identify those sponsors thank you just one question why is fannie mae charge both the sponsor and the the recipient of the two you know i don't have it and the answer from the panny me i my best answer would be because they can and that it's a money making venture for fannie mae because honestly the sponsors are not receiving the report so that's why it was a shock to my client that in fact the sponsors were being charged is fannie mae private or it's a government agency it's my understanding ok well think thank goodness near to you mr jordan wisconsin includes an element that clearly is not part of i was law they did not perform a analysis for choice of law and then they looked at no loss see what's the unjust enrichment what i can't figure out what you did that you think was wrong what jessup did that was wrong is they continue to use our sponsorship and have us incur the charge for their and and it could have protected himself so easily just by cancelling the sponsorship your honor hindsight is twenty twenty but the butt of the contract as it's written by the  say anything about their mansion sponsorship no it doesn't your honor and it doesn't have to it's so stupid but yet we're i don't you say no sponsorship not sponsoring anybody who doesn't sell mortgages to us it's so simple i'm sure in the future that they will show no i'm not sure at all often because they don't seem to show any sense in this case why  a sensible future well your honor that interacting this one in such broad terms i mean it would have a it would have a detrimental fact creating master agreements in the future commercial master agreements if we can't rely on broad terms like the and i agree with you i just said i agree with that wholeheartedly because i don't have contrary i need out of both sides your mouth first you say that the contract will be with the with the suppliers of mortgages will be changed to make no sponsorship if you're not selling mortgages patients like right if i have anything to do with you know because if you start specified things like sponsorship you lose the value of broad terms to make up your mind about both are valid points judge both are valid points and if you're going to have spot that nationwide is going to have sponsorship in its next contract and it's not going to have understand it's a big company and they all make mistakes judge but the results business really should might like this actually well and that's what and if that's the case then we have the alternative unjust enrichment your honor and it's not going to just you screwed up this can't be laid at the house nationwide completely it isn't just once a business relationship is over it's over and it's common sense that you could not continue to use the benefits of a relationship once it's over you know i had i over the course of this of a proceeding with this had the the benefit of enjoying some analogies around it in closing here for from other colleagues kind of in a reductio ad absurdum i think that one question it's terminated it's terminated forever the contract was terminated we could no longer purchase loans from g s f i mean could no longer it we could no longer purchase couldn't make a new contract if we made a new contract  mortgages to you well and answer specifically to this to that question one i know for a fact that wasn't the case because they were dissatisfied with g s up and two it wouldn't have incurred this much in cos if that's in fact what they were doing and then ended up would increase the volume of its lungs the that sale of mortgages to nationwide and it encouraged by the fact that nationwide was remaining a