have to find usual mistake that is both parties have to be mistaken and the evidence shows that chase did not make a mistake and in fact if you read through the judge's opinion he never identifies what the mistake was that chase made who made it and when they made it and the reason for that is that the the lawyer who was drafting the guarantee and she was not a drip on behalf of chase knowing drafting the guarantee but also drafting all of the other ancillary documents all the many guarantees and pledges and so on that were never supported the men she testified at the trial that she intended for the guarantee to the full recourse as to the trust that when she changed the when she added the trust to the guarantee and in the way that she had it she intended understood and intended that the that the chief recourse to the trust would be full recourse since that's what she said on the on the on the  stand judge go and find that testimony incredible he did not hear they found the testimony of two found two witnesses incredible mr shield and mr burgess both of whom were senior attorneys at dickinson right and neither whom was directly involved in either that there are there are eight drafts after she added the trust to the guarantee there are eight droughts those drafts were circulated as was the practice for all of the dockets redraft of the time they were circulated to the wires at the other side but if you look at them and i'm sure this chase team in this work out effort at that time and so they reviewed every one of the of those eight drafts and the first draft had all of the language relating to the to the trust in black letter now none of them have said to the singer nobody ever said the singer made a mistake and in fact though miss thompson could not recall in and it's no surprise that particular guarantee among all the many guarantees that have been drafted legal effect at once this case that this is a diversity case under michigan law bricked our role as a federal appellate court is to predict how the michigan supreme court would decide this case ok that right correct correct yes can to the michigan court of appeals decisions yes but we have to predict how the michigan supreme court would do so we look we having we look at their opinions we look at their philosophy we look at their approach to contract law to statutory interpretation and for contract law and i guess my question is in how do how do we do that how do we how does the philosophy and approach of this most conservative court some people have said it is the most conservative states supreme court in the nation as to statutory interpretation and contract interpretation i mean so much so there's a hole in the shit supreme court that in a statute is nevertheless given effect even if the statutory term is absurd it is it is in force as written that law is that ambiguous it absurd terms and statutes  forcible how does that approach impact this case for us to look at this case when we're doing it as a prediction of how this conservative court would rule i have always felt and since we first wants to be first talked to get litigated this issue years ago we looked at this issue and thought about it it's always been our belief looking at the michigan court law in general that there are very conservative approaches that they're very reluctant to tamper with or are men to reform and agreement that has been signed by both parties who are more counseled to fairly well by adequate by adequate lawyers and for whom and for whom there's there's there's no evidence is here that that there was actually there was actually a firm prior supportable isn't then our decision pretty much gone because reformation is an abuse of discretion i mean if we find that there was a mutual stake effect seems to me that the next question almost answers itself because that's how else could it be cured is there another thing that he could have done that makes what he did do at the end of his opinion an abuse of discretion or is the real question whether there was an actual legal minus in the law is the finding a mistake is a factual finding correct reviewed on a clearly erroneous standard not a dyno was but my a sufficient to support a legal conclusion that there was a neutral mistake but my question was if we disagree with you if you disagree with me then and then it seems to me there's another factual finding that has to be that there has to be clear evidence of prior agreement between the parties but look my point is at the throne for the moment that we wind up agreeing with judge call right now the question is remedy remedy here with reformation again it's my understanding that my question is very simple we get to that point or say well was the remedy appropriate every disagreed with you with everything else so i was talking about dancing or linda thompson and also roy gallagher the chief financial advisor for the for the bank at that time who so a manager of the young he also testified that the bank that the lenders were trying to detain everything that they could in these agreements to support that loan so there's there's no there's no there's no testimony no evidence that people at chase either missing or though the lawyers draft the documents or the bankers who are running the michigan supreme court majority would say no what did they say words mean what they say their textualists what is next i mean isn't that really the key here and judge cohen doesn't subscribe to that philosophy he is the intent side of it the fact he's criticized michigan supreme court for their for their approach he thinks it simplistic and it but anyway it is the law of the state of michigan and that's what he of but it isn't really the key here is the difference in philosophies i agree that's right that judge cohen when he talks he always talks about the intent of the parties are and he talks he's he looks at what they actually did and tries to discern the intent behind that and in michigan what you would even then you have to find neutral mistake if what they did was a mistake then that's as far as you get so i agree that it and i actually almost apologize for using the word we got that we get carried away in intent of the court below but what really outline only and it's signed by only one party mr winship that's not a prior agreement so unbowed the legs of reformation the facts simply do not support what judge co testimony if i recall correctly only does he only recites mused testimony about wanting to be certain that they've got the actual owner of the stock in regard it's a it's a book clearly defined effect by him and secondly she did say that originally and it had the situation basically was the trust was what the trust was never mentioned by mr windsor it's when the trust cited on trust was never mentioned until they're well into the drafting period and the lawyers representing mr winship said to dawn on the facts and you know there's this trust out there and it may own some of the assets that are being pledge them so that they were there were substantive changes in those in fact there were changes to the very sentence in which the trust was added an additional language was added in there to make the section three as we have it now that talked about the steps it would have to go through to to collect against mr winter and as we as we mention our briefs during the course of the drafting there was also initially none of the none of the pledge devotees would be allowed to borrow make any many could make any borrowings for the obvious borrowing power whistle was put into the guarantee into the pledges to allow those companies to prime the bank by thirty three million dollars in also another another thing was as you as you know very important in this was the ultimately the australian and south african entities which run through prevent several steps of several steps of ownership to prevent go back to the trust they were very important because they were operating functioning companies this the terms of the agreement are like a moving target very little are finally they finally execute it right and they'd they'd like to take the position you know the intent of the parties way in the beginning and all we're doing is writing down the terms and negotiation that's right there irrespective of testimony or conversations correct letters are extrinsic evidence of this is your position well the judge cohen said no your position is not in the draft well why that's there's just there's there's no suggestion anywhere in there that that it she lacked authority when for the most part judge come just once to ignore what she says in these pejorative she was only woman she's only a third year associate and so on the simple truth is this could have been fixed with a few words correct and sort of qualification in the guarantee limited to the extent that period and then we wouldn't be here good morning right johnny ending on behalf and the liturgy of living trust and like to pick up by addressing some of the questions that the the court has addressed to the full council first of all i want to talk about what the michigan supreme court has said because we don't need to predict what they will say they it many times and they have said it for many decades and that is that with respect to reformation ambiguity is not required in the language itself that we are not a state our state the intent of the parties is paramount but we're not talking here just about what the parties sydney agreements although we certainly are doing that we're also talking about what they did  in the period after the ban was executed and i'll turn to that but there are couple of other things that i think we need to touch on before you move on you look at the term sheet as evidence of what  it was before they knew the trust oh and some of these assets right because the term she doesn't even have the trust in it that's true so i mean that's a fact that came up later and of course the term sheet is just so it's a page and a half long  why you know your brief you kind of all the parties instead of this look at the term sheet well it continued after that and it's a moving process and you just conceded all the way up to the time they actually executed the terms of the the eighth amendment and what that point became a binding contract judge there's no question i conceded that it's a binding contract at the time they executed it and i and i i want to move past the term sheet because the courts analysis of what the parties intent was was not bound by the terms that he used as he was in some evidence but he also looked at a number of other things that include the commandment of which the guarantee was a part includes paragraph oh which is a record cited five twenty five three page eighteen four eighty five which recites all of the unlimited guarantees that are being provided in connection with this transaction the trust is not mentioned the guarantee itself in recital b recites the following that the guarantee is no recourse if your t is non recourse non recourse means that you do not have an unlimited guarantee but rather you have a limited year there is no financial statement secured from the trust in connection with this transaction if they are going on tor as the court pointed out limited guarantor of this transaction is found in the bank's file because they never asked for one and in fact as the court found there were no limitations on mr winter its ability to dissolve the trust during the course of the relationship with the bank which once again points to the fact that the trust in mr widget in the bank's eyes were treated is in the visible and the contemporaneous document executed at the time if a member was was executed there's a document in which is provided by mr widget that says that either he or the trust in the assets that are the subject of the pledge well that's kind of interesting because if you're the bank you want to know who owns what especially if you have an unlimited guarantor you know it was all of those contemporaneous signs point to the fact that the trust in mr widget were viewed as visible your position and that was in the context of a motion which the court denied an old rule was ambiguous and that's why we had the trial well but you know you didn't deviate from your position as to that it was unambiguous we never took a trial for a position that initially in denying our twelve motion that he thought it was clear that it least on the face of the language there's two different obligations being extraordinary circumstances to really right or wrong legal cases would not do does this case fit that situation when you have sophisticated parties multiple attorneys and you know review of everything else and you don't have a mistake of fact you have a mistake or alleged mistake that for what was put into a contract or not to do a contract does does this fit really of the picture of most of the cases were will exercise extraordinary equitable remedy of doing justice under the circumstances under the circumstances of instigated parties and all sorts of attorneys reviewing this absolutely judge it well i'll tell you why because you're my witness that the bank put on the stand was a lawyer and every lawyer that the judge had an opportunity to view the credibility of the judge found to be not he stated the only spot for its position is found in the strained testimony from the lawyers for the agent all of them essentially said that because there was never expressed intention that section three meant anything other than the plain language fact of trust was not included trust was unlimited this view which went unexpressed by the agent for years is now borne by the bar up and they have someone come back to that in just a moment in addition he found conclusions on the agent's position at page twenty eight the absence of any credible testimony excuse me the absence of any credible testimonial evidence from gross who negotiated the language of the amendment as to the that does not express the true intent of the proteas as a result of fraud mistake accident or surprise cops he's got versus growth real one mish which is a nine hundred forty two case again we have a long history of in our state but there are a number of  considerations that the court focused on that support reformation in this case first of all the post execution hound is treated extensively and i'm not going to focus on the memoranda that are replete in the credit file that all describe this as a limited guarantee i'm not going to focus on the memory of the have a section guarantees and make no mention of an unlimited guarantee of the trust and we're going to talk about that from what i like to talk about is what the lawyers for chase said to the bankruptcy court after these documents were executed they came into the bankruptcy court in an effort to get phones released to them as a secured party and represented to the court that their deficiency would not be covered by the collateral and would they say that or they said they had only a limited guarantee of fifty million dollars is peace truly believed that this was an unlimited guarantee it represented to the bankruptcy court that it is a fifty million dollar guarantee what it did it's may have about how much of a deficiency it had in order to get six million dollars that's f convinced that had it been sitting as a trier of fact it would have weighed the evidence differently you may conclude that you wouldn't perform this contract that's not the question before this panel question before this panel whether there was sufficient evidence to support the finding that judge cohen made it his opinion written after an eleven day trial looking at one hundred seventeen exhibits listening to the testimony of every person council said readers opinion he never said what the mutual mistake was the mutual mistake was this that at the time it was this was a non recourse guarantee that she did what she was told that she harbored in her own mind her belief that it made of nothing but a guarantee that she shared it neither with the lawyers that she worked with the client or anyone else so this is a case for reformation now i've got a minute to talk about another issue which is the issue that which we maintain is the the issue that i which judge  error was this we were barred from proving that the fifty million dollar guarantee would have been repaid by widget to contribution of outside operating assets of one hundred fifty million dollars in the form of south africa and australia which would have resulted in cancellation of a guarantee and how did they all happen the one day i contract which is an eight hundred million dollars contract which was an asset of the state not my testimony of the testimony of war for chase who admitted that it was an asset of the state it was so much an asset of the estate this hyundai contract that hyundai actually came into the bankruptcy court and asked for relief from its obligations to perform up to the this is not by the way my spin on this contract from occurring this was a major piece of business and the record below is very clear that had that major piece of business been secured by the company mr winch it would have contributed as outside assets with whether or not they'd exercise reasonable care connect with their in first one of their security rights we were given thorough depp's two hours each no document discussion discovery no what we pieced together was the information that was incidentally produced in connection with the unlimited guarantee exception of the case where the judge specifically rule we could not get discovery the limited liability portion of the case and what we came in and said we'll put in your dip financing and put you into seven if you pursue this opportunity it was exercising it legal right but a legal right in bad faith because its objective its objective was to scuttle this company in terms of its ability to have long term existence to force mr winter to place south african os truly inside the bankruptcy companies with one hundred fifty million dollars this was critical to reorganization and had it been allowed to go forward mr winthrop would have contributed the outside assets in this guarantee would have been cancelled time is expired other question has this case been through our mediation facilitate facilitate this case judge but it takes two so the answer is there's been there's been suggestions of doing that but it requires that both sides be willing to well in your view would it be matters here but it seems to me the only issue is whether or not touched on there is was a sufficient evidence jury basis particularly in light of his he knew that standard contrary to their view he cited carries but was that firing the not clearly erroneous and if you could just tell me why persuade me of th the credibility finding what can seem to me to be crucial well the credibility finding is crucial but it's not it doesn't stand alone because the contemporaneous evidence in which the guarantee itself is described is not all of the jet the documents that are generated by the bank in an environment where they're seeking to enforce the curity oath in front of a bakers to court and otherwise where there's no mention of an unlimited guarantee put live or one hundred mentions of early in a limited guarantee the representations to other judicial bodies where when it served chase's interest they described it as a limited fifty million dollars and not limited  these are these are all of the pieces that are part of it on a threat that point clearly in the direction of the inequity of enforcing a guarantee that would effectively destroy my client a seven hundred fifty million dollars judgment any sanctions against him under twenty eight u s c nine hundred twenty seven the answer is no he did not abuse his discretion as has been commented on the district court and lived with the case for many years made many rulings heard a lot misconduct on the part of mr burgess and mr burgess was neither unreasonable nor vexatious these are highlights and pages eight twelve of our brief we we gave a lot more elaboration secondly the facts as  case law on twenty eight u s c nine hundred twenty seven again we've really i think tried to elaborate and give the court a sense of what types of cases very high standards the district judge has to yes reach yes satisfied has been reached was not reached and therefore his decision should be up to all yes right decision it's a fair decision i know all the circumstances to single him out go against him elaborated that i'm not going to repeat or go through any of the cases here i think we've tried to give you an idea of here's the types of things in cases where sanctions have been awarded so i'm just going to conclude the motion for sanctions against mr burgess was properly den by the district court district court did not abuse its discretion in making that decision there's no reason whatsoever for this court to reverse order just to disturb the judge comes right thank you question i raised i mean first was the defendant's description of the statements made in the bankruptcy proceeding by lawyers representing the ba particularly with regard to the nature of this guarantee has the defendant accurately portrayed those statements and if so why aren't you judicially is stopped from now telling us something different that aren't you telling us something when and i think the only one that i the only thing with that i think he recalled that he talked about was larry nine hands statement to the court what larry was talking about was really one memo written a hundred times but the notion always was when when the bankruptcy lawyers and when the bankers were looking at the collateral that was available to guarantee they looked at the pledges because pledged collateral  this is like this is like a sentence this is of this isn't intended to be a thorough examination of all the rights of the of the parties under the guarantee it's just at the end of the day if you have to execute on the collateral what are you going to get when you've got a guarantee you got to guarantee you that the guarantee is there is and there's  unlimited for recourse guarantee of what the trust ons what you have is pledge you have you have a pledge of the assets and that pledge can be cancelled for fifty million bucks so the most conservative statement of what they could recover was fifty million dollars and that's what they always say that's what they always use and especially when mr ninan is coming to court and saying you know there's there's certain money that's being held and held in reserve you're not going to give it to us because you know we'd like to have it because we think there's going to be a deficiency at the end of the day and we add up the collateral that we actually have that we can that we can act against and collect on we're certain that we can get fifty million dollars from the pledge and south africa and australia that's what he said and that's as i say  it's have meaning but maybe why he said it yes what he intended what the bankruptcy court was told and heard well that you have to look at it in context the make of the question the question before the your collateral you're going to have a deficiency larry i had says yes we are and as counting down the counting down the collateral and saying this is what we can get from this and this is where you get from that i come to the pledge of the i come to the winter guarantee it secured by a pledge of pledges worth fifty million dollars i mean you have to understand that again he was this was in the context of argument the presentation to the court and everybody in that room understood the context and understood what the what the purpose of that testimony was in those circumstances worth and we have pledged collateral we know what that is and there's a fight this five year period where they were denied the ability to go back and look into whether chase made reasonable efforts collect on the collateral always business about how young die and all the other things that's what they want to look at they were denied the opportunity to look to check on reasonable efforts to liquidate the collateral the and all those all of our for it's all of our efforts to collect on the collateral made in the bankruptcy court that is every last bit of collateral was liquidated either by the debtor in possession or subsequently by the by the bankruptcy trustee all chase ever did was take the money that's all we ever did it and the story the marshall case which they said peevishly we made arguments in our brief which i'm sure you've read about why that why that doesn't say that the decisions that the bankruptcy court makes on core issues like the value of collateral decisions like that when it's a final decision it's it's race to the cot has to as to any other claim this raise on the same facts so they can't come since mr winter was always a party to bankruptcy here who have cases to be argued today so we must proceed but thank you very much we are going as we very much appreciate that the case will be submit