good afternoon my name is lou sharp and i represent the talent union jewel you in exchange for a total of four point five million dollars in funding from a number of investors  arnold agreed to make a film the door and to provide recruitment of the investment along with a percentage of any proceeds from the film to the investors mr arnold alleged that he never got the money know he thought make the film well did that's not what the district court ruled in saying about him having to make the film well he he still has that obligation to the original investors right whether it's actually different issue well my understanding it's not going to his pocket well my understanding though is that's what's happened so he already got two million dollars of that from another from the state court case right and that was offset yes that's correct but then here the court awarded him the remainder as well as attorneys fees and interest so but the fact is he or i and some as i understand he made the movie it was the change the name and it made the movie with a different set of investors so that's what that's what ultimately happened became the called the shadow people as i understand from a field up on i m d b on the internet but so in this situation what he's asked the court and what the court ruled is just to give him the money so it would be all of the big game for all of the four and a half million is so what is the point you're making now that the district court erred you know warding any money and all are rewarded too much or a class to hi wrong way or i think the key point that i'm trying to make is that even if one accepts the default the matter in which the court calculated damages was incorrect there was simply no basis for that well if there were the profits but that's what he'd have to show he wouldn't be entitled to just get the four and a half million dollars and like said the court's order below didn't say anything about oh now yes to go make the movie or he has to give the investors back their money or y give them receipts from the movie and i said at this point i don't even think that's possible i mean it wasn't the court's award essential equitable in nature in the sense that the action was brought for breach of contract but the but mr arnold returned money to mister it was you and his daughters sophia that they wrongfully converted to her uses and the court ordered that money to be returned as part and parcel of the judgment cracked well the allegations and the allegations were a bit muddled but one of certainly one of the allegations was that there was actually a new contract and even even mr arnold alleged that that so initially the investors said we'll give you four and a half million dollars that was the allegation then later there was a dispute over missed somehow missed on spending some of the etc and then they went back and even mr arnold characterize it as a new agreement to give him only two million dollars so then we had the two million and one point seven million right that that had been placed in a dark all account at one point the two million mr arnold now has he got that through the state court action that's correct and that's it so he actually got that two million dollars already the one point seven million he alleges went somewhere  fee but in any event certainly what the court's decision was was a look court the district court looked at it as a breach of contract and he won the court talked about conversion did it in the context of breach of contract if we look at pages twenty three to twenty five of the excerpts of talking about the damages he suffered even under those even under torture a stored damages you're not entitled to more money than you would have ended up with essential and this is why get back to the lost profits issue or some other type it's not to simply like half of the award as it is attorney fees and interest that what nine or ten percent is that's correct yeah there's about i believe what so we're really arguing over about what one point seven to two million of the court's judgment well again i would argue that even with regard to the where the where they awarded the attorneys fees on the and what were placed i mean i apologize where they were the interest the two million dollars approximately with regard to that that was based off a breach of contract and again when they're saying a breach of contract it was the wrong number though that she's put that the district court was basing the the interest off so she didn't base any portion of the award on any of these other claims from a source of a conversion fraud you know and again in fact we look at the decision it's mixed she says well i could have maybe done it this way or that way but ultimately we're talking primarily breach of contract although she doesn't label some of that conversion but she says breach of the contract converting the money but that the evidence before this record show there didn't do anything that should have been doing if he really had a legitimate defense to the counter claims but well actually the district court found in it although it denied our motion for a leave from the default it did find that he had legitimate defenses but he kept firing his lawyers and wouldn't pay them and so their rights through in this litigation drug on for a couple three years i i'm only focusing on the issue you raised of did he have any type of meritorious defense in the district but actually sounds good but the problem is that he was the original plaintiff in the action and then he failed to prosecute so the district court is obviously familiar with the entire record of the litigation and i think that's all fair game for us to look at on appeal when we try to decide whether your client was to privatise due process well but again i go back to the damages any time when when the court was calculating that and we're looking at even if we talk about conversion as you f that money the whole four and a half million one point to any portion of it was never mr arnold's or dark calls just to do with as he pleased that was never an in in his possession for that purpose that even when it was some of that money was in a bank account belonging to him that was not that was there pursuant to some type of agreement it wasn't just there ok mr arnold can keep this and do whatever he wants with it so that's why i believe the court characterized it more focusing on the breach of contract issue because there was a fight over ok well you know was there was there a new contract what happened with that so i mean it looked to me like what happened was this journal originally said i need four and a half million to make this movie the investor said ok we'll give you a four and a half million but then things began going awry and they didn't come up with the full four and a half million but they came up with three and change and then there i still understand there was this japanese investor who had another hundred eight hundred thousand but i'm not sure where that all fits into the the allegation on mac and again you know i was but the allegation was that that eight or nine hundred thousand went to sophia you you know mr hughes daughter right and that mr arnold felt he was client basically in essence unilaterally reduced the amount of money that the investors were willing to part with by two million dollars but in mr arnold gave some of that money to i guess what  with regard to the other again mr arnold himself alleged that there was a new deal and he testified in the state court action this is in the excerpts in fact as well that he believed it was a new deal when they went from three point whatever it was four  five down to that down to two so certainly under that he's then he got his whole two million but like i said regardless when we look at this he's not into the whole four and a half million he never was going to end up with four and a half million once he made his movie i mean i guess maybe if you could prove that would have been his last profits but short of that well almost all of us as i understand it from what you said earlier he was forced to find other investors in essence he with the word mitigated his damages by finding other investors to make up the difference well and in fact if that's what happened i said i i just know what we saw what i can see on the internet that the movie was made a tighter but then exactly right though he should if he mitigated his damages that should be part of that even if we accept the default for the sake of argument that doesn't make him now entitled to the four point five million anything it should offset that you want to save some time for rebuttal so we hear from  much appreciated the last time i was out here i couldn't do that and i missed both the vet school and the law school graduation so i appreciate well as a dog owner we need i can tell you we need a lie to hear that she default and we don't we believe the default was absolutely appropriate the judge went to great lengths to apply the appropriate law on the devolved matter there was simply no participation by mr yoo in the lower court he would hire and fire lawyers he's come up with this theory now that the lawyers he couldn't communicate with the lawyers that they found the case without his permission that they did all these things and there is not an iota of evidence in the record to support that look to the calculation of damages so to fling point five plus in pointed out your honor there were several theories which he she upheld breach of contract product conversion and promissory estoppel but i think they all led to the same damages which was the four point five million which was the original agreement so i think that they each of those to go into that the easiest one to see is to breach of contract for the pour point five million dollars and that is a liquidated amount and there's no need for a hearing on that and i want i want to address one issue which i think is extremely important here none of these issues will range to the district judge none of the arguments we're we're seeing here today were raised with the district court counsel got into the case intra line the district court gave her opinion that liquidated the damages and came up with the damage number in march of the following year the only motion filed with the district court was the main motion to set aside the entry of default there was never a brief filed never anything given to the district court to give the district court the benefit of these arguments that are now being advanced today and like why did you doing have pointed to you brief  we raised on the on the hearing issue we specifically raised the issue that they never asked for a hearing in the in the core below and they didn't so that that argued damages to the district court in the context that he had a defense when he was trying to get the entry of the faults set aside but he never filed a brief even though there was a brief pending when he got in the case he never addressed a case that brief never asked for an opportunity to file a response and let's go to the issue he rings about well there's got to be some county just put this money in this pocket when this case was filed there was no movie we don't know what the tan this case was being pled we don't know what the outcome is going to be it may well be that mr arnold would have to account to his investors as sumi would to his new investors but that was never raised a lot there was no pleading file below asking for an accounting they're asking for him to explain after the movie's made where the money went and that's because mr you didn't partizan pain in the pleadings he just took a walk just took a walk and and so now we're coming up today with this new theory that we have to account for this money and he could have pled that in the district court he could a litigator that in the district court and he never did and so we been shadowboxing with mr you for years  since two thousand and seven and we still own them and we still have these planes that we've done something wrong when all we tried to do was make a movie based upon a four a half million dollar promise and the idea that they came after some good lawyer in here come up with these new theories that's inappropriate on appeal the the core applying the the statutory attempt percent interest rate to the entire judgement right she she well she applied the can percent rate to two the three categories of damages that were found which is know how you can get everything under contract part of it seems to be fraud damages doesn't know so well you know because it was lost because of the misrepresentation that  has compensatory damages from you do two and a half million dollars ok and then and that's the difference between the four and a half and the one point nine million that he was that's the way you figure it but you know she could have gotten there a different way what i'm getting at is how did she classify that she she didn't really classify the damages that you and we put you can argue part of it was from and from contract and i don't but i don't believe she just has one lump sum of damages too and i have the two million five six one one four one point eight two equals four point five million less the a million nine that we got it's right one hundred percent on its face straight arithmetic and then so that's to two point five to maybe earth but sick but you allege you know several bases judgment then the court should accept that and basing it on justified either way i'm sorry i think and is can be just a fine either way and and the second point i want to make is this is not an issue that was raised to the district court this is new argument by counsel when he had an opportunity to do that and didn't do it does the panel have any other questions  this picture and it turned out that he was fraudulent we induced to enter into that agreement because the money he testified in his affidavit and went to  you for other purposes it was an investor issue at all so he was progs only induced to modify the original four and a half million dollar contract on the basis that he was told discretion the district court went to amazing you know links to deal with this issue on both the entry of the fault and on the judgment i mean her her opinions are extremely link the and i think it's quite difficult now to come in after the fact and say she abused her discretion when she was never given many of these arguments at the time and given her detailed findings i think the judgment should stand thank you counselor think you've got about three and a half minutes on rebuttal just very briefly again mr arnold and his company dark fault that he was only intitled to the benefit of the bargain that's all he was entitled to nothing more so we also you know what's he going to do with the money now we know the film's been made and i said there's nothing said the district court order about oh now he's got to get well you got to give money back to the investors and he collects it from mr you who you know so what's he going to what wasn't but that counsel says and that's how i read the record the representation was made to him by  your client that the investors had changed their mind and they didn't want to give them four and a half million to make the movie so he parted with a couple of million bucks that he gave back to them but instead of that money being returned to the investors that he doesn't the records show that she was acting answer father's agent throughout in the negotiation of the the original contract again i don't believe the record shows that i know there are allegations of that but like i said i mean dr arnold says in his  declaration and all of this goes back to the even again the damage is what he actually saw for the benefit of his party he got his two million dollars what happened that two million did he did he give any of that back to the investors that you know so the fact is under the that bargain he made he might have made some profit he might have made nothing when he finished the movie i don't know could have been a big hit could have been nothing at all but that's what he needed to show or the district court and he didn't the district court just said ok you can have whatever whatever investment money they were going to give you you're entitled to have that and you make this argument to the district court when you move to the default yes we're going to set aside the default we raised but a number of these damages arguments in fact it was a large part of our brief and it was the again the judge actually found in the district court opinion that although she denied our motion obviously since we're here she did find though that he did have meritorious defenses based on these damages issues but the problem was that he had not acted properly through the course of litigation or to timely assert but regardless even if the law is clear that in a situation where a default judgment even though we accept the allegations as true that is it's for everything except damages so with regard to damages he still had an obligation to prove that up whether by hearing or affidavit or whatever and he did not do that all he did was say i want my you know i was told i could get four and a half million dollars i want that money was all ok i think we have your argument with the panel if anything for you've got thank you for y you just argued is submitted and we are