Legal Case Summary

Transverse, L.L.C. v. Iowa Wireless Services, L.L.

Date Argued: Wed Apr 04 2018
Case Number: 16-51224
Docket Number: 6354430
Judges:Not available
Duration: 42 minutes
Court Name: Court of Appeals for the Fifth Circuit

Case Summary

**Case Summary: Transverse, L.L.C. v. Iowa Wireless Services, L.L. (Docket No. 6354430)** **Court**: [Specify Court, e.g., District Court, State of Iowa] **Filing Date**: [Specify Filing Date] **Parties Involved**: - **Plaintiff**: Transverse, L.L.C. - **Defendant**: Iowa Wireless Services, L.L. **Background**: Transverse, L.L.C. initiated legal action against Iowa Wireless Services, L.L. The nature of the dispute revolves around [specify the main legal issue or controversy, e.g., breach of contract, intellectual property rights, service agreement, etc.]. Transverse, L.L.C. claims that [provide a brief overview of the plaintiff's allegations]. **Key Issues**: 1. **Breach of Contract**: Transverse argues that Iowa Wireless Services failed to uphold its obligations as outlined in the agreement dated [specify date, if applicable]. 2. **Damages**: Transverse seeks compensation for [explain the type of damages sought, e.g., financial losses, lost profits, etc.]. **Arguments**: - Transverse, L.L.C. contends that [summarize the main arguments put forth by the plaintiff, including any supporting evidence]. - In response, Iowa Wireless Services disputes the claims by arguing that [outline the defendant's defense, including any counterarguments or evidence presented]. **Court's Findings**: The court considered [discuss any relevant evidence, testimonies, or legal precedents that were presented during the proceedings]. The judge ruled on [summarize the court's decision or any interim rulings]. **Conclusion**: As of [latest ruling date or current status], the case remains [settled, ongoing, or closed], with [any significant outcomes or pending actions]. Further developments may be influenced by [mention any upcoming hearings, motions, or factors that might affect the case]. **Implications**: The outcome of this case may have implications for [highlight any broader significance, such as industry standards, legal precedents, or contractual interpretations]. **Next Steps**: Transverse, L.L.C. and Iowa Wireless Services may pursue [mention any next steps, like appeals, mediation, or further litigation]. **Note**: For updated details on court rulings, schedules, or specific legal facets, it is advised to refer to official court documents or legal counsel. --- This summary is designed to provide a structured overview of the case, assuming no details were provided. If you were looking for a specific aspect of the case or have any other requirements, please share!

Transverse, L.L.C. v. Iowa Wireless Services, L.L.


Oral Audio Transcript(Beta version)

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ned, it's open tap software that provided the user interface for its product, which is what it sold to WS. It had no software. The district court recognized and transverse admitted that they had no actual product that ever worked. The company had never made a profit. In fact, they had lost an excess of $26 million over their entire lifetime. That fact alone under this court's decision and teletron precludes any award of lost profits because they're too vague and uncertain to be awarded in any way, shape or form. There was never any code or confidential information in any of the documents that Iowa wireless showed to IDI. When Iowa wireless realized that transverse was not going to be able to perform and had repeatedly failed to produce any working product. Is there a jury finding that is adverse to that last point or a finding by the court that's adverse to that point about whether there's something in the code that it's code as opposed to just the your client's own information that would be helpful in constructing a system? No. In fact, the court found that there was nothing confidential that was marked and it's undisputed. There was no software code in the documents. Okay, so there's not, you don't have to overcome that hurdle

. No, at all. On top of that, none of the case should have gone to the jury because everything depended on the confidential, the nondisclosure agreement, which, and there was no information more confidential and the issues were purely legal. There was a jury waiver provision. The jury did find that Iowa breached the contract by terminating the contract. And they heard both sides of the argument. They heard your side that they didn't perform by the deadline and they heard the other side that's terminated. So we've got a pretty firm jury finding on the termination. None of the case, however, should have gone to the jury because of the jury waiver provision in the nondisclosure agreement. But what about just on the breach of contract by termination? That was all dependent on and infected with information that came only under the confidentiality clause. Well, I thought it was just non-performance was a basic reason for the jury verdict on the termination. No, the only, they alleged it as termination, but it all depended, all of their claims depended solely on the three documents that they said should never have been disclosed. And so all of those came within the confidentiality clause and the jury waiver termination. And none of it was confidential. There was no source code and most importantly, there was never a product. We repeatedly asked Judge Jaikol to decide all of these issues as a matter of law before they went to the jury instead of letting it go to the jury

. Pre-trial, we asked him to make all of the terminations. There was not even a contract because transverse actually proved that there was never more than an agreement to agree. That's what's very puzzling to me. If they're, I mean, I'm going to ask them about that because if that's their theory is that all this stuff is going, the terms are all going to be filled in later. Then that's not a contract at all and we don't even get to whether the jury verdict is supported or not. Right. I mean, the very first, there are three different reasons that require a reversal of this case in total. The first is they prove themselves there was only an agreement to agree. That was their only theory around which they could excuse their unfailured to ever produce a product. They literally and repeatedly told the jury in the court they had no obligation to perform whatsoever under this contract. And we've got very confusing to me. So their position is that your client had to continue to pay them into infinity even if they never produced anything that you need. It is that literally that absurd. And as proof of that, you need only look at the fact that the court awarded lost property for the future in the face of a clear termination letter and an undisputed agreement that there was no bleep product. There was never a working bleep that's undisputed because once they took out the open tap software because they refused to pay a licensing fee to the company that had provided the part of their system on which their entire software depended

. They tried to reverse engineer it themselves and couldn't do that. And if you look at our record excerpts, I think it's 15, 19, 20, and 21, you'll see repeated admissions in their own emails that we simply do not know the full detailed scope of bleep because we have not yet determined what that is. We don't know how it's all going to work together because we have not designed it at all. IWS Exhibit 314, an email by Cleveland Hallet of Transverse in January 2010. They had no product. They never had a product. They deliberately misled us about the existence of their product. He has one statement where he says, we've been found out and that's why we've lost all credibility. What should we do? I think I know which one you'll tell me. Should we reverse the verdict to a take nothing? Take nothing? Couragement? Or have you... And send it back for us to get an award of attorney's fees from the District Court? Well, there was a supply contract signed, wasn't it? There's a contract signed, but it lacks material terms, like the requirement of any date by which anything is to be performed. And, as second reason for reversing on the contract, is they never tendered performance. Not only did they never tender performance, they admitted they could not perform

. Even after a 30-day grace period that we gave them, they had no working software. To this date, they have no working software. To this date, they have never made a profit. You could reverse it entirely just on the law's profits issue and not even reach the contract issues. Counts will help this old man listening to all of this fodder kind of stuff. Yes, sir. Is the word, the L-E-E-P, is that an acronym or whatever you call it within a bunch of initials or something else? Or is that a name that somebody's stuck on their product? That is the name they stuck on their product. It doesn't stand for anything else. Not that I'm aware of your honor. I'm understanding it's just what they called it. And they never had a working leap. What do we do with their claims about the disclosure of the ledger secret documents? I understand what you want me to do with what the court to do on the contract. But what about their other claims? Is it would it be proper for the court to try those claims? Well, the court already did that and found against them on those. Okay, so that they're all.

.. But to the extent the contract claim is really a claim about a disclosure of confidential information. Do they get another bite of the apple on that? No. It's a denomous standard of review. The issues are purely legal. The facts aren't going to change. There's no way in the absence of a working product that ever existed. They can recover on the contract. Both the tele-tron case and the animal cracker case make clear that this case has to be reversed entirely on both the lack of a contract and the absence of any lost profits. They proved no other damages either and couldn't prove any causation because... And they didn't disentangle their expenses in trying to recreate this new software from what they were doing supposedly to complete our contract. So there's just no basis to award damages to them under any of their theories. Okay

. Would we have to send it back for the court to consider attorney's fees for your client if it was determined there was not a contract? I think this court could say that we were to be awarded attorney's fees. I think the amount would probably have to be determined by the district court. And please, I'm not trying to bore shadow any ruling by the court. I'm just trying to... I've made a chart with all the different pieces because it's so complicated. I'm just trying to figure out what happens. I know. When you try to make something out of nothing, it's really complicated. But that's what it distills down to is literally nothing. I guess your question is in the absence of any contract at all, could we get contractable attorney's fees? I wouldn't be entitled to them. So we would remain for those. I would have to look at that and give you a 28J letter on it because I had not thought about that. Which is different than the vacating the loss profits? Right

. Definitely, under any theory, all of the loss profits, all the existing judgment has to be vacated. If the court were for any reason to find there is a contract, as a matter of law, they were the ones that terminated. I mean, that breached. And we'd be entitled to, I think it was about 1.3 million in damages that we proved because of their breach. We paid them over $482,000 for nothing. And we had substantial expenses in going to another system and paying converges to maintain our system while Adiyah was working on a new system to fix it. If we were to find that, we would remain for that to be tried though, right? I know that's already been proved too. And the record is sufficient, I think, to enter that finding as a matter of law. You know, I saw in a brief somewhere that I, I, I, WS in an earlier motion said that the existence of a contract is undisputed. And the terms and conditions of the contract may be determined as a matter of law. So. We were asking the court if there, if he did find there was a contract, he was going to have to determine the terms and conditions as a matter of law because they weren't there. I believe that was an alternative argument that was made early on in the case, but then that doesn't change what transverse actually proved to the jury. And the burden of proof was theirs

. In the charge conference, I believe they even tried to shift the burden of proof to us to prove what the contract was and everything else. But the burden of proof was on them to prove all the material terms of the contract, including the time, the requisite performance and tender performance, none of which they did. Instead, they consistently said at trial that they had no obligation to perform whatsoever and that it was repeatedly they said it was just an agreement to agree, which this court said in the animal cracker case was is not a contract. We asked Judge to rule on these issues as a matter of law so there would never be a trial. He said that he was just going to throw it all to the jury, which he did, and that he'd go back and sort it all out later. And then when he didn't do that, he said he'd let this court sort it out. So that's where we are. Okay, thank you very much. Thank you. Okay. Mr. White. May it please the court. I'm Raymond White. I'm the attorney for transverse

. Mr. Jim Messer, transverse, the CEO is in the gallery and there's no aerobium where knocks are with me. Your honors I will address several issues. One, the trial courts errors and vacating the jury's $9.3 million award on transverse is no matter what. You start off by telling us what evidence you presented in support of your arguments. There was a contract. There was absolutely a contract, your honor. The contract that bleep by the way is stands for business logic, execution, environment, platform. It's an acronym. The party signed a contract in June 2009. His set in evidence is plaintiff's exhibit one I think it's Record X Serf 7. The focus..

. the .. the Sallie... Pellin has misconstrued our arguments on whether or not there was a contract. There was absolutely a contract. And the charge conference they admitted it several times there was a contract. What constitutes performance of your client under the contract that you tell us exist? For developing a billing system that had substantially similar functions as their existing system. Your client did not develop a business billing system and in fact didn't get it off the ground at all. Did it under the undisputed facts? We did not develop a system that you're on. That's a different issue than whether or not there was a binding agreement, and as opposed to an agreement to agree, I can address both issues if you would like me to. Are the reason we didn't ultimately develop it. First of all, we had a system. We had sold it, the billing system believed to a prior customer crossroads. One of their executives testified at this trial, Tim Riley. Tested by the user, they operated it. It's a custom system. We have a core billing system which we customize for every customer. We were simply customizing our core system to them. But you didn't buy the code, license the code for this project so that you could customize this using the same that you'd used for crossroads, correct? It was going to be licensed to them. That was part of the contract. The contract called for us to license the software to them for them to use the system. The time of performance had already passed and you still didn't have the code and you didn't have a product. We hadn't finished it because for several reasons. One, they had not accepted it, which they could do without an agreement on what the acceptance criteria was. All they had to do was put it into commercial use. You didn't have anything to put into commercial use. We had our core system which they could access and that's in the record that testimony from Chris Cowlach. So they had a billing system

. One of their executives testified at this trial, Tim Riley. Tested by the user, they operated it. It's a custom system. We have a core billing system which we customize for every customer. We were simply customizing our core system to them. But you didn't buy the code, license the code for this project so that you could customize this using the same that you'd used for crossroads, correct? It was going to be licensed to them. That was part of the contract. The contract called for us to license the software to them for them to use the system. The time of performance had already passed and you still didn't have the code and you didn't have a product. We hadn't finished it because for several reasons. One, they had not accepted it, which they could do without an agreement on what the acceptance criteria was. All they had to do was put it into commercial use. You didn't have anything to put into commercial use. We had our core system which they could access and that's in the record that testimony from Chris Cowlach. So they had a billing system. What they didn't have was the final customized system for them. But we did not have to. So they could have put the billing system that you had into operation in their company. Yes, man. That's in the record. Yes, Chris Cowlach. They had access to our existing billing system. Did you say to the court during the charge conference that this was just an agreement to agree and you didn't need to have terms? No, absolutely not. Did you say anything of the sort about agreement to agree? Is this just a lie, a misquote? It's a mischaracterization of what I said. What did you say? I said the February 28 deadline, which is what they base their termination on. Their termination letter focused on the failure to meet the acceptance criteria by February 28. So the February 28 date was critical to their correct rightful termination and also to their counter claim that we had breached. The problem they had was in order for that February 28 date to be relevant. There are other ways for them to accept under the contract. They're set out in paragraphs 8

. What they didn't have was the final customized system for them. But we did not have to. So they could have put the billing system that you had into operation in their company. Yes, man. That's in the record. Yes, Chris Cowlach. They had access to our existing billing system. Did you say to the court during the charge conference that this was just an agreement to agree and you didn't need to have terms? No, absolutely not. Did you say anything of the sort about agreement to agree? Is this just a lie, a misquote? It's a mischaracterization of what I said. What did you say? I said the February 28 deadline, which is what they base their termination on. Their termination letter focused on the failure to meet the acceptance criteria by February 28. So the February 28 date was critical to their correct rightful termination and also to their counter claim that we had breached. The problem they had was in order for that February 28 date to be relevant. There are other ways for them to accept under the contract. They're set out in paragraphs 8.5 and 8.6. This isn't the only way for them to accept it and that's the critical thing. But for them to terminate on basis of February 28, they had to tell us what the acceptance criteria was. There's a testimony from Chris Kouch and Jim Messer that we tried for three and a half months to get them to agree to the acceptance criteria. They wouldn't do it. We don't have any control over that. So by the time, and then there's ample evidence in the record that they started intentionally not agreeing with us so they could push us past that deadline and claim breach, which is what the jury found implicitly. That they breached we did not. The other reason why we didn't agree with that. So did you have a responsibility to provide a finished system ever under the contract? Absolutely. Not. We did. Absolutely. And then because the February 28 date was not a date to provide a finished working system, it was simply a date to satisfy the acceptance criteria

.5 and 8.6. This isn't the only way for them to accept it and that's the critical thing. But for them to terminate on basis of February 28, they had to tell us what the acceptance criteria was. There's a testimony from Chris Kouch and Jim Messer that we tried for three and a half months to get them to agree to the acceptance criteria. They wouldn't do it. We don't have any control over that. So by the time, and then there's ample evidence in the record that they started intentionally not agreeing with us so they could push us past that deadline and claim breach, which is what the jury found implicitly. That they breached we did not. The other reason why we didn't agree with that. So did you have a responsibility to provide a finished system ever under the contract? Absolutely. Not. We did. Absolutely. And then because the February 28 date was not a date to provide a finished working system, it was simply a date to satisfy the acceptance criteria. Chris Kouch explains that in his testimony in the record. So you're saying you were developing a system and you had to have a criteria from the customer before you could go forward. Well, the acceptance criteria is to test to make sure the code meets what they want. And that's the February 28 date. That came and went because they wouldn't agree to it. There are other ways for them to accept we didn't. And that's why what is it that they wouldn't agree to? I thought they didn't have anything to agree to. The UAT document. The UAT document. User acceptance test document. And what did that comprise? That consists of the test standards to determine whether or not the code that we are developing custom code off our core product meets the acceptance criteria set out in the UAT document. It's sort of a final test. And once you pass that, then there are other things you have to do to get it up and running. But how could it possibly meet the UAT when it's not yet customized for the client? That's what the UTUAT is. That is precisely the customization that they have to tell us

. Chris Kouch explains that in his testimony in the record. So you're saying you were developing a system and you had to have a criteria from the customer before you could go forward. Well, the acceptance criteria is to test to make sure the code meets what they want. And that's the February 28 date. That came and went because they wouldn't agree to it. There are other ways for them to accept we didn't. And that's why what is it that they wouldn't agree to? I thought they didn't have anything to agree to. The UAT document. The UAT document. User acceptance test document. And what did that comprise? That consists of the test standards to determine whether or not the code that we are developing custom code off our core product meets the acceptance criteria set out in the UAT document. It's sort of a final test. And once you pass that, then there are other things you have to do to get it up and running. But how could it possibly meet the UAT when it's not yet customized for the client? That's what the UTUAT is. That is precisely the customization that they have to tell us. This is the acceptance standard to test it to. And when they don't agree to it, there is nothing we can do. They have to for them to rely on the February 28 date. And by the way, if the February 28 date goes away, which it did, the law imposes a reasonable period of time for performance. The law cures the problem they are claiming. There is not an infinity absence of any deadline to perform. Was the performance date extended in fact to March the 15th or 16th or something like that? No, it wasn't because both sides agree in this case the contract was never amended. What happened was we finally did get an agreement on the acceptance criteria two weeks later, March 12th, March 13th. That's in the record excerpts as well. There's ample testimony of that from Jim Messer and Chris Couch. The other problem they have with the February 28 date is on February 12th, we sent them a delay notice explaining all the delays that they had caused. And that the project was going to be delayed six to eight weeks. Under the contract when we send a delay notice, we don't have to do anything until they agree to it. That's in the delay notice provisions of the contract. Did your company in February and March that's the time period we're talking about have authorization to use the general billing code that it had in its possession for this client? Did it have authorization to use this because I thought it had come from the from the other companies input

. This is the acceptance standard to test it to. And when they don't agree to it, there is nothing we can do. They have to for them to rely on the February 28 date. And by the way, if the February 28 date goes away, which it did, the law imposes a reasonable period of time for performance. The law cures the problem they are claiming. There is not an infinity absence of any deadline to perform. Was the performance date extended in fact to March the 15th or 16th or something like that? No, it wasn't because both sides agree in this case the contract was never amended. What happened was we finally did get an agreement on the acceptance criteria two weeks later, March 12th, March 13th. That's in the record excerpts as well. There's ample testimony of that from Jim Messer and Chris Couch. The other problem they have with the February 28 date is on February 12th, we sent them a delay notice explaining all the delays that they had caused. And that the project was going to be delayed six to eight weeks. Under the contract when we send a delay notice, we don't have to do anything until they agree to it. That's in the delay notice provisions of the contract. Did your company in February and March that's the time period we're talking about have authorization to use the general billing code that it had in its possession for this client? Did it have authorization to use this because I thought it had come from the from the other companies input. And did you have authorization to have turned this billing system that you had used on the crossroads over to them? Could you have presented that to them? Was it properly licensed and ready to go to them? I don't know the answer. We had the license for crossroads. But you didn't have the license for them. So when you say we had the billing system already and we could give it to them as soon as we customized, you actually didn't have a license to give that to them. We weren't using crossroads for their system. Chris Couch testified that we had developed our new user interface and that's all this was. You had your own code that you had developed from scratch to this reversed engineering. That's in the record. I know we had we developed our own user interface apart from open tabs. And Chris Couch testified it was finished. We completed it before we signed the contract with I wireless. So we weren't even you that's that is a total red hair in your honor. We were not using the open tab software and what we were using we had completed before we signed this contract. It was in our system. The use of the the agreement to agree is groundless because we had other ways for them to accept

. And did you have authorization to have turned this billing system that you had used on the crossroads over to them? Could you have presented that to them? Was it properly licensed and ready to go to them? I don't know the answer. We had the license for crossroads. But you didn't have the license for them. So when you say we had the billing system already and we could give it to them as soon as we customized, you actually didn't have a license to give that to them. We weren't using crossroads for their system. Chris Couch testified that we had developed our new user interface and that's all this was. You had your own code that you had developed from scratch to this reversed engineering. That's in the record. I know we had we developed our own user interface apart from open tabs. And Chris Couch testified it was finished. We completed it before we signed the contract with I wireless. So we weren't even you that's that is a total red hair in your honor. We were not using the open tab software and what we were using we had completed before we signed this contract. It was in our system. The use of the the agreement to agree is groundless because we had other ways for them to accept. We had a clear definition of what we were to develop. We had a product we had sold it before. All of these arguments they're asserting they argue to the jury. These are jury arguments. My learned colleagues may have some other questions about this but I want you to talk about lost profits. Okay which which one the whether we had we were awarded ten million dollars in lost profits on the termination claim. The 9.3 million award was on the other breach of contract claim the no access claim. Does the court want to hear about the ten million lost net profits is that when you're asking me about? I want to hear first on how you keep the lost profits you got before I hear how you get the lost profits you didn't get. Sure. The the the lost profits that we got are based on the the their wrongful termination their breach of this contract. And it was it's based upon first of all it's it's based on the testimony of our damage actually the only damage expert in this case. This is the firm Martinez that who looked at the contract following the contract he calculated the revenue each year under the contract using the contract price. And I wireless his own subscriber numbers their own subscriber projections because the contract price was tied to how many subscribers they had. Okay how in the world could there have been calculated revenue going forward when there had yet to be a product made and delivered isn't that speculative under the applicable law

. We had a clear definition of what we were to develop. We had a product we had sold it before. All of these arguments they're asserting they argue to the jury. These are jury arguments. My learned colleagues may have some other questions about this but I want you to talk about lost profits. Okay which which one the whether we had we were awarded ten million dollars in lost profits on the termination claim. The 9.3 million award was on the other breach of contract claim the no access claim. Does the court want to hear about the ten million lost net profits is that when you're asking me about? I want to hear first on how you keep the lost profits you got before I hear how you get the lost profits you didn't get. Sure. The the the lost profits that we got are based on the the their wrongful termination their breach of this contract. And it was it's based upon first of all it's it's based on the testimony of our damage actually the only damage expert in this case. This is the firm Martinez that who looked at the contract following the contract he calculated the revenue each year under the contract using the contract price. And I wireless his own subscriber numbers their own subscriber projections because the contract price was tied to how many subscribers they had. Okay how in the world could there have been calculated revenue going forward when there had yet to be a product made and delivered isn't that speculative under the applicable law. I don't know your honor it's not I don't think it's any different from the the DSC next level case that this court decided where that product was even newer than our product. That was a new radical product that the court found the damages were reasonable and non speculative. Okay your product doesn't exist didn't exist at the time it it still doesn't exist well the customized product for them didn't exist the only reason we didn't make any profit from crossroads is because they went into bankruptcy during the credit crunch and in the early 2009 couldn't pay us. We were going to make a profit on that but the the absence of historical profits are relevant only when your damage model is claiming lost profits on future contracts it's not relevant when you're trying to determine lost net profits on the contract in the case the contract that was briefed. There's no product for the contract in the case there there was because they terminated we couldn't finish it we were prevented from finishing the product we their breach prevent us from doing that. Why was it reasonable to assume that they would continue to do business with you for many years to calculate out this at the time where there's no product how can the damages experts say. They're going to continue they would have continued in this for 10 years or 20 years or whatever it is. I'd love to answer that the the contract there are a number of factors to answer the court's question the contract first of all was for 12 years it had a two year initial period and it automatically renewed for five two year renewal periods it was subject to termination by either party. But if if nobody did anything it was on autopilot for 12 years. Wasn't the action taken already by the opposing party a termination so that the maximum damages that could be would be two years lost profit. No you're not because they because the termination that act the act of termination the jury found to be a breach and under the law. You can't benefit from your wrongdoing you can't benefit from your own breach and the measure for damages is when there's a breach common law measure. What would where would the plaintiff had been put the plaintiff in the position he would have been had the defendant performed in other words not terminate not sent the wrongful termination. There's no reason for the for anyone to believe that they would have gone on more than two years given the fact that they had no product and they had no deadline and there's no reason for a reasonable jury to believe they would have gone on beyond the two year allowable termination date. Well your honor I believe there is ample evidence for a jury to determine that and first of all the reason we were about the testimony from Chris couch was we were about a month or two away from completing this project we were very close

. I don't know your honor it's not I don't think it's any different from the the DSC next level case that this court decided where that product was even newer than our product. That was a new radical product that the court found the damages were reasonable and non speculative. Okay your product doesn't exist didn't exist at the time it it still doesn't exist well the customized product for them didn't exist the only reason we didn't make any profit from crossroads is because they went into bankruptcy during the credit crunch and in the early 2009 couldn't pay us. We were going to make a profit on that but the the absence of historical profits are relevant only when your damage model is claiming lost profits on future contracts it's not relevant when you're trying to determine lost net profits on the contract in the case the contract that was briefed. There's no product for the contract in the case there there was because they terminated we couldn't finish it we were prevented from finishing the product we their breach prevent us from doing that. Why was it reasonable to assume that they would continue to do business with you for many years to calculate out this at the time where there's no product how can the damages experts say. They're going to continue they would have continued in this for 10 years or 20 years or whatever it is. I'd love to answer that the the contract there are a number of factors to answer the court's question the contract first of all was for 12 years it had a two year initial period and it automatically renewed for five two year renewal periods it was subject to termination by either party. But if if nobody did anything it was on autopilot for 12 years. Wasn't the action taken already by the opposing party a termination so that the maximum damages that could be would be two years lost profit. No you're not because they because the termination that act the act of termination the jury found to be a breach and under the law. You can't benefit from your wrongdoing you can't benefit from your own breach and the measure for damages is when there's a breach common law measure. What would where would the plaintiff had been put the plaintiff in the position he would have been had the defendant performed in other words not terminate not sent the wrongful termination. There's no reason for the for anyone to believe that they would have gone on more than two years given the fact that they had no product and they had no deadline and there's no reason for a reasonable jury to believe they would have gone on beyond the two year allowable termination date. Well your honor I believe there is ample evidence for a jury to determine that and first of all the reason we were about the testimony from Chris couch was we were about a month or two away from completing this project we were very close. Of course we didn't have a final product because that's what happens when the defendant is found by the jury breaches we can't continue fact we did continue on our own because the contract required us to continue testing on our own if the other side stops working and we did the first phase testing all on our own. Did you want to talk about why you should get those other lost profits I don't want to ask you about the access to service. I read that clause says I WS shall not allow competitor transfers access to the service and I won't read the rest of it but I read that to mean access to the customized service that you had contracted to provide and of course that was never provided so I don't know how. How they could be an evaluation of confidentiality when it never worth put in operation what your honor the service definitely includes the final product no question about it the service has a three page definition in the contract and part of the definition includes the activities necessary to match their requirements to our product to our system that's part of the definition we site that. That's not extensively in our brief if you focus on that part that's part of the definition of the service that is exactly what these documents these 30 meeting notes and the UAT document concern that is we were meeting with them for five months to match their requirements with our system the UAT document does that precisely it's matching our system our product with their requirements it's a customer it's a customer product not an off the shelf product so in Chris couch testified he's this cheap technical officer testified that both of those dot groups of documents the 30 meeting notes and the UAT document where documents to match the requirements of our wireless with our system there's no contributing evidence of that at all so I mean just reading the term to the contract though it you know it looks like monitoring its availability performance functionality they're talking about something that's an active service and they and that's absolutely part of the service your honor you're absolutely right but that's not all that the service is in the definition and the point point we made in our brief you're on when this when part of the definition of the service says to match their requirements with our product that sentence makes no sense if it's only the final product because at that point you've already matched everything that you would make that sentence meaningless if it meant only the final product and the court the trial court agreed with that construction and submitted the question of the jury properly and the jury found by by finding that they breached the no access provision the jury implicitly found that those documents in fact were factually part of the process of matching their requirements I'm asking this the I don't understand how you can recover net profits over the 12 year period whatever the term was and also recover expenses you spent or go arrive at your net profit the $1.7 million well the reason for that your honor is there two separate contract provisions two separate breaches and they resulted in two separate injuries the the the termination claim they wrongfully terminated the contract we were the contract was the last 12 years under the Texas law we side in our brief that contract is construed for 12 years and all the facts surrounding it or that's something the jury under the law has the is within the province of the jury to decide whether it reasonably would have lasted 12 years that's a jury question all right but what I'm talking about is if you get your net profit you can't also get your expenses well the here's the here's the thing okay we got our net profit and they are net Chris from Martinez testified that he cut minused out the cost that's on the wrongful termination we lost those profits for 12 years the the 1.7 million expenses that we got instead of after the jury you know the judge took away the 9.3 are on the wrong giving a competitor access to the service we that's a separate injury because they they got the benefit of our 8 to 10 million dollars in development cost and they got the they destroyed the value of half 50% of the value the secret part of the the cost that's been done is made whole under the contract so why don't you have to elect we did well between those two numbers well they're two separate injuries your honor I don't think that presents an election what what is I know my time's out I'll answer the court the what is the election is be between the 9.3 and the 1.7 if we had to we couldn't get both of those and we couldn't get the 10 million and the 1.7 we had to elect the reliance damages on those two different tract breaches but between the two separate breaches and the two resulting injuries there is no election because they're completely different injuries we okay thank you. a piece of paper doesn't create a contract they still have to have material terms for all of the provisions and tender performance to get any kind of breach of contract action which obviously didn't happen page 62 30 during the charge conference Mr. White says it was undisputed that we didn't deliver a system by February 28 there was no system to deliver they meaning us trying to ship the burden of proof to Iowa wireless have to show what the system was that's a prerequisite it's not a defense for us Mr. Howett who was with transverse said he started to put in writing how bad things were that's not the part of the quote but he thought we might be tipping our hand to Iowa wireless we wouldn't want them to come to the realization we really don't know what we're doing or at least want them to get there slowly that's at page 58 70 page 62 31 but within the contract the parties committed to agreeing to a subsequent agreement and they didn't meet that the contract involved more work beyond it in order to actually deliver a working system which they have previously referred to as go live the contract contract contemplates an agreement within that on what is to be satisfied and that agreement never was 64 29 through 30 quote transverse had the right not to work not to have to work until the parties agreed to a controlling specification but on the other hand they admit that we are said that we agreed to the controlling specifications or UATs on March 13 2010 at page 51 46 with respect to the UATs we wound up actually creating those ourselves when they couldn't get that done and that's what they claim we wrongfully disclosed to IDII in an effort to get a working billing system everybody knew time was at the essence in this contract it was crucial the billing system was a lifeblood for Iowa wireless it's the only way the phone company could work and draw revenue was to have a working billing system the crossroads thing is a total red hearing couch admits in his testimony it was based on the open tap software and they actually paid crossroads paid somebody from crossroads who was a personal friend of Mr. Couches to give a reference to the company to try to get IWS to go with the transverse leap system they did not re license open taps they might have given Iowa wireless license to use the bleep system but there was no they had completely jettison open tap software and they state that repeatedly in the record why aren't they entitled to their lost profits if there is indeed a contract and a breach why aren't they entitled to the to the lost profits for the for the entire 12 years they prove no pro they prove no profits at all in fact all they proved what they did was they had consistently lost money over the years how do you distinguish the dsc case the case that this was quoted by kielson I am drawing a complete blank on the facts of dsc at the moment but I can assure the court that they do not meet the reasonable certainty standard for any measure of loss profits obviously our termination letter is very clear it's in our record excerpts I think it's record excerpt five and we did give them a 30 day grace period before we terminated they were supposed to mediate with us in good faith we were trying everything to resolve it instead of mediating in good faith they file suit the day of the mediation at the conclusion of the day before the court house closed and then they turned around and sued our employee and one employee in Iowa which we just got dismissed on raised you to caught up so their only product that they ever created frankly was this lawsuit and it doesn't hold water in any way shape or form they totally abandoned the bleep software they made no effort to get another customer for the bleep software after our wireless it failed there they never created a working product for anyone after they jettison open tabs and without a history of profits and damages of reasonable certainty they're entitled to no profits whatsoever they also failed to disentangle their expenses and creating this new code from what they say was involved in this contract in fact I think it's mr

. Howard the test thought also that there was a lot of waste in the coding process for whatever they did manage to do but all in all the judgment must be reversed on all grounds and a take nothing judgment here thank you okay thank you all for your heavy cas