[00:00:01] Speaker 01:
Good morning.

[00:00:08] Speaker 01:
May it please the court, presiding judge Lee, fellow justices.

[00:00:12] Speaker 01:
My name is Ryan Giannis.

[00:00:13] Speaker 01:
I represent the defendants in the appellants fitness elite, as well as Dan Mauger and Brooke Mauger, who are both with me in the courtroom today.

[00:00:22] Speaker 01:
I would like to reserve three minutes for rebuttal.

[00:00:25] Speaker 01:
Just to start off, and I know the court is well aware of this, this entire controversy revolves around

[00:00:31] Speaker 01:
Well, it was competing breach of contract claims revolving around the head coach employment agreement of Ivan Ivanov with Fitness Elite.

[00:00:40] Speaker 01:
This case went to trial.

[00:00:42] Speaker 01:
It was well briefed.

[00:00:43] Speaker 01:
But what is not disputed at any point during any of this is that the agreement governed.

[00:00:48] Speaker 01:
The parties do not dispute that the agreement was signed and that they agreed to the terms in it.

[00:00:54] Speaker 01:
This is important because the district court below, on at least three separate occasions, these are really the three issues I'd like to focus on today, effectively rewrote the contract for the parties.

[00:01:07] Speaker 01:
First off, in determining what was, well, two separate liquidated damages provisions, effectively rewrote them to be severance pay provisions, despite the word severance not appearing anywhere within the contract.

[00:01:23] Speaker 01:
And this is despite the fact that within the provision that Mr. Ivanov relies on, the liquidated damages provision,

[00:01:30] Speaker 01:
It states liquidated damages on two separate occasions and despite the fact that in the following provision there is in fact a liquidated damages provision in the event of Mr. Ivanov's termination or breach of contract in favor of fitness elite that would in fact entitle them to liquidated damages serving both the serving the liquidated damages purpose.

[00:01:50] Speaker 01:
Additionally, I'd like to talk about the fact that the

[00:01:53] Speaker 01:
the fact that the district court rewrote the contract effectively minutes before we were scheduled to give our closing arguments to imply Wendell Idaho as a term of the contract that the jury had to infer despite the fact there being testimony and plenty of evidence that it was explicitly excluded and agreed to for a reason that the parties did not want to include it and it was agreed to by the parties

[00:02:16] Speaker 01:
that Wendell Idol would not be included.

[00:02:18] Speaker 01:
And finally, I think it kind of hammers the point home that effectively there was a new contract made for the parties by the district court based on the fact that we were not entitled to present a waiver argument despite it being included within the plain and unambiguous language of the agreement.

[00:02:35] Speaker 01:
We asked for it on several occasions, and we just simply were not given it.

[00:02:40] Speaker 01:
So to start off, and I know that there's been plenty of ink spilled over the liquidated damages provision, but I think it's important because it turns what is effectively a contract the parties agreed to that at the time, based on the future damages, the future salary left are remaining on the contract,

[00:02:58] Speaker 01:
The amount of damages in question, the only amount the jury was entitled to decide was $660,000.

[00:03:04] Speaker 01:
By rewriting this contract and turning it into a severance pay provision, despite those words not appearing anywhere in there, it turned this into a $2 million case and something that the jury had no clue about, something the jury was not entitled to see.

[00:03:18] Speaker 01:
In fact, something that we asked for when on summary judgment after we

[00:03:23] Speaker 01:
I mean, I guess I will take this in two points.

[00:03:26] Speaker 01:
First off, we believe the district court's ruling should be overturned and reversed based on the fact that the Moore case, unambiguously, unequivocally, black letter law states the Idaho Wage Claim Act does not apply to liquidated damages provisions.

[00:03:42] Speaker 01:
all the case law that's been cited by the parties.

[00:03:44] Speaker 01:
This is the only case that deals with a liquidated damages provision.

[00:03:47] Speaker 01:
Every other one deals with provisions that dealt with severance pay specifically or as agreed to by the parties.

[00:03:54] Speaker 00:
Isn't it significant that in both Huber and this case, the liquidated damages provision provided for a lower payout if substitute employment was found?

[00:04:06] Speaker 00:
So that makes it sound like the liquidated damages here are a bit more like wages.

[00:04:11] Speaker 01:
Your Honor, I don't believe it is, because if you look at the Moore case or also the definition that we cited to, under the liquidated damages definition, liquidated damages are in turn are the purpose they're supposed to serve is when there's a breach of contract, you are entitled to a certain amount of damages entitled to the parties and it's supposed to reflect some close to what would have been the damages actually suffered.

[00:04:37] Speaker 01:
So a liquidated damages provision can include such a term.

[00:04:40] Speaker 01:
And the fact that Huber included a similar term but was a severance provision doesn't render this liquidated damages clause automatically a severance provision.

[00:04:50] Speaker 01:
And the fact is, I mean, as lawyers, and the fact is a lawyer drafted this agreement, we know that severance pay and liquidated damages are different things.

[00:05:01] Speaker 01:
They have different words and different meanings.

[00:05:04] Speaker 01:
And under Idaho law, I mean all law as far as I know, but what matters here is Idaho law, courts need to interpret and apply contracts according to their plain, unambiguous, and ordinary sense.

[00:05:19] Speaker 01:
Under the plain, unambiguous, and ordinary sense of the words, liquidated damages were written here.

[00:05:24] Speaker 01:
They were agreed to.

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And plaintiff's appellee's counsel relies on the fact that this was negotiated.

[00:05:30] Speaker 01:
That further supports this fact.

[00:05:32] Speaker 01:
They didn't scratch it out and say this was severance.

[00:05:34] Speaker 01:
The term liquidated damages was agreed to and was specifically signed and to when asked on the stand was agreed to by Mr. Ivanov and was agreed to by Fitness Elite.

[00:05:48] Speaker 01:
By then saying, well, no, I mean, that was the intent of the party it was testified to.

[00:05:56] Speaker 01:
By saying, no, this is severance, the court is effectively not only rewriting, it's ignoring the intent of the parties, which is unquestionably improper and inappropriate under Idaho law.

[00:06:09] Speaker 01:
And I mean, I think it's also important, and I know we've discussed this as well, but in all the other cases relied upon the severance pay was something that was earned over time throughout the course of the employment.

[00:06:24] Speaker 01:
Here, in effect, what we had was a wasting clause almost, or a wasting provision, whereas the liquidated damages were based on if he was terminated without cause a month before he was scheduled to leave, that would have been what he was left with.

[00:06:39] Speaker 01:
Um, it was, since it was, uh, whatever the amount was about five years, it was determined based on the amount of time left on his contract, which is precisely what liquidated damages serve.

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It is supposed to be an amount based on a breach that somewhat exemplifies what would have been the damages suffered.

[00:07:01] Speaker 01:
And so, Your Honors, I would be happy to answer more questions about this, but I think that there is no question here that this should be reversed just based on the plain language of the contract and based on the plain language of the Idaho statute, which specifically says that its wages are for services rendered.

[00:07:20] Speaker 01:
past tense, as well as the Moore case, which is reiterated by the Huber case, as well as the Sauvage case as good law, remaining law, and binding law.

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And even if that weren't to be accepted by this court, there still is the fact that, okay, if the court then found, which I believe it did despite neither party arguing that there was ambiguity here, even if the court were

[00:07:44] Speaker 01:
able to find that there was ambiguity, then this matter needed to be submitted to the trier of fact.

[00:07:50] Speaker 01:
That also was black letter law under Idaho law.

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And it wasn't.

[00:07:56] Speaker 01:
And we did request it.

[00:07:58] Speaker 01:
We specifically asked.

[00:07:59] Speaker 01:
I mean, after the summary judgment decision, when it was OK, I guess the district court, you're not going to grant our summary judgment decision, we requested a jury instruction saying, OK, well, if we need to decide whether liquidated damages in this contract is ambiguous and if it means severance pay or means something else under the Idaho Wage Claim Act, let's submit it and ask for a jury instruction.

[00:08:20] Speaker 01:
The court denied that as well.

[00:08:24] Speaker 01:
Even if the court were not to decide, this is the second part of my, I'm finally getting to the second part of my inquiry, were it to get to that far and find that the court somehow appropriately determined there was ambiguity, it still then needed to be submitted to the jury.

[00:08:38] Speaker 01:
And the fact is that it wasn't, that was improper, and it should be reversed for that reason as well.

[00:08:46] Speaker 01:
And so turning from that, I think that I just really want to lastly

[00:08:53] Speaker 01:
hammer on the fact that Idaho law, I mean, we've cited in the cases that we talked about liquidated damages, but also in the Chava versus Huckleberry case, which we cited in our briefing, I mean,

[00:09:05] Speaker 01:
Where there is no ambiguity in a contract, it needs to be applied according to the plain, unambiguous language.

[00:09:12] Speaker 01:
And liquidated damages being in the contract is plain and unambiguous as it gets.

[00:09:17] Speaker 01:
And somehow this was worked around, and the words were worked around.

[00:09:21] Speaker 01:
And I believe there's been a case that labels aren't controlling.

[00:09:25] Speaker 01:
Well, if labels aren't controlling, but plain and unambiguous language is.

[00:09:30] Speaker 01:
And the plain and unambiguous language here is, this was a liquidated damages clause.

[00:09:34] Speaker 01:
And it was worked around so that the Idaho Wage Claim Act could apply.

[00:09:37] Speaker 01:
And the fact is, it does not under Black Letter Idaho law.

[00:09:42] Speaker 01:
So moving on to the second issue I want to talk about is the, again, rewriting of the contract, where, again, we had

[00:09:53] Speaker 01:
in the agreement agreed to by the parties that uh... mister ivanov was an employee of fitness elite and he was to serve as an employee of fitness elite uh... there was no location in the contract there was no

[00:10:08] Speaker 01:
There was no location specified.

[00:10:11] Speaker 01:
It was specified during trial.

[00:10:12] Speaker 01:
And Mr. Ivanov was examined on this.

[00:10:15] Speaker 01:
Mr. Mauger was examined on this.

[00:10:17] Speaker 01:
Was there any location put in there?

[00:10:20] Speaker 01:
And the answer was no.

[00:10:21] Speaker 01:
And there was a reason for this.

[00:10:23] Speaker 01:
They talked about

[00:10:24] Speaker 01:
that they wanted to be able to an idea was to expand the business to move it outside i mean these clubs the goal is that you want them to expand outside of state lines you want to get clubs in other areas you don't include a location because your duties can take you to places and did in fact take mister i've been off to places other than idaho outside of idaho including utah on multiple occasions

[00:10:50] Speaker 04:
make a difference because the district court let the jury decide whether Mr. Ivanov's duties were elsewhere, right?

[00:10:56] Speaker 04:
So, I mean, ultimately, you know, whether the actual physical location was in Idaho, does that really matter given they let the jury decide that one?

[00:11:06] Speaker 01:
Sorry, I did not mean to cut you off, Your Honor.

[00:11:07] Speaker 01:
It does because, in effect, I think it's a distinction that ultimately is extremely harmful error because it places by putting a jury instruction in front of the jury that says you are to imply that Wendell Idaho is the place of fitness elite and that is where his duties are to be performed.

[00:11:26] Speaker 01:
Yes, they could be entitled to find, okay, he could be told to go to Utah, but it effectively, A, rewrites the contract, and B, places undue importance on a term that the parties never agreed to.

[00:11:40] Speaker 01:
And the fact is the parties never agreed to this term and never agreed to Wendell, Idaho being the place of performance for this very reason, because Mr. Ivanov and because Fitness Elite wanted to reserve the right to place him in different locations.

[00:11:54] Speaker 00:
Are wrestling seasons the same from location to location?

[00:12:00] Speaker 01:
Wrestling seasons I believe are different from club, depending on club and depending on collegiate.

[00:12:07] Speaker 01:
Mr. Mauger would be the more experts on this, but I believe they do change.

[00:12:14] Speaker 00:
If they change from place to place, then I'm wondering why that and the fact that the contract requires in-person interactions doesn't make some location an essential term of the contract.

[00:12:25] Speaker 00:
The contract refers to a wrestling season and how would an employee know what season it's referring to if the contract doesn't have any location attached to it?

[00:12:36] Speaker 01:
Well, no, I don't believe it would make it an essential term because by leaving it out, that enables a fitness elite who wanted to preserve the right to move Mr. Ivanov.

[00:12:50] Speaker 01:
wherever, to have him travel as part of his duties under the contract, it made it essential to leave it out for that reason, because it's up in the air.

[00:13:01] Speaker 01:
Were there to be other locations, they hadn't obviously determined if there was to be a specific location or where.

[00:13:06] Speaker 00:
The contract says that something,

[00:13:09] Speaker 00:
the parties agree to meet and formally discuss all aspects of the operation of the program within 30 days following the conclusion of each wrestling season.

[00:13:19] Speaker 00:
Doesn't that have to be some place that, it doesn't make sense to have a requirement that they meet within 30 days of wrestling seasons in five different states or locations, does it?

[00:13:34] Speaker 01:
Well, no, Your Honor.

[00:13:35] Speaker 01:
I mean, I believe that

[00:13:36] Speaker 01:
By the terms of that contract they can meet wherever that doesn't mean that it needs to be in Wendell, Idaho That means that they can just meet they can meet between each other and that they can Determine where they have to meet and decide doesn't I don't believe that that means that there needs to be a location specified within a contract particularly

[00:13:55] Speaker 01:
Sorry.

[00:13:57] Speaker 01:
I mean, and particularly when the parties specified that they didn't and that they left a location out specifically for that reason to enable this to happen.

[00:14:06] Speaker 01:
And I mean, an analogy was given at trial with Mr. Ivanov's son, Georgi Ivanov, who had two locations, two different locations across state lines, both in Nebraska and Iowa.

[00:14:18] Speaker 01:
And that if under this interpretation if you were to say it needs to be in Wendell Idaho or there if it was it needs to be in Nebraska Idaho in effect, precluding him from crossing state lines and putting putting all of this aside.

[00:14:33] Speaker 01:
The fact that the court decided this, effectively, again, rewriting the contract, rather than submitting it to the jury, who was to have the case submitted to it within a matter of minutes?

[00:14:45] Speaker 01:
We had closing arguments yet to go.

[00:14:47] Speaker 01:
This ruling was made five minutes before we were scheduled to give closing, and then it was to be submitted to the jury.

[00:14:55] Speaker 01:
The fact that it was minutes before was also erroneous, and I would say that

[00:15:01] Speaker 01:
Under Idaho law, based on the fact that ambiguities in contracts are supposed to be required to be determined by the trier of fact, it was also erroneous not to submit that to the jury as well.

[00:15:17] Speaker 01:
Lastly, I want to just briefly turn to the waiver argument, because I think it kind of underscores the issues that we have here, that the district court was effectively kind of ignoring, not kind of, it was ignoring the plain language of the contract.

[00:15:34] Speaker 01:
Because here, and as we put in our reply brief, we had a waiver

[00:15:39] Speaker 01:
provision that specifically excluded any and all other damages other than liquidated damages.

[00:15:44] Speaker 01:
Again, emphasizing that liquidated damages were the damages in the contract, and I won't get into it again if we have the special verdict from it, and the jury instructions, et cetera, et cetera.

[00:15:55] Speaker 01:
but the court then refused to allow us to have a waiver jury instruction despite the fact that there was an unambiguous provision enabling us to do so and the fact that plaintiff was claiming additional damages in addition to the liquidated damages clause the court indicated that it was allowing us to make the argument that okay well there's a waiver provision in the contract

[00:16:18] Speaker 01:
It wasn't giving the jury any instructions on the law that that had any significance.

[00:16:22] Speaker 01:
So we could argue until I had no breath left, but it really made no significant difference, as the jury had nothing to go on and no jury instruction to indicate what that significance was.

[00:16:32] Speaker 01:
And it wasn't harmless error, as I believe was indicated and argued in the Pelley's brief, because although whether it was $412 or $400,000, the fact is they awarded damages as a result of that.

[00:16:44] Speaker 01:
And we weren't entitled to make that damages.

[00:16:45] Speaker 01:
And under the application of the law, that waiver provision should apply and should have prohibited those damages from even being sought, which was a motion we made as well.

[00:16:54] Speaker 01:
So what we have here, and I'm going to try and get to the point where I preserve my time.

[00:16:59] Speaker 01:
But we have three distinct instances of the court having plain language under the agreement that the parties did not dispute they agreed to that was plain and unambiguous in their terms.

[00:17:12] Speaker 01:
And then the court effectively rewrote or ignored the contract and didn't apply it according to its plain and ambiguous terms.

[00:17:19] Speaker 01:
And for those reasons, Idaho law mandates reversal as Idaho law is clear that these contracts need to be applied according to their plain, unambiguous, and ordinary sense.

[00:17:29] Speaker 01:
On the other issues, I'll submit it on our briefing, and I'll reserve my remaining time for rebuttal, unless you have any questions for me right now.

[00:17:35] Speaker 01:
Thank you.

[00:17:35] Speaker 01:
Thank you.

[00:17:36] Speaker 03:
May I please court?

[00:17:54] Speaker 03:
Council, my name is John Howell.

[00:17:56] Speaker 03:
I'm from Boise, Idaho, and I represent the appellee, Yvonne Delchiff Ivanoff.

[00:18:02] Speaker 03:
The primary issue, as I understand it, in this appeal has to do with the district court's determination that the damages awarded by the jury under Section 6B were wages under the Idaho Wage Claim Act.

[00:18:20] Speaker 03:
This is not an appeal with respect to whether the termination was with or without cause.

[00:18:25] Speaker 03:
They didn't appeal that aspect.

[00:18:27] Speaker 03:
They're focusing on the wage decision that Judge Dale made.

[00:18:32] Speaker 03:
Now, I think the court got it right, obviously, and I would summarize it by highlighting four items.

[00:18:40] Speaker 03:
It represented bargain for compensation.

[00:18:43] Speaker 03:
And I'm going to get into that a little bit with respect to the details and the argument that the district court wrongfully reviewed extrinsic evidence in making her decision on summary judgment in just a moment.

[00:18:57] Speaker 03:
But number two, the payment was akin to severance pay.

[00:19:01] Speaker 03:
Why?

[00:19:04] Speaker 03:
It served as a salary substitute to protect the economic well-being of Yvonne, my client.

[00:19:13] Speaker 03:
Number three, it was not a mere gratuity.

[00:19:15] Speaker 03:
And number four, it was not future wages.

[00:19:19] Speaker 03:
And I'll go through those in just a moment.

[00:19:22] Speaker 03:
With respect to the background of the first item there, with respect to bargain for compensation, I think it's very important.

[00:19:30] Speaker 03:
I'm not going to bore this court with all the details of the history.

[00:19:32] Speaker 03:
I think it's an interesting story, especially for

[00:19:35] Speaker 03:
parents with kids who pursue sports or debate or whatever it may be.

[00:19:41] Speaker 03:
But very briefly, my client as a younger man was a world-class wrestler and after his wrestling days became a world-class coach.

[00:19:51] Speaker 03:
He moved to Boise in 2010.

[00:19:54] Speaker 03:
A friend of his from Bulgaria started a wrestling club in Boise named Supless.

[00:19:59] Speaker 03:
His name was Ivan Radniff Ivanov, just a different middle name than my client.

[00:20:05] Speaker 03:
Now, the Maugers lived in or live in Wendell, Idaho.

[00:20:09] Speaker 03:
That's a small town in Idaho about 100 miles southeast of Boise.

[00:20:14] Speaker 03:
They have three kids, two boys.

[00:20:16] Speaker 03:
They got into wrestling.

[00:20:17] Speaker 03:
They began driving over to Idaho or to Boise in about 2011 three to four times a week to get world-class coaching at Supless.

[00:20:27] Speaker 03:
In 2013, Appellant Fitness Elite was created.

[00:20:31] Speaker 03:
And they started a gym in Wendell.

[00:20:33] Speaker 03:
So instead of driving over to Boise, they paid Supless $150,000 to bring the coaches to Wendell.

[00:20:40] Speaker 03:
And they formed a relationship with my client, Yvonne.

[00:20:43] Speaker 03:
In 2015, there was a dispute arose between Mr. Mauger and Radnev.

[00:20:49] Speaker 03:
And as a result, Mr. Mauger asked my client to be the head coach.

[00:20:53] Speaker 03:
So this is the critical time period with respect to the bargain for compensation discussion in the October and November of 2015 time period.

[00:21:04] Speaker 03:
We know that there were discussions with respect to the agreement, and specifically Section 6B.

[00:21:13] Speaker 03:
That's Exhibit 202, a trial.

[00:21:16] Speaker 03:
It's in the ninth volume of excerpts record.

[00:21:18] Speaker 03:
And there's handwriting that's scratched in that agreement.

[00:21:21] Speaker 03:
The parties discussed this.

[00:21:23] Speaker 03:
Why?

[00:21:24] Speaker 03:
Two primary reasons.

[00:21:26] Speaker 03:
One is that my client wanted to make sure that he had economic stability in taking this job.

[00:21:32] Speaker 03:
He had talked to Radniff about taking the job.

[00:21:34] Speaker 03:
Predictably, he got extremely upset, asked my client to sign a non-compete, and Mr. Mauger then sent my client the draft agreement that his attorney created.

[00:21:46] Speaker 03:
There were discussions between my client and Mr. Magher, and my client's son, Georgie, also participated in those.

[00:21:53] Speaker 03:
And the result was what we have in the actual agreement, exhibit 101.

[00:21:58] Speaker 03:
that in Section 6B, there is this payment for the life of the contract.

[00:22:04] Speaker 03:
If we terminate you without cause, you'll be paid the remainder.

[00:22:09] Speaker 04:
And so the bar… Can you discuss and distinguish the Morvey-Omni care case?

[00:22:14] Speaker 04:
Because I think that's the most fashion analogous.

[00:22:15] Speaker 04:
And if I – maybe I missed it, but I don't think your answering brief addressed that case.

[00:22:20] Speaker 04:
And I think that's the most relevant one.

[00:22:23] Speaker 03:
Sure, yeah, absolutely.

[00:22:25] Speaker 03:
And in Moore, Moore deals with – I mean, obviously we know what Moore deals with.

[00:22:30] Speaker 04:
It dealt with liquidated damages, and this case involves liquidated damages.

[00:22:33] Speaker 03:
Sure, Your Honor.

[00:22:33] Speaker 03:
What Moore doesn't do is it doesn't provide us a real good roadmap with respect to how to handle these cases.

[00:22:39] Speaker 03:
Moore was an appeal from an arbitration panel's award and decision with respect to Mr. Moore.

[00:22:46] Speaker 03:
It was an appeal.

[00:22:48] Speaker 03:
It was – there was a motion to modify or vacate that award.

[00:22:52] Speaker 03:
It went to the lower court in Idaho.

[00:22:53] Speaker 03:
Judge Copsey, who I used to work for, rendered the decision on that.

[00:22:58] Speaker 03:
And the primary issue in that case – and I'll get to my point here in a second – but the primary issue had to do with whether the Federal Arbitration Act applied or the Idaho Uniform Arbitration Act applied.

[00:23:08] Speaker 03:
And that's important here because it wasn't a de novo review.

[00:23:11] Speaker 03:
So that's why I think the court and more doesn't deal

[00:23:14] Speaker 03:
with the was this, you know, what doesn't deal with the party's intent and was it bargained for compensation?

[00:23:22] Speaker 03:
Judge Dale addresses this in her memorandum for on the decision for the motion for reconsideration post-trial and she does a nice job outlining this discussion.

[00:23:32] Speaker 03:
But what Moore does is it tells us that future wages are not wages under the Act.

[00:23:38] Speaker 03:
That's the takeaway from that.

[00:23:40] Speaker 03:
It doesn't go into any analysis with respect to bargain for compensation.

[00:23:49] Speaker 03:
And what it also doesn't do is it doesn't give us any discussion as to what the party's intent was.

[00:23:55] Speaker 03:
Now, what we have after that 2005 Supreme Court decision is we have several other decisions that are right on point from the Idaho Supreme Court.

[00:24:03] Speaker 03:
Huber, I think, is right on point.

[00:24:06] Speaker 00:
Well I'm not sure that it is.

[00:24:08] Speaker 00:
I mean there the court talks about the relevant contractual provision as being severance pay, not liquidated damages.

[00:24:18] Speaker 00:
It seems like something like severance pay would

[00:24:21] Speaker 00:
naturally increase rather than decrease with the length of employment.

[00:24:26] Speaker 00:
And it also seems unusual that something like a severance pay agreement would be mutual, which the provision is here.

[00:24:34] Speaker 00:
I mean, your client would have had to pay Fitness Elite if he had decided to terminate his employment early.

[00:24:40] Speaker 00:
And it just seems like it would be a very unusual severance pay provision.

[00:24:45] Speaker 00:
Sure, sure.

[00:24:47] Speaker 03:
I think it is on point, Your Honor, because sections 3.2.2, I believe, from the Huber agreement is strikingly similar to our agreement here.

[00:24:58] Speaker 03:
They both talk about if there's a termination without cause, you'll be paid a certain amount afterwards.

[00:25:06] Speaker 03:
And that, as Your Honor noted in the question to counsel earlier, both provisions have reduced the amount that the employer owes or would owe if the employee goes out and gets additional work.

[00:25:24] Speaker 03:
And so that number is reduced.

[00:25:26] Speaker 03:
And the Huber court thought that that was extremely important.

[00:25:28] Speaker 03:
And what happens now is that in Huber, the court says this is like or this seems like a severance pay provision.

[00:25:38] Speaker 03:
In severance pay, the intent of severance pay is to protect the employee, to protect them from economic harm.

[00:25:45] Speaker 03:
And in Huber, the court found that that provision protected Mr. Huber from economic harm that he would have while unemployed.

[00:25:54] Speaker 03:
It's the same thing here.

[00:25:57] Speaker 04:
But in Huber, the severance payment was just flat amount, right?

[00:26:01] Speaker 04:
No matter the timing.

[00:26:03] Speaker 04:
Whereas here, the amount decreases as Mr. Ivanov worked longer for the Maugherty.

[00:26:08] Speaker 03:
That's right.

[00:26:09] Speaker 03:
And I think it's important on that aspect, Your Honor, that the contract here, Section 1 and Section 6C, both talk about how important it is to both parties to have a long-term agreement.

[00:26:20] Speaker 03:
I mean, it was super important to my client moving from Boise and giving up burning the bridge with Radnev.

[00:26:25] Speaker 03:
It was also important to Fitness Elite to have a long-term agreement.

[00:26:30] Speaker 03:
It specifies that in section one.

[00:26:32] Speaker 03:
And in section C, they even say, the contract even says, section 6C, excuse me, that the only reason Fitness Elite, or part of the reason, the big reason, is that they're entering into this decision to hire him based upon the long-term commitment that the coach is giving.

[00:26:50] Speaker 03:
So, you know, the long-term commitment here was super important.

[00:26:53] Speaker 03:
We knew that that was going to be the purpose, is to have a long-term commitment, Fitness Elite,

[00:26:58] Speaker 03:
Indicated in the testimony indicated at trial that they wanted coach to be there for a long time Right, so I think back to the severance pay provision is this severance pay this is more akin to severance pay

[00:27:09] Speaker 03:
I'm not sure that it fits into some sort of black letter-defined box of what severance pay is, but as the courts indicate, you look at the intention of the parties, and is it bargained for compensation?

[00:27:21] Speaker 03:
And what is severance pay?

[00:27:22] Speaker 03:
It's to protect the employee from economic hardship.

[00:27:26] Speaker 03:
And that's exactly what this was.

[00:27:28] Speaker 03:
That's exactly what this did.

[00:27:30] Speaker 03:
And I think the Huber case is spot on on that, respectfully.

[00:27:35] Speaker 03:
And I don't think that more is spot on because it doesn't get into the analysis that all the other courts that have applied or looked at this issue do with respect for bargain for compensation.

[00:27:47] Speaker 03:
And the other thing that I'll add with respect to more, they call it future wages.

[00:27:51] Speaker 03:
We've learned from the following cases from the Idaho Supreme Court, Nettleton, Savage, Huber also, that in order for something to be a future wage, there has to be something more for the employee to do.

[00:28:06] Speaker 03:
And if that's the case, then it's not going to be wages.

[00:28:10] Speaker 03:
If there's nothing more for the employee to do, then it's wages.

[00:28:15] Speaker 03:
And that context comes up regularly for commissions.

[00:28:20] Speaker 03:
Was the commission earned or not?

[00:28:22] Speaker 03:
And that's where the Idaho Supreme Court has, unequivocally in my mind, indicated that, look, if there's nothing more for the employee to do, then it's not a future wage.

[00:28:34] Speaker 03:
That's what Judge Dale held in this case.

[00:28:37] Speaker 03:
There was nothing more for Yvonne to do.

[00:28:40] Speaker 03:
It could not be a future wage, which is dissimilar to more.

[00:28:45] Speaker 03:
With respect to extrinsic evidence, real quickly, the argument is that the court erred in reviewing, or as soon as there is an ambiguity, it automatically goes to the trier of fact.

[00:29:04] Speaker 03:
And they point out an Idaho Supreme Court case.

[00:29:07] Speaker 03:
I think Judge Dale in her decision on the motion for summary judgment back in November 17, 2022, addressed this.

[00:29:13] Speaker 03:
and identified Idaho law, starting with a 1917 Idaho Supreme Court case called Snodderley, where if there's an exception to that rule, that if there's a latent ambiguity,

[00:29:26] Speaker 03:
in a contract, the court can consider extrinsic evidence.

[00:29:29] Speaker 03:
I pointed out in our answering brief that there's Ninth Circuit.

[00:29:37] Speaker 03:
This circuit has a similar carve out on a motion for summary judgment.

[00:29:43] Speaker 03:
There's no hard and fast rule that a court cannot consider extrinsic evidence when there's an ambiguity in a contract.

[00:29:49] Speaker 03:
And that was a San Diego, Gaston Electric case.

[00:29:52] Speaker 03:
and others.

[00:29:53] Speaker 03:
So I think it was appropriate, whether you apply federal, the reason why we cited that, I wasn't quite sure if there was going to be an argument made as to whether it's federal procedural or whether this was a procedural question or substantive question.

[00:30:08] Speaker 03:
But under both federal and Idaho law, I think it's appropriate for the court to consider extrinsic evidence in this context.

[00:30:15] Speaker 03:
And when you do that, that's when it becomes clear that it's bargained for compensation.

[00:30:22] Speaker 03:
Moving on to the two other items that council addressed, and the first is the location of the school.

[00:30:37] Speaker 03:
I'll tell you, we moved for a directed verdict at the close of evidence or the evening before, yeah, at the close of our case, asking for two things.

[00:30:49] Speaker 03:
A location of the school and that the duties should be primarily performed in Wendell, those two items.

[00:30:56] Speaker 03:
I lost on the second one.

[00:30:59] Speaker 03:
I won as to the location of school, or the judge agreed with me, Judge Dale.

[00:31:04] Speaker 03:
In this appeal, it seemed like they're appealing something that they actually

[00:31:10] Speaker 03:
There was no issue on I mean the court clearly indicated that Where the location of the duties were to be performed was going to be a jury question And so I don't think the court did anything wrong.

[00:31:22] Speaker 03:
I think the court got it right She certainly had the ability to

[00:31:27] Speaker 03:
imply a term where there was no disputed fact whatsoever.

[00:31:32] Speaker 03:
And that was what happened there.

[00:31:37] Speaker 03:
And again, she denied our motion with respect to the location of the duties, indicating that that was for the jury to determine.

[00:31:42] Speaker 03:
And the jury ultimately found that, as we know, the termination was without cause.

[00:31:50] Speaker 03:
On the waiver argument, the failure to give a jury instruction on waiver

[00:31:57] Speaker 03:
In order to establish a defensive waiver, you have to prove reliance and that a party altered its position.

[00:32:12] Speaker 03:
And I would submit there was no evidence whatsoever presented on that issue, which is why the court didn't give the jury instruction.

[00:32:20] Speaker 03:
The contract talks about waiver.

[00:32:22] Speaker 03:
She indicated to counsel, you can argue that.

[00:32:25] Speaker 03:
You can argue waiver if you want.

[00:32:27] Speaker 03:
But they hadn't established waiver from the true sense of waiver as an affirmative defense, which is, again, reliance and change of position.

[00:32:40] Speaker 03:
Other than that,

[00:32:42] Speaker 03:
never expect a cold bench or hot bench, but those are specifically responding to the other provisions.

[00:32:49] Speaker 04:
Can you address one of the evidentiary issues and that's the court admitted one of the taped recordings of Mr. Roger saying that he's going to lose millions because of COVID.

[00:33:02] Speaker 04:
What is the relevance of admitting that

[00:33:06] Speaker 04:
testimony.

[00:33:08] Speaker 04:
It seems gratuitous.

[00:33:09] Speaker 04:
It seems like that was really intended to show that the Maugers are wealthy.

[00:33:15] Speaker 04:
They have deep pockets.

[00:33:16] Speaker 04:
I'm not sure what the relevance of that amount.

[00:33:18] Speaker 03:
Sure.

[00:33:19] Speaker 03:
Sure, Your Honor.

[00:33:20] Speaker 03:
I think every request that was made to redact portions of the audios were complied with by us.

[00:33:30] Speaker 04:
Well, I think there was a colloquy between, I don't know if it was you at the trial level or and the judge, but I think

[00:33:37] Speaker 04:
uh... the Margaret's attorneys wanted that portion out I think precisely because they thought it would be prejudicial because you're referring to one party again having very deep pockets.

[00:33:46] Speaker 04:
If you lose millions in COBOL you probably have a lot more millions that you didn't lose uh... and I just don't see the relevance of mentioning millions of dollars other than to say look these are very very wealthy people and you know no they lose this case no big deal

[00:34:03] Speaker 03:
Well, OK, on that specific term, I guess my memory might be failing me a little bit, Your Honor.

[00:34:10] Speaker 03:
But how I would respond, I guess, is that you have, I mean, we've been over backwards with respect to auditing or editing the audios.

[00:34:22] Speaker 03:
as soon as we could, addressing any issues.

[00:34:25] Speaker 03:
On that specific issue, depending on what came in, I apologize, if my argument, you know, I do think that there is relevance with respect to the context of the termination, right?

[00:34:39] Speaker 03:
We're arguing about whether this was with cause or without cause, and we obviously argued that it was a without cause termination.

[00:34:49] Speaker 03:
We knew that the Maugers had

[00:34:52] Speaker 03:
that Coach was their highest paid employee.

[00:34:55] Speaker 03:
We knew that their oldest son was going to Utah to wrestle at Division I. And bluntly, Your Honor, we felt that this was a situation where the Maugers found an opportunity to get rid of Coach and to get him off the payroll.

[00:35:09] Speaker 03:
And so that went into the narrative of the reasons for the termination, which had nothing to do with a for-cause termination.

[00:35:18] Speaker 03:
It did not have anything to do, or the intent was,

[00:35:21] Speaker 03:
with respect to the deep pockets of the modders.

[00:35:23] Speaker 03:
It had to do with the financial situation that they may have found themselves in with respect to COVID and wanting to jettison a salary.

[00:35:32] Speaker 04:
But wasn't the main issue whether he has to move to Utah or not under the contract?

[00:35:38] Speaker 03:
April 22 letter in 2020.

[00:35:41] Speaker 03:
is the justification that Mr. Magher gave for the termination during the audio recordings.

[00:35:48] Speaker 03:
In this litigation, they brought up all sorts of different things and attacked my client from the standpoint of saying that he abused children, he was a terrible coach, et cetera.

[00:35:59] Speaker 04:
But it seemed like the thrust of the trial was, does he have to go to Utah or not?

[00:36:02] Speaker 04:
I mean, it seemed like all the facts leading up to it, you know, there's counter offers, demand for more money, housing, et cetera.

[00:36:08] Speaker 04:
He has to move to Utah.

[00:36:09] Speaker 04:
It seemed like that was really the thrust of the trial.

[00:36:12] Speaker 04:
Not whatever, you know, he lost money during COVID, lost millions in COVID and therefore wanted to cut costs.

[00:36:19] Speaker 03:
Yeah, I mean, I don't know what Mr. Mauger was or was not thinking, but that was the justification that they utilized in order to terminate him, which then circles back to the terms of the contract and whether my client felt like, again, that he was getting, he was being pushed out and that he couldn't comply with the contract.

[00:36:41] Speaker 03:
If he was to go to Utah, he still had a contract that says that he had to coach the kids at Fitness Elite.

[00:36:47] Speaker 03:
And there was lots of other students at Fitness Elite that he was responsible for coaching.

[00:36:51] Speaker 03:
So the purpose of that April 22 letter was, I mean the testimony was, hey I'm trying to get his attention, I'm trying to see what the heck is going on here because I don't think under this contract I can go down to Utah because I have other obligations.

[00:37:09] Speaker 02:
Thank you.

[00:37:10] Speaker 02:
One follow-up question.

[00:37:12] Speaker 02:
So, in this case, if I understand correctly, the liquidated damages provision, he gets us the remainder of his salary times the years, you know, what would be paid out.

[00:37:23] Speaker 02:
But he doesn't get it if he gets alternative employment, right, that gets reduced by alternative employment?

[00:37:28] Speaker 03:
That's right.

[00:37:29] Speaker 02:
So, I'm just trying to think, a 10-year period here, right?

[00:37:32] Speaker 03:
Yes.

[00:37:33] Speaker 02:
So, let's say in, you know, three months in, he gets let go,

[00:37:37] Speaker 02:
I mean, he's the thought that he would just sit there and twiddle his thumbs for nine plus years.

[00:37:41] Speaker 02:
So I'm trying to figure out, because part of the way you compare this case to Hoover and say it's not like Moore is because it's more like Hoover in that, if I'm getting the names of the cases right, it's more like Hoover in that sense.

[00:37:54] Speaker 02:
But as a practical matter, it's hard to see how that provision will work.

[00:37:58] Speaker 02:
I mean, for one thing, you come in and say, I want my nine years worth of pay.

[00:38:03] Speaker 02:
But then once you get it, then you can't work for nine years, or they can clot back?

[00:38:07] Speaker 02:
I mean, how does that even work?

[00:38:08] Speaker 02:
I'm trying to figure out.

[00:38:08] Speaker 03:
Yeah, I think the contract addresses that with respect to the extent there's a future, to the extent you get future employment, there is a repay provision in there.

[00:38:19] Speaker 02:
So it's actually encouraging somebody to not work for, if you had nine years left, you'd basically, well, I could go work as a coach, but if I do, I'll have to pay all this money back.

[00:38:28] Speaker 03:
Yeah, I mean, Your Honor, Judge Van Dyke, I mean, I think, I mean, those aren't the facts, number one.

[00:38:33] Speaker 03:
And I don't mean to not discuss it with you.

[00:38:35] Speaker 02:
But the reason I get it, but like, it does seem like this, the fact that this liquidated damages provision is like more, in a sense, it provides for a lower payout.

[00:38:45] Speaker 02:
If it turns out that that provision is just practically almost irrelevant, because I assume that it doesn't sound like this is the kind of guy that's going to sit around and twiddle his thumbs.

[00:38:55] Speaker 02:
No, not at all.

[00:38:56] Speaker 03:
That's right vision that in other words It's kind of a low risk to put in there yet for the other party to put in there that That we have to pay your salary as long as you have this other term that we don't pay to get our job because it's gonna get another job That's right and and under section 1 in section 60 I mean it was critical for fitness elite to have this long-term commitment They believe that they were gonna honor it the entire time too and the only time that they wouldn't honor it is if they terminated them without cause so I mean I think

[00:39:24] Speaker 02:
OK, that's a strange provision.

[00:39:28] Speaker 02:
Thank you.

[00:39:29] Speaker 03:
Appreciate it.

[00:39:30] Speaker 03:
Thank you.

[00:39:42] Speaker 01:
Thank you, Your Honors.

[00:39:43] Speaker 01:
I will try and be brief.

[00:39:47] Speaker 01:
Perhaps it's this setting and just where I am that it feels like me wanting to drape the American flag over my shoulders, but words matter, agreements matter.

[00:39:59] Speaker 01:
The facts are in this case, Mr. Ivanov, Fitness Elite, they signed a contract that said liquidated damages on four separate occasions.

[00:40:07] Speaker 01:
There is case law in Idaho that specifically says is the dispositive that liquidated damages, a liquidated damage provision, the Idaho Wage Claim Act does not apply.

[00:40:19] Speaker 01:
How this has gotten turned out and how this result was reached is baffling to me.

[00:40:24] Speaker 01:
And I think that your honors hit the nail on the head that the cases that have been relied on by the plaintiff and the appellee are

[00:40:32] Speaker 01:
completely distinguishable in the fact that, for many reasons, but here the amount goes down over time, whereas in true severance provisions or like the Haas case, for instance, he would be working, he would get $100,000 for each year that he worked.

[00:40:49] Speaker 01:
That was money he earned over time for services rendered under the plain language of that statute that fits.

[00:40:56] Speaker 01:
Here it goes down over time and it's based on future wages

[00:41:00] Speaker 01:
based on future salary and it's based on a time that he was not going to be working.

[00:41:05] Speaker 01:
He wasn't going to lift a finger to get this money.

[00:41:08] Speaker 01:
Under the Idaho Wage Claim Act, it needs to be for services rendered.

[00:41:12] Speaker 01:
This wasn't for services rendered.

[00:41:13] Speaker 01:
This was the amount agreed upon in the event of a breach of contract that worked both ways, we can't forget, because Fitness Elite had its own liquidated damages provision.

[00:41:22] Speaker 01:
And the fact that this has somehow been turned around, and the words have been not just twisted, but absolutely changed so that liquidated damages now say severance pay, it's not fair.

[00:41:34] Speaker 01:
It's not justice.

[00:41:35] Speaker 01:
It's not right.

[00:41:36] Speaker 01:
And it's not what's proper under Idaho law.

[00:41:39] Speaker 01:
And so for those reasons and those included in our briefing, we asked the court to reverse it.

[00:41:46] Speaker 01:
to address judge's point on admitting the evidence about the Maugher's finances.

[00:41:54] Speaker 01:
I mean, it was gratuitous.

[00:41:58] Speaker 01:
There had already been evidence that had come in of their bank statements.

[00:42:02] Speaker 01:
It served nothing but to inflame the passions of the jury.

[00:42:08] Speaker 01:
objected, and we tried to get that out of there, and it just did not.

[00:42:14] Speaker 01:
The judge overruled us.

[00:42:15] Speaker 01:
I will say one more thing.

[00:42:17] Speaker 01:
There's been an Idaho case in where a contract that included a liquidated damages clause was found that the Idaho Wage Claim Act applied, and that the treble damage or the attorney fee provision applied.

[00:42:29] Speaker 01:
The only case that addresses it is Moore, and the liquidated damages clause in that provision, the Idaho Wage Claim Act, does not apply.

[00:42:36] Speaker 01:
The same is true here and should be true here.

[00:42:39] Speaker 01:
Thank you.

[00:42:40] Speaker 04:
Thank you.

[00:42:40] Speaker 04:
Thank you, and thank you both for the helpful oral argument.

[00:42:43] Speaker 04:
The case has been submitted, and we return for the day.

[00:42:58] Speaker ?:
We're staying.