[00:00:05] Speaker 03: We have one case scheduled for oral argument this afternoon. [00:00:08] Speaker 03: Team Hall Venture LLC versus Army and Air Force Exchange, Dock at 18-2283. [00:00:37] Speaker 04: You may have pleased the Court. [00:00:38] Speaker 04: Good afternoon. [00:00:38] Speaker 04: James Creeden for Team Hall Venture LLC. [00:00:42] Speaker 04: I'd like to start by thanking the Court and opposing counsel for your indulgence in recalendering this argument due to weather conditions last month in my home state of Texas. [00:00:52] Speaker 04: So before the Court today, it's a question of ambiguity in the language of a release signed by Mr. Hall for Team Hall Venture. [00:01:03] Speaker 04: Turning to supplemental appendix 15, that's actually the copy of the amendment of the solicitation contract with the actual language that was signed. [00:01:13] Speaker 04: I understand, of course, that at the board there was a quotation of the release, but the larger language from that release is there at supplemental appendix 15. [00:01:25] Speaker 04: And the contention today is that phrase C, which is the release that was cited to by the board in its decision, [00:01:33] Speaker 04: is, in fact, ambiguous and is ambiguous on its face. [00:01:36] Speaker 04: And that is because that phrasing should be interpreted in the context of the larger document itself. [00:01:42] Speaker 04: That is, within the four corners of the document. [00:01:45] Speaker 02: So why, to include the time period of 1 to 17 July 2016, why could that possibly be a limitation? [00:02:01] Speaker 02: I see no reasonable basis for saying that. [00:02:06] Speaker 02: The term include is open-ended. [00:02:10] Speaker 02: It doesn't say limited to. [00:02:13] Speaker 02: It doesn't say including this, but excluding anything else. [00:02:17] Speaker 02: It says to include. [00:02:22] Speaker 04: Your Honor, turning to Section B, which is in that same document, Section B provides a context for what the language of Section C means. [00:02:30] Speaker 04: In terms of looking at the language itself word for word, if we parsed down every single individual word, first considering the word within the context of the larger contract, we could find all sorts of interpretations. [00:02:42] Speaker 04: But looking at letter B, there was already a termination that was in place of the contract. [00:02:47] Speaker 04: The contract was already set to terminate on July 17, 2016. [00:02:53] Speaker 04: Here, the language in this amendment speaks to the change of that termination date from July 17, 2016 back to June 30. [00:03:03] Speaker 04: And so looking at the way that the phrasing reads, that phrasing, in fact, only speaks to that period because the very purpose of this amendment was to change from a July 17 termination date to a June 30 termination date. [00:03:17] Speaker 04: Therefore, when it says, [00:03:19] Speaker 04: to include the time period of 1 to 17 July 2016, that's the only time period that's intended to be included. [00:03:29] Speaker 02: Well, maybe you can sell that somewhere. [00:03:34] Speaker 01: I mean, isn't the more logical reading is that the government was worried that since they were agreeing to terminate it early, your client might come back to them for some kind of claim for the period that it had originally agreed to be bound to because of the 90-day termination clause, so they wanted to make [00:03:54] Speaker 01: be clear that this waiver included post-termination periods after June 30th, which is what they were now agreeing to, in addition to all claims related to the pre-June 30th termination? [00:04:11] Speaker 04: Well, Your Honor, in terms of the government's goals and such, that is revealed by the emails at supplemental appendix 36 and 37. [00:04:20] Speaker 01: Well, sure, I know you want us to look at all the extrinsic evidence here, but the problem is we don't get to any of that if we find this is plain. [00:04:31] Speaker 01: And when it's a pretty standard release clause that adds on, I mean, this is in almost every government [00:04:38] Speaker 01: Contract that you know where you have some kind of termination a great termination or the like and all they've done is add on it a specific thing Emphasizing that it includes this first post termination period as well. [00:04:53] Speaker 01: I Don't see how that makes it on plane. [00:04:57] Speaker 01: It just makes it more specific [00:04:59] Speaker 04: Well, I believe, Your Honor, that if you're looking at, for example, the transcripts from the board proceeding, certainly there was some confusion within that proceeding as to what the phrasing meant. [00:05:09] Speaker 04: It wasn't intuitively obvious at the moment. [00:05:11] Speaker 04: The question was positive at one point to Captain Williams. [00:05:13] Speaker 04: What does that term mean? [00:05:15] Speaker 04: And the response was he believed it was intended to apply to 1-17-July only. [00:05:20] Speaker 04: Now, of course, that does not bind [00:05:21] Speaker 01: I mean, our job is not to look at the subjective beliefs in the extrinsic record. [00:05:28] Speaker 01: Our job is to look at the plain language of this and see whether it is indeed plain and unambiguous or not. [00:05:36] Speaker 01: So the fact that one of the government council may have believed one thing, they certainly changed their position by the reply brief at the board, I think. [00:05:47] Speaker 01: You know, it may be unfortunate that this is the way it occurred, but again, isn't this a standard release clause? [00:05:56] Speaker 01: I mean, everything up into that last phrase looks like something I've seen hundreds of times, and then it adds on a specific period. [00:06:04] Speaker 01: I don't know how making it more specific somehow renders it ambiguous. [00:06:10] Speaker 04: Well, frankly, I think looking at the larger intent of the contract as a whole, to which this was an amendment, the intent was to structure the relationship between APEs or the exchange and Dean Hall venture. [00:06:22] Speaker 04: The intent here was to change from one previous termination date to another termination date. [00:06:28] Speaker 04: And so that phrase of including, at the very least, it would be in article drafting that raises some questions. [00:06:33] Speaker 04: But I would argue that that phrasing, read within the context of letter B of the change from July 17 to June 30 as the termination, is exactly what creates the ambiguity, that there is sufficient indicia of ambiguity that the court should look through and look to the intent of the parties in order to facilitate the intent of the larger contract in the amendment. [00:06:58] Speaker 01: I know he initially got about $30,000 to settle this contract out, and he was originally seeking $640,000 and dropped it to $240,000. [00:07:11] Speaker 01: Do you have any insight on to how much of that $240,000 still contains future lost profits? [00:07:17] Speaker 04: I don't have down to $1 in the Senate. [00:07:20] Speaker 01: I didn't see it in the record. [00:07:21] Speaker 01: Sorry, I interrupted you. [00:07:23] Speaker 04: I don't have it down to dollars and cents, Your Honor. [00:07:26] Speaker 04: What I will say is I believe that that has been a moving target, certainly the amount claimed, depending upon different ways of changing up those amounts. [00:07:34] Speaker 04: For example, if you look at the amount that AP's that the exchange had set in its last offer, which was continuing on the months after this termination, that was based upon a way that some of the money had been handled in dividing up the entire contract period. [00:07:49] Speaker 04: Now, certainly the question of how much dollars are being claimed or how much is being awarded speaks to the fact that there was an ongoing claim process here where the exchange certainly seemed to believe that this was not a waiver of claims going forward. [00:08:07] Speaker 04: Well, Your Honor, I tried to make the argument more generally and trying to speak to it more specifically now as it was raised at the lower proceeding and as it's shown in the transcripts and as it's shown in the briefing that was filed by Mr. Hall on behalf of Team Hall Venture at that time. [00:08:20] Speaker 01: There's been a consistent argument made from the beginning that this language... I know that there's been an argument that this is ambiguous and this is not what's intended, but [00:08:32] Speaker 01: I don't know if you're alluding to our line of cases that suggest that even with releases, they're sometimes not enforceable. [00:08:40] Speaker 01: It's clear from the government's context that they intended to go on and do that. [00:08:45] Speaker 01: But you didn't cite any of those cases in your brief, did you? [00:08:48] Speaker 04: I did not, Your Honor, know that's correct. [00:08:50] Speaker 04: Those were raised in the lower briefing and they are shown in the record. [00:08:53] Speaker 04: And certainly we've suggested in the briefing that there's a larger question here of whether it's limited to this time period or not and what the intent was of the parties. [00:09:08] Speaker 04: So if the court sees fit to pierce through and to say that there is some ambiguity here, there is certainly a question of what was intended by both sides in the meeting of the minds for this contract. [00:09:20] Speaker 04: And looking at the record, [00:09:22] Speaker 04: It's clear from both the email proceedings back and forth between the contracting officer and Mr. Hall and also from the ongoing handling of the claim by the exchange that there was an intent this would be limited to a shorter time period. [00:09:36] Speaker 04: If that's not the intent, then certainly what happens is Team Hall said that they would shorten up their period by 17 days. [00:09:43] Speaker 04: The government seemed to concede and agree that shortening by 17 days was appropriate and would allow for the stop of ongoing losses and the development of ongoing claims. [00:09:52] Speaker 04: Once that happened, the government would continue to handle the outstanding claim that was present before. [00:09:57] Speaker 04: before a fees. [00:09:58] Speaker 04: And that is why for the months afterwards, there's a continuing handling of that claim, continuing negotiations. [00:10:04] Speaker 04: And so the overall record shows that the intent of both sides was to limit this waiver to the time period between 1 and 17 July 2016. [00:10:31] Speaker 00: May it please the court? [00:10:33] Speaker 00: The issue before the court is the plain language of a contract. [00:10:37] Speaker 00: Paragraph 4C of what we call the termination agreement is a broad, unrestricted general release clause. [00:10:44] Speaker 02: I have another question for the government. [00:10:46] Speaker 02: Yes, sir? [00:10:48] Speaker 02: You filed a brief in this court, it wasn't very long, 12 pages. [00:10:52] Speaker 02: It's missing page 11. [00:11:07] Speaker 00: I'm sorry, sir. [00:11:10] Speaker 00: What you're saying is that page 11 of the Appellee's brief is missing? [00:11:13] Speaker 02: Yeah. [00:11:14] Speaker 00: I'm not aware of that. [00:11:15] Speaker 00: I do have a copy. [00:11:16] Speaker 00: The paper copies you filed with us don't have page 11. [00:11:20] Speaker 00: My apologies. [00:11:21] Speaker 00: We don't have page 11. [00:11:22] Speaker 00: Yes, I do have page 11 of the electronic. [00:11:25] Speaker 03: So we're missing about two paragraphs. [00:11:27] Speaker 03: That's a classic way of argument, too. [00:11:31] Speaker 00: No, I apologize. [00:11:32] Speaker 03: I was not aware of that. [00:11:38] Speaker 00: We have paralegals. [00:11:41] Speaker 00: I apologize on behalf of my office, Your Honor. [00:11:44] Speaker 01: But I'll leave it to the courts. [00:11:45] Speaker 01: You might take back and suggest that the paper copies get compared to electronic copies. [00:11:51] Speaker 00: Yes, this is a problem that should not have happened. [00:11:53] Speaker 01: I'm sure, you know, I'm aware of the situation. [00:11:57] Speaker 03: Mrs. Creeden, did you get a page 11? [00:12:04] Speaker 01: This is just a printing error in filing the paper copy. [00:12:09] Speaker 02: Don't worry about it because Judge Rain is instructing me on how to do the electronics. [00:12:17] Speaker 01: Well, can I ask you what I was asking him? [00:12:19] Speaker 01: I know this is not before us, but they ultimately got roughly $30,000. [00:12:25] Speaker 01: They reduced their claim from $640,000 to $240,000. [00:12:28] Speaker 01: Do you have any insight? [00:12:30] Speaker 01: I know this is not particularly in the record, but how much of that $240,000 was still seeking lost profits for the terminated period? [00:12:39] Speaker 00: Yes. [00:12:41] Speaker 00: So the contracting officer [00:12:44] Speaker 00: made an offer of approximately $29,000 to settle the claim. [00:12:49] Speaker 00: Have they accepted that? [00:12:49] Speaker 00: They did not accept it. [00:12:50] Speaker 00: And that's in the final decision during a conference call. [00:12:54] Speaker 01: If they lose this, they can still get the $29,000. [00:12:55] Speaker 01: Yeah. [00:12:58] Speaker 01: It's the final decision. [00:13:00] Speaker 00: It's in the final decision. [00:13:01] Speaker 00: There was a conference call, and the appellant declined that offer. [00:13:06] Speaker 00: The bulk of the claim was for future lost sales. [00:13:12] Speaker 00: In the papers before the board, the appellant adjusted their- Which is probably hard to get when they're the ones that asked for the early termination. [00:13:23] Speaker 01: I mean, I know this is none of us before. [00:13:25] Speaker 01: But I mean, it does seem like there's a little bit of this is a very small government contractor that may not have intended to sign away its claims. [00:13:36] Speaker 01: But I'm just trying to get at how much of his actual [00:13:40] Speaker 01: out-of-pocket cost due to the flooding and the broden infestation was covered by that $30,000 offer? [00:13:47] Speaker 01: And how much of what he's additionally asking for is future loss profits post-termination? [00:13:54] Speaker 00: Yes. [00:13:55] Speaker 00: So this can be determined, I think, best from the final decision. [00:14:00] Speaker 00: And what the contracting officer did was to deny some $624,000, which was loss of future sales. [00:14:10] Speaker 00: And the $29,000 were for what were termed build out costs. [00:14:16] Speaker 00: So these were improvements, electrical work, plumbing, that the team hall did to the facility. [00:14:25] Speaker 00: Also, losses due to the rodent infestation and the flooding due to no fault of either party. [00:14:34] Speaker 00: And the contracting officer specifically said, in the interest of resolving the claim, [00:14:41] Speaker 00: We make this offer of some $29,000 to help them out. [00:14:46] Speaker 00: And that was turned down. [00:14:49] Speaker 00: But I believe that in the brief to the board. [00:14:55] Speaker 01: I just want to make it clear. [00:14:56] Speaker 01: I think you said this. [00:14:57] Speaker 01: But assuming you prevail here, that's still the final decision. [00:15:02] Speaker 01: And even though they haven't accepted it yet, that's presumably still on. [00:15:07] Speaker 01: available, and if they- Yes. [00:15:09] Speaker 00: That is the final decision. [00:15:11] Speaker 01: The government will cut them a check for that amount if they ask for it. [00:15:16] Speaker 01: So it is our position that- Can you say yes to that? [00:15:20] Speaker 00: Yes, sir. [00:15:21] Speaker 00: Sorry. [00:15:21] Speaker 01: I just wanted you on the record that you're going to give them their money if they lose this appeal. [00:15:26] Speaker 01: That's right. [00:15:28] Speaker 00: That would be at issue in that final decision. [00:15:33] Speaker 00: It is our position, however, [00:15:37] Speaker 00: especially in light of the fact that the appellant turned down that offer and decided to litigate this. [00:15:46] Speaker 00: This language is plain. [00:15:50] Speaker 00: It is not ambiguous. [00:15:51] Speaker 00: And the appellant's argument that the effective date of the release was only for a brief 17-day period is not reasonable, and it's not supported by the plain language. [00:16:03] Speaker 02: Wait a minute. [00:16:06] Speaker 02: That was one sentence. [00:16:07] Speaker 02: It began with, it would be our position. [00:16:10] Speaker 02: And it was in response to and followed your statement, yes, as to the $29,000 still being available. [00:16:21] Speaker 02: Are you saying it's not? [00:16:22] Speaker 02: Or are you just saying they have a bad argument? [00:16:25] Speaker 00: No. [00:16:25] Speaker 00: In the alternative, if the court were to fine for the appellant, [00:16:34] Speaker 00: That is the amount in the final decision that was offered. [00:16:37] Speaker 01: You're not going to use this release language to turn around and say, oops, we shouldn't have given you the $29,000. [00:16:43] Speaker 00: Actually, it's the government's position that based on this. [00:16:54] Speaker 01: You really shouldn't ask for more than you should get here. [00:16:58] Speaker 01: You just answered that it was the final decision. [00:17:00] Speaker 01: I'm sorry. [00:17:01] Speaker 01: I mean, it was issued after this amendment. [00:17:03] Speaker 01: So, right? [00:17:06] Speaker 00: Yes. [00:17:07] Speaker 00: And it's our position with respect to the final decision. [00:17:13] Speaker 00: There is certainly authority that if the government entertains a claim following a general release, that vitiates the release. [00:17:24] Speaker 00: But this was not an issue raised before the board, and it's not in their opening brief. [00:17:28] Speaker 00: This argument is waived. [00:17:31] Speaker 00: Sure. [00:17:35] Speaker 01: Can we just ask you one more time? [00:17:36] Speaker 01: Yes, sir. [00:17:37] Speaker 01: And I think you've already answered this, but then you muddy the waters. [00:17:41] Speaker 01: If they lose, you've given them a final decision awarding them roughly $29,000. [00:17:49] Speaker 01: Are you going to pay that money or are you now going to use our decision here and the board's decision to say you're not even entitled to that $29,000? [00:18:01] Speaker 00: Well, Your Honor, I believe that the result is, in light of the fact that they decided to challenge this and they turned down that offer, yes, they get nothing. [00:18:14] Speaker 00: That's an appropriate result. [00:18:18] Speaker 01: Well, how is that? [00:18:19] Speaker 01: I don't understand how, just as a matter of law, that's correct. [00:18:24] Speaker 01: When this decision issued after this amendment and release, if it had issued prior to the amendment and they turned it down, and then you issued the amendment and release just cutting it off, that would be one thing. [00:18:38] Speaker 01: This post-dates the release. [00:18:41] Speaker 01: So at least this decision clearly contemplated, even in light of this release, giving them $29,000. [00:18:48] Speaker 01: You are digging yourself a hole here that you don't want to dig. [00:18:51] Speaker 02: I hear a voice saying, I am the great and powerful laws. [00:18:54] Speaker 01: I'll take that. [00:18:55] Speaker 02: Or the government, as it were. [00:19:00] Speaker 02: You are digging yourself into it. [00:19:02] Speaker 00: I will try not to dig myself further. [00:19:05] Speaker 00: I understand what the Court is saying. [00:19:07] Speaker 00: OK. [00:19:08] Speaker 00: Anything else? [00:19:09] Speaker 00: Subject to the Court's questions, I have nothing further. [00:19:20] Speaker 03: And you have all your rebuttal time available. [00:19:25] Speaker 03: Thank you, Your Honor. [00:19:33] Speaker 02: And if you come up here and say we wouldn't take the $29,000 if it was offered to us on a gold platter, I'm leaving. [00:19:42] Speaker 04: I certainly will not say that, Your Honor. [00:19:44] Speaker 04: I unfortunately will say something that [00:19:48] Speaker 04: There seems to be a little bit of a logic trap, which is that, yes, that offer was made after this language was signed. [00:19:59] Speaker 04: Then the question becomes, if that offer was made after this was signed, is that an outstanding and proper offer in response to a claim? [00:20:07] Speaker 04: And if it is in response to a claim, then claim that claim, if not, be properly appealed. [00:20:13] Speaker 01: We have lots of cases about, [00:20:15] Speaker 01: officiating release language, but you didn't make that argument in your blue brief. [00:20:20] Speaker 01: You didn't cite in these cases and you didn't file a reply brief. [00:20:23] Speaker 01: So under any notion of waiver, you've waived that, haven't you? [00:20:29] Speaker 04: Well, it's certainly before the court and that it's been argued by the exchange. [00:20:34] Speaker 04: And so there's been an expansion to some extent. [00:20:37] Speaker 01: The government proactively responding to arguments that weren't made doesn't excuse you from failing to make an argument and doesn't prevent application of waiver. [00:20:49] Speaker 04: Understood. [00:20:50] Speaker 04: Well, certainly, I appreciate the court's time. [00:20:53] Speaker 04: And I thank you. [00:20:55] Speaker 04: Thank you very much.