[00:00:03] Speaker 04: Good morning, counsel. [00:00:05] Speaker 03: Good morning. [00:00:06] Speaker 03: And if it may please the court, my name is Gus Flingus and I'm representing the appellant Ignite International Brands, Inc., which we've referred to as brand throughout the paperwork. [00:00:16] Speaker 03: Also with me today is Kimberly Stein. [00:00:19] Speaker 03: She's representing the other appellant, which is Ignite Spirits, Inc., which we've referred to as spirits throughout the paperwork. [00:00:27] Speaker 04: All right. [00:00:28] Speaker 04: It's my understanding that you all will divide the time 10 minutes and 10 minutes. [00:00:32] Speaker 03: Well, Your Honor, what we've decided if this is okay with the court because a lot of the arguments are very similar for both parties. [00:00:41] Speaker 03: I will handle the bulk of it. [00:00:42] Speaker 03: Miss Stein will be here to answer any specific questions that you might have pertaining to our client. [00:00:47] Speaker 04: 20 minutes total. [00:00:48] Speaker 03: That's correct. [00:00:49] Speaker 04: So when the time is gone, if you use it all, [00:00:52] Speaker 04: then we don't get to hear from Ms. [00:00:53] Speaker 04: Stein. [00:00:53] Speaker 03: That's correct, Your Honor. [00:00:54] Speaker 03: We accept that. [00:00:55] Speaker 03: And then I'd also look at trying to reserve about five minutes at least for rebuttal. [00:01:00] Speaker 04: We'll see. [00:01:01] Speaker 04: All right. [00:01:03] Speaker 03: Thank you, Your Honor. [00:01:04] Speaker 03: OK, first of all, this is a comment to the court because of a motion for summary judgment that was granted by the district court against the two appellants. [00:01:16] Speaker 03: The motion was wrong on many levels. [00:01:18] Speaker 03: Excuse me, the granting of the summary judgment was wrong on many levels. [00:01:22] Speaker 03: One, this entire case is replete with genuine issues of material fact. [00:01:28] Speaker 03: And the first thing I want to address is it pertains to my client. [00:01:32] Speaker 03: Somehow the district court found my client liable as a matter of law [00:01:38] Speaker 03: for a breach of contract on a contract which my client wasn't even a signatory to. [00:01:44] Speaker 03: Joined severally liable. [00:01:46] Speaker 03: In addition to that, with all the cause of action that they had against my client, those were all dismissed with prejudice. [00:01:53] Speaker 03: They're not part of this appeal. [00:01:54] Speaker 03: So we're here dealing with a breach of contract action. [00:01:57] Speaker 03: Now, how the lower court found that my client was a signatory of the client is a little bit tortured. [00:02:04] Speaker 03: First of all, my client, again, was not a signatory to the agreement. [00:02:10] Speaker 02: The agreement we were referring to is a letter agreement. [00:02:13] Speaker 02: I'm sorry to interrupt, but just before you get into the merits of that, what is the, so this is a question of contract interpretation, right? [00:02:22] Speaker 02: The court, you know, [00:02:23] Speaker 02: The court read the contract to make you a party to it, and you say you're not a party to it. [00:02:29] Speaker 02: What is the standard of review that we apply to that determination? [00:02:32] Speaker 03: De Novo, I believe, is the standard of review. [00:02:35] Speaker 03: You're looking at this as though you're hearing it for the first time on a motion for summary judgment. [00:02:40] Speaker 02: And what was the standard that the district court was supposed to apply? [00:02:44] Speaker 02: I mean, is contract interpretation is a question of law? [00:02:48] Speaker 03: Yeah, contract interpretation, yes, is a question of law, but there are other factors that sometimes factor into. [00:02:54] Speaker 03: Under Nevada law, that's generally your right, Your Honor. [00:02:58] Speaker 03: It is a question of law, but sometimes there's other factors that factor into the interpretation that may require a finder of fact to get to it. [00:03:06] Speaker 03: And this is what I'm going to get into right now as far as what it goes pertaining to this contract. [00:03:11] Speaker 04: The question of who was a party to the contract, is that a question of law? [00:03:15] Speaker 03: I don't believe that's a question of law at all, Your Honor. [00:03:18] Speaker 03: I think that's clearly a question of fact, and I will address that now. [00:03:23] Speaker 04: You're saying there was a material issue of fact raised regarding who was party to the contract? [00:03:29] Speaker 03: That's correct, Your Honor, because the contract itself states that the contract is between Ignite, and that's Spirits, and AR Consulting. [00:03:41] Speaker 03: And again, the agreement we're talking about is a letter agreement dated March 11, 2021, for clarity. [00:03:47] Speaker 03: That agreement states in the heading who the parties to that contract are. [00:03:52] Speaker 03: That's clear interpretation. [00:03:54] Speaker 03: There's no other parties listed. [00:03:57] Speaker 03: Now the court said in its order that there was references to Ignite throughout the contract and that somehow we can find that the brands is a party to that contract. [00:04:08] Speaker 03: But let's look at what it says in the contract. [00:04:11] Speaker 03: In the heading of the contract, [00:04:13] Speaker 03: It says it's between, like I said, consulting by AR and Ignite Spirits Inc., spirits, and then it has a defining term next to Ignite Spirits Inc. [00:04:25] Speaker 03: as being Ignite. [00:04:27] Speaker 03: So everywhere in that contract you look where it says Ignite, that is a defined term. [00:04:32] Speaker 02: Well, but maybe not quite everywhere because when you get to the compensation provision, it says that, you know, [00:04:40] Speaker 02: The AR is going to be compensated by the issuance of, you know, it says ignite shares, but there it means ignite brands shares, right? [00:04:48] Speaker 03: If you look at that compensation portion, your honor, it says ignite brands their shares, and then it has a defining term as ignite shares. [00:04:58] Speaker 03: We do those in contracts because you don't want to be spelling out [00:05:02] Speaker 03: ignite international brands, inks, shares everywhere in the contract. [00:05:07] Speaker 03: So you put defining terms, and it is a defined term. [00:05:10] Speaker 03: The only other places [00:05:12] Speaker 03: that Ignite Brands appears is an Exhibit B and Exhibit C to the letter agreement. [00:05:18] Speaker 03: And those are separate agreements. [00:05:19] Speaker 03: Those are option agreements to buy shares in Ignite Brands. [00:05:24] Speaker 01: But if Ignite Brands was not a party to the LOI or the letter agreement, how did it have an obligation to issue shares to AR? [00:05:36] Speaker 03: The obligation pursuant to the contract fell on spirits to deliver those shares. [00:05:42] Speaker 03: That was their obligation. [00:05:44] Speaker 03: And furthermore, I will point out that throughout this entire thing, consulting by AR is represented by counsel. [00:05:52] Speaker 03: And counsel should have, if that was a worry for them at the time, should have put in there a separate agreement [00:05:58] Speaker 03: between brands and AR consulting. [00:06:04] Speaker 03: And the reason they should have done it would have been like a guarantee. [00:06:07] Speaker 03: You know, sometimes we have contracts where it's between person A, person B. Person C is not a part of that contract, but they guarantee performance of that contract, usually in the form of payment. [00:06:18] Speaker 03: Of course, that didn't happen. [00:06:20] Speaker 03: Furthermore, I'll point out that this is a fact that was overlooked by the district court. [00:06:25] Speaker 03: Prior to this letter agreement being signed, there was a draft. [00:06:29] Speaker 03: The draft had brands as a party and a signature block for brands. [00:06:36] Speaker 03: And that was taken out. [00:06:37] Speaker 03: So that's clearly an indication that it wasn't there. [00:06:40] Speaker 01: But do you agree that John Schaeffer had authority to enter contracts on behalf of... I'm sorry, I couldn't hear you. [00:06:44] Speaker 01: Did John Schaeffer have authority to enter contracts on behalf of Ignite International Brands? [00:06:50] Speaker 03: that he had authority to enter into this contract with spirits. [00:06:56] Speaker 03: And if you could make the argument, he could have the authority to enter in on behalf of brands because he was a president of that company as well. [00:07:04] Speaker 03: Which leads me into my next point. [00:07:06] Speaker 03: The Judge Mahan, excuse me, below found also that they were party to the contract because there was common management between the two entities. [00:07:18] Speaker 03: And if you look at that, it's completely ignoring corporate formality because, you know, we got companies all over the state, country, where you've got several subsidiaries and you've got common management, but you still have separate entities. [00:07:35] Speaker 03: Each corporation is its own entity. [00:07:38] Speaker 03: The brands is the parent corporation, the spirits, and just because they're the parent doesn't make them liable on that contract. [00:07:46] Speaker 03: The bottom line is they're ignoring, the judge below ignored corporate formality on this. [00:07:52] Speaker 03: The thing that's really important to point out here is you could somehow try to peg liability on brands if this was the case, if the facts supported it, with an alter ego claim or, you know, piercing the corporate veil. [00:08:07] Speaker 03: That never happened below. [00:08:09] Speaker 03: It wasn't, it wasn't, wasn't pled. [00:08:11] Speaker 03: And so therefore there wasn't before the court. [00:08:14] Speaker 03: So therefore, [00:08:15] Speaker 03: there's no way, you know, there's clearly all kinds of issues of fact on whether or not my client was a party to that agreement. [00:08:25] Speaker 03: Any more questions on that? [00:08:26] Speaker 03: I apologize. [00:08:28] Speaker 03: Going into the next part here, to find my client liable on that contract, you have to find that there was a breach of that contract by spirits. [00:08:39] Speaker 03: And there wasn't a breach of the contract by spirits. [00:08:42] Speaker 03: In fact, there was a breach by consulting by AR. [00:08:45] Speaker 03: So let me address how do we get there on that. [00:08:48] Speaker 03: The contract had a very clear contractual provision that consulting by AR was required to deliver a definitive agreement with resort worlds prior or on July 1st of 2021. [00:09:03] Speaker 03: As a court is aware. [00:09:05] Speaker 01: Let me ask you a question. [00:09:06] Speaker 01: So even if time is of the essence, even if there was a provision in the contract, time is of the essence provision, can a party who fails to perform by a specified date still enforce the contract if their performance was delayed? [00:09:21] Speaker 01: Let me give you an example. [00:09:23] Speaker 01: So if A.R. [00:09:26] Speaker 01: had submitted the contract a month before the deadline and Ignite just sat on the contract and refused to sign it, [00:09:36] Speaker 01: How could you argue that that is a material breach by the party who's done all the things that they need to do, have turned the contract over for signature, and then here we're talking about a day, but I'm not sure it matters whether it's a day or two weeks or two months. [00:09:54] Speaker 01: That would be an issue of fact, Your Honor, and the reason is, the issue of fact is whether or not my client... Is it disputed that the contract was submitted to IGNITE for signature and that it wasn't signed until the day after the deadline of the contract? [00:10:10] Speaker 03: It was signed the day after, but what we don't have... But that's not a disputed fact, correct? [00:10:13] Speaker 03: But what we don't have right now is... Answer my question. [00:10:15] Speaker 01: I'm sorry. [00:10:16] Speaker 01: That is not a disputed fact. [00:10:17] Speaker 03: It is a disputed fact, Your Honor. [00:10:19] Speaker 01: It's a disputed fact that the signature didn't come until the day after the deadline? [00:10:23] Speaker 03: They came on the day, Your Honor, of the deadline, and it wasn't... That's a disputed fact. [00:10:30] Speaker 04: It came on the day of the deadline, and I also point out... Can I go about the day that's put on the contract? [00:10:36] Speaker 03: If I can, Your Honor. [00:10:37] Speaker 04: But just to answer that, do we look at the date it was signed as the date that's indicated in the signature block on the contract? [00:10:45] Speaker 03: That's correct, John, because that's what the contractual term calls for. [00:10:49] Speaker 03: So if I can get this out, what I'll tell you is that that agreement wasn't provided until early part of June to my clients. [00:10:56] Speaker 03: And then as late as June 29th, [00:10:59] Speaker 03: the resorts world was still working on a contract. [00:11:02] Speaker 01: But what does it matter if it was submitted and then held? [00:11:05] Speaker 01: I think the point that I'd like you to address here is this idea that somehow the time is of this essence provision, assuming that we find that there is one, is a sort of dispositive issue given the facts that IGNITE could have held the contract for any amount of time without performing. [00:11:28] Speaker 03: That's a possibility, yes, they could have done that. [00:11:31] Speaker 03: But there's been no, all we've heard from the respondent on this is a bare allegation that they sat on their hands. [00:11:38] Speaker 03: And that's a bare allegation. [00:11:42] Speaker 03: What's really illustrative of this is there wasn't a single deposition or declaration, affidavit or anything from anybody from Resorts World. [00:11:53] Speaker 03: We just have an allegation that Mr. Stein's client sat on his hands on this. [00:11:59] Speaker 03: And that's all we have. [00:12:02] Speaker 03: So that becomes an issue of fact on whether they sat on their hands on this. [00:12:06] Speaker 03: It's clearly an issue of fact. [00:12:07] Speaker 02: But the contract does not have a time is of the essence provision. [00:12:11] Speaker 02: No, it doesn't, Your Honor. [00:12:12] Speaker 02: And I thought under Nevada law, unless you have an express statement to that effect or the circumstances create that necessary implication, we don't read one in, do we? [00:12:26] Speaker 03: Well, that is partially correct, Your Honor. [00:12:30] Speaker 03: what it says under nevada law this is mayfield versus corgi one twenty four nevada three four three pence site three four nine [00:12:39] Speaker 03: If time is not of the essence, the parties generally must perform under the contract within a reasonable time, which depends on the nature of the contract and the particular circumstances involved. [00:12:51] Speaker 03: So let me, if I may, Your Honor. [00:12:53] Speaker 03: So what we have here is we don't have a time of the essence clause, and time of the essence clauses usually go into what we call miscellaneous provisions on most of the contracts in Nevada that I've dealt with. [00:13:06] Speaker 03: and it's supposed to cover all. [00:13:08] Speaker 03: But in this case, we've got something stronger and more powerful than a time of the essence clause. [00:13:14] Speaker 03: So under section one of the letter agreement, if the court will allow me to read this portion right here, [00:13:22] Speaker 03: and bear with me on it, it says CIR, which is consulting by AR, shall be entitled to the compensation set forth in Section 2 below in the event IGNITE executes not later than July 1st, 2021, a definitive agreement with Resorts Worlds acceptable to IGNITE in its sole and absolute discretion, which contains substantially all the terms and conditions detailed in Exhibit A attached here too. [00:13:50] Speaker 03: If that's all it said, I think I wouldn't be up here trying to push this forward because we don't have a time of the essence clause. [00:13:58] Speaker 03: And I would concede the issue. [00:14:00] Speaker 03: But if you read on there, this is what it says further. [00:14:03] Speaker 03: This is a specific contractual term. [00:14:06] Speaker 03: In the event the Resorts World Agreement is not fully executed by July 1st, 2021, IGNITE shall have no obligation to compensate C-AR or to reimburse C-AR for any costs or expenses. [00:14:25] Speaker 03: Furthermore, [00:14:26] Speaker 03: The AR consulting recognized this the day of, on June 30th, the day before this contract's done, and they sent an email to our clients asking for an extension of this date. [00:14:37] Speaker 03: So they knew this was a material term. [00:14:40] Speaker 02: But when you read it in context, and it seems fairly clear from the agreement that the point was they wanted the agreement in place so that they could have the launch party. [00:14:49] Speaker 02: And the launch party [00:14:50] Speaker 02: it's hard to see why the date matters in terms of anything that the parties cared about when they were drafting this. [00:15:04] Speaker 03: Because there were more things involved in the launch party because we're dealing now with kiosk We're dealing with putting these things in the room the product of ignite Which requires ordering product getting it there on time? [00:15:18] Speaker 03: So that it can be launched with the launch party and that you can go in the rooms in the kiosk I mean you don't just say hey, I'm entering the contract. [00:15:25] Speaker 03: Here's five hundred [00:15:27] Speaker 03: that's why it was important to have that agreement signed on that date. [00:15:40] Speaker 03: And then lastly, I'll address really quickly. [00:15:43] Speaker 03: The damage issues. [00:15:45] Speaker 03: The compensation on this was supposed to be the issuance of restricted stock belonging to brands. [00:15:53] Speaker 03: And judge may have instead awarded a cash [00:15:57] Speaker 03: And it didn't call for cash. [00:15:59] Speaker 03: There was no cash to be paid to these folks. [00:16:01] Speaker 03: The idea was for them to receive shares in stock. [00:16:04] Speaker 03: And it's kind of like this is attorneys doing things on a contingency basis. [00:16:08] Speaker 03: They felt that if this agreement came through, this stock was going to go through the roof. [00:16:13] Speaker 03: because of other problems with the agreement, the stock didn't go through the rough, but it was still about getting an issuance of these shares. [00:16:20] Speaker 03: Problem is the issuance date is not the same as when the Canadian securities officials would need to approve it. [00:16:29] Speaker 03: That would really be the issuance date because you can't issue it until there's an approval. [00:16:33] Speaker 03: And then the valuation would have to be on the time that these things are sold. [00:16:38] Speaker 03: not when they were handed to him. [00:16:40] Speaker 03: So you just don't take $2 million of Canadian converted into American based on July 2nd, 2021. [00:16:47] Speaker 03: If there's no further questions, I'd like to reserve the remainder of my time for rebuttal. [00:16:52] Speaker 04: Of course. [00:16:53] Speaker 03: Thank you. [00:16:58] Speaker 04: We'll hear from opposing counsel. [00:17:05] Speaker 00: Thank you, Your Honor. [00:17:06] Speaker 00: May it please the court? [00:17:07] Speaker 00: In listening to the question... Please introduce yourself. [00:17:10] Speaker 00: Oh, I'm sorry. [00:17:11] Speaker 00: Jason Wiley, the law firm Wiley-Peterson. [00:17:13] Speaker 00: Along with me is Daniel Kidd of my firm and Alan Richardson, who is the proprietor and principal of Consulting by AR. [00:17:20] Speaker 00: May it please the court? [00:17:22] Speaker 00: Yes. [00:17:22] Speaker 00: Good morning. [00:17:23] Speaker 00: Based upon the questions that I heard from the court, you guys get it. [00:17:27] Speaker 00: And the district court got it as well. [00:17:30] Speaker 00: And the issues that were raised in the moving papers. [00:17:36] Speaker 04: Could you please stay close to the microphones? [00:17:38] Speaker 00: Understood, Your Honor. [00:17:39] Speaker 04: We're broadcasting this, so we need clear audio. [00:17:42] Speaker 00: And I'd like to address some of the issues that were raised by opposing counsel in his remarks. [00:17:49] Speaker 00: But first, the reason why we're here is pretty clear. [00:17:54] Speaker 00: And that is that the Ignite parties believe that they found a loophole in order to avoid paying compensation in the amount of $2 million Canadian to my client. [00:18:04] Speaker 00: The record is devoid of any [00:18:08] Speaker 00: communications, documents, emails, any sort of correspondence whatsoever after the Ignite parties received the definitive agreement on June 29th of 2021 as to why that agreement was not executed either on the 29th, either on the 30th, or on July 1st. [00:18:32] Speaker 00: Instead, [00:18:33] Speaker 00: They wait until July 2nd where they believe the expiration of this deadline occurred and execution occurs at 924 in the morning. [00:18:45] Speaker 00: It's pretty clear, it's pretty unequivocal why they did that. [00:18:49] Speaker 00: And that's simply because they thought that the expiration of 10 hours, had that agreement been signed 10 hours before, then consulting by AR would have gotten their compensation in their mind. [00:19:04] Speaker 00: but they thought they could sit on it and avoid that obligation whatsoever. [00:19:08] Speaker 00: And all we have in the record from June 29th to July 2nd is the passage of time. [00:19:17] Speaker 00: Council did address Mr. Richardson's email where he indicated, do we need an extension? [00:19:25] Speaker 00: What's going on? [00:19:26] Speaker 00: Is there any issue with the final execution? [00:19:29] Speaker 00: And what's telling is the inaction [00:19:32] Speaker 00: of the Ignite parties. [00:19:34] Speaker 00: Did they respond? [00:19:36] Speaker 00: Did they say anything? [00:19:38] Speaker 00: Did they respond to that email? [00:19:39] Speaker 00: They did not. [00:19:41] Speaker 00: Again, they sat on the issue. [00:19:43] Speaker 00: They wanted this date to pass, and they thought that that would avoid a $2 million Canadian obligation. [00:19:51] Speaker 04: Council, could you address opposing counsel's argument that international [00:19:56] Speaker 00: night brands was not part of the was not a party to the contract absolutely your honor and I would direct the court to exhibit be of the letter agreement and that's the form of option agreement that's ser 766 the express language and if I may I will read it [00:20:20] Speaker 00: And again, this document is form of option agreement. [00:20:24] Speaker 00: It has to do with the option that consulting AR could have exercised. [00:20:28] Speaker 00: When interpreting the terms and conditions of this option agreement, reference should also be made to a letter agreement between the option E, as defined by consulting by AR, and the company, [00:20:45] Speaker 00: dated March 11th, 2021, herein referred to as the letter agreement. [00:20:51] Speaker 00: The following paragraph, the company is defined as Ignite International Brands LTD, the company. [00:21:02] Speaker 00: And that excerpt indicates the option agreement, the agreement defined, is entered into between Ignite International Brands LTD, the company, [00:21:14] Speaker 00: and the option E named below pursuant to the company's stock option plan. [00:21:21] Speaker 00: So the literal language of the form of option agreement indicates that the company brands entered into the letter agreement dated March 11th, 2021. [00:21:36] Speaker 00: This document is initialed. [00:21:39] Speaker 00: This document is on Ignite letterhead. [00:21:43] Speaker 00: This is their document. [00:21:44] Speaker 00: This is their form. [00:21:48] Speaker 00: Also, issue was raised regarding the signature block. [00:21:53] Speaker 00: It is clear and it's unequivocal that John Schaeffer was the president of both Spirits and Brand. [00:22:01] Speaker 00: The record reflects that he had the authority and the power to bind both of the companies. [00:22:10] Speaker 00: Also, [00:22:13] Speaker 00: The course of performance that occurred thereafter, as indicated in the record, indicate the generic use of ignite throughout and that there is no delineation between the letter agreement being between spirits only. [00:22:30] Speaker 00: In Mr. Schaeffer's email from July 20th of 2021, now this is 18 days after the execution of the agreement, Mr. Schaeffer writes, [00:22:39] Speaker 00: I spoke to Paul and David Bell about this, and they have both agreed Ignite should honor the deal made with you based upon this feedback. [00:22:51] Speaker 00: Ignite should honor the deal. [00:22:53] Speaker 00: Ignite should pay the shares. [00:22:56] Speaker 00: That's brands and spirits. [00:23:00] Speaker 00: Paul Bilzerian's email from April 2021 to Consulting by AR's Council, and I quote, [00:23:08] Speaker 00: Paul Holden forwarded your email to me. [00:23:11] Speaker 00: So that there are no misunderstandings pursuant to the letter agreement dated March 11th, 2021, between Consulting by AR and Ignite, your client will have earned nothing until a definitive agreement between Ignite and Resorts World is signed. [00:23:29] Speaker 02: What do we do though about the very first sentence of the letter agreement? [00:23:35] Speaker 02: The enumeration of the parties there in a way that includes spirits but not brands, doesn't that at least create an ambiguity? [00:23:44] Speaker 00: That document in that paragraph alone potentially could cause an ambiguity, but the fact that form B indicates that brands, the company entered into the letter agreement, erases that ambiguity altogether. [00:23:58] Speaker 00: the signature block issue that was raised by council indicating that a prior iteration of the letter agreement included a signature block denoting brands and a signature block denoting spirits does not work in their favor. [00:24:15] Speaker 00: It's to the contrary. [00:24:17] Speaker 00: The parties realized that's built in suspenders. [00:24:20] Speaker 00: We don't need two separate blocks. [00:24:23] Speaker 00: Instead, [00:24:24] Speaker 00: All we have to do is put John Schaeffer's name there as president. [00:24:29] Speaker 00: He's the president of both. [00:24:32] Speaker 00: But again, any ambiguity is totally erased based upon the literal language set forth in exhibit B. With respect to the damages that were raised, council indicated that [00:24:53] Speaker 00: This was the damages that should have been provided were the shares. [00:24:57] Speaker 00: Sort of akin to a specific performance argument. [00:25:04] Speaker 00: That is not a correct conclusion of Nevada law. [00:25:11] Speaker 00: Under Nevada law, in the Turley v. Thomas case, which is 31, Nevada 181, [00:25:22] Speaker 00: The holding from the Nevada Supreme Court states, a court in Nevada is not required to order specific performance in a contract case where a material breach has occurred. [00:25:35] Speaker 00: The decision to grant specific performance lies within the discretion of the court, which will consider whether the breach can be adequately compensated by damages. [00:25:47] Speaker 00: If damages are sufficient, the remedy at law is preferred. [00:25:52] Speaker 00: and specific performance will not be ordered. [00:25:56] Speaker 00: So the court had the discretion to make a determination as to what the damages in this instance should be. [00:26:04] Speaker 00: And that goes back to consulting by AR's counterclaims wherein under the breach of contract, the prayer for relief asked for both specific damages or monetary damages. [00:26:19] Speaker 00: The court exercising its discretion [00:26:22] Speaker 00: made the determination that monetary damages were proper. [00:26:27] Speaker 00: The court calculated those damages from July 2nd, 2021, which was the date of the execution of the definitive agreements because according to the express language of the letter agreements consulting by AR, [00:26:51] Speaker 00: was entitled to that compensation simultaneously at the time of the Resorts World Agreement being fully executed. [00:27:01] Speaker 00: So the court did not err in determining the breach occurred as of July 2nd, 2021. [00:27:09] Speaker 00: The court did not err in awarding monetary damages and the court did not err in converting [00:27:18] Speaker 00: a $2 million valuation of Canadian dollars into United States dollars of $1.611 million. [00:27:25] Speaker 02: So I was curious about the second clause under two, which was the option to purchase shares. [00:27:32] Speaker 02: Did you seek damages for, presumably one could calculate that the option had some value, presumably less than $2 million, but there was some value for the option. [00:27:43] Speaker 02: Did you seek damages based on that? [00:27:45] Speaker 00: Consulting by air never sought damages under the option agreement. [00:27:49] Speaker 00: It was pretty clear that once the breach occurred, the damages were limited to the $2 million initially to be provided simultaneously. [00:28:00] Speaker 00: The district court in its order made the correct determination regarding the materiality aspect of the contract. [00:28:15] Speaker 00: There, the district court held that execution of the final definitive agreement one day after the deadline was not a material breach. [00:28:26] Speaker 00: And in this instance, that is correct. [00:28:30] Speaker 01: Yes. [00:28:31] Speaker 01: Is it true even if we were to read in or assume that the language constitutes a time is of the essence requirement? [00:28:38] Speaker 00: I'm sorry. [00:28:39] Speaker 01: So if we were to find that there is a time as of the essence provision in this contract, wouldn't the late signing of the contract be a per se material breach? [00:28:51] Speaker 00: It would not. [00:28:52] Speaker 00: And here's why. [00:28:53] Speaker 01: And what's your best case in support of your position that AR still is not materially breached the agreement? [00:29:01] Speaker 00: It's the BZ Clarity Tent sub-case that was cited in our moving papers. [00:29:07] Speaker 00: Materiality generally depends on whether the provision induced the party to enter it, goes to the substance of the contract, or affects an essential purpose of the contract. [00:29:18] Speaker 04: Now, here... So, Counsel, just so I understand your argument, you're saying even if time is of the essence, [00:29:24] Speaker 04: Do we still have to look at materiality of the breach? [00:29:28] Speaker 00: You do. [00:29:29] Speaker 00: And here's why. [00:29:31] Speaker 00: First of all, without beating a dead horse, consulting by AAR did everything that was required of it pursuant to the letter agreement. [00:29:38] Speaker 00: There was no other obligations that it had to provide in late June in our time frame when the Ignite parties had the agreement on their desk and refused to sign it for whatever reason. [00:29:51] Speaker 00: Now the district court made their determination in their order [00:29:54] Speaker 00: that the purpose of the letter agreement was for consulting by AR to negotiate terms of a definitive agreement between Resorts World and Ignite. [00:30:05] Speaker 00: That was accomplished. [00:30:07] Speaker 01: Yeah, this fact is to me particularly relevant and something that I find interesting is that none of the briefs cited a Supreme Court of Nevada case, NGA number two limited, which I think goes precisely to this point, which is even if there is a time is of the essence provision, [00:30:25] Speaker 01: If we have a circumstance where there's nothing more that your client can do, it's turned over the contract, it seems that you can't then cite to that provision, which of course we don't even have on the face of this contract, but if we were to read one into it, to be able to say that that constitutes a per se breach by your client. [00:30:48] Speaker 01: Again, I hate to ask you about a case that you haven't cited, but I think that principle is well established under Nevada law. [00:30:56] Speaker 00: And I would agree, absolutely. [00:30:58] Speaker 00: The materiality aspect of it here is that even if time was of the essence, the fact of the matter was that the Ignite parties sat on the agreement. [00:31:09] Speaker 00: And there's nothing in the record that indicates why they did that. [00:31:13] Speaker 00: Why? [00:31:15] Speaker 00: also taking the totality of the circumstances. [00:31:18] Speaker 00: Here, time isn't of the essence in any way. [00:31:21] Speaker 00: The underlying obligations of Resorts World and the Ignite parties were not changed whether or not the agreement was executed on June 28th, June 29th, June 30th, July 1st, July 2nd, July 3rd, July 4th. [00:31:37] Speaker 00: It didn't change those underlying obligations. [00:31:40] Speaker 00: Time may have been the essence. [00:31:41] Speaker 00: Let's assume on a hypothetical that [00:31:45] Speaker 00: say, Ignite wanted to have Independence Day product put in Resorts World. [00:31:52] Speaker 00: And obviously with Independence Day being July 4th, that, sure, the definitive agreement may have been, had to have been executed at that time in order for that Independence Day product to be highly marketable right around the 4th of July. [00:32:08] Speaker 00: If the agreement was executed July 10th, well, [00:32:11] Speaker 00: You're not gonna keep that Independence Day product for 360 days and hope to sell it the next year. [00:32:17] Speaker 00: But we don't have that here. [00:32:19] Speaker 00: We don't have that here. [00:32:20] Speaker 00: And more importantly too, what we have is we have performance by the parties of the definitive terms and conditions in that definitive agreement between Resorts World and Ignite. [00:32:34] Speaker 00: The July 1st target date was always [00:32:38] Speaker 00: hinged on the Resorts World grand opening, which at the time was scheduled for July 4th, 2021. [00:32:45] Speaker 00: Resorts World moved that up to June 24th of 2021, and the parties both performed. [00:32:53] Speaker 00: Their obligations required of them pursuant to that definitive agreement. [00:32:58] Speaker 00: Ignite representatives appeared, posted on social media regarding Resorts World and the grand opening. [00:33:04] Speaker 00: Resorts World had Ignite products. [00:33:07] Speaker 00: Any of the final revisions during the period of time from June 24th to June 29th were minor at best. [00:33:17] Speaker 00: Mr. Flangus referred to the movement of a kiosk, where a kiosk was going to be located. [00:33:22] Speaker 00: Well, that's not material in any way. [00:33:25] Speaker 00: That's kind of ancillary. [00:33:26] Speaker 00: That's not the purpose of the agreement. [00:33:30] Speaker 00: So again, using the adage, if it quacks like a duck and it waddles like a duck, it's probably a duck. [00:33:37] Speaker 00: We had a definitive agreement as of June 24th. [00:33:44] Speaker 00: With respect to the waiver agreement that was raised in the moving papers, [00:33:50] Speaker 00: The district court correctly determined that IGNITE waived any dissatisfaction argument as indicated in the letter agreement. [00:34:07] Speaker 00: It says that consulting by AR shall be entitled to compensation set forth in section two below in the event IGNITE executes not later than July 1st, 2021, a definitive agreement with Resort World acceptable to IGNITE in its sole and absolute discretion, which contains substantially all the terms and conditions detailed in exhibit A attached here too. [00:34:34] Speaker 00: Ignite tries to raise the issue of, well, there's a creation of a genuine issue of material facts because Ignite, in their sole discretion, could have made a determination as to whether or not the definitive agreement was acceptable. [00:34:51] Speaker 00: Fair point. [00:34:52] Speaker 00: But there's nothing in the record at any time indicating Ignite's dissatisfaction [00:35:00] Speaker 00: with the definitive agreement, any dissatisfaction with consulting by AR, or dissatisfaction with the terms and conditions of any of the underlying agreements. [00:35:12] Speaker 00: And in fact, it's just the opposite. [00:35:17] Speaker 00: Ignite representative Paul Bilzerian sends an email in June of 2021, approximately 20 days before the execution of the definitive agreement. [00:35:27] Speaker 00: And I quote, I continue to receive positive reports regarding consulting by AR and your efforts to help ignite. [00:35:35] Speaker 00: I thank you for that. [00:35:37] Speaker 00: He goes on to further state a very mutually enjoyable and beneficial relationship between ignite and resorts world has developed. [00:35:46] Speaker 00: I am sure you meaning consulting by AR had much to do with that. [00:35:51] Speaker 00: And again, let's refer to Mr. Schaeffer's email post-execution of the definitive agreement, where he states, it is clear that Resorts World plans to honor their agreement with Ignite and will continue to work with us as strong brand partners. [00:36:10] Speaker 00: I spoke to Paul and David Abel about this, and they have both agreed Ignite should honor the deal made with you based upon this feedback. [00:36:20] Speaker 00: So even after execution of the definitive agreements, there's satisfaction. [00:36:28] Speaker 00: The Ignite parties commenced litigation on a very narrow declaratory relief cause of action. [00:36:35] Speaker 00: They want the court and the trier facts to look at just the four corners of the agreement that includes that July 1st deadline date without anything more. [00:36:47] Speaker 04: So, Council, you have 35 seconds. [00:36:48] Speaker 04: If there is something you want us to know, you should say it now. [00:36:51] Speaker 00: Understood. [00:36:51] Speaker 00: I think I've hit all the high points. [00:36:53] Speaker 00: Unless any of the Honors have any questions, we would just request that [00:36:59] Speaker 00: The court affirmed the judgment entered by the district court, as there are no genuine issues of material fact. [00:37:06] Speaker 00: And the district court's decision granting consulting by AAR's motion for summary judgment for its breach of contract cause of action against Ignite Brands and Ignite Spirits was not erroneous. [00:37:18] Speaker 02: Thank you. [00:37:32] Speaker 03: Thank you, Your Honor. [00:37:34] Speaker 03: The first thing I want to point out is that this motion for summary judgment was granted without any oral argument. [00:37:42] Speaker 03: And as you heard from the presentation by my fellow counsel, this case is replete with issues of fact. [00:37:49] Speaker 03: He's got all these facts coming at us. [00:37:52] Speaker 03: on why Judge Mahan did what he did. [00:37:54] Speaker 03: If you look at it, Judge Mahan was weighing credibility of folks. [00:37:58] Speaker 03: First of all, the letter that he said that was sent by Paul Bilzerian in June was actually sent in early March 2021, and that's SCR 629. [00:38:11] Speaker 03: In fact, Mr. Bilzerian said another email on January 11, 2021, [00:38:16] Speaker 03: which is SER 58586, and it's mentioned in their brief on page 24, where he wasn't real happy with the terms as they were coming together, because what Mr. Bilzerian was saying is we're trying to get a return on a lot of money, that's why we're going to give you all this stock. [00:38:34] Speaker 03: And you've got to deliver the agreement the way we said it needs to be delivered. [00:38:39] Speaker 03: And it's not coming that way. [00:38:41] Speaker 02: Before you run out of time, could you address exhibit B to the letter agreement? [00:38:49] Speaker 02: You know what it says, but it seems like that just doesn't really make any sense unless Brands is a party to the agreement. [00:38:55] Speaker 03: Well, it does make sense, Your Honor. [00:38:57] Speaker 03: First of all, you've got to look. [00:38:58] Speaker 03: The court's only allowed to go to the four corners of the document itself. [00:39:02] Speaker 03: The document is the basic letter agreement. [00:39:05] Speaker 03: This is an option agreement that's added to the agreement. [00:39:09] Speaker 02: It was part of the agreement when the agreement was signed. [00:39:12] Speaker 03: I don't think it really is a part of the agreement because it is to enforce a term of the agreement, which is B under the compensation there, which that option agreement gives them a right to purchase shares in brands. [00:39:28] Speaker 02: Right, but it's referenced in the agreement, right? [00:39:31] Speaker 02: When you signed the agreement, you had it as an attachment, right? [00:39:35] Speaker 03: And this is really nebulous because I'm going to split hairs here if you'll excuse me. [00:39:41] Speaker 03: Where it says company, there's no defined term for company. [00:39:44] Speaker 03: And then as you go down below it, there is a defined term for company. [00:39:48] Speaker 03: And in that case, the company on that option agreement is brands. [00:39:52] Speaker 03: And so it wasn't a defined agreement up there. [00:39:55] Speaker 03: They're just referring to the company, which would have been spirits of the main agreement. [00:40:01] Speaker 03: because there's nothing in the main agreement that says Brands is a signatory to this contract, nothing. [00:40:07] Speaker 03: And there's defined terms throughout all these documents. [00:40:11] Speaker 03: I would also add that Exhibit B wasn't signed. [00:40:14] Speaker 03: I don't think it's a question of fact. [00:40:16] Speaker 03: It's not a question by brands either. [00:40:19] Speaker 03: It's just put on there. [00:40:20] Speaker 03: And so I think it's distinguishable on those bases right here. [00:40:23] Speaker 03: Again, it becomes a question of fact. [00:40:25] Speaker 03: What is what is the purpose here? [00:40:28] Speaker 03: And they're trying to judge may and below try to extrapolate from all this say there's no issue of fact. [00:40:35] Speaker 03: Because I've got these things and you know, all these different factors here and those factors don't [00:40:43] Speaker 02: And if we look beyond the agreement and its exhibits, the facts that we would look at would be the removal of the signature block and then I suppose they point to the sort of interrelationship of the two companies. [00:40:59] Speaker 02: Is there other evidence that would be relevant to whether there's a factual dispute? [00:41:04] Speaker 03: Exactly, Your Honor. [00:41:06] Speaker 03: That's one big factor. [00:41:07] Speaker 03: I don't know how he says that's not an important factor. [00:41:09] Speaker 03: It is, because if you're going to put brands as a obligor on that contract and you take that signature block off, that's a huge factor. [00:41:17] Speaker 03: But the main factor, Your Honor, is what's defined in the contract as the parties, because here's... But I just want to be clear. [00:41:24] Speaker 02: You're not saying that there's some other evidence, other than what I just mentioned, that would give rise to a factual dispute. [00:41:29] Speaker 03: The factual disputes that signature block the fact is that there's nothing in that agreement that says brands is a party to that agreement. [00:41:37] Speaker 03: In fact, if you take judge made hands rolling on this, you're going to set contract law on its head in the state because how can you rely on the heading? [00:41:45] Speaker 03: It says who the parties to the contract are. [00:41:47] Speaker 03: If, you know, if you've got the headings up here and says contract between A and B, oh, I'm going to bring C over here and make them liable without some form of, now if it was an indemnification claim and you're trying to do that based on, you know, the corporate, excuse me, on Pearson, the veil or an alter ego theory, I can see it. [00:42:07] Speaker 03: But here we don't have it. [00:42:08] Speaker 03: I think my time's out unless you want me to answer any further questions. [00:42:11] Speaker 04: Are you satisfied with the answer? [00:42:12] Speaker 04: All right. [00:42:13] Speaker 04: Thank you, counsel. [00:42:13] Speaker 03: Thank you very much. [00:42:14] Speaker 04: Thank you to both counsel for your helpful arguments. [00:42:17] Speaker 04: The case just argued is submitted for decision by the court.