Private Jet Service Group v. Tauck, Inc.

NOTICE: This speech-to-text record was generated from automated speech recognition, is likely to contain errors or inaccuracies, and should be verified against the recording provided by the Supreme Court at https://www.courts.nh.gov/our-courts/supreme-court/oral-argument/live-stream/2023.

I understand you reserved Two minutes. Two minutes. Yes. Thank you. Good morning, chief Justice Justices. My name is Jeff Mint. I'm from Connecticut. I'm with Brian Cullen. We represent talc. But before I begin the substantive argument, I'd like to publicly thank the court and my opposing counsel for the continuances that you've extended to me due to some weird and bizarre health issues that have happened. So, as you know, this is the third time this is scheduled. The third time's a charm. But thank you for being a, a civil guy in an adversarial world. Uh, we are here on a certified question from Judge McCullough at the district court. We are here to answer the certified question, I think rather than the merits of whether talc wins or PJS wins, I think that this court's decision will send us back a couple miles down the road so that Judge McAuliffe can take this decision into these facts and continue to interpret the, the contract or the party's positions as he began to do in the summary judgment decision that he, uh, worked on. And of course, it's taken us a long time to get here, um, partly in part to the pandemic, which is what the case is about too. The question as laid out by the court, um, has two parts. How I'd like you to find is no and yes, how he'd like you to find is yes and no. So we're, we're, we're, we're talking about the same cases. We're talking about the same black letter law issues about commercial frustration and impossibility. And wow, this is a much different argument than the one I just watched beginning here this morning. But, um, we're talking about these contract theories, common law defenses, and we're looking at whether or not tout has the opportunity to raise those defenses in the contract dispute at the district court. In the last, uh, line of the certified question. I think Judge McCall is really laying out for you the key, the key question is the word viable. He, he's not asking this court to decide whether talc wins or loses. He's asking this court to determine whether or not talc can raise defenses so that he can then decide whether or not it's a viable defense. And I think I've read his order like a hundred times or more by now. And, um, what I'm left with is wondering almost why did he send this? Uh, because it seems to me a simple no. And yes, because it seems to me that the body of New Hampshire contract law interpretation that spans a hundred plus years has always stood for the proposition that the court can interpret the contract. There's, uh, plenty of case law that New Hampshire courts would consider the contract as a whole, give words to their ordinary meaning, unless it appears from the context that the parties intended a different meaning. And Judge McCall had begun that very analysis when he was looking at the commercial frustration, uh, three prongs that he outlined. 'cause he looked at the first one and he analyzed the intent of the parties. And he said, yes, Ivan Fur and I, I, I believe that there's, uh, intent of the parties that it was, uh, the purpose of the contract has been ob ob obfuscated by the pandemic. But it's when he got to the second prong that he stopped his analysis and he said, I think I need the Supreme Court to tell me whether or not I can look into this contract to determine implicit waiver. Because he's clearly told all of us that there's no explicit waiver. There's nothing in the provision that says tout and talc is a, a tour operator. They plan trips around the world, seven continents. People go from the United States all over the world. And of course, when covid happened, the travel industry stopped temporarily. But in New Zealand, it stopped for two years because New Zealand, unlike many other countries in the world, New Zealand closed its borders until July of 22. Now, if anyone's interested, between the beginning of the pandemic and July of 2256 people died in New Zealand. So the idea of closing the borders to this remote island nation worked. But what it also did was it stopped companies like talc from being legally able to go there. And when you look at, um, I mean, it is clear from the judge's decision that he reached that conclusion because he said, uh, in, in all these pages of his decision that it had never happened before. There's no evidence that New Zealand ever closed its border until this incident instance. There's no evidence that either party ever spoke of the potentiality of borders being closed for years. It was a four year contract, starts in 19 ends in 23 COVID 2020 closed until mid slightly past mid 2022. So for more than half of the time of the contract, you could not legally take non-residents into New Zealand and touts business, just like the company here in King, uh, called Alexander Roberts. They do the same thing. They bring people from the United States to other places in the world. And when Judge McCullough analyzed all of that in the first prong of the commercial frustration, the analysis that he did, he recognized that that's what this contract was about, was about taking people from the US was New Zealand on two specific tours and private jet services, which is the, um, other party in this instance. Their role was procuring an airplane to be in New Zealand for when the people needed to get on or get off. So they're like a broker, they're like an aviation broker that arranges for services. Um, and that's how the contract began. I mean, the court's well aware of this, uh, BPA and SOW statement of work. Uh, the, the briefs are littered with references to all of that. But I don't really think that matters a whole lot to the simple question of can we go back down the road and have our fight? Can we go back down to the district court and debate whether or not talc did or did not impliedly waive its right to raise common law defenses? So you, you've talked a bunch here about, uh, the pandemic and, uh, uh, legal restrictions that New Zealand put into place, but you also said, I think correctly in the beginning that this is a matter of law. So these facts, what, why do these facts matter to our analysis? I think the facts matter. Well, okay, that's a, that's an excellent question. I don't think you need to get into the facts of this case to decide. The, the issue framed by Judge McAuliffe, I think Judge McAuliffe is asking you, in New Hampshire, can a party come to court and raise common law defenses if it's not clear whether they've waived him or not, I think synthesized, that's his question. So I don't believe, frankly, that much of the briefs really matter to, I I, I thought about that last night as I thought, you know, Tim and I spent hours writing these things, talking to you about all different covid cases. But who cares? Because that's not what you're deciding. Maybe you'll have another case where you have to decide covid cancellations and whether they're force majeure or not. But this isn't that case. And you're right, justice, this is the case where you should say the facts of your story don't really matter. Guys, our decision amongst the four of us is does tout get to go into Judge McCullough's courtroom and continue to argue because he denied the summary judgment without prejudice. So he's, as the court knows that there's two claims, one in 2019 that's not part of any of this, and one for 2020. And he denied both motions, uh, without prejudice so that it could be re-raised. And in fact, in a, in a status conference we had about this, he said, well, I'm gonna send you all to the Supreme Court, and I guess whatever happens there, you guys will come back and we'll figure out what to do. Something to that effect. So I think that's really what we're we're here asking is, can can TLC go back down the road and raise a defense that is clearly not expressly waived or not? And when you look at New Hampshire contract law, I've come to the conclusion, and I hope the court does as well, that yes, tout should be afforded the opportunity to present evidence as to whether or not it can raise common law, uh, defenses of impossibility and practicability or commercial frustration spent most of the time talking about commercial frustration because that's how he spent most of the time in the decision. But it simply wasn't possible to go to New Zealand. So If that's the case, why isn't the force majeure clause simply sur plus it? I didn't, I didn't hear the end what you said. Why, Why doesn't that that render the force majeure clause surplusage, which would be contrary to what the way we Interpret contracts? Well, the force majeure clause as written in the statement of work, the plain reading of it only references PJS getting the benefit of it. It doesn't reference anything about tout, but even in what it mentions, it doesn't mention what happened in our real life story of the two year border closing. It mentions a lot of other things that travel companies know might happen. I mean, this past two weeks I've spent almost every day helping clients deal with what happens in Israel. But in that context, which is different than this context, if you've been planning trips to Israel any time in the past since 1948, you've known that there's potential conflict that can erupt at any moment, at any day, You're getting into facts again. And we don't need any facts. We just need to go back down the road and get to argue that isn't, Isn't there a factual inquiry embedded, at least in frustration or purpose, whether the parties in fact contemplated the, the risk? Yes. Chief Justice. And I think that's what Judge McCullough should, should analyze. I think he should analyze whether or not in the totality of the circumstances did these two commercial parties in the travel industry have reason to believe that a border closing like this could, um, wreck havoc with the planned intentions of the con. So yes, I think you're exactly right. And all we're asking this court to do is let us go have that argument. So there, there are these common law defenses isn't the issue you, I think you're correct. There's no explicit waiver. If there were, we wouldn't probably be here. But then there's the issue. Okay. Is there, is an, is there an implied waiver of these common law defenses and is that something that we should look into? No. Or is that what Judge Judge McCall should look into? I don't think, I don't think that's what he's asking you to do. I don't think I I don't think he's asking you to decide the merits of the implied or not implied. I think he's looking for your approval to analyze that. And I was slightly confused why? 'cause He Essentially does a similar argument, a similar analysis when he looks at the first, um, prong of commercial frustration. 'cause if you read his decision on, on that, he, he finds an intent of the parties based on the totality and the circumstances. I think we could have just continued the analysis over there. But um, we're only asking for this court's permission to go back to the district court and continued the analysis of implied waiver or not. Thank you. Thank You attorney. May. Attorney McCaugh. Good morning. May it approve the court quite tall.

My name is Tim McLaughlin. I work at Shaheen and Gordon. I live about, I'm about a mile over there. Um, I'm here today representing private Jet Services Group. I'd like to address, I think what Justice Bassett asked first, which is why do the facts matter? Um, for context somewhat, but beyond that, this is really a legal question. There is one set of facts, however that Judge McCullough has already answered. It's at talc appendix 66. It's the third element of the affirmative defense issue that we are here on today. And you don't need to decide these facts. The district court has already decided this. And after having reviewed the contract language, judge McCullough his words, there can be little doubt that the COVID-19 pandemic as it threatened New Zealand, was a thing of the same kind or nature unquote as an epidemic. And within the Force majeure clause event described as epidemics and of course the exercise of civil authority by the government of New Zealand, enclosing the nation's borders, false comfortably within the event described in the clause following epidemics, acts of civil or military authority. So there is a force majeure clause, it allocates risk, but it doesn't allocate risk in a vacuum. It allocates risk with regard to certain events. All of the discussion we just heard about COVID-19 in New Zealand in two years, that's all been answered by Judge McCullough. The only question then is how the force ma your clause operates. The false clause comes from the combination of what amounts to a blanket purchase agreement and a statement of work. But I'll read it 'cause that's really what we're here on today. You don't need to decide facts Judge McCall has, the only thing you need to look at is the contract, I think both attorney Matt and I provided to you. So the question of whether a force majeure clause that protects only one party to a contract should be redeemed. A relinquishment of the other party's right to interpose common law, defenses of impossibility, impracticability or frustration. And here's where it is on the theory that the clause represents the party's implicit allocation of the risks identified in the force clause. So the risks identified are epidemics, civil and military events and other events of a similar kind or character. Judge McCullough answered that that happened. Those events happened, those events within the context of this contract happened. So then you look at the language of force ma clause, here's what it says, neither Eric Carrier nor my client PJS. So PJS is not quote, responsible for delays, losses, or damages of any kind caused in whole or in part by force majeure. And then you get into the enumerated items that include epidemics, uh, acts of civil authority and events of similar kind of nature. So what it says, PJS is not responsible for losses caused by those events. PJS is not responsible for losses caused by those events. So then Judge McCall's question is, well, if PJS isn't responsible for it, there's only one party left. And sure, the force majeure clause doesn't go on to say promise. So it must be responsible for tout, but play it out if PJS by contract is not responsible for losses due to covid or we'll call it New Zealand. And if talc can raise those affirmative defenses and prevail, then we've just nullified the central question here. Because if he can raise the affirmative defense to use the enumerated defense that have occurred to avoid liability and damages, then it falls the losses they fall back on PJS. Well that doesn't that beg the question as to whether the enumerated events have in fact occurred and whether a pandemic is the same as an epidemic? Yes. And that has already been answered by Judge McCall. So did Judge McCall just make a big mistake sending it over here? 'cause he is already answered all the questions. There's nothing for us to do. No, I don't think he's made a big mistake. I think he's found in the area of law that needs development and I think a force clause as written here that expressly protects PJS, it does leave open the implicit question of, well, if PGS is expressly protected implicitly, in my view, that foreclose the affirmative defenses to tell. But that's the question before you judge that, that's the question. So, so Wa waiver of these, uh, common law defenses can be either explicit or implicit? Yes. And you agree it's not explicit here in terms of talk, right? Yes, I agree. So the question is then is this force majeure clause and implicit waiver by talk of their ability to invoke those common law defenses Because the events described were found to have occurred if you took a different event like an alien invasion, that's totally not contemplated at all by the forced peor clause, but the language of the force majeure clause expressly covers epidemics. Yes, Judge. But the, the, the premise of your position seems to be that the pandemic was within the scope of the party's thinking at the time the contract and all these clauses were, uh, were written. Is that right? Yes. That that a pandemic of the nature that unfolded around the world and to in 2020 was within the contemplation of the parties and therefore was, uh, talk knew that it was giving up the rights. Yes. That question is not before you. That question has been answered by Judge McCullough and with that foundation, the only question left is where the force majeure did not expressly say, and t shall be liable only that PGS shall not be responsible for losses. That's the question. I think it's an easy answer. 'cause common sense says if PGS shall not be responsible for losses, the only party left is she. And so that makes sense actually in the contract as a whole. And there's no dispute that the unpaid trips constitute losses as opposed to third party losses that someone's seeking to recover. I don't think that question is before you judge. That's my argument. Um, but if you move to the contract in a larger context, which you can do to make sure that the force provision aligns with the rest of the contractual terms, other contractual terms that also allocated risk are the minimum contract guarantee. A guarantee is a guarantee. If during the year 50 flights aren't flown, talc is responsible for paying PGS 50 flights. That's an allocation of risk that's consistent with the force majeure provision and then the economic conditions clause, which is the actual clause that was used to terminate the contract. That clause also says that nothing in this agreement shall be deemed to, uh, cause PGS to not be paid for flights that it should have been paid for. So the contract as a whole, when you move away from the force majeure provision contract as a whole, makes it clear that there are allocations of risk that talc would be responsible for paying a 50 flight minimum and expressly that nothing in the contract shall be deemed a relinquishment of PGS Right payment. So both in the force majeure provision isolated and the contract as a whole. Um, of course as an implicit waiver, do I wish the force majeure clause said, and talc shall be responsible for all losses liabilities? Sure, of course. I wish that, But that, but that's not really what we're being asked. Well, I think it is. Well, no, it's whether as a matter of New Hampshire law, you need to expressly waive common law defenses, which is you just told Justice Bassett did not occur in this case. I think that's the second question, judge. So there are two questions on I understand, but why, why isn't that dispositive? I I, I don't think so, judge. So I do not think that as a matter of New Hampshire law, in order to waive an affirmative defense, you have to expressly write down the affirmative defense the way it's described in any rule book and say I waive to possibility. That's not how the law works. Done. Um, so in a force majeure clause here, This this is contract interpretation. Yes. I I we're trying to discern ultimately what the intent of the parties, I mean that that's the object here. That's right. And so in discern The intent of in discerning the intent of the parties, there's a requirement that if something is waived, does that need to be expressed or not? That's right. And so here, in my view, it is an expressly intended point of the parties that these affirmative defenses are waived by the language of a force majeure. I don't think that you have to use magic words to waive an affirmative offense. But You earlier indicated that you agreed that there's no explicit Waiver here. And I think Judge McCall agrees. And I think s that's, that's what we're here for. So in the absence of an explicit waiver, magic words, so to speak, does the allocation of risk function as an implicit waiver of the affirmative offense when the event has occurred? And I think that answer is easy. You just go back to the force majeure. When you say when the event has occurred, what event? An epidemic. The a civil Pandemic? Yes. A pandemic. And the pandemic isn't listed there. Yes. But Judge McCullough has already answered this epidemic is of a particular type. It, it's, it's in his summary judgment order, page 35 of the summary judgment order. There can be little doubt that the COVID-19 pandemic as it threatened New Zealand was a thing of the same kinder nature as an epidemic. And within the force majeure clause, Are we bound by that? What Judge McCall if has said on that, I think as a matter of fact finding, he has already found as a matter of fact finding, But that's interpretation of a contract, that's a matter of law. But I don't think that question is before you, Your Argument seems to hinge on it. I I I disagree judge. Um, judge McCullough has already found that the event has occurred as a matter of effect, the event is part of the force majeure clause. The only question is where the force majeure clause explicitly protects PGS. Does it implicitly prevent tout from raising the force majeure on that event? I think it does implicitly prevent that. But We have two certified questions that don't embody that finding by Judge McCullough. They're just straight questions that actually don't really even turn on the language of the force majeure clause or the listed items. Right? I mean, the word pandemic or epidemic doesn't show up in the questions that have been posed to us. Uh, I agree that the words do not, but the first question of whether a force majeure clause at the end of the sentence, of the risks identified in the force majeure clause Generally, Or this force majeure clause, I didn't hear you judge. Generally Or in this force majeure clause. Uh, I think looking at as a capitalized, uh, term of art, I think it's the force majeure clause in this contract. It says a force majeure clause, not the force majeure Clause. That's right, judge. Nonetheless, um, of the risks identified in the force majeure clause, um, judge McCullough's view is that the epidemic and pandemic distinction is not relevant. So I think the only question is where it doesn't explicitly foreclose the affirmative defense to talc whether in the event that the event has in fact occurred, it is implicitly foreclosed. Do we have to answer both que both questions or if we answer, uh, the first question in a certain way, does that obviate the need to address the second question? In my view, its the need. I think you could answer both questions. The first question in my view is yes, it's obviously an implicit waiver of the affirmative defense. And because there can be an implicit waiver of the affirmative defense, the second question would have to be no. So I think you can answer the second question within the first question. The last aspect I'd like to cover is the affirmative defenses themselves all require an element of unforeseeable. The language of the force majeure clause and the language of the summary judgment order both foresee the exact issue that is being raised by talc, which is to say talc says frustration of purpose. I could have never foreseen these events. And yet the force majeure clause explicitly covers acts of civil government epidemics and other events of similar kind of nature. So if you look at it from that point of view, uh, implicitly you lose an element of the affirmative defense simply by reading the language of the force. But isn't there a matter of degree here? I mean, it's one thing to have an epidemic. It's, I I think you would agree that the what happened to the world in 2020 was unprecedented and unforeseeable, wasn't it? Yes. Well, doesn't that answer it? No, it doesn't. Um, unprecedented and unforeseeable Yes. To the common person, no, to these contracting parties. Um, and additionally, there wasn't a pandemic in New Zealand, if we're going to drill down, there was an epidemic in New Zealand. Had New Zealand ever been closed for two years before by court, by uh, government order? I don't believe it has judge. But the parties anticipated this, the party's language in the force, majeure, expressedly included epidemics. It expressedly included acts of government authorities and it, the included clause that described other events of a similar kind or nature. Um, I don't think those questions are before you. I only think taking those summary judgment facts applied to these questions that of course, it's an implicit waiver and I do not think we need to expressly use magic words to waive an affirmative defense. Thank you very much, attorney McLaughlin. Thank you. Reserve two minutes. I have nothing add, I have nothing to add during my rebuttal time. Very good. Casey submitted.