judge of the district court in the state of minnesota we're pleased that he's here to help us today because we have a number of matters on the calendar but the st three have been submitted we'll do that officially at this time the morning on it may please the court my name is selena lindsey and i represent philip the appellant in this insurance coverage action appeal at this time i would like to reserve two minutes for about it will try to help even if you're on the clock please i really i know today i will be addressing the following two issues one the district court erred when it rewrote the unambiguous language of the policy and determined that the takedown notice in the beach t action were a single claim and to the district court erred by dismissing zillah's counter claims regarding national union's duty to defend as can i get some clarification from you please this of course is a claims made policy the one that's directly here but also the predecessor claim from roughly july of agree that it was a demand letter or a claim that the take on of yes your honor we do and is there anything in the record that clarifies wise yellow didn't make a claim during that period no your honor it's not within the record but it i would submit that it doesn't need to be and this is why this policy is a claims made policy that operates differently than the majority of claims and policies that the panel might be familiar with and that's because of the specific language of this policy now your honour's the clear and unambiguous language of the national uses national union policy issue a bar explicitly spells out when two claims arising out of the same claim will be treated as a single claim particular policy and this clause this limited integration clause states if written notice of a claim has been given to the insurer then any subsequent claim made against an insured arising out of based upon  or tribute able to the facts giving rise to such claim shall be considered made at the time such notice was given women recourse read again at ninety five dollars because you call it or attention to it but again a claims made policy unless there's something specifically referring to a different policy refers to the policy of the st of the term of the policy and question so i read that clause as referring to whatever occurs during the term of the policy this i call it the nd policy if that's right what does that have to do with whatever happened in the term of the previous policy it doesn't refer to the previous policy it doesn't you honor and that's the point the only place in this entire policy where you can relate claims to make a single eighty two claims into a single claim is this clause other policy with respect let's just assume hypothetically that the takedown notice had been given that during the st week of the nd policy but the end but the actual lawsuit wasn't filed till the last week of the nd policy d i would then  understand this paragraph to say you know the fact that you didn't do anything you actually said if you give us the information then it's going to relight back so that given the information would help i fail to see how this particular paragraph carries the day for you i get your point the same claim and i know you dispute that am i missing something well i think you are your honor and i think that this clause is critical and i'll tell you why it's critical because you have to read the policy as a whole and the only place in this entire policy the critical critical and when you make it into a single claim we submit this is the only place in the policy where it actually tells you that two claims that some point in time would become a single claim well other policies yes or no here are there other policies i mean there's no question there's no question at all that law cross the country is replete with cases where the standard integration clause which deems that all related claims are a single claim made at the time that claim was st reported that's the standard integration plus it's found in the overwhelming majority of claims made policies there's no the best it's a language that says all claims arising from same events are related series of events as alleged earlier deemed a single claim and that language is not in this policy correct actually your honor it's in other policies it's in other policies national union made a choice i mean throughout the country you have those and in fact what happens in those cases the policyholder often loses it's considered a trap for the unwary in fact courts across the country are doing things about it they're right the regulations they're doing they're making their have an additional decisions that require prejudiced and other items but we're not asking this court to go that far we don't have to do all we need to do is direct you to the that you're really saying a claim can be made in some situations more than once and the union and insurers say no claims st made or claims  st made and once made done and they can't make them again and so we're trying to make this policy work wouldn't that be then a very good reason for us to say this is ambiguous language at an absolute minimum your honor and that was my nd point on this issue at an absolute minimum it's ambiguous because if it's ambiguous what is my procedure at this point washington is clear on that the supreme court has held that all ambiguities must be considered now in this isn't what washington says washington says construe the ambiguities against the insurance company if there is no other extr evidence which may be introduced to clarify the ambiguity so wouldn't i in that instance if it's ambiguous return it to the district court to determine if there's some extrinsic evidence that might be used you're right national union or is relying on the three words claims st made and those that those three words they still have meaning under this policy what they mean under this policy is that well what you're suggesting they mean is what you're about to say which i've read in your  but the problem comes in that we're really talking about i look at the language it seems to me that one can under your interpret their policy say there was a claim made in the original policy the st policy and there was also a claim made in the nd policy and you're saying the claim made in the nd policy is in fact the suit and therefore the suit made during the period it ought  been defended and that's it and simply because there's a claim made before doesn't make any difference it's the same if it's a claim it's a claim it's a claim it's a really  you will a disjunctive way to make a claim either way i understand that's your argument on the other hand if i'm not determining what claims st made means and i'm back to that's an ambiguity because i depreciation as well as yours but your honor i bring you back to the entire policy as a whole and you know yes it is called the claims made policy and yes those words appear but those words have meaning when you look at the entire policy there are seven places in this policy that make it clear the national union intended that there could be multiple claims under the same policy there is no language other than the limited integration clause that makes it multiple claims into a single claim the cases cited by national union how of language that specifically does that language that deems all related claims made at its base into a single claim that language is absent from this policy but instead we have seven other areas in the policy that that  provisions of the ball and see if i look at the way the policy is structured enough i look at the fact it's a claims st made policy that their interpretation there of is the exact is the correct one know you're suggesting is no you look at this other language and it isn't in my book that makes it ambiguous again your honor with due respect i submit that when taken as a whole it is clear that to talk about the attorney fees indorsement number five has some very specific requirements there's a list of counsel they give it to you it looks to me like follow this you don't get my wrong yes your honor you are ok the clause has three different parts and the rd part of that clause actually allows for some negotiation back and forth what happened in this case is that we we did communicate with national union regarding to tell the new hire and they and they came back and were in discussions with us about the rates of panel counseling using our preferred firm and our panel counsel rates they stopped that they stopped the communications about the council they never said ok you know we're done negotiating use firm that never happened instead they ignored us and in fact when we went to them and asked for consent for certain expert fees other fees they said we can either consent or  because we went in there after and asked them to go forth and approve the council we've already chosen and they never said no we won't approve that the policy allows it your honor st i submit t before this court right now is whether or not is whether or not our motion for the duty to defend was moot as the court underneath said that's just not the case what are issue here now is that even if you were to find against on the coverage in the indemnity issue this court still has a duty to follow the law under immunex the supreme court case in washington that says any carrier acting under reservation of rights has an obligation to pay that the firms you want to hire to defend the insured sure don't need to pay for the insured defense the defense the insured should take who you want to defend your honor they never said use firm a we when you operate under reservation rights the controlling law here is the in the next supreme court case which is controlling on this court and there is no question whatsoever under the facts as presented to the just a court that national union owes the defense up until the actual policy is that if you if you have defense counsel not select in accordance with policy the policy endorsement five it shall not be coverable that's pretty clear endorsement five indorsement five clause see in the invent the insured cannot select legal counsel from the list of chosen counsel due to twelve or three other circumstances which use the armless to counsel is both reasonable and necessary the insuring the insured shall jointly agree upon counsel who will defend the insured in such matter if the insuring the insurers are unable to agree upon the selection of defense counsel the insurer shall select defense counsel selected defense because you didn't do the intermediate steps they stopped that's not true we were in communications with them we sent them said we've hired these people that's correct it which is exactly that people that national unit had approved up before the little rubber case was not this one that's correct and we were in the middle and your honour's they could have at that point in time done anything they could have said no they could but instead what they do they started negotiation they asked us about the panel counsel rates they said they said well if the firm uses the panel counsel rates and then they went silent and tory judgment action which they should have done which they didn't do until a year after that exactly to the date one year after they specifically asked us to withdraw our tender they could have done that they didn't union has to say for it agree with the panel that that is the the key question on the issue of whether coverage exists the claims st made provision in the ensuring agreement i submit is not ambiguous the claim is st made provision has been applied in numerous cases in washington including the sea shepherd case or not are going to be what they do in other cases we're looking at the language so go to the language go the language of this policy what you call it or what you don't call it doesn't make a whole lot of difference under washington law what it says under washington law is that defined by those specific the language of the insurance contract and so i'm looking at the specific language of the insurance contract i don't have to go to four thousand and eleven cases i just look at this language what language you going to point you do to say that this is clear now an ambiguous in the policy not some other case the the language that i submit is clear and unambiguous is the phrase claims st made itself by its nature of the coverage says this is solely with respect to claims st made against insured during the policy period and reported to the insurer pursuant to the terms of the policy isn't that what the coverage section says indeed it is your honor and then it says that a claim can be both a written demand or a suit the written demand for money services non monetary relief for injunctive relief which is exactly what the demand letter is and which you've stipulated to and it a also be a suit a civil proceeding for monetary non monetary injunctive relief and you and that you did have a suit the so the suit was st filed in july th two thousand  against the insured within the policy period seems to me coverage your honor there would have been coverage had the claim not been st asserted in the earlier demand letter st to suit while the other policy language says that it cannot be st asserted as that is the claims st made language just a minute there is nothing in this claims st made language that says that it all i i i guess where in the policy does it say that because the demand for the suit involved the same wrongful conduct that there are a single integrated claim well your honor didn't say that that is the only place it says that is the claims st made claas by it's here which is this coverage clause yes that's that's the insuring agreement which is the critical i'm having a tough time everybody else who writes a policy like this as your good calling is suggested puts in other language to make sure it's the does relate back all of that happen in this case is good the good judge on the district court left the policy left the language of the policy and started to interpret ing other cases and in washington to suggest what this should mean but this is language i have to interpret here so tell me where in the policy do i come up with that if i may your honor my colleagues suggestion that other cases addressing this issue rely on policy outside of the claims st make laws itself is simply incorrect alaska interstate allegiance benefit on and on the cases we cite make their determination based solely on the claims st made language that is that is the language that we rely on not be fair the cases that i read the court cites and that you want me to look at clauses and says that the claims st make laws is in fact the integration class i go outside the policy itself and go to cases which are on both sides i can get to where you want me to go your honor i respectfully submit there  is not a single case going the other way oh that yet not one case is what history marina management says that it's got to have require in the current provisions explicit requiring the integration of the factual related because of that clause says that there is no coverage when a demand letter is made in one period and that suit is filed the next if then goes on to say that its conclusion is supported by a separate claims integration clause but if you read that case it is clear that the decision was based on the claims st made and i moved to the language of the previous insured previous claims policy him and policy where in that i'm talking about july two thousand thirteen to july of two thousand and fourteen where in that policy is there language that would oblige zillow to make a claim based on the july two thousand and fourteen demand letter the that policy includes a notice provision that requires zillow to report any claim as soon as practicable but in no event later than forty five dollars days after the policy the letter came i don't know whether the exactly the time the other one terminated but it was pretty close it would get into the new period i guess what i'm struggling with and i think it's a thing with judge smith is that you got your historical information section so you need saying about a previous policy you've got a  claim made virtually on the eve of the one policy finishing of the new policy beginning that can stretch over the new policy where they don't seem to be tied together in the way that my colleague indicated isn't that almost on its face ambiguous i don't think it is your honor and i also don't think it matters per se that there was a prior policy that what the policy at issue says is that that there's only coverage of the claim is st made so even if that earlier policy hadn't existed the demand letter was still a claim st made before the policy in sept ok but you didn't make i guess they didn't make them on the letter that made a claim on the suit  why did your why did your policy not require any disclosure needed said don't refer to anything in the previous period are you thinking well your honor that is specifically because a the prior policy did seem to me that have been a real good way for the district court to have ended this case look to the exclusions and decide the only exclusion clause that i found says this excludes claims alleging arising out of based upon attributable to any wrongful acts or related acts there to then there is the bad language alleged or contain any claim which has been reported or any circumstance of which notice has been given under any prior policies so they're excluded only if notice has been given or there it has been reported it could easily said which was received in any prior period and you'd be done well you know i don't think there was any need to include an exclusion when the no need to ensure an agreement itself explicitly limits coverage to fines st made your analysis very good that sounds good but when you're trying to decide if in fact this is clear and unambiguous as you wanted to be it doesn't seem logical that in the exclusion you would only exclude claims for which notices been given or have been reported not claims in which they were received in a prior period that would seem to emphasize the fact you can do two different claims and as long as one of the claims happens in the period in which the insured is in they are covered well you're  had i believe that the claims st made closet so does address that court after court in both washington and outside of washington have found that to be unambiguous and have applied it to deny coverage in just these circumstances so i do not think of international exclusion as necessary to address this that national has included single integrated claim language and policies you know how to put a policy language provision like that into policies correct that is correct and it's not here the claims st made provision is the integration clause in this policy but it's ok it doesn't say precisely that single integrated claim based on all different factual elements language that we're looking for correct it does not have a additional integration clause beyond the ensuring agreement but what does that make this the whole question big us the you know i'll turn it if under washington law turn it of policy language language that is not in the policy the issue is only relevant if in the st instance the policy language is ambiguous here claims st made is simply not ambiguous as a matter of washington law so you don't even get to the next step of considering how the policy could have been written differently selected and apparently they're saying that ultimately it will reach agreement and therefore they were entitled to hire the lawyers themselves what your response to that is your honor there was no colloquy regarding defense counsel unfortunately but that is because blatantly disregarded its obligations to select panel counsel from the list provided by national union and the facts on this are absolutely clear national unions initial communication provided the list zillow ignored the list and instead a month later said here's the council we provided and we selected and by the way here's this demand letter that's been floating around for over a year that we never told you about at that point national union over a period of six months sent four separate letters to zillow reserving rights requesting information and inviting a discussion refused to respond until national union demanded in mediation as the policy provides for and when we're talking about a delay in when we step back at that mediation that was the st time that zillah disclosed that it had ran up big defense costs bills through not one but two different panels on panel counsel firms that it was now asking now she had to pay for at that point as soon as it found out about this nationally and sent another letter again specifically quoting endorsement five dollars which by the way has a three step process the st step is you pick from our list of firms if you can't do that we work together to pick yes you know and the st step just to finish it is that if you can't agree back and forth something something went on during that period of time and we both sides claim the other side did respond why shouldn't be allowed to develop factually the question of whether there might be a waiver of the indorsement five  or compliance with the policy it is they believe they did why shouldn't that be developed factually rather than just dismissed well you know you're out of there are ready is a factual letter fashion record developed regarding selection of defense counsel and the timing of the reservation of writes letters and the discussions and neither before the trial court nor in its  regardless of the fight about about counsel that you had a duty to defend and you did not defend how do you respond i respond that national union fulfilled its duty to defend by offering a defense panel counsel which is exactly what they are supposed to do under washington law and the terms of the policy and you know national you cannot force zillow to change its coun so there was nothing further the national union could do to fulfill its duty when the rejected the defense that was offered let me let me go one further and i don't know when there's a duty to defend and the insured does not want councils that the gas if they have the insurer selects the attorney and the attorney sits with if you will the insured counsel and client relationship is with the insured and not the insurer and so in washington if the insured refuses to accept counsel tendered by the insure at that point the obligation ends on a duty to defend that is correct your honor but zillah says that national during this process did express a willingness to allow this particular law firm susman godfrey i believe to represent subject to reimbursement nationals rates if that is proven to be true and i think that's just a proposed delegation at this point why wouldn't that be a waiver of endorsement five a few things about that statement  number one the letter that zillow is referring to is not in the record they make an allegation about the contents of that letter in a brief but it's not in evidence but the letter itself was an outgrowth of the mediation it was a ongoing mediation communication as the parties discussed various options to try to resolve their dispute it was in no way and so because it's a mediation and communication it would not be admissible and beyond that in no uncertain terms gnashing and did not commit to pain any portion of not panel counsel's bills this was a that national union some evidence but not in the record evidently the so called evidence is a letter protected by e r for eight it's a settlement communication and it's not admissible evidence other questions right thank you counsel would be couple of minutes to respond will try not to interrupt you but i can promise no no no no worries i what i welcome the questions thank you your honors i'll be brief i submit that you have to look at the policy is the whole the only thing national union has pointed to are three words that say claims  made those three words still have meaning under cilla's interpretation of the contract and there are seven places in this policy that indicate that national union made the choice in providing this language to that they expected that there could be multiple claims under the same policy this is a contract and you can't take one contract and link it to others unless there's something in the language of the policy that does that your honour's the critical question again is just when two claims become a single claim and unlike the case law all across the country and unlike the only water case that the district court and national union relied upon sea shepherd which has that language in dean multiple claims a single claim there's nothing in this policy that does that and there's multiple areas that show that they were giving the flexibility the policyholder on the nd point your honor the immunex court is controlling national union has never disputed they were acting under reservation of rights even if this court were to find that maybe perhaps a little breach the indorsement they would still have to wait until there was a judicial determination they would have had to file declaratory judgment action because that's how washington law works now he would have had to provide counsel to provide or help or whatever happens to this counsel you've already chosen no they would have had to pay the defense and the question of how much defense i'm not sure that's what that case i guess i'll have to read it again but please do and also recording star which also goes through the exact same thing and in immunex they never pa people contrary to this you don't get paid anything you're right your honor but under washington law again they were acting under reservation of rights tend to get the benefit of not having to pay a dime they have to get it you just feel determination and then it's going forward or they had to deny they could have denied they did ok all right thank you your honor thank you both for your argument we appreciate it in the case just argued it is submitted