may please the court martial the cash for for employers insurance company of wausau on june sixth two thousand and seventeen of this year the new york court of appeals in the case burlington insurance company vers new york city transit authority overturn the appellate divisions and held that the term caused in whole or in part by in an insurance policy in the granta coverage required proximate cause ation negligence and not mere but for causation here and a grant of coverage is construed broadly in favor of coverage here we're dealing with the exclusion the court specifically held that those words were now or in a rising out of i submit that new york would simply construe the phrase resulting from which is at issue here similar to the caused by language in that new york court of appeals decision to as we quire proximate cause ation simply texas courts and texas law is relevant for the travelers policy has construed the phrase resulting from as requiring proximate causation and specifically in the directly on point accu fleet case which the district court didn't even address below here there is clearly texas law applies to travelers policy does the new jersey statute apply i'm focusing on texas law i'm not arguing in this argument that the us on the bus statute requires the coverage texas law by quoting a new york court of appeals decision or texas of these two policies here we have the traveller's policy issued in texas where we're saying that we're not contesting texas law we have the harleysville policy in new indemnity requirement and we're looking just whether they're under texas law there's a i think a reasonable possibility or potential of coverage isn't that right yes this is purely due to defend case and here in addition they cannot begin to argue that's not that's not a complaint part of the complaint no it's not treated as a pleading under new york law case i've cited case law it's really not a pleading it's maybe something in the middle but it's not a complaint but even if you look at the bill of particulars all it does say is that there are multiple ways this might have happened so one way includes the pump jack but there are other ways that had nothing to do with the pump jack why can't we consider the video the video is extrinsic evidence and if you do look at the video and i  caution you it's a speeded up video it's not real time when you look at the video the way i see it what happened it looks like there were issues with this lift gate the lift gate is a piece of metal that sticks off the end of the truck that you put the this very heavy battery on and a battery diving board then it's still a dog because not because of the negligence the use of the pump jack but because there's a defect in the in the lift gate where they put something too heavy on the lift gate and then it popped up like a diving board that was possible for all i know  the truck was not absolutely that's a possibility too in other words it might be that there was no negligence the use of the pump jack and if you look at the deposition testimony the deposition testimony supports that there was no use no negligence and mechanical device but he said there's another theory that was negligent in use of the rear which would be outside the exclusion given that it's a duty to defend case he defend now and then they don't know it will be determined on whether or not there was actual negligence in the use of the of the mechanical device what can we look at if we take a very strict about what we can look at and assessing duty to defend and look just at the complaint for example what is there in the complaint that suggests that the vehicle itself might have been  four and a fifty five they each allege the ownership the least the control of the operation of a vehicle there's no basis for them and no reason for them to a vehicle it's a very general allegation in that complaint or is what i'm saying there is nothing very specific about that but why would you allege and again it's a reasonable possibility why would you allege a vehicle as having a status it had nothing to do with the loss they're clearly implying and a reasonable reading of this complaint is that it has something to do with the loss but if you want something very specific you can go to the monarch's third party complaint on the record at seven hundred forty one in the seventh complaint they specifically allege negligence and causing a battery to fall off the vehicle and paragraph seven of militia third party complaint and the record at page eighty seven hundred fifty five they make the exact same allegation third party complaints helman was not sued directly your honor because hellman was was the employer so there was a third party complaint by monarch and a third party complaint by miller both against helmet and  third party complaints they specifically allege that the battery fell off the truck you can read the pages you yes eighty seven hundred forty one is the monarch's third party complaint you would look at the seventh paragraph so that's my reference to the one just that it didn't you said it had very general allegations of how this accident happened right but then it goes on at the bend it says caused personal injuries as a result of a large battery that was being offloaded from the truck falling on top of him so that was the negligence connected to the motor vehicle it says that they did the cause of the accident was i mean i don't think you need to have to say the  legal term negligence these are factual allegations the cause of the accident and his injury was a large battery that was being offloaded from a truck so the so that's the tie in to the claim that it rises from the use of a truck again possibility test i mean it's not it could be construed as negligence and use of the truck when you have that specific allegation i think a reasonable person would say that this is a claim from rising from the use of the truck are the allegations any more specific with respect to th the fact that they do have led one theory that might be barred doesn't mean the whole claim is barred because ultimately a jury could find this happened from where it was parked as happened because it was a defective list eight there's a lot of different things that a jury co is endorsement for very specific project and there's a group on the endorsement it says for this project for off site only the only reasonable construction only purpose for having that language on there was to indicate that these people were additional george and this is applies to that one specific project project travellers has a primary other insurance provision they are the insurer from on the long term lessee their vehicle there's a hired autos endorsement and there's no dispute their policy says for own vehicles we are primary and there's no dispute under the hired auto indorsement that this vehicle was a described vehicle they ignore in arguing that this  treat this vehicle as an owner vehicle language they ignore that this indorsement atop says it applies in modifies the business auto cover form they're trying to argue that this definition term only modifies all the portions of this endorsement in fact the definition of whether you only order or don't want to only auto has nothing to do with the rest of the indorsement the only effect it could have would be on the priority of coverage issue and the same here if there  primaries did they typically just divide in half the costs or is there any other application of policy language that would govern their liability well under new york or there's no dispute that when you when you and texas know when you when you when you pro rated figure out primary versus access you look at the other address provisions but assuming two policies have conflicting provisions or both say their primary both say their  then under unless the policy under new york law unless the policy specifically provides a different way you do it pro rata on policy limits i think here both if i recall both policies have the same policy limits so doesn't matter whether it's pro rata or equal shares this court however the case when you look at the second department second circuit decision the one thing that they did accept was the insured means the insured seeking coverage and applies good morning may please the court lance keylock for harleysville preferred insurance company let me start by talking about the movement by mechanical device exclusion and language resulting from  suggestions in here indicate that if you look at the complaint there's nothing that would trigger a duty to defend under our policy in any event there was nothing in the initial complaint that said that help f small hellman wasn't sued at all and there was nothing tying the mt or the t b t as a to the use of a vehicle so our policy was an auto policy that the battery that was getting to  heard was had to be delivered through the use of a vehicle that they were the vehicle owners unless sores weren't named as defendants think complaint was extraordinarily vague about the theories of recovery and that if we do look at the b particulars we see that there was a negligence claim and related to him regarding to have your property maintain the equipment or insure that such equipment including but not limited to the gate which is part of the vehicle in good working order on the motor vehicle bearing the new jersey state plate why doesn't that raise enough of a question about the work of the safety of the vehicle to trigger a potential duty to indemnify and therefore duty to defend so the bill of particulars absolutely if you look at a bill of particulars absolutely falls within our ensuring agreement because i think from the bill of particulars it would be fair to say that this arose out of the use of an auto that may have been used by an insured helman or the m t a or the t b t i that same exact document says that this resulted from the use of a pallet jack and so the same  where does it say that and precludes these other theories that i see laid out in the bill of particulars i mean just misreading this right so so i think the district court's decision is correct in this respect that all of the theories are premised particulars including the elevation related risk which i think means they parked too much on it and also the things slip out and then the gate was not in good working order the liftgate so why isn't why it why is everything the in the bill of particulars that being alleged is enough to trigger the exclusion with respect to all theories of liability it's the operative back to understand that why why why is that i mean that district court would generally have one thing the battery that was being accomplished in a number of different ways and the vehicle i find it difficult to exclude the possibility that the vehicle and the liftgate didn't contribute in some way to that particularly on the duty to defend we're talking about potential theories of recovery as opposed to indemnity why is that excluded by this document and i think you have to look at it and the district court cited a case u s fire vs new york marine that that quote basically the mount vernon and the new hampshire cases from the court of appeals and one of those cases deals with an assault an assault exclusion and in that underlying action they alleged well it is the  injuries occurred from the failure to supervise and the injury may have occurred because there wasn't sufficient lighting and the injury may have hurt because of the actual assault and what the court of appeal said is look we don't look at the theories of liability what we look at are the operative act that creates the injury and the accident and that's what the district court said is under all of these theories we know from the undisputed facts here and from the bill of particulars that the operative act that that caused this accident not an approximate cost sense but certainly they were using the mechanical device at all times throughout this process or were correct and how do we know battery on the lift what he said in that deposition was that there was a momentary stoppage of one to two seconds as they're moving the pallet jack to the back of the truck they pause and that's when it started to teeter where we paused and  dead there's no facts in the record that the liftgate you know i'm talking about the pallet has two levels so yes they brought the power down in between the two levels so there's would the lift gate at the time it slid off why is that not roll because they were still using the pallet jack so it's not it doesn't have to be the negligent operation of the pallet jack it's the movement of property by a mechanical device that weight and then we see the left gate sail you can not supposed to be up to three thousand pounds to lift gate fails it comes down to battery topples over in that were established you're saying that your policy would have nothing to do defend in that case if that those facts were established i think if the if the if the acts if the injury was not caused by the movement of the property by a mechanical device i caused by i'm asking if you were visibly if  you could see that the pallet jack didn't contribute to the injury except having moved and placed the battery on the lift gate and what happened is the lift fails i think that case would be a duty to defend because i think that case is more like the forklift case but what i'm what i'm having difficulty is excluding that possibility based on the bill of particulars and the complaint we have here right and again it's because the operative that is that the property was being moved instrumental e and dominant part of this case and i think we have the argument that if you want to take just a minute to finish up sure and the resulting from language in the exclusion is the same resulting from language in the grant actually use the word arising at our grant of coverage is we provide coverage for injuries resulting from the use of an auto there's no gap in coverage our coverage for autos is as broad as their exclusion for autos so you would see the duty to defend their me to exclusive correct right but our exclusion uses the same resulting from language it's not a proximate cause resulting from language it's the same language that's in our ensuring for our resulting from excluding our accountable device exclusion the counterpart is actually in their policy so so they give back coverage under their auto exclusion for injuries resulting from the use of a mechanical device so it's not like the insured is being left without coverage they cover injuries resulting from the use of mechanical device we do not thank you very next we'll hear from travelers the employers liability exclusion in our policy precludes coverage from bodily injury to an employee of an insured if he's injured in the course of his employment it's undisputed that the allegations of the underlying complaint are that mystic have a tail was killed during the course of his employment with hound our position is that the employers liability exclusion precludes coverage as to home and looking to the m t a in t the where as here the duty to defend cannot be determined by looking at the allegations of the complaint against m t a t v t a a texas courts look to extrinsic evidence company and has operations in businesses throughout the united states so for that reason including monarchic and for that reason there are endorsements specific to all of the states  that insurance under the policy do work but why if texas law applies if the choice of law to solution is texas law because of its parent why do you need all the other and states endorsements of the texas law applies to the policy texas law applies to the interpretation of the policy under certain circumstances for example here where the vehicle at issue is garage or registered in the state of new indorsement that endorsement modifies who is an insured under the policy for purposes of vehicles that are registered in new jersey the only difference in that particular endorsement is the new jersey on for vehicles that are registered in new jersey and what it does is the policy provides that who is an insured is a permissive user of a covered auto hear the truck and says except any one while moving property to or from that auto the indorsement takes away that exception to who is an insured for insurance limits required by the new nt who is in insured is modified and references the omnibus statute but that same indorsement says that all other provisions in the policy remain the same i e the insuring agreement and the exclusions and in fact if you look through the policy there are specific indorsements to forty seven different states and where the insured had wanted to take out certain exclusions they did so by virtue of the endorsements it for example if you look to the new york endorsement which is not at issue here that takes out the mechanical device exclusion so otherwise you're saying it just modifies who is and insured correct and based the policy language you look to the policy language and it modifies who is an insured and then once it is determined who is an insured then you go to the insuring agreement and then you go to the exclusions to determine whether or not there's coverage under the policy  we're just was a conceptual between the bird it was added it's not in the record whether or not it was requested by the insured because and respectfully that's why it's in the policy is not at issue it's what's  issue is what does the policy say in the coverage afforded under the policy and while we just viewed that hellmann is insured under the policy it's really an important because the employers liability exclusion applies  that it was the pallet jack that caused the problem and that yes your honor because under texas law you can look to extremes of evidence and then if you look to the incident report and if you look to the police report separate and apart from the bill of particulars those cabot i mean that that really does also relate to the merits of liability claim basis for negligence what exactly happened here in texas law is a fairly broad understanding of the duty to application of the mechanical device exclusion does not hinge upon the theory of liability that alleged and and negligence but rather the operative act resulting in the acts and if you look at the language of the policy it's not in there can be more than one that it could be to move it that would have been fine but that is correct so even though there are multiple theories of liability you look to the actual facts resulting in the accident and because the exclusion in so far as they are clear that's correct the exclusion does not preclude coverage for liability for bodily injury caused by the movement of property it precludes coverage for bodily injury resulting from the movement of property by a mechanical device and it simply can but for the moment of battery by this mechanical device would have been no act that is correct it is unavoidable not to c law i always thought that if you have a multi state corporation like this with a sub that's monarch like in new jersey that of new jersey law for example requiring all current vehicle insurance to have one hundred thousand dollars of liability coverage but texas law only required twenty thousand that the new jersey requirement would apply and that's why you have an endorsement like this to a policy am i wrong about that i think perhaps what you're referring to is that there is a coverage extension portion in our policy and not hinges upon where the accident occurred so it provides that where the vehicle is being used out of state from where it's principally garage and registered it will be required to maintain or how the minimum insurance requirements of the state where the vehicle is being operated which is a separate issue by the power of the new jersey law in other words not just something agreed to between the insurer and the insurers it's because states have different motor vehicle laws with different financial responsibility limits but if you if you house a truck in new jersey even though you're headquartered in texas you've got to comply with those new jersey financial responsibility laws is and i wrong about that and this policy does afford those those limits of liability applies no respectfully no in that texas law applies to the policy and under the statute does not write out the exclusions of a policy that's a function of new the fundamental issue is when you took it take a look at the u s fire insurance company case that relied on that uses arising out of language this is resulting from language and i started with the new york court of appeals case which just came down which rejected that the simile caused by language is the same as arising out of rather in a grant the coverage was construed burghley they said never the less it requires prospect causation slash negligence now in this case rules and see a rule to supplement my briefs with this new case there is one i do apologise twenty thank you but so here you here under texas law first of all the definitely  agreement which is construed broadly in the favor of coverage to resulting from an an exclusion which is construed narrowly to answer a few questions i believe the bill of particulars was actually served in response to a demand for coverage under both is a potentiality of coverage under both if that's the way they wanted to do it they could in the insuring agree and the other insurance agreement say if you have c h l coverage then there were we don't have a duty to defend or were excess they didn't say that they said there's surance and the duty to defend is very broad you can have and it happens all the time we have complaints under deano and c d o policies that are that ultimately one policy going to apply but then what about the position that because a pallet jack first but for causation saying it is proximate yes is most definitely is proximate causation the texas courts have ruled one hundred percent for the for the texas policy and the new york courts court most recently when they words if if the end here the pallet jack and i believe project was actually being moved used at the time to move anything it was lowered to the deck of the the battery was lowered to the deck of the lift gate so nothing was being moved at the time  say one more thing i mean let the and let me ask you it's friday it's the holiday weekend how about by the end of next week thank you your honor with texas law you can't it's texas has a very strong a corner's rule you can't go outside the complaint is a narrow exception they call it not you or don't qualify you clearly don't qualify as an insured whether or not for example the truck is excluded from the policy which doesn't apply here whether or not there's a dispute the policy exists in the first place and in addition to having to fit within one of those things the texas courts say where the where the issue of whether the exclusion applies is being litigated in the underlying case clearly you can't use extensive evidence and what's clearly been litigated underlying case it