giving of a jury instruction on a clear law that would enable the jury to understand whether or not travelers inclusion of the i r s on their policy benefits was either retaliatory or legally required the district court correctly found after trial and held in his ruling that the inclusion of the i r s was not mandatory and was and that the r s was not entitled to be named on the check unfortunately the jury was deprived of evidence on this issue other than improper evidence from lawyer testifying witnesses produced by travellers used lawyers testified contrary to the laws of the district court properly determined later in travelers counsel was able to argue to the jury   the court did allow witnesses lawyer witnesses including retained expert witnesses to come in and i'm justified to what the law wasn't you you said it was improper for for the bad faith tactic or whatever th why they did that they could have offered an explanation of what they thought that the law was but it would have been contradicted by what the court told the jury was that they were wrong and the jury would be able to understand that they did not put them on for two years retaliatory put highly prejudicial to have these lawyers come in and testify about this little incident streaming prejudice well yes it was particularly because compared when it was connected to a casey a standard jury instruction is the only that evidence from th testifying witnesses that wrong law could be considered that the argument of counsel could not be findings three months after the jury left would have been something that secretary could have used in deciding whether or not this was appropriate yes  statements of demands made by the mill houses in a mediation down the plant let me ask you this let let's assume for a moment that your legal argument is absolutely correct that it's intertwined this is substantive not judge basically gave it up you didn't bring it up again and it just suddenly appears magically on appeal didn't you waive this no in fact your honor it can't be implied leeway and under california prior to trial there were several there were a number of in limon emotions and i understandably the district court judge says you get rid of these motions you know they were ridiculous thirty five in limiting motions and yes counsel to to deal discussion about the fact of mediation and you don't object he said that's fine i would like to address that as a matter of fact both sides did bring in the many motions and twenty seven of the thirty five were brought by the defendant  court refused to hear them denied them all without prejudice and in the windowing process has a plan of attempted to comply with the court's order and reduced down to one there was agreement that it would not be in the trial if there was no such agreement at the time of the pretrial hearing on the hours before trial occurred the court suddenly on its own after both counsel indicated that mediation statements would be privileged decided that under four or eight that wasn't the case and developed this due process exception but you can and i believe i recognize or remember the record on that and i believe your testimony our your statement before the court was on the on the issue of bad faith that is relevant that was what you said to the judge and then there after when it was raised and by defense counsel during the trial your objection was foundation and hearsay not your honor this is mediation this is an issue that cannot be raised in the questions that are being asked are well  beyond the scope of what the statutory privileges don't you had didn't you have an obligation to raise it clearly and specifically otherwise in a fight take your argument as the way you seem to be presenting it is that this statute state statute whether you raise it or not in trial always gives you the opportunity let's assume that as a happened in this case your client's last you could always raise it on appeal because it is so substantive that whether you raised it or not that you haven't waived it doesn't it have to be plane air but i this but that's assuming that you sat back you let this evidence come in strategically perhaps you felt you could deal with it but your client lost and so you have an automatic right to raise it on appeal based upon the statute even though you didn't do anything to preserve it but yes i understand what you're saying i believe that the statute absolutely precludes the introduction of the statements that were objected to on the grounds that remained after discussion was with the district court i also don't recall saying that it was relevant only that offers made by the millhouse could never be relevant are offered for bad taste on the part of the defendant they are logically  or an insured statement to its first party insure that precluded it from paying the claim there are nothing about those statements so it's hearsay alleged demands that were offered in the trial that could have been relevant in any sense in this case email houses and they over three hundred times it was brought up in an eight day trial about these alleged extravagant demands in iraq that i did your honor take on each and every one of these i did not your honor it was futile out at point and know i would have let it in anyway but that doesn't that's you know he didn't have to go that far he could just said you waive it i've done over thank you i agree and i appreciated the court's candor with us in the post i order because it was consistent with what the understanding was the night before trial on what he was going to allow and the reason why i you know to be honest if you're not heard your answer to judge silver's question but i do not understand how you can stand there and say you didn't the question what did you know that statement that occurred at mediation and you didn't yet you didn't say you honor i object that's improper it's barred by california's mediation confidentiality california which the court was aware we were not waiving our right and mediation confidentiality i was attempting to look to pursue the trial essentially in accordance with what the court had indicated i also believed i had a sort of proper basis to exclude it based upon the fact that there was no foundation for it and that it was double hearsay but what is your best evidence that you properly raise the use of any even though the law is what the law is that somehow you could do what was done here and yet you still have retained this wavered privilege if you will well what i did was the court indicated that evidence of mediation would come in and i objected on other valid bases which i thought remained the court just indicated that it was going to allow it under for a way to rebut  went along with the court as i as i recall that that colloquy with the court you said well it seems to me that it might be relevant on the issue of bad faith because the insurance company had asserted that look at your  honor we engaged in mediation we tried to resolve this and i believe your statement to the court was yes it would have some relevancy there then that and then you didn't respond to the court when the court said you know this is gone into and very detailed analytical legal determination as to whether or not was a privilege whether or not your e applied but you didn't do that and then a trial and stead of reasserting it your objection was hearsay foundation hearsay foundation so and then following up on what judge smith said where else in the record did you then pound the table and say your honor remember this mediation issue and or offer in evidence or something of that sort until after the trial i guess well there were certain there were in fact the court gave me a standing objection because i was objecting so much to the hectoring examination of mrs milhouse fundamentals that she could not even recall making i do not recall saying to the court at any time that the mill houses statements in a mediation would be relevant to that face in fact the only thing relevant that could be relevant to the bed his cause of action would be off lowball offers made by travelers if we had put those in which we did not because we honored to confidentiality agreement but under white versus western title a california supreme court case lowball offers to settle would be admissible against travelers nothing the mill houses would have to say would be about what to how they value the tort claim would be relevant to the benefits cause of actions i'm fairly comfortable i did not say that but we weren't what what what counts what i was trying to do was trying to point out that as i did in the record that the mediator was not on the witness list was not intended to testify this wasn't this was ambushed testimony and the mediator couldn't come in didn't this was double hearsay so it couldn't be cross examined and it was offered for a wholly irrelevant and improper purpose you must have thought about this before the trial because somebody prepared a motion in limine to exclude all mediation evidence and then you would  and you had it i mean you did it and the judge said you know you could you could object during the course of the trial which is usually what judges do who run trials that you get they get thirty thirty motions in limine they tell counsel look you can't really decide these motions until you had been exchanged this is in the right and it showed today we're going to attempt to introduce you have a d the fact of mediation and my statement to the court was i would hope that not even that would be a part of this trial and that's when the court opened up the  was the testimony of the expert witness mr holland who essentially took the demeaning testimony about the mediation statements of the mill house that he knew nothing of and the i r s question that he knew nothing of not even a distinction between levy and lien and had testified in his deposition as expert ports and so forth he would not opine about taxes and tied those two theories together for the bow that counsel used on the box  issues and also the other thing i would say is that with respect to the mill houses claim for interest under the statute that the damages were calculable and that we would we would  opening brief is that he's entitled to a new trial on bad faith because the trial court refused to give his proposed instruction number forty six the problem with counsel's argument is struction number six was an improper statement of the law because the proposed instruction stated that the i r s as a right before the i r s has a right to receive the property of a taxpayer it must either prevail in a lien foreclosure suit or serv the ministry of levy on the third party in possession of the taxpayer's property he cites for that proposition the united states versus national back of commerce but that's not what the national bank of commerce kay said what the united states supreme court in that case said is that a federal tax lien is not self executing affirmative action by the i r s is required to enforce collection of the unpaid taxes and then the general revenue code provides  united states united states versus back of selena and walker versus united states call very clearly that if you're aware of an i r s lean on somebody and you that attaches to the property money or whatever that you happen to have and you pad to the taxpayer without accounting for the lien that you're liable to the government for conversion so the instruction was clearly improper feeling too early and so the quickest in court quite properly refused it and certainly there was no error in not giving that instruction regarding mediation and there's been a lot of discussion about whether counsel is obligated to object or not i just noted in his briefing next  a very serious misstatement of the law when he says that the federal rules of evidence and subject to the rules enabling act that's simply not the case unlike the real federal rules of civil procedure the rules enabling act is deemed an act of congress it is not i mean scuse me the federal rules of evidence are deemed an act of congress and are not subject to the rules enabling act the only issue under federal rule of evidence one of the three which requires that the party to preserve an issue on appeal from the mission or explosion of evidence must state the specific grounds of the objection the only issue is whether it's constitutional and congress clearly has the right  under the constitution to specify what a party has to do to counsel out that's all interesting but probably not terribly helpful to us in this case i'd be interested in knowing whether you believe failing to properly object at the trial level they clearly weighted by failing to object the only objection was hearsay and that can be quickly disposed because this is milhouse and her testimony essentially admitted that everything that the  traveller's witnesses said about the mediation demands was true so from from your perspective regardless of how one construes the california law on taking argue when doe that this is a substantive rule we must apply that the just not really we don't need to get to that because it was waived and so that's the end of the story as far as that part of the case is concerned from your perspective from my perspective and i would just p out in terms of the argument well we don't have to object and even if this case were tried in state court the california supreme court of the fox gave homeowners association versus for melia case which is cited in the briefs of page ten footnote seven states that even though you cannot in plainly waive mediation confidentiality that that doesn't mean you don't have to object to a trial the california supreme court in footnote that decision said that a failure to object to have a dance regarding what happened at mediation is is a waiver so if we don't have that particular case it's not really this case in the sense that you don't add this is post trial is what you're saying and post trial or during trial you have to raise and during trial but the court in the court you cited or the opinion you cited said that you can't waive it but that was think the fox case case from the california supreme court makes clear that and california as i say the california supreme court said you can't have an implied waiver by litigation conduct you know other words the fact that you sue your lawyer you weigh the privilege but you don't wave of mediation confidentiality but that's a whole different that's conflate counsel is conflating two kinds of waivers because that doesn't mean you don't have to object if the evidence comes in because i think as your honor pointed out the council has correct other rather absurd results that you can let the evidence come in without objection see how the trial comes out and if you don't like the result then you go up in appeal and say i didn't get a fair trial because the evidence regarding what happened at mediation came then and th clearly an absurd result that's why you have to object to trial so counsel stood up there when he was up there just a minute ago he said it would have been futile to raise this objection any for after the pre after the pretrial conference the day before trial started well there's nothing there w said the judge said and then this rule seems to suggest even statements made an offer which made operas made which are inadmissible can be admissible if to rebut a claim of undue to lie well it's interesting that what he's saying well that that just me wait a minute under federal rule of evidence for wait maybe more come but he was just musing he never there was never any ruling and certainly counsel for plaintiff if you felt that this was in this if the applicable rule was california evidence got sections eleven nineteen it was counsel's obligation to stand up and say wait a minute your honor i think you're confused we're not talking about the federal rules of evidence here the applicable rule is california other than to go to section eleven nineteen that on what happened after trial there was certainly nothing that judge kearney said during the pretrial hearing that would give any indication that he was not we do have case law that says that before trial when the judge makes a ruling on a limb an emotion makes it clear that you don't need to continually object that's claimed rounds during the course of trial certainly that's the case but that's not what happened here judge carney never as your honor pointed out a judge carney said i got thirty five motions in limine rulin distinguishing feature the council's making between the mediation the judge said that mediation may well be admissible but that his position was and he was clear trying to made clear that the minute there's room for a way to nobody ever said suggested to him that we wait a minute you should be looking at california evidence code section eleven one thing i would just point out that perhaps it's not necessary for me to go into this but i think th regular case in the california decisions i think that notwithstanding mediation confidentiality there is a due process exception and in this case based upon counsel's whole theme of the case starting at doing opening statement and continuing through the questioning of travers witnesses he made it very clear that his position was that travelers for from the beginning of the case took a very unreasonable hard nosed reasonable interpretation of him to the policy and it continued doing that through the mediation in fact he started out by telling the jury my clients of never ass trevor's for any more than what their internal to into the policy no however we know now there was a misrepresentation if travers was not allowed as the defendant to introduce evidence to rebut that the statement would have been under budget and certainly as a matter of due process it's eleven twenty eight which deals specifically with the admission of students during the d h and states that a pretty substantial rights have to be effective if there's air in you presume prejudice in a civil case in federal court the other side has to show that there was prejudice well but it clearly clearly the i think i think the record is you know crystal clear that there was no prejudice because this is not a case where  jury heard about damaging admissions during the mediation and i can understand why public policy would say that if the parties entitled to know spill their guts of mediation and say all kinds of things but what it is certainly didn't come as a surprise to the jury the plaintiffs were contending that travers did all kinds of bad things and therefore plaintiffs were entitled to millions of dollars in bad faith damages so you know you know what from my perspective when i read the parts of the transcript that got this mediation and looked at the exchange that took place the questioning the cross examination or examination of mrs milhouse when she was on the stand and mr miller i mean i think the very reason why we have the confidentiality privilege in state court and in federal court some extent is the very you know you just read that transcript and you see this never should have come in this just went way too far not the fact that mediation may have been relevant because they wanted to show that they were engaging in ways of settling the case but the extent of what took place there it well justifies the whole basis for california's mediation privilege well this is not you know when you go to say i don't have any so my conference i presided at when i was a district court judge in a state court judge and people come in with wild estimates for their settlement position that happens all the time but in this on the basis of that mediation is to is to sit down and to discuss the case mediation confidentiality public policy prison provision that california has a done that the california legislature adopted well if counsel for plaintiff and not merge the subject by going beyond the fact that there was a mediation and effectively telling the jury that it was traveller's fault that the mediation failed not his clients because all his clients were never asking for was their policy benefits the travel it was taking the hard nosed position i mean in his opening statement after telling the jury that my clients have never asked for more than what they are entitled to under the policy in no in no time ever then he tells the jury in june of two thousand and ten travers is put on notice by the mill house's lawyer it's time to pay th claim you will find that that was met with resistance and an insistence on using an improper system so the mill houses met the travelers tried mediation that failed they suit travelers the clear message was that travelers suppose agree with judge smith there was no prejudice here because all the jury heard is what plaintiff's position at trial was namely travers was a terrible company and plaintiffs were entitled to millions of dollars in damages so how plaintiffs can argue that that evidence prejudiced them when they asked for over seventeen million the jury i mean the jury would only draw negative inference if they concluded that travelers did not can commit bad faith but that was dependent on the evidence  not you know not what party demanded that mediation just going to mr holland's testimony the expert witness the district court had broad discretion to determine whether an expert  experience he has a clearly is able to develop a very strong impression of which way the case is going whether it's going toward subtle lunch or whether the plaintiffs are really trying to set up a bad faith case and he offered his opinion and he certainly cost was from the associated construction services was six hundred ninety two thousand actually it was about eight hundred twenty seven thousand when you had a pertinent structures and and and  shrubs and trees then after the plaintiff requested that the payment be based on the comparable comparative sales analysis even though that's not what the policy provide would that have gotten the more money two thousand and ten the trial was in august of two thousand and thirteen so there was i mean there was a dispute about this check payable to the iris but as i explained i think that travers quite properly named the i r s as a paid to avoid being sued by the i r s for conversion but in the event it well before trial travelers paid the money and keep in mind i think first of all that there were in this case i mean the cases cited by plaintiff are all cases where the defendant essentially agreed with the plaintiff's calculation in this case there were three different estimates of what it would cost to rebuild the plaintiff's home and in fact estimate which was nine hundred twenty two thousand but the plaintiffs conveniently didn't tell travelers that they had gotten an earlier estimate from a mr hatch for five hundred eight eighteen thousand dollars and then the associated construction came up with an estimate of including everything eight hundred twenty seven thousand so to say the damages were certainly are capable of the made certain when you have three different estimates simply makes no sense keep in mind also that  million dollars in damages the remitted amount awarded by the district court only two hundred ninety one thousand of that is the replacement cost and the balance of that you know there's there's an award of two hundred fifty seven thousand for personal property plaintiffs didn't submit an inventory for that too until three and a half years after trial much the insurance company concede was in effect  liquidated amount due under the policy before the trial began well i mean if you take out our position is that i could do the math here that we believe that there are three i had that there was a million that travelers received was totally meaningless because it gave no would they to ages for any ages for any of the property and the code and ordinance upgrade which policy required to have to be incurred if that means plaintiffs have to sign a contract which is never signed by the plaintiffs that was you know there was no evidence that they had signed a contract so those three items we contend should not be part of the judgment and the judgment should be about eight hundred thirty thousand dollars to rebuild everything and how much of that money was part of the judgment that was actually awarded while the judgment felt that you know the judge concluded that the jury could have found that  more in other words the court found that the jury could have found that notwithstanding travers eight hundred thirty thousand dollars payment that there was still two hundred ninety one thousand dollars left i was a jury determination you know we're not challenging that but there was a difference of opinion and the jury came to the conclusion that travers estimate was low but that was based upon conflicting testimony and so that's wh thank you for one minute i can answer the question on that the amount they came up with the forty appraisal done by their insurance expert was one million five thousand dollars replacement cost of the property at the time i mean five thousand million and five thousand at the time of the mediation which they had didn't share then but shared after it in november two years after the fire at trial both sides put on evidence of the replacement cost an actual cash value which exceeded the policy limits the policy of them as for what were requested the with respect to the issue of prejudice clearly the prejudice that was you were asking and asking about whether or not their presence there was the timing of these demands that they say in the end a district cour not a law school exercise i'm sorry i'm asking for specific evidence in the record that you believe proves prejudice while i was offered to show prejudice on the record the questioning about them being immoral for the amount of money they requested i understand your position that that's that is prejudicial i'm asking it what do you put on the record to show prejudice i just and i was overruled ok so that's ok and then with respect to the cop to talk about mr hatch mr hatch the evidence says he wasn't a contractor there was no five hundred thousand dollar amount and with respect to being a payments that were made the only payments made prior to the november period two years later was six hundred two thousand dollars which still dated and finally as with respect to the personal property claim we feel we believe the court properly dealt with that through the abuse of discretion standard and ample evidence was provided for both the additional living expenses on the special of truck construction and the and the media and the and definition of incurred which was decided by the jury and the court thank you counsel that are submitted the panel's going to take a short