morning your honour's may it please the court my name is ryan kaplan and i represent the appellant's first one landing corporation and john the sara i'd like to reserve three minutes for rebuttal i'd like to begin our discussion this morning by recognizing a number of  controversial principles guiding when the duty to defend is triggers in the defense case insurance defense case the first being that the duty to defend is triggered when a third party complaint potentially seeks damages covered by a policy second is that damages in the context of what is insurable means payments made to compensate a party for injuries it is alleged to have been curved the principle is that when the cessna what it would do to defend has been triggered court looks to the allegations of the complaint the entire complaint not any one part in isolation as well as the facts reasonably inferrable from those allegations and is not necessarily rely on the labels used by the third party plaintiffs in drafting complaint as well as in the extrinsic evidence that has been made available to the insurer and the final point like to make is that in the context of a summary judgment motion the insurer will be relieved of its obligation to defend only if the underlying complaint can by no conceivable theory raise a single issue which could bring it within the policy coverage with this backdrop the issue presented here is whether the hertford satisfied complaint here from what what is it about the complaint that would suggest that really what although they make reference to reimbursement or whatever they've written they make reference reference some equitable kind of relief that doesn't necessarily exclude damages so what is it about this complaint that would suggest there's a possibility well i think that the spirit court could awarded or whoever it was in this i guess the district court could have awarded in the original underline it could have awarded damages and i say and i would say a number of things and you might have hit the nail on the head that it does not necessarily exclude damages which is the appropriate standard here but focusing on the complaint itself what i would argue is that you have to consider not simply the prayer for a leaf you have to consider not just the allegations throughout the complaint but  my question was what allegations here suggests that they were seeking damage or there was a possibility that they could recover damages i was going to finish that point by saying not simply the allegations but as well as the cause of action under which the allegations are brought so here to answer your point answer the question the the point is  to use the defendant's profits as a measure of the plaintiff's damages and that's the crucial point here when we distinct or when we look at we have to reconcile these insurance principles where pure restitution or pure discouragement or pure divestment of ill gotten gains is not necessarily insurable with a lot of cases in the car in the causes of action we have issue in this case which is a lanham act claim and a common law unfair competition claim with respect to the lanham act claim the plaintiffs can measure its damages not just fortunate its damages off of people off of the defendants profits that's found eleven seventeen eight of the lanham act it's recognized and it's recognized under the lindy it pen decision under the skydive arizona decision and more specifically it's recognized in the spinmaster decision which said as i quote under eleven seventeen a a pla adequate to fully compensate in ca for the harm caused by defendant's misconduct including the harm suffered by and a ca for its continued loss of good will and exposure to civil claims based on first ones fraudulent  and wrongful conduct then if you go down paragraph fifty seven defendant scam has and will continue to negatively affect in a c s reputation and good will in a ca has suffered harm and will continue to suffer harm by defendants misleading claims an affiliation looking at these potentially parallel or corollary principles of law it is necessary to reconcile them with the standard for the duty to defend and the defender cries only a potential for cover damages so under claim a plaintive seeking seeking to recover monetary leaf measured off of the defendant's profits does not necessarily exclude that being compensatory to the plaintiff and that's the real issue here because to defeat the duty to defend it's not enough that the monetary relief could be considered here could be considered discouragement or could be considered restitution it must be exclusively and the restitution concept does not really come into play in this underlying lawsuit it's just an articulation of the standard that the hartford relies upon but if you resent this back you actually might still lose right because you could still lose if they decided that it was against public policy if we decided what was against public policy to have the insurance company and the amounts that your client actually took the only way that it would lose your honor would be if the district court were defined based on the facts that that was the exclusive remedies sought which is contrary to the  pleated the allegations as well as the causes of actions of gradualness a as well as they try it would be a trial as well as and i want to also bring into consideration the settlement agreement that was ultimately reached when the insured here was not provided insurance and defense because the settlement agreement itself like the the unified grocers case was for an amount in excess of the alleged judgment the insurer must conclusively eliminate any potential for coverage and on the facts that were presented before the district court we had extensive evidence that showed a potential disparity and that is i agree a potential disparity that may or may not pan out and that's ultimately for the trier of fact to determine but on the evidence presented to the district court there was a disputed issue of fact in terms of any sort of disparity between the allegations of restitution or discords meant th may have been alleged as part of the amounts of may have been sought versus the ultimate some amount which on the facts presented encompassed more than what was being sought on a restitution or a theory want to follow up on what judge a book of alluded to which is that to the exclusion of any others we would argue that the natca action was not that case because when you look at the causes of action as well as the allegations that were encumbered in this case which is distinguishable from the cases cited by hartford in support of its position we have lanham act claims and common law unfair competition claims that necessarily encompass compensatory damages  for coverage in which case the hartford had a duty to defend it also potentially possible that the trier of fact finds that the ultimate award was purely or was not unsure of all those are two separate concepts and morning your honor and johnson for hartford a service saying i don't necessarily disagree with some of the broad standards that have been have been advanced here i think that the proper approach is to examine this particular pleading and this particular pleading has a couple of very important things in it number one it says that natca performs these services for free and that is very important in this analysis and number two it says that natca after the first one it's diverse the clients through the false affiliation etc etc natca there then referred back to natca so there's no lost profits by the facts pled in this pleading there's no place to sit there i'm sorry there's no restitution for that and they weren't representing but people how could they do that that that's a great question but they were the standing issue i completely agree what how did this happen how are they how is this allowed to go forward when they didn't necessarily have standing to represent the homeowners but no that is that the relief that they were seeking they were in fact seeking as they state in this complaint return of the money to the homeowners because all they plead in this complaint again concentrating on the facts is that first one charged eight hundred two thousand dollars and they should have done that that was very bad very illegal all these reasons why they shouldn't have done it and they should give it back well  restitution as that seemed to indicate they're asking for more than restitution i'm sorry repeat that last part but if they're asking for more than restitution well it's an oar and i would agree if we look at the restitution  part i don't know that there's a lot of debate about that restitution would not be covered the debate seems to focus on the amount of defendants profits i agree that under ip law and the cases that counsel cited that there are three justifications for awarding the infringers profits as a measure of compensating plaintiff for diverted sales for their own damages to prevent just enrichment and as a deterrent those latter two i don't think again that there's a lot of debate over whether or not they would be covered they would not so then we look at the first one as a measure of compensating plaintiff for diverted sales there were no diverted jail now you get it back so this is a non profit correct yes read the complaint is well whatever profits this other guy made over here that's our damage and we want you to pay us then and now what we do with the money after that is our business no i don't agree that that is well just  i understand i think if we look at paragraph seven of the complaint because i think that the correct way to approach this case is to look at the complaint just as your honor positive from the get go that the complaint and we and the rest of the complaint is completely consistent with that why it's lost profits here as a basis for injunctive relief they have to show some damage get to get injunctive relief and what they're saying i misspoke not lost profits but goodwill and reputational damage that is why they plead that in order to get the preliminary injunction which the ultimately got otherwise devoid of that they couldn't get an injunction because all of the damage was to somebody else the homeowners the money given back so there can't get compensatory damages for the damage to their reputation if they get an injunction to stop the misrepresentation measure a nonprofit that's not in the business of making money and they suffer damage they can suffer damage to the rest to their reputation and to their good name how do you  take this complaint and say or there's no possible way well i believe there's no possible way without speculating which if you read the entire thing in context and the context of the allegations and it is strange that there submit some other things but they're really outside the as a settlement the settlement agreement is relevant to the analysis the settlement a good at a funeral of unfair except that i to the extent you're saying well this was all really about reimbursing these what's pled but to some an agreement is at the end of the case and can bat not be considered in terms of an alley waiting the duty to defend it has to be can't have hindsight just for the very reasons that they're objecting to us and we say you know repeatedly in our priests that we reserve on that it was it was a lot to look into a lot to brief in one three five thirty three argument which is very complex and the damages argument which also unfortunately is complex as well in this particular context but i think here focusing on the allegations of this complaint which is all anyone really had at the time the discovery responses are the only other thing that have been really been raised as by the plaintiff as triggering a defense and they don't really say anything contrary or different from the allegations of complaint we have nine circuit cases one of which i wrote which is this is  sense not to allow them to sue for their damage and what he may lose the question is is there a duty to defend which is much lighter standard then the duty to indemnify why shouldn't there be a duty to defend well i think that question which would turn on did they sue for that did they sue for that damage and that's all i'm saying in that in the context of this complaint they were not suing for that damage they were asserting that damages that as a grounds to enable them to plead injunctive relief properly to show some damage but when we look at what relief they really thought it was injunctive relief and the complaint says they spun on just got more and more specific about that to scorch meant a profits or which would have been a measure of damages or restitution and attorney's fees punitive damages whatever the rest of them are it could be that the discouragement of profits would be another way of saying you made money and damage your reputation and the way to measure the damages would be the profits i completely agree with that and in that but in that context you made money ripping off these people what the allegation was you you took this money wrongfully you now have to give it back that is just scorch mut of ill gotten gains that is not covered that is what is being sought here when this complaint  that's it's the potential for covering the potential for coverage has its limits you know that sounds like a contradiction in terms but it is relief but that you know under the under the lanham anchor the time of law and copyright or trademark theories that were alleged here it easily the potential for that to be explicitly clear that that was just a way of measuring their damages it's pretty obvious i don't know i think that when you have the allegation of it loss of profits in the context of a company bringing that allegation saying we don't make any money and the defendant did all these wrongful things and we want them to return this to the homeowner that that the allowance in th ip cases for using the defend its profits as a measure of the plaintiff lost profit is every single i don't need to repeat you know i don't mean to repeat myself but i have a difficulty with the notion that a nonprofit whether be a nonprofit the judge nelson is running or some other nonprofit cannot get damages for its for its reputation and it doesn't make any sense that makes sense and it doesn't mean that the fact that they don't make profits doesn't mean they don't have income i don't know in this case where it was coming from from the government i suppose some and they wanted to exist them or foundations or whoever if they think that really somebody that's associated with them is swindling people they might well say we don't need to do with you i cut them out so it seems to me reputation damage could be quite real i agree except that here and reputational damage to a nonprofit if there is some monetary loss that could result where you could use the defendant profit as that measure of damages that would be one thing here there is no monetary loss so the only other way they could plead that there's no equation there's no connection between the defendants profits and the reputational damage because there's no monetary damage from the loss of reputation it's an intangible in this particular situation based on this pleading that says we don't make any money so therefore it doesn't mean that they don't have reputational damage is for which they're entitled to a remedy it's just their remedy is a money the remedy is cut it out stop falsely is affiliating an have or not has damaged model was flawed and when we assess the duty to defend it's important to take a look at the allegations because it's only the potential for seeking cover damage that in triggers the duty to defend and that are in hartford very well could have come in defended the first one in this case and in the defense said ok now could you have problems with your case but the potential for liability is as remote as it may be is not necessarily the standard for triggering the duty to defend i also want to point out that these allegations of reputational harm and injury to goodwill they were not made exclusively within the context of the kick of the request for injunctive relief you see that in the common law