for visiting that scene helping us out and several cases if you meant to go in for returning to help us out with this particular case again so thank you judge cook in your locker  two hundred thousand actually has changed hands so the two hundred dollars in the district court's ruling continental did it send eight hundred thousand dollars check to next level which next level did not so ok so nobody has negotiated the two hundred dollars is nowhere  three arguments that continental mates are guarding the two hundred thousand dollars limit are as follows st continental our view is that there is actually no evidence to each of those in order because they think they build on each other the st is to your goes to whether or not there is any admissible evidence in the record that can create  is provide evidence of consent the contract requires written consent so if we were limited in the evidence that we consider to that how would we actually get to you or how do you how is there a question  that proper policy procedure had not been followed that's number one number two there is a legal issue and that is that parties braithwaite condition crap and then all the time it is certainly within a continental per a in the context of insurance and this is exactly one of those cases so the fact it was written the requirement is for writing britain consent there are two legal theories to address actual problem though at this point are you conceding that with the mediation privilege we the email that happened during the mediation is out the st part of your all those were all situations in which insurance company representatives were there in person and each center this bacchis what significance to draw from that that st there is really no evidence that that is actually true and or not not all it creates an actual beer as to whether or not continental and i'm actually going to cut to the chase and address some of the arguments that mr riggs raised st with respect to the state of the record let's keep in mind that this case had already gone through summary judgment proceedings we had actually had an order from the district court into orders clarifying that order and we were a week before away before a trial was about to begin and the judge realized that there were no factual issues in dispute and only legal issues were presented so the court specifically asked the parties to address the four issues the key issue no one we're talking about is whether continental can be held liable for any more than the two hundred thousand that it is greed to pay a part of the settlement of this should actually so that question placed in issue whatever rights and obligations the parties had regarding the settlement and it's specifically placed an issue any right next level may have had or did not have under the e p l policy to coverage for the six  thousand dollars settlement so that was the state of the record going in this issue of whether our next level was limited to the two hundred thousand dollars amount that continental had agreed to pay was at the forefront of pretrial submissions motions for clarification orders clarifying and that was the key issue that the judge asked us to brief which we did fully and trial yes i'm wondering if you if not seem to address in any in any depth the duty to defend issue sure ok on the duty to defend issue let's keep in mind here that this was really not your traditional duty to defend case when continental received notice of the claim under the e p l policy the next level already had retained its own warriors so it had asked continental to consent to its retention of its own lawyers as defense counsel and continental provided that consent and agreed to pay defense costs consistent with california's statute as we referred to it at twenty six you have the civil case and so it's april th teen reservation of rights letter that's where it sets out its agreement to consent to counsel retained by next level and consent to an agreement to pay what will call independent counsel rates under california civil code two thousand eight hundred and sixty and it did that and so the judge found that continental did not breach any duty to defend it found that next level's attorneys and continental and reached an agreement on early rates for defense counsel and also that at the time of mediation continental was defending in the next level zone council in the should be action and admitted that at the time of mediation continental was defending and understood that continental would continue to defend if the case did not settle well there was a letter i mean there were speeches of the defense that were i mean at least the argued as as potentially generating additional damages the delay the failure investigate those features  potentially entitling why to additional damage like everybody i think that your point is your honor so there is an element here that's been that's no longer part of the case which is that the claim was originally tendered under a directors and officers policy and also a g l policy so in continental deny any duty to defend or indemnify under those policies level retained its own counsel continental agreed to that next level was controlling the defense so under california law the duty to defend becomes a duty to paid sixpence and then to the policy there is no duty to pay defense expenses until the retention is exhausted and in practice obviously and it sure can't pay defense costs until it gets an invoice for those defense cos it doesn't just write a blank check and that all of that happens they got invoices they had a raid agreement in the fall of two thousand and fifteen and continental paid the defense expenses within two weeks that was before the mediation so to the extent there was any purported delay it had no bearing whatsoever on the mediation or the settlement of the claim so it's still a disingenuous to argue that there were addition there was some additional damages the next level had retained its own coun and there was nothing that continental could have done in between all of that or differently than what it had done to perform what it was required to do under california law which was to pay independent counsel rates and the insurance company paid for defense costs that were incurred before the e p o policy before coverage was accepted under the g p l so that defense cuts that were incurred before then were actually within the retention so i believe the answer is no it did not but it had no obligation to under the policy but were  you know waiver is a very loaded term i would say the district court found on the record that there was an agreement between next level and continental  found that was implied yes by and ply imply is the key term your honor i agree in clyde because the contract itself so this is a case about what was not said speaks volumes we have before you go jets are there down that path i hope you will address the the the argument about due process the court sort of created this out of whole cloth that it wasn't argued but i will be happy to your honor it's in terms of the implied stated there is there were no factual disputes about the conduct to pay the conduct is established in the record in terms of what the parties did right and so when next couldn't be there was the response of the time for the for the plaintiffs here to address it then that i will adjust your honor because continental repeatedly argued that the agreement was continental would pay two hundred thousand consenting to settle in exchange like every other settlement it gets a release of claims every piece necessarily implies that that is true what they weighed was the right to recover any more than the two hundred thousand so continental has argued from day one it pled this in its in its pleadings that there an agreement limiting next levels recovery for any indemnity coverage to the two hundred thousand that was argued extensively in the in the summary judgment proceedings and the proceedings  so as to judge cook's link about you know it seems like the district court comes up with a new argument that the parties didn't raise or brief rule fifty six doesn't allow that so i don't understand your response that it that no question we argued there was no consensus at all that's what we argue we lost on that that was the record so going in the judge then asked us to brief certain specific issues so we were constrained by the record as of that time the ruling as of that time that there was consent to settle that's what he said and then the question he framed was was next limit scuse me is next level limited to recovering two hundred thousand the limitations that that comprised if you will that leave sufficient for to nettie for next level which they did they argued in their briefs and we argued repeatedly that there was a release and that the content of that release says specifically that they are releasing waving just charging claims not argue in implied waiver as a concept and the judge did not warrant next level that that's where he was going i don't think the judge is on of any obligation to do any more than he did which which was to a light and specifically identify what he was looking at which is was next level limited to recovering two hundred thousand then the question is why why are they wanted still so of course the court is limited to a question but that doesn't mean we don't look for analysis in support and and consideration of all the arguments so we didn't see consideration of the independent argument regarding the duty to defend that failure to consider that and the attendant bad faith claim we didn't see that in the judgment ok so on the duty to defend claim he held that basically there was no the facts did not support any argument that there was a breach of a duty to defend the duty to defend it with  duty to pay and that was done and so he didn't find that there was any delay or if there was delay that it had any effect there's no breach of contract claim obviously without a breach of damages and so again going in these were on undisputed facts we were a week away from trial and he decided there were no factual issues in dispute in this you know we had already had a round of summary judgment proceedings and we're going for a nd round s we proceeded again in the trial court on undisputed facts and i would like to get to this question of whether next levels conduct if you can even if there was an agreement which is what the district court rules ok he failed to rule that they shin is expressed lee demonstrated by the fact that they sued in this case three cover the six million five hundred thousand dollars settlement so there's no question that even if there was an agreement that supported by the record the record also supports that they repudiated that agreement so our contention has been that they cannot take and cherry picked out of that draft released one sentence in it in a draft that was provided eleven days after the settlement and that that statement should be deemed to satisfy a condition precedent to their breach of contract claim so isn't there a question of fact as to whether or not  will was told that the the continental was only willing to contribute the two hundred thousand dollars now your honor now there's no not now they've never there's the record is clear there's no undisputed i'd like to reserve my time if you actually don't have another term so it oh i took a then i'll i'll keep going ok i didn't realize that so on the on the next issue i think there's also a fundamental disconnect here because next level has been arguing that parties go into settling a dispute with no expectation of a release so somebody pays but they don't get anything in exchange for that which is a release when you settle a case you do said to buy peace uncertainty and fear if if what next level is proposing is allowed to occur i would urge you that this will disincentive ice insurers who are involved in most liability he says from agreeing to settle for consenting to settle and i mean the that this usually works is this it is you go into settlement negotiations and and it's you just don't say it every time you write something oh and by the way remember that this is going to be subject to every least of all your claims that and you just don't do d that you go back and forth with offers and demands and everybody understands a release will be forthcoming afterwards and then the other disconnect here is that there is no question under california law that next level setting aside all the other stuff still had the burden to show what if any part of this settlement was for cover the loss in their brief they argue that they didn't have that burden they argue that the last provision is essentially an exclusion well the california supreme court has already settled that issue in the waller case the california supreme court held that the policy holder has the burden of showing that the claim falls within the ensuring agreement and the definitions that are used of terms used in that insurance so applying while are here as courts have done in the metal case that we cited an we cited have said that that means the next level had to show that the settlement was not paid for things that insured is obligated to pay or compensate as part of an employment contract like an earned compensation in stock and employment related benefits can you still hear me yes thank you and so so that's the other fundamental disconnect next level just doesn't get two million dollars without meeting its burden to show what part of the settlement if any was covered addressed the argument next level made with respect to the breach of fiduciary duty claim that claim according to next level turns into litigation was assessed it having almost no value whatsoever and judge otero eventually ruled that that plane also did not see any coverage loss so what he did was to say that none of the settlement was for cover lost but that continental's agreement to pay two dollars hendrick one thousand dollars would essentially satisfy any indemnity obligation that it might have had and remember that two hundred thousand dollars was for an estimate of what it would cost to defend a case the info were so it's sort of a misnomer to call it indemnity although that's sort of how we would phrase that because it's clearly not paying for speaking about is the trial in the coverage action so in the coverage action no there there was no factual dispute according to the judge and that's where we were going in ok and maybe i'm not could you or see that you have been short short changed i mean the council said you know they operate in they were there monitoring the mediation i mean what