which required g e not only to manufacture and deliver this turbine this engine but also to be on site with a supervisor to direct the contractor archer exactly how to install that turbine and that second part is very important because the work if we do consider it as narrowly and as you would like for us to can you i guess explain your position as to why the damages to the turbines wouldn't be excluded from coverage well because the cases like the clarendon case that the insurance company relies on here all state the proposition which is not disputed that if there is damage to the work or property of others than the contractor it's covered if the contractor comes into the house knocks over contract with us said that we would get none defective b g he said oh well he did settle out yes and they paid a significant sum and they were so they were sued by the owner right for supplying defective parts which is the claim we made but in this case if you look at our contract and i think this is really important our contract has a section this is work by others and it says you put right there have an obligation to follow the instructions and to cooperate with the work of others on this project the work of others on the worked on that particular part i know that's not your view but seems like it might be a reasonable interpretation really that me just ask this question then you can drill down but it seems like it would lead to kind of odd results in certain cases and be x more difficult for courts to apply because we would then be determining what is the smallest possible unit of division available to the work at issue i mean if we did that as you propose i mean it seems like you'd be very challenging in certain cases such as the one maybe we're talking about involving the manufacturer simply interacting parts well that's exactly what the eichler of the black field case say the court should do i mean it is a question it depends on the circumstances of the case in this particular case we did not have control over the in the northern district just a few years ago applying eichler and blackfield says listen it's ambiguous in this context as to whether particular part means the whole project for you the contractor or only the particular part that you're working on and because it's ambiguous because the insurance company draft of that language it's construed against them so in this case what makes this case specific is that we did not control the whole project is not like the arroyo case and i know there are cases recently cited was submitted that's an entirely different case that's a case where you have a vineyard there's components to the work of weeding and watering and all the other activities are conducted over the entire bin year at the same time in this case we have separate contractor genes that have a separate contract to supervise the work of the installation and to tell us what to do there's evidence in the record that our engine here objected to the specific thing that caused the turbine to damage and that was pretty rotational check while the engine  by water company but i'm asking about archer archer settlement which she archer did settled out with everyone and paid some money including two million dollars of the liberty mutual money which was the policy underlying and i'm just wondering why g e isn't here or i'm sure it isn't here because i mean a large a large part of your argument is we didn't do it some other dude did it they paid a lot of money as we did a lot of money to settle out our claims because i pointed out there is least as to whether or not it was our work because the responsibility into the gene contract makes the installation and the parts and the construction of that turbine their responsibility and says that it's the owners work so as to the issue  part of construction we would argue that the district court placed on this policy makes this exclusion will it mean the exclusion has limitations that you no particular part of real property of which you are looking but it seems like the district court was following the more recent cases in the california courts and which interpret it broadly i know you point to eichler and to feel that i mean i think those were duty to defend cases i think that's those are might be but so do you think we need the certifier asked the california supreme court to look at this i mean even though this is a black field what is it i mean was decided fifty years ago and no other court has cited it from what i can tell taken a more broad interpretation of this and so i'm just trying to figure out how we're trying to figure out what the california supreme court look at and we do that's our job there and we have all these recent cases in the california supreme court hasn't ever disagreed with them the cases that have been cited like the claritin case and the barcode case which are cited and spun is for cases where the issue doesn't really be addressed it's not an issue where there is damage to non defective work all of the work is defective that's the claim it's the contractors proposition that there's a different rule for general contractors than everybody else it's wrong and it's dicta the hillenbrand case is a case for malicious prosecution where the insurance company try to argue listen there's these two cases are cerro and imperial those cases say general contractor is not covered it's a different rule those cases don't say that those cases we're dealing with a different exclusion instead of particular part those cases are dealing with any part of broad exclusion not a narrow exclusion  apart and basically beings any part it says you know where you're performing operations where you were contracted to perform operations whether you're actually doing them at the time or not it seems like she's focused on the project that you were given i mean that particular part seemed to be interpreted as the project that you were supposed to work on so i don't i mean i thought maybe it would you know you have got i'm just sure you disagree with that i disagree seems like that's not it's not as you know out there is as you make it out to be i think it depends on the facts of the case in the arroyo case for example much different case the court there in a royal rising hillenbrand which i think is wrong but it's a different case because in that case you're dealing with one single undivided piece of work that the general contractor has complete control over in this case we don't have complete control over the entire project the turbine is not our work the installation of the turbine was not something that we had authority were discretion as to how to do so for those reasons we are essentially saying that this case is different because it deals with components of deals with parts that are damaged so that there is damage to the work there's there's at least a factual question all right i do want to reserve the rest of you heard which to my ear sounded like liability defenses being asserted by a general contractor claiming that other folks were responsible for the effects and damages that occurred to their work that's not the issue before the court we're dealing with today in a settlement is the liability of archer based on the allegations against archer i would specifically direct the court to page nine of the archer western brief and page ten of the national union brief which are filled with the allegations of the defective work components archer's improper storage handling and cleaning of parts and contamination those parts during storing and or initial is your own archer assert a claim over against g i do not know whether they cross complaint against what would that be relevant i don't think i mean if we're going to look at the complaints filed in the underlying action i should we look at all of the complaints or many of the complaints i mean if you've got a public utility suing three entities in the alternative i mean san diego doesn't care who pays they're going to make every allegation they can under against every potential defend the allegations against archer form the basis for the settlement and that's what we have valuate to determine whether or not there is coverage under the policy i brought this to your attention to say the allegations were much more than just conducted a rotation project component parts when you stand back and look at the fact that it's purchased by an owner or a subcontractor it is then worked with so you would go so far as to say of g e designed and built a defective turbine arch you're stuck with the damage that is occasioned by that defect when archer's work included the assembly installation welding and testing of that turbine say that they don't i would say the issue before the court is whether a liability insure for a general contractor has to provide coverage for property damage the curs to the general contractors project while the project is ongoing that's the issue before the court  the trial court determined archer was a general contractor no this is disputed the damage was at least within the scope of the work they were performing on the project the damage occurred while the operations are ongoing end of analysis far as you're concern yes and what do you say about the possibility of a certification to the supreme court of california i would say the supreme court has already said that they didn't need to rehear at least one or two of these cases when the parties that issue attempts to bring them up t california courts of answer this question three times in the aisles of sir we should we should act on the basis of a denial of service well i would say the court didn't think it was necessary to hear it broke a west clarendon toll brothers three cases in last fifteen years by the california courts of appeal holding exactly as this court just did in a royal and each one of those cases was the general contractor for the project the damage was to the project the damages while the work was parts has been rejected by the courts and suffers from a logical fallacy i would say let's start with it usually takes two different forms there's a temporal form and a geographic for temporal is we worked over here five minutes ago now there is some damage that we're not working there anymore the liability insurance the general contractor to come in and pay for that damage geographic one is we were hammering on the front side that wall we may have done some damage to the back side we weren't performing operations on the back side so therefore the general contractors liability insurance should come in and pay for that damage each of those assertions has been rejected by the courts i just mentioned the clarendon court  squarely consider those the a royal court squarely consider those and i think underlying that is the logical fallacy that it general contractors only performing operations on little discrete parts of a project a general contractor b very nature is charged with coordination and supervision of the entire project they have a responsibility generally to coordinate supervise the subcontractors perform things in the correct order protect portions of the work allegation here absolutely contradicts that archer says they were under the direction of g e in connection with a very significant part of this work well that's what archer says that's not what the allegations were against them and that he went on the basis of the settlement the factual record here supports that assertion i don't know that it does i would refer to the court to excerpts of record one thirty four and one forty five which are portions of archer's contract which charge them with insuring and managing the property and the work performed throughout the jobsite at all to the district court as a as a part of its summary judgment ruling didn't get into any of this right obviously district courts are not going to make any findings but as i understand the district courts approach here the district court said categorically because archer is a general general contractor no coverage if it's a categorical rule who cares about the facts who cares about what the contractor did or didn't do or who was in charge of any particular part of the contract execution i mean  that about that about my characterization of the district court's approach i would say it goes a little further than that a little for yeah i think that first you have to establish that it's a general contractor overall supervisory responsibility for the project  here and agreed to perform the scope of work and that's not disputed right the damage has to be to the scope of work that's not disputed and the damage has to be while the operations are ongoing and that's not disputed  bit more it's a blanket rule general contractor doing the work the deficiencies in the work causing injury to the owner if as a general contractor you don't go any further i believe that is actually where the california courts of appeal have landed on this and where this court landed in a r think the hornbook answer is of course exclusions are construed narrowly and coverage grants are construed broadly this exclusion has some additional language where it says and arising out of archer's operations which the court recognized broaden the exclusion and i think that in the context of a general contractor with the justices just articulated it is the test and is appropriate under that exclusion to suggest otherwise afoul not only of the california courts and that is terminations but also the public policy underlying all those decisions which is reflected in many of those opinions which is these are called the business risk exclusions for a reason the general contractor assumes the business risk of performing its contract faithfully and in compliance with the terms and conditions there of to have the insurance carrier of the general contractor come in and effectively bail out the general contractor for problems that occur midstream in a project is simply a bad idea what it does is it increases the expense of insurance for all contractors this is been recognized by the courts it also takes away the incentive for the general contractor to run a proper job and that if both of those are considered negative by the courts and there this stablish public policy of california i'm blackfield can you talk to me a little bit about that because even though that was a duty to defend case it seems like there's some confusion over based on what was said in that case how the california courts interpret the language of exclusion issue in that case no problem and if i may i'll just address eichler and blackfield together because i think they're generally construed together they are very similar to each other they're also very distinct from the facts of this  case as your honor noted they're fifty years old they interpret different policy language the exclusions entirely different fundamentally the definition of property damage was very different that's a significant issue that we could have an academic discussion about i'm not sure it truly matters at this point they did not have the modern business risk exclusions and as you said their duty to defend case not an actual you know determination that there's coverage so while they did have that particular part or some variation on that language the remaining of the language in the policy was really quite radically different and of course the terminations with regard to them are quite radically different don't genuinely dispute the ability of this court to look at it treatises on insurance law and evaluating the issues in this case   that's not the situation in california i think we have about thirty years of established law on the topic and while various commentators may have a lively debate amongst themselves as to whether they think california's rule of law on this criticizing california law the preface to mr turner's book i should note pretty much tells you where he's coming from on these issues he says it's written as an instruction manual for construction litigators to see can pursue insurance coverage to assist them in resolving construction disputes it's not presented as an even handed treatise of the statement of the law on these issues more of a hand guide for people seeking to obtain insurance coverage thank you to include simple diminution in value and incorporation of faulty workmanship into a project certainly ok i get you your distinguishing and and of course that's what we do but in fact it is still good law correct it has not been  court it's fifty years on hundred years so it's good not agreed what i would also note is those were completed operations cases to look at a somewhat distinct thank you thank you just briefly i would like to read from the contract between the owner and archer as respects installation of the turbines quote all installation work and adjustments shall be performed under the supervision of the manufacturer's supervising the work shall be done in accordance with their instructions this is a dramatically different case from a general contractor who has authority over the entire project and you just heard from council that that's the reason why the courts have found that the general contractors work is the entire project because they control it we don't control the entire project here here we have a major piece of equipment the turbines which was the most valuable piece which was the piece that caused all the damage a delay in this case because it was it needed repair that was under the control of g e it was built by g e it was owned by the owner was not our work so this case presents a dramatically different situation because there's a separate contract i think you're now you're  at fault well i'm just saying that for the purposes of determining what work was damaged was it our work with g s work this case is different from a typical case where the general contractor because we don't control the entire project and there was a significant part of the work that was the work of g e the black she'll be responsible for the part of the work that you do control well i think that the cases i clear blackfield say that we are responsible for defective work and so it wasn't as the allegation and it was faulty work on your part with even with respect to the the limited part that you say you had in the truck there's a there was allegations that we did of the policy language prevails right i don't i don't agree because i think there's three that particular part are working arise out of your work it doesn't arise out of our work even if the particular part is found the way the district court found it the wrong i think it's wrong and as i argued to the district court in a my oral argument which i've attached as part of the work here i said there's a broad and get back type when a deputy makes us liable for everything whether it was our fault or not and that's the loss of those kinds of contracts that the