the one case we have for argument is access reinsurance company versus northrop and counsel are you ready  underlying insurers improperly roaded their policy limits by settling and earlier different claims against northrop that improper erosion theory is wrong let me begin with the costco case this is judge callahan i have a question i think we said we know we asked to talk about costs go back to district judge same ted grant summary judgment on like two grounds it was the improper russian which i don't know if that's if palance position is right on what's called for now the costco issue the improper roge an issue that there is no such theory then you never get to an issue so while there are a number of factual disputes as to whether there may or may not have been a discord judgment and we do disagree with the district could it could end there as a matter of law if the courts are not in a position to nd guess the decision northrop's underlying insurers than that all of the context of all of this you do not have across a motion for summary judgment right correction and then was filed in the district court so if just hypothetically if the court were to find that the north or would file a summary judgment motion which presumably would win based on the th circuit's holding so proper disposition by the court would be a reversal with every man for further proceedings in accordance with the court's decision and at that point once it gets back to the district court northrup would file a summary statutory or is there any legal basis for i don't think there is a legal basis and i can explain both the case law and can contract role issue but i don't see any support for access of the area under either so as i understand from reading access is brief that they they point to the to the length of the contractual language in their insurance policy they point to one provision but they overlook or skip over the provision that says the insurer may make any settlement of any claim it deems  respect to any insurer at object to such insurance or written consent that set or eighty two of the excerpts of record i think that's the critical provision of the insurance policy that  essentially precludes any improper erosion theory based on the policy itself if they were claiming there was some collusion or fraud involved could they raise that claim i think they could under  the case law there isn't an exception at least in the situation where you're dealing with the same claim if there's an allegation and if there's evidence of fraud or collusion but there are no such allegations here so we see that these claims are not related don't they sort of arise from the same factual kind of circumstance you have private you know plaintiffs and you know the settlement of those claims so it's it it i have to say it's not totally unrelated but it's a different claim it's different its claim let's put it that way well now mr frank could access carriers if if i'm assuming that because here we've got two layers of demand access in the nd layer could they write policies not this policy but they probably could creatively write a provision that gives them the right to nd guess each and every one of the policyholder under the principles of construction of an insurance policy that are summarized in the cosco case but i don't i really don't think it's a big us when you read the provisions to get there especially the provision that  cosco is that it does surveyed the cases from various jurisdiction in various circumstances on areas provision and it accurately says that the weight of authority is that there is no basis for an should follow it you know it can survey of a case law it can follow or look to the analysis and reasoning of cosco but then you should look to the policy language at issue here and as judge callahan pointed out there is nothing in the policy language here indicating that access and access a sure and nd guess the decisions of the underlying insurers know how impractical such a rule would be and if maybe why access insurers don't write it into their policies imagine you have a product liability policy a primary and on more excess policies you could have dozens or hundreds of underlying claims that are settled by the primary that lead to exhaustion or roshan and  they could challenge and the courts would have to resolve each and every one of those underlying claims that lead to the exhaustion or erosion that doesn't make a lot of sense and i'm not sure there are many excess let me start out by explaining the real circumstances here and how access was h and arch the rd access carrier as well as north of under of the two thousand and six north of a real policy so they were deemed by all the participants all the participants deem deal claimed on the grade that claimed to be treated under the same policy so what happened a portion of the national genome two thousand and six primary policy had previously been  so access exhausted to the remainder of its fifteen million dollars primary limit when it funded the department of labor so the money then we had to see in these up to bat c and they then exhausted it because it contributed more to the grey backs of the month that otherwise would have contributed to the great back settlement in the amount and that amount is the amount of the department of labor sell a month because the department of labor selling one is not well it's both it clearly is based on california public policy as well as the terms of the insurance policy this is the way our insurance policy how is it the insurance policy well st if you look at the access access policy expressly provides in the what we would call the attachment provisions i think this is shall have paid the full amount of the underlying limits or covered loss under the underlying insurance so it requires before the oculus policy attaches it requires that the underlying insurers paid the full amount of their underlying limits for covered loss now what's interesting let's go back to the c n a policy the c n a policy actually has similar language it only in the event of exhaustion of the limits of the underlying insurance by reason of the underlying insurance carriers and or the insurance paying in legal currency loss which except for the amount there rob w different than the cost bill gates access has never challenge any payment decisions made by the underlying carriers or tending to the payment of defense expenses that's never been done  pa and the policy wording that i just cited is completely different than the excess policy language and concept but the main thing is now case it's not just  question that the claim isn't covered the deal also elements not covered under the terms of the access policy it's not covered at all it's not covered under the nat primary policy it's not covered under the sea and they fall off the it's not covered at all as a matter of california public policy so what and the way to solve that mr west if you look obtain insurance coverage for matters he receives which constitutes an ill gotten gain or benefit that is clear california law is clear on that point bank of the west is clear on that point and the bank the says is well established that one may not insure against the rest being ordered to return money or property that has been wrongfully acquired you know i was there you have a settlement with the department of labor and i know some of the allegations that the department of labor made and he used the words discords men but they also used the words lost opportunities when you have a settlement and there's no admission of guilt how can we take from that that  the because of the funds that northrup received that it should never receive that the remedy is exclusively just towards me and as i mentioned i was mentioning and unified western although the concept of restitution may have a broader meaning another context we limit our references to it here to situations in which the defendant is required to restore to the plaintiff that which was wofully acquired so it doesn't matter there's there's never a provision in the access policy that says you can attack and we're not trying to get money by nasa and or c and they were not challenging their position  carrier's discretionary analysis or coverage based on all the terms or solutions we're talking here about a matter of california public policy and california public policy polls and judge broad recognized that it was covered this payment was not covered under the national unity policy that would have been covered under the c n a policy it's not any policy as a matter of california public policy because the bank of the world m yes this is judge pi and so let me ask you this you know it's not been my experience over the years that insurance companies generally generously make payouts right what was it so obvious to you that this is contrary to public california public policy yet the primary insurer in the st excess insurer determined that these losses were pending and they propped may well have known they were going to be toast as we say down the road and selling great so they went ahead and just offered up their limit on an uncovered claim which resulted in  why claim against them because there were nothing to go after because the underlying limits would have been properly exhausted by proper payments they would have been the problem as problem is access anything else counsel mr with no you're on ok any i don't think there are any other questions so thank you will hear from them i believe there's a little bit of time for rebuttal thank you national union and see any could decide to settle for right reasons for example to avoid future defense costs or eliminate risk of loss including risk of loss to themselves to nor for or to access itself for access or the courts to nd guess that decision would deprive the insurer it of its reasonable expectation that it can seek coverage from access without having to justify the prior decisions of its underlying insurers that exhausted those underlying policies that's the point made in the cosco case and my apologies i don't think i ever did get to costco but the costco court did look to the excess policy language which said that the s s policy attaches in cosco and in the circumstances of our case a reasonable one sure would not understand that it would have to justify the underlying insurer's payment decisions in every one dollar of those payment decisions as a prerequisite of getting coverage for the excess insurer i think that's the proper interpretation of the policy language here and in ca thank you so just to be clear you do you believe that cost is a can in a contractual interpretation or is it just a separate free standing rule oh i think ultimately the holding in cosco  is reading interpretation of the policy language in that case with policy language similar to in our case but in our case it's even better because we have the expedient provision anything else counsel i think my time is up thank you your honor ok thank you very much counsel for your argument and your willingness to participate remotely under the circumstances thank you very much