insurer the facts are pretty complicated saw a prison that the court read the briefs i'll just jump to the heart of the facts there's a sugar plant that exploded and there's a question about whether the people that were hurt or employees and the subject of the workers comp board and so you had a potential for dual coverage you know they were definitely covered by the worker's comp policy that a g issued they also had potential tort claims so they could be covered under the general liability tower of insurance that imperial s all the people that were hurt there were dozens and the way it went about it is first it went to imperial sugar and got approval for a certain amount for the each tort claim then it went to the plaintiffs and negotiated a lump sum which each plaintiff separately that some of those lump sums were unallocated some of them were specifically allocated on the plaintiffs and within a i g went back without telling a without telling imperial sugar and reallocated the settlement spiking most of the amount into its geo coverage and instead of its workers comp coverage in the settlements that had been allocated with the plaintiffs they had to change those without telling or asking anybody the way they did this benefited a i g it hurt imperial sugar how to tell me that that's the interesting part of this right how did it hurt imperial sugar it hurt imperial sugar it numerous ways it had limited coverage you need long term jail coverage for it even now they need it for that policy period because you have you could have a long term pollution loss or something they had to go out and buy more insurance because they burned through their excess insurance to pay for these claims which could have been settled under the primary insurance also their primary policy had a duty to defend and win eight and they id intentionally burned through that primary policy as fast as it could to extinguish that duty to defend their making imperial sugar have to start paying the lawyers to defend because the excess g o policies  right but not the duty to defend so your position is not that that the subrogation claim survives even though the insured by virtue of its excess insurance didn't suffer a harm but instead that the insured suffered harm well it's both my primary point is that the the fact that imperial sugar did not bear the brunt of these excess towards settlements because it's excess insurers had to pay them doesn't mean there's no subrogation and that was the  second mistake that the district court may get to that there's plenty of georgia law on point that says if you have a loss and it's insured and the excess insurer pays for it that's that's still a loss and the excess insurer has the right to seek subrogation the best case for that is the great american versus international insurance company case we had primary limits of five hundred thousand is the primary insurer breached its duty to get that case settled they breached lots of duties actually ended up having a one million dollar settlement where there was two million dollars in excess coverage there so the insured was never out of pocket the excess insurer had to pay the excess settlement there are other cases that extend that principle beyond the failure to settle context into the great question as to a i do duty to settle a case it's not limited just to get a case settled the homewrecker home vs north river insurance company case is the best example for that we had the court binding the primary and sure breached its duty to settle in three ways not just the duty to get it settled but also in representing policy and coverage information to the insured and also it's trial strategy so it's an all encompassing the do sherry duty and the best case on the produce area duty is the home vs when case or a spouse is not insurance case but it's about to do sorry duty there a spouse and settled a wrongful death claim then she became the executive for the state and allocated the settlement proceeds among the beneficiar she had to produce here a duty to get that to allocate a properly nobody questioned the amount of the two tort settlement as somewhere to this case we're not challenging the amount of these lump sum settlements a r g had a duty to allocate them on discussions of failing to change trial strategy and things like that i couldn't quite tell if those were still within the court's discussion under the umbrella of subrogation or if they were somehow sort of like an independent duty existing out there oh yes and  to put my cards on the table for you i find this question a state law very very close and very very difficult it's a it's a principle i think that's fairly well settled but the extension into this context beyond failure to settle seems novel to me you made a suggestion in your reply brief that perhaps we ought to certify the question and i don't think that we've heard from your opponent on that but i guess i'd like to hear what you think about that and sort of  first instance solution here and then we'll ask the apple e when he stands up as well that's certainly an option you have there's two major mistakes that happened here and you've seized upon the first one the district court looked at the duty to get the case settled and i said they got the case settled so there's no breach it is a continuing fiduciary duty when a primary insurer controls the events and settlement negotiations and the home rubber case it looks broadly it's not just looking at did they kick get the case settled yes or no how did you defend it did you and the way that duty is phrased is not the duty to get a case that will what the georgia cases say is you have to give the same both full consideration to the insurance interest as you do your own and so that can be breached in a number of ways here it's by miss allocating and reallocating lump sum settlement in a way that was not told to the insured so it's i think it would be a perfectly legitimate issue to certify but it's like what you're what your case if any is not an insurance case but it's a fiduciary duty case about allocation of a settlement if the facts of this case are so specific that it's hard to find the georgian president right on point there is a case in that a powerful reason for not certifying the question there are certain general principles of georgia law that we have before us and it's our job to apply and as best we can being eerie bound to those general principles to the peculiar facts of this case just doesn't strike me as the kind of stuff that would yield the conclusion that we should go to the supreme court of georgia put it out and say give us your opinion about this i think you can reverse i don't think you need to  but to to answer that as i say there are some general principles of georgia law that are pretty clearly enunciated that we have no need to go to them to restate those those principles but let me ask a different a different question a i g w c contributed did they not substantial pre settlement funds and lean waivers to the claimants yes they did that doesn't matter they had why does that not matter why does that not suggest at least in some part that there was a reasonable allocation of the total payments between ai g w c n n a i g g l that money was definitely  it was water under the bridge what they were settling at that point in time was future exposures that water that they that money that they paid previously they definitely owed it there was definitely coverage for it they were going to get it back at the time they were settling these lump sum settlements and then reallocating them all you have to look at it at that point in time what are the interest that they are settling then nobody was ever going to get that money back that they had spent on medical treatment what significance should we first of all at imperial sugar was not told about the allocations they were told about the general liability towards settlement but they were not told about the allocations they were not told about changing allocations that have been previously so you think imperialism happy with the resolution here i don't think it matters they wrap it up but that's not my question whether it matters or not the answer to the question matters to me is there any record evidence that imperial was unhappy here that they thought the settlement was no good because the outlay was no good or the allocation was wrong or anything did they ever serve in this record anything that suggested they were not pleased with the well you can't argue that because they had a lump sum settlement at that point in time g s duty to settle is continuing they could have settled it for the general i believe aspect for a lot less than they get they only settled it for of a little bit less than they could but if they were looking at the bottom line i'm talking about imperial now right and the payout was less than it otherwise might have been and they might reasonably have looked at that settlement and said it's not bad we'll take it we're in our tough spot here twelve dead twenty six injured bad accident a lot of liability we've gotten out pretty well here you're right wouldn't they have been reasonably said that and if the answer to that is yes doesn't that illuminates the question of whether or not the trial judge made a mistake here you're right they were not unhappy with the settlement versus hartford they were cited says you know the insured has little incentive to sue or to complain in these situations because the harm falls completely on the excess and sure we paid for those shoes so we have the right to stand in those shoes and seek or dress for the breach of the produce thank you if you have reserves three minutes for your rebuttal thank you please the court my name is michael tricare go in with the law firm of kennedy c m k and i represent the ai g parties in this dispute i think that what's important here and we've discussed in already in some respect is this is a claim that's brought to subrogation claim and american guarantee stands in the shoes of imperial sugar there is no a lot of the argument that i heard from counsel here is is focused upon focused upon american guarantee the trial court correctly concluded and now they drop the argument that in the state of georgia a primary insurer does not have a direct obligation to the excess insurer that's pretty well established they made that argument before the lower court the lower court rejected it and they've dropped that argument on appeal so what we're faced with here is a situation we have to look at imperial sugar and the claims that they would have imperial sugar as the court correctly concluded below was not harmed they had no personal liability for this for this suit no corporate liability and that's because your contention i because they had the excess insurance right well it's that it's it's not only that it's it's they did have the excess insurance which which prevented them from from paying out of pocket loss but i think you have to look at the bigger picture here what was the goal of imperial sugar the goal of imperial sugar these were these were catastrophic cases and as the record demonstrates subsequent events have indicated that this was literally a bet the flop bet the company type case because subsequent verdicts in georgia georgia for these types of cases have spiraled out of control to the to the point of where you know individual claims have been resolved one hundred million dollars so they had one hundred one million dollars worth of coverage their goal was to settle the cases within that insurance cover edge and to avoid any of any personal liability any catastrophic liability they might face that like i said is a bet the company type of situation so here the settlements accomplish that goal they had approved the board of directors its general council had approved settlement of these claims in the amount of one thousand point three million dollars we ended up settling those claims on the g l side for six sixteen point three million dollars three point two million dollars less than they had authorized us to and get i can't stress enough these settlements were reasonable american guarantee doesn't dispute they're reasonable they offered no expert testimony to to establish they were unreasonable the only expert testimony in the case comes from an expert robert ingram that we provided who said undoubtedly you settled these claims for one third the special bama does that was a tremendously reasonable settlement the special master and the district court acknowledged this was exemplary lawyer so it but it but if if imperial hadn't had excess coverage then they would have suffered an out of pocket loss no doubt about it right if if imperial had had had had no access coverage then yes if the claims could not be resolved in our layer of coverage they would have suffered an out of pocket losses i mean in some sense the the the fact that they didn't suffer an out of pocket losses a direct result of the fact that they had excess coverage and the reason i'm asking these questions i'm trying to figure out it seems fairly well settled that excess carriers can bring equitable subrogation claims at least in the failure to settle context and i wonder whether you harm because excess coverage in effect means that excess carriers don't have equable so well i am not saying that ect that excess carriers don't have equitable subrogation rights but it's certainly not this case because again they're in the shoes of the insured insured was completely happy with with the settlements that will reach there's nothing in the record to indicate that they were dissatisfied again they had approved settlements on the g l side for a higher amount and they were settled for three point two million dollars less the the harm that forms the shoes into which the excess carrier either can or cannot step is judged not by monetary loss necessarily out of pocket loss but by sort of happiness with the result well i don't i don't know if it's us or the happiness with the result it's there is can dribble in factual evidence that they got a better result than they had initially approved so i think that there was monetary savings here i mean i think this is a classic example of no good deed goes unpunished because the way these settlements worked was there was a worker's comp comp contribution it was a general liability contribution and then what happened is the amount that was contributed by workers comp was actually subtracted from the general liability contribution so anything that they paid in workers comp they got a deduction on the general liability side so here we're saving money off of what imperial sugar had improved by giving this deduction that we didn't have to give and now we have american guarantees purportedly stepping in sugars shoes complaining about that really this is this is american guarantee just trying to sort of direct claim against us because clearly we did everything that we did what was beneficial to imperial sugar and i think that the lower courts opinion at page thirteen sums it up best it says w g may have chosen a settlement allocation scheme that benefited a ga it did not do so to imperial sugar's detriment a idea is not barred from choosing its optimal settlement allocation from monk choices that are equally beneficial to imperial here we undertook actions to benefit imperial and like i said before this whole notion that we just ran up g l settlements to get out of these cases and avoid paying defense costs is quite frankly nonsense because we defended these cases for three  years we paid nine million dollars in defense costs we could have done is they've discussed in there and their briefing this manker case which was a large claim we could have done is picked out the largest claimant gone and settled that claim without even having them sue us we could just went to the person with the worst injury said here this is what we'll settle for we don't incur any defense because we're out but that's not what happened we defended these cases we did everything possible to reduce the amount below amount an amount that was authorized by imperial sugar and that's undisputed like i said they don't they don't claim that these settlements were unreasonable what they can i don't take him really to be disputing that i mean it sounds to me like he's all he's concerned really only about the allegations and the effect of the allegations and so you resist the premise of the lower court's statement that you just read us that this was a self interested move by and i mean i don't i don't think it was if interested but even if it was self interested but the court is telling us it doesn't matter you have to look at the result and the result clearly clearly is they settled these claims for less than imperial sugar had had a prove there's no harm to appear sugar you know and if you look at it if you look at it from another aspect what we could have done is we could just settle the g l claims for that amount taken no deduction from the worker's comp component that we paid and we were perfectly within our rights to do that because because imperial sugar had approved payment of one thousand plus million dollars for this we could just gone sedulous and left left the the workers comp claims pending now you know it was also a benefit to imperial sugar because you know whenever there's a worker's comp case that's something they're involved in as well it was a benefit to the attorneys who were handling those cases on behalf of the plaintiffs i mean his testimony in the record mr tate who is a noted plain plaintiff's attorney in the state of georgia he said that he was he was happy to get rid of those those liens and they had value to him because he had other parties to pursue claims against and if those liens aren't taken care of well whenever he goes to settle a claim against one of these other parties these  are hanging over his head it because you can come in and say hey we have a lien and were entitled to a portion of the recovery now they've made an argument that all those liens wouldn't have been recoverable but a we don't know that and b they were important to tape so those had value you know we paid this notion that we only paid a de minimus some of the worker's compensation is is just not supported by the record if you look at our brief there's a chart that shows how much we pay we paid i think forty three million dollars total just it's just it's their argument and it's not the insureds are i guess i mean i guess what they say is that that both you and the plaintiff's lawyers wanted to load up the g l side because you did because so you could exhaust that wing of the coverage more quickly in the plaintiff's lawyers did because they take a higher percentage of those well here's the thing if our incentive was to was too exhausted g l side as quickly as possible why would we have gone into court and made the first argument that there's a worker's comp bar and these claims at these claims should be dismissed outright but presumably right i mean first we wanted to win loneliness but under that circumstance we still have g l exposure we're still going to end up paying our limits in g l and plus we're going to have a continuing workers compensation not just so you correct me if i'm wrong i thought your argument on the work of workers compensation bar was that it would bar not only the workers comp claims but that you had this very creative argument that ultimately didn't quite work but that you were pressing that it would bar the g a o claims as well you know at what i'm saying i think the argument was these are work these these workers are limited exclusively to workers comp recovery it bars the g a o claims but that's again that's not all of the plaintiffs involved in this case only a certain percentage of them are actually employees where the workers comp are potentially applied so we we went in with a strategy of say hey let's not get these claims out completely we're still going have g l exposure we still would have exhausted our limits because they settled to make case for something around twenty eight million dollars so to say that there was this this strategy to go in and and run up the g l payments you know and avoid so we could avoid paying our workers comp benefits it's completely false and not to not supported by the record again i can't stress enough the the insured in pure sugar had approved settlement amounts that were significantly higher and and we went in and we developed the strategy again the the special master and the district court exemplary lawyer and we reduced those amounts we got at amazing settlement that's the only way to describe twenty six catastrophic claims or i'm sorry forty one catastrophic claims for twenty six million dollars i don't heard of result and we did it by by by getting approved we got approval of a certain amount and we went and we did better than that we did better than that for insure so for them to come in here and say the insured is unhappy with this because you know the result impact that it's excess coverage it's just simply not true it's it's fictitious quite frankly so your position is that once once you settled for less than the authority that was given to you you could sort of allocate these things however you wanted to well guess again i think i think that's true i think that again as the district court said you know we can we can look out for our own interests as well as long as we're serving the interests of the insured and we've done that we've served the interests of the introduced gotten them a result that that quite frankly on is less than they authorized and it set the foundation and that set the table for what they want do and what that was is resolve all these claims within one hundred one million dollars of of coverage that they had and that's exactly what we accomplished you took everyone realized you took these claims to trial and it was it was a bet the company situation  have catastrophic injuries people with severe burns terrible terrible claims sigrid significantly more than a hundred one million dollars that they had coverage in the end the the subsequent history of cases in georgia tell us that those discussed i think in the papers just a couple of things to point out this again all of the cases that they've cited in support of this this is this their position are these failure to settle cases almost exclusively i mean that the when case which is not make sure it's case a little different you know there the executor completely controlled the settlement no input from anybody else on like here we had you know the players were represented by counsel and she just allocated these settlements on in a state and she as she saw fit without consulting with anybody so it's really a dysfunctional case but this this home insurance case that you asked about before again in the context of failure to settle and why these failure settle case why do they hold such a such a high duty place a high burden on the on the insurer is because you're basically rolling the dice with the insurance money that's not the situation that occurred here but what do you say in response i guess to his argument  my confusion frankly about reading home insurance that it does seem to me principally to be a failure to settle case but it does also seem at least in that secondary discussion sort of range beyond that well it is a failure sort of case but i will say this one of the one of the points that they that they raised was a misrepresentation about the policy limits and the appellate court threw that out and they said no that's that's not a valid point yes certainly not the appellate court as i recall said on these fact forget about it but i don't know that the appellate court said that's not a valid theory well i think it was out there because they stand as far as not knowing the insured is is assumed to know the limits of its own coverage it should it has the contract here you insurance company step in the shoes of the insured the insured is supposed to know what its own coverage is you know saying that mistakenly saying that the terms are one thing when there's something else that's that responsibly were dismissing that claim but the the failure to adjust strategy that all plays into the failure to settle because if you look at the case closely what ended up happening is the claims these were claims where the individual plaintiffs had been exposed to chemical and had severe injuries and they had come up with a settlement strategy based  upon the claims being tried separately and they gave a certain value to them but then the court ruled that the claims were going to be tried together and defense counsel was extremely concerned by that it raised that notion to the insurance company and said hey they're going to try these cases together that means greater exposure for us because these are going to be one offs these are going to be three people killed or corroborating each other stories and all being in the same situation and all playing upon the sympathies of the jury you have to consider increasing the settlement amount and the insurance company said no we're just going to go what we had before so it really does it's not really an independent thing it's mentioned as an independent thing but it kind of ties into really this whole fairy to settle argument and that's that's really you know that's really where you see this i mean think about the part of the public policy ramifications of the of a decision of this type if if you decide this case in favor of american guarantee what they want you're basically putting an insurance company or primary insurance company in an impossible situation it's either you know it's damned if you do damned if you don't well if i settle then i have to worry about the excess and if i if i enter into a good faith settlement i have to worry about the excess insurer coming back to me and saying no you paid too much if i don't settle and then they get hit with a huge verdict well i should a settled before so that there's a very good reason why these cases are limited in scope to these failure to settle claims cases because that's really the concern you're  the dice with the insurance money you're putting your interest well above the insured you're saying i have a million dollars in coverage you know i probably am going to exhaust my coverage but why don't i roll the dice maybe i get lucky and win and the insured doesn't have to pay anything and then the insured ends up getting hit with a verdict verdict that's uninsured because you way exceeded the excess layer of coverage but here not the case at all not the case at all ok i tell you what so as i've held you up here long enough can you just respond briefly having had the benefit opponent's reply brief to my question about certification well i don't think that so i think that the law existing that the case law existing in georgia is sufficient to make a decision on this i think that the that the special master in the district court got that correctly got that correct i think that they improperly raise this certification issue from a procedural standpoint in a reply brief but i mean we could even ask you that a day or a large guy as certainly certainly not a like i said i think that th e law in georgia is clear enough on this that that the decision that was made below was correct and that you can make that decision without certifying the question to the state court however if if if if by some chance you were to decide to certify a question the state court certainly not the questions that they've presented i mean there are the questions that they've presented basically are saying you know the federal court would be essentially saying to state what you know we don't want to decide this so why don't you hear all the facts and make a decision on it so but but again like i said i think that state law is clear enough in georgia as on this point and just one last point on that you know the american guarantee has talked about this fight do sherry duty that if you look at the language of the cases it really doesn't talk about a fight you sherri duty it says it limits it it in its origins or in the evans case which i think that they incorrectly cited in their brief it's actually in one thousand nine hundred sixty seven case but the language in in that case is somewhat of a fight to sherry duty and i think that's picked up for a number that was extremely reasonable by all accounts and it was well in line with the settlement strategy that imperial sugar had had hoped to use in this case and it was well below the number that they approved for the senate thank you much thank you counsel you reserved four minutes three minutes three minutes and i have five points i'd like to make is that quickly as i can the reference to public policy of getting cases settled i also believe it was in the home versus north river case which awarded the excess of the ability to subrogate because of the public policy not just to get cases settled but for the prompt and just settlement of cases so public policy works in our favor i think all the references to the facts of the scope of this case that a i g did not burn through its policy as fast as possible those are very complex issues of fact i mean we have one statement in the record by the g l adjusters saying spend my money please i mean these are questions of fact that the special master should decide and way and not satisfying it produce very duty if you can get it settled for five million last ten million less twenty million less they're pretty sure a duty continues to the end of the case and the end of the settlement and just so they settled it but for a little bit less when they had the evidence that the workers comp settlements were underpaid but that doesn't mean that the deal settlements were overpaid and that's a logical mistake because by that time this is a lump sum and that's the duty we're an an analyzing today it's like a pipe chart with two colors if you reduce one you're necessarily making the other one bigger so if one underpays the other one has to underpay at that point once the two claims are crystallized in a lump sum settlement  so in a nutshell those are the two mistakes that the district court made first just looking at the duty to settle before the time of the lump sum and not looking at the part that we're criticizing the duty to complete a settlement to answer justice marcus's question about certification earlier it's true that the precise facts of this case probably don't have much presidential value for other cases but there is a rash of holt demand cases out there in georgia for the past five years at least sitting in a year in a diversity case we simply cannot make hide nor tail out of this case we just don't know what georgia law is it is so unclear there's no decisions that illuminates the path for us and we've just kind of guess like shooting blanks in the night before we turn around and say to the georgia supreme court we want you to help us decide this case and what you understand so there's got to be a pretty powerful reason at least speaking for myself before we step down the road of asking them to do our work for us right and i'm not asking them to do your work on this case but t the defense the settlement the way the settlement goes the way the settlements allocated everything and taking giving this insurance enters the same fateful consideration as its own interest is it extinguished just by getting the case settled period this is a broader than that and i think the harm versus north of a case suggests that it's broader than that but if you need more guidance that would be that would be the question to sort of by is the duty limited to just getting it settled or is it all encompassing and   what that duty is so that would provide guidance for a lot of litigation in the state of georgia not not just this case thanks very much and thank you both and we'll proceed to the third in the last case