although there are two parts to this appeal they are interrelated to this extent the district court did award a c l and its excess insurers a sum in excess of three point five million dollars for reimbursement of defense costs what's important about that decision it ties in to the to our appeal from the district costs yes it does your honor when you when you examine the purpose of these policies they are both defense costs separate and apart from the liability limit i understand that there is the express language on that and certainly to the extent you were being paid five million on liability and then the expenses in costs were more you would be entitled to that but you are only entitled it investigation and defense costs with respect to any liabilities covered under coverage and not any liabilities under coverage a liabilities covered under coverage and the limit of coverage is stated in the insurance contract to be according to the vessel schedule which is here five million so it's difficult for me to understand how once the five million limit is reached expenses or investigation conducted there after investigation and  costs occurring before the five million is reached even though it's going to be more than five million i'm fine with but but the investigation cost after the five million is reached how is that a liability covered under the policy well the term liabilities covered under the policy refers to the type of liability where does it say that if you look at the structure of the policy am and and we know the part i'm looking at says that why abilities are covered the limit of liability this is our part to article limited liability is stated on the vessel schedule so i wouldn't think liability is covered beyond that limit if you look at the it limits the liability indemnity limits to coverages a and b it is silent on coverage so covered see any liability under an above five million dollars yes with respect to this casualty is there any liability cover on beyond five million dollars there's no payments to be made by the policy or any liability  the five million for this one vessel as far as the indemnity limit under this policy it caps at five million dollars which it that's we want to pose you struck me that would you agree that there's some arguable ambiguity here as to what this means not at all b is for other other pollutants other than a and b e's publicity i think for f is fines and penalties if you look at the coverages with d d e enough this policy specifically says that those coverages will be that what it is limited to is that those costs and those investigate for defense costs have to pertain to liabilities covered under coverage area and that seems to me to be limited to the five million dollars i would agree with you as far as indemnity payments the policy is clear it pays only five hocking about costs and defense and not just another reason that i'm troubled by this your excess coverage policies aren't limited to be liabilities excess for the liabilities they are also for costs the defense costs an investigation but as i coverages in other words these access policies couldn't be access then they are still access to other war abilities such as the p and i liability for personal injury had that floated above the p a nice tower those defense course language which has been incorporated in most policies since one thousand nine hundred eighty five and beyond states that our obligation to pay for defense ends upon payment you agree this is not a duty to do i agree with that is a duty for reimbursement but i don't think it makes a difference aren't you in essence arguing that this is a duty to the fans not at all where we admit it is a duty for reimbursement but coverage she has no limit of liability they could have easily put a separate limited liability into limitations section which they did not they could have ended language such as yes our obligation to pay for defense ends upon payment i believe limits as they did in the great american case they don't have any when the underwriter court found that you didn't happen repudiation you have basically that the disclaimer of coverage which are two different things that's that's the problem you have you  an explanation on policy terms this policy has no limit of lawyer billing for defense costs therefore they should have paid the at least the amount of the judgment which came after the exhaustion of the five mi of our policy limits which is a three point five million dollars they say they continue to say in regardless of the affirmative defense of theory to provide obtain consent they even  ordinarily entailed language that refers to terms outside of a policy here they referred to the terms of the policy here they referred to the lack of notice by reference of the policy that  to reserve time for rebuttal so let's hear from your siri thank you very much and to continue that thought this is not a case of a claim by an assured against an insurer although it style of american commercial barge lines against water quality it's really a quite a fight between excess insurers and primary insurers the assured in this case a c l has had its claim paid in full it has been fully reimbursed and there is no why ability there's no recovery that would come from because that would go to a c e o and that's confirmed in the a claim of the under the policy to its assured that's what all the cases talk about is a repudiation because some activity outside the policies went out led to a repudiation of the insurers obligation to pay anything under the policy in this case not likes to pay you're insured your insured got paid by the third party when the third party didn't think it had to and so if you were wrong in your insurance ok the with respect to the to the case that we're appealing which is whether or not we have to continue to pay defense costs after our policy limit is exhausted the district court below in their decision recognized the cardinal principle in the interpret as a marine insurance contracts under new york law which is that the contract should be interpreted in a manner to give effect to the intent of the parties that is a carnal principle but then the court proceeded to ignore the intent of the parties ignore the evidence in the record of the intent of the parties and instead attached a literal meaning when informed by even the context in which the policy was issued were the context of the entire policy  liabilities covered that's the touch tone to what is a defense cost payable by water quality it's an arguable that the that coverage does not have a dollar amount limit but it is limited by the language of covered liabilities and if there is in that in the interpretation of the policy that that means the w q y s pays defense costs only with respect to defending liabilities under its policy that is within the five million is cost is in addition and that's why in this case w q us paid the first five million and then when defense costs were presented to it it paid an additional five hundred fifty one thousand you can look at that language without considering custom and here's why international multi foods which is widely reported and nobody quoted as the seminal case international multi food says we start by looking at the  words no and here's why words taken in isolation just the plain meaning interpretation of the words is not the correct way to interpret any insurance contract and that's the holding of international multi foods of  international versus world trade center a whole line of cases in this court which says threshold question is first to determine is there any ambiguity and in order to do that in order to do that there must be  whether there are the the two interpretations in fact suggest meanings which when viewed objective lead by a reasonably intelligent person who has examined the entire integrated agreement and who is aware of the the fever's position well the in addition to language is with respect to liabilities under the policy covered liabilities that's how it has to be read that's the limitation because there is no dollar limit  dollar limit defense costs are included within that only the primary had this appendix as it were sticking outside which covered some additional defense costs and that was it historic reason in the old days that these mom and pop operations that were getting this insurance wanted to make sure they had the full limit of liability available to them and that it wasn't eroded by defense costs so that's why in the old days that it was the scheme was divided devised to allow x for the defense cost to be paid outside taking the position are the ones represented access but they have one part they have one policy i mean there are multiple insurers but they own for one policy and that's the seventy five million excess of twenty five million that's the policy that seeking to recover the defense costs that it paid willingly knowingly and according to the custom and practice of the industry prior to this lawsuit i would just mention that it was mentioned in argument by appellant the great american case i would just point out that although it's not reported decisions westfall side on that the the great american case had language that was different from the language in our policy that had a a language that said it would pay defense costs in full it did not say it would pay defense costs only related to covered liabilities or liabilities covered as ours does plus in that case as you can tell from the wording from the from the description of the loss that was a one loss event and the defense costs were all incurred with respect to defending one loss not where as here defense costs have been going on for years and i'll just conclude on this point the illogical result of the decision below is that eight years after the spill eight and a half years after the spill w q i guess is still being asked to pay defense costs and which are still being incurred only a few months ago the excess insurers settle the case with the government for twenty million dollars but preserve the right to appeal and have appeal to the fist circuit defense costs are continuing to be incurred which benefit only the excess underwriter and that was not what was intended that was not the result anyone intended what was intended is what happened here the primary pays it turns over the cleanup to the excess it pays only defense costs that were incurred to defend its limit and then the excess pays the defense costs to do to defend its its own policies and that is the only way that consent and the going back to repudiation the  consent makes sense as well it makes no sense for w a s to be given the right to consent or not consent to defense costs which aren't incur which are incurred to defend the seventy five million excess of twenty five million dollars la r the decision maker who is deciding what defense costs should be paid are borne by the assured in that we will take on ourselves as insurers must be the decision maker whose policy is at risk and in this  case the defense cost should be incurred by excess thinking they're going to push those costs down onto the primary never been argued before but that's what they're going to try to do as would just happen in his decision is permitted but they're incurring defense costs that are only only protecting their policy and that it's an illogical result it's an absurd result and it's one that frankly doesn't bear scrutiny and this court should let the losses stay where they have fallen which is the defense costs incurred by defense by the excess to defend its own policy should rest with them because this issue was raised during the injured during my parents argument i can advise the courts and some involved with the appeal the peel could recover all of the money paid by all of the underwriters with the small exception of maybe two million the way the insurance industry protected itself was by adding the language there our duty to defend or or our obligation to reimburse court defense course and upon our payment of our liability limit either by way of dollars for pollution these cases go on for years they need to be protected that's why the attractiveness of the ws policy was that it paid defense goes beyond its limits that's what it says addressing your art is a question during my two you have coverage up to five million dollars that does not say that plainly in this policy and but your your problem is you have that decision is a matter of law if it doesn't say plainly it may have to be reconsidered it's not