my name is dean overstreet i'm from little rock and i represent the appellant here today jay mcdaniel construction company they are the plaintiff below the basic facts of this case cost item very quickly jamie daniels general contracts you could you one of possibly two sub contractor don't know which one was negligent in the installation of their work installation or plumbing or the excavation work that was done that work and the problem that resulted from that work caused other damages to the home eventually mr mcdaniel resolved that case mission janel then filed lawsuit against his insurance company seeking reimbursement for his losses under the comprehensive general building policy that claim was denied and this lawsuit was filed there are really two issues on appeal here today in the first issue centers around the definition of occurrence and the application essex rule from arkansas our position is and it's argued in the brief is that the essex rule is old it's outdated and if the ourselves supreme court were presented with a similar situation like we're seeing here now the minority rule in the country cases such as lamar and canaille holmes which are cited in the brief have gone the other way in favor of this modern trend to do away with the strict  to change its application interpretation of the current role there number of reasons why i think the court should look at this issue really admitted that federal courts are to follow state law when they can but counsel for folly you see to ask you are telling us that the existing supreme court press in the state of arkansas would not be your fate that's correct or are the would not be in our favor and that interpretation of any of occurrence is a problem for mr mcdaniels claim so we're asking the court we asked lower court to look at that rule and even to determine him in light of the circumstances what would the supreme court's decision be if it were faced with a similar case at this point now significantly in addition to the other changes in case law that had come down around the country another significant factor is that after make mr excuse me mr mcdaniels claim arose honor did not and and that's an issue in this case it's been argued by the defendant that that would preclude that profession of the statute and i would i would admit that the retroactivity the statute is not there but i think today it could you could choose to override essex just like had been done in a number of other cases around the country so even though that's the statute was not retroactive the spring court could have done that and i think you have to look at that statute and and give it some credence about how it applies to the existing law and that that is one factor  why shouldn't this court defer to the supreme court of arkansas to determine whether or not it chooses to reverse its precedence well your honor i think that this court above all tries to make a decision that light of the changing all around the country did you ask the district court to certify the question we did not your honor and my understanding is that there's no rule that requires me to do that and the authority that i've seen indicates that the court to a particular case that that came from this court and it involves the current rule and i'm not going to go into the depth about the case but it's  american it's cited in the briefs and i'll have to be very brief about this but in the lexicon case this court came down and made a distinction between kinds of damages that  kerr on a construction project like this in the lexicon case the owner hard subcontractor to build silos and he was responsible for building all of the silos one of those silos later collapsed because of negligence it course destroyed the silo and cause collateral damage this court found that that the silo itself was not covered but the collateral damage was covered in the case at bar and you can draw close analogy between the lexicon case and what happened here the plumber or the excavator whoever it might be had their own particular work that was the summer building a silo in the lexicon case in our particular case either the foundation was bad or the plumbing was bad which caused what i would argue is collateral damage further damage to the house lexicon decision the further damage to the house would be collateral damage would be covered and that's explained in the decision and it's not that it's not that oh so i think that if you look at the lexicon case and you plot to the facts in our case you'll see that the further damage is to the home our platell in nature and the damage to the plumber work is the work that would be excluded and i might add that this case went off on a motion for this case went off on the now of the opportunity to amend the complaint and based on the fact that the complaint was futile which is basically a motion to dismiss  there were no facts in this case except for some scattered facts in the brace but we were in the process of doing discovery when the judge announced his decision on the motion to dismiss so we don't have a quickly for the amendment was to to use a stop all right that's correct your honor and that's the second part of what i want to speak to just for a second but that that was the core of the amended complaint and was that's true as what was  two to two is arkansas allow stoppel to extend coverage the general rule is not to but there are exceptions to that if you look at the time case you'll see that there are exceptions but they're limited and i think under that it clearly makes it a fact question and that's in fact best and should have been allowed to go forward under the time case in addition moody's decision that there was no need in his case to go into the facts to try to apply the stoppel but i think it's very clear from the decision that that could have happened had the judge want to do that  zero four two thousand and eleven can and should be applied retroactively the defendants contend here as i did below that application of the act retroactively is incorrect and that the district court properly applied controlling arkansas law is represented by the essex case to this case and dismissed counsel with the principles of the doctrine of this court to make its guess as to what the arkansas supreme court would do and choose but the problem is asking to apply in essence apply the statute ritu actively i don't think it would your honor and the reason is that your doctrine allows a predictive in corrie only in cases where there is insufficient precedent or guidance from the state supreme court such that it has to make its own predictive inquiry of what would the arkansas supreme court do if this case arose and were presented to here in this instance there is guidance controlling binding authority from the arkansas supreme court that addresses this very issue in fact the essex case is factually and legally directly on all four points with this case you have in the essex decision there was a by a contractor for indemnity from his insurance after he sold a home that was defectively constructed through the use of subcontractors they are the arkansas supreme court looked at that decision it examined its own commercial general i believe policies since one thousand nine hundred six that definition has been defined at occurrence as an accident resulting from the same or substantially same exposure to conditions here the court looked at that term accident in the definition of occurrence applied thirty years of arkansas precedent that described accident as something that was not for as the record in this case indicate the that the motive of the state's legislature or that the genesis of the new act was in fact the essex decision that it was a legislative response to the judicial existing judicial crisis there were a set of findings that were there were issues that talked about whether the act i think the term the act used was there was confusion over the issue and what it purported that the stated purpose of the act reported to be that it allowed an insurance consumer to safely purchase commercial generalized build the insurance to are versus that were case and the older case hears and versus matthews both talk in terms of remedial statutes that do not disturb vested rights or create new obligations but only supply a new or more appropriate remedy that's not the case with x six o four x six zero four doesn't say previously you had a remedy now here is a new room or remedy of a different kind what it says is the definition of occurrence for policy sold in the state will now include faulty workmanship or specifically property damage or bodily injury resulting from fault for which so what you have is a fundamental change that changes the very essence of the insurance contract because now something that was previously not defined and specifically was not an occurrence as required to trigger coverage under these policies is now  forward going to be required to be part of a policy and its use of the term shall to me suggests that it was intended to operate not retroactively but prospect the other opinion  poem by the plaintiff is a case called shell to rejoin surance versus irving and it was a case that involved interpretation of act three thirty five which required under insured motorists coverage and said that unless expressway declined with that would be implied in as a matter of course in urban the last and related events occurred about one year after the act was affected that's on page three in arkansas report on three zero nine page three thirty two southwest second report of all you make thirty one a page one thirty six that case is completely inept political because there simply is no retroactivity issue the statute was already in effect when the loss occur contrast that to this case in two thousand and five oklahoma surety company issued this policy the policy term was from october fifth two thousand and five to october fifth two thousand and six in two thousand and six jaimie day of construction so the home that upon which the climb was made by the surety company and in april two thousand and oklahoma surety coming just going coverage for the loss of the congress filed suit in two thousand not all these events occurred two years prior to act six zero four being adopted by the changed yes the policy issued about five years before the statute change understand the occurrence didn't occur until after but does that make any difference i believe doing it i believe it doesn't the argument that in here the loss in everything that occurred occurred previous to the act being effect and that is it is actually a good segue into the second point i like to make and that is arkansas law says that the default rule if there is no express  unequivocal statement that a statue is to be a particular actively it is a part perspective and in the interest context that rule is even strengthened by a corollary of this represented by the the state farm mutual auto insurance company vs henderson decision which says that we will we as a courts of arkansas courts refuse to apply retroactively a change in the law if it would deprive an insurer of a defense to coverage that would have otherwise existed under the previous law so under both the normal statutory construction as well as under the the laws specifically put the insurance policies the result is perspective application now of course we are due for a third reason for avoiding retroactive application and that's because we think about what's the the contract talks but i'm not sure this court needs to even go that far because under the arkansas law that channel your response to that your honor i believe that design professionals insurance in this court recognize that the times case time insurance vs drive does not square with with prior or subsequent arkansas law by the arkansas supr so we have to look at the facts of that case and cite does this really even apply i think probably not the time case really seems to be more in line with a body of arkansas law that involves misrepresentations or misstatements by  and refusing to allow a insurer to avoid coverage where an agent or someone has made misrepresentations in the application process in time mrs graves was a cancer patient she had health insurance coverage she was nine has a civic retroactivity but if you look at the legislative history that bill when it was signed had explaining language in the front of it and that's contained in our briefing documents and it gave the purpose for x six o nine which role i believe he's correct and i believe the judge is correct when he talks about in the one case that was mentioned that it was allowed to change a contract retroactively and then the last point the two cases that i cited in and alluded to in both coming from this court i think make it clear that there are exceptions to the stop the rule in arkansas and believe the courts