thank you our good morning may it please the court my name is quentin rhodes i'm appearing on behalf of the appellate giant gray tac partnerships i'm going to read the issue for this case from a case that's been decided by the montana supreme court there was quote montana courts have long held that an insurance failure to comply with a notice condition in an insurance policy bar for cover end of the policy and that issue was posed by the insurance company in that case in the insurance company argued that because it didn't receive timely notice or a claim that didn't receive timely notice that it was not obligated under the policy on insurance i mean you're sort of jumping right into things so i'm just going to jump right in as while you're looking at paragraph sixty five i'm looking at paragraph sixty six the court there is talking about what he had done in steel and i guess you know i mean steidl to me why i talk about prejudice there if it's not a requirement and paragraph sixty six the court  insurance company and i shall present is in order to be excused from its obligation under the policy and if it can't or if it doesn't know if there's no finding a president that is obligated to indemnify and to cover the third party beneficiaries did not have the benefit when it ruled in january of two thousand and thirteen of this clarification by the montana supreme court but in may of two thousand and thirteen the montana supreme court made clear that if there was any doubt after steidl that you had to show prejudice the defendant contractor that knew about the insurance sued the defendant contractor the defendant not contractor did not submit the claim to mean insurance company defendant contractor did not appear and did not found an answer and so the with a plan have had a choice to make he could seek or they could seek a judgment by default or they could inform the insurance company look at we've sued your insured you need to be aware of this so you have a chance to defend it if you choose to and they took the former course they saw a default judgment and waited sixty days until the it was dry and the time for appeal had passed and then approached the insurance company  look you have to pay the seven figure judgment by the fall against your insured and we're talking about it day after there's nothing you can do about it and of course in stable logically enough the montana supreme court said no that's not how it works if you are seeking an insurance claim here against this judgment proof defendant you've got to tell the insurance company about it in time for the insurance company to step in if it chooses to defend the case because you didn't you prejudiced the insurance company's ability to hire counsel investigate the claim to interview witnesses formulate a strategy and try to case if they think it needs to be tried because you prejudice us abilities there's no coverage and as i say that makes perfect sense but the mistake that they were made in this case and again it didn't have the benefit of the newman explanation was that it did not require a very narrow ruling so it's a very narrow issue it did not require the insurance company to address whether it was prejudice and the anomaly of that result is that you have the store victim who is prejudice you have an insurance who doesn't you have notice to the insurance company in the torture victim company wins now the insurance company got its policy or its premiums it got what it bargained for it should have to either make a choice here or you can defend the case indemnify or clearly say we're not going to everyone i think that you know that this court doesn't have to guess at or reason its way to what it thinks the montana supreme court would do if faced with the precise question i think the naming case makes that perfectly clear that unless there's a showing of privateness then there's not an excuse for the obligation now there could be a showing of prejudice and still is a perfect example of how an insurance company can be prejudiced by a lack of notice but the flip side of that is the name in case you've got late notice but you've got notice in time for them to make a choice whether they're going to defend any newman they decided not to defend or whether they are going to defend and  of the facts in our case in our case in november of two thousand and ten our plants filed a claim against the insured in the form of a counter claim after having been she sued by the construction company for construction the foreclosure evil of two thousand and eleven some five months six months after that consequence filed there was a settlement conference and there was a resolution up most of the claims the construction contractors claims against victim were released the torture victim released its claims against the construction company that would have not been covered in form a breach of contract fraud and the like all that remained were on the counter claim negligence company a full and complete opportunity to come in and defend that case if it chose to and so that one of the character characterizations in this case has been that there was some kind of a settlement of the claims between the victim and the insured and that we're asking for the insurance company to now pay a settlement based on a mediation conference in which they did not participate and that is simply not the case what we did when i didn't participate they did not participate i love the way they're a major settlement conference with the insurance company that's correct your honor and what happened was there the the insurer did not submit the claimants of interest i didn't know about i start but at the settlement conference the insured did not agree to make itself obligated to pay a judgment that the insurance company would then be responsible for indemnification all the parties agreed is that we're going to reset we're start over with a new schedul the complete file from the insurer it got an opportunity to interview the principal for the insured and the transcript shows that all the questions that were posed by the justice were answered and you know there were no objections to any questions or nine where he dealt with the fact that there was this previous judgment and it had been fake a person vacated and he didn't make a claim on whether that was appropriate or not appropriate he didn't hold and so consequently we would ask the court to reverse that what we view to be an arab law and consistent with the naming case and in return it for for the fines thank you it finally received the untimely notice it still had the opportunity to conduct an investigation and defense which it did by the way it both conducted an investigation and to f d and so in lead the same set of circumstances were present when sure his company finally received the notice of the claim and lay judgment had not been since notice was light and omitted material information that that alone was an independent basis to bar coverage quote these emissions were a material breach of lease policy of the court's discussion of prejudiced was merely the fact that the notice was late and omitted material information there was nothing more the court pointed to no particular matters there there was it wasn't full notice and so that was when they said their language was independently sufficient was the timing and incomplete notice that's that's correct your honor then if you take that circumstance there's no suggestion here that we are here complete notice right there was incomplete notice in this case also your honor because  notice once it was finally provided contained no settlement documents it contained nothing referencing the subtle much it did not contain the sub agreement itself are you asking us to make a finding argued that the majority should require the insurance company to show actual prejudice more so than what would be inherent and untimely notice or notice that lacks material information that the senate argued that but if of course the majority found otherwise it determined that a lack of compliance within those requirements was a condition proceeding to coverage and violation of that was an independent basis to find no coverage and so so we have levy out there at two thousand historical importance that montana course have applied to complying with the notice requirement under montana law i asked you just lower on this point the question intended for you but asked your opponent steidl should if in fact the rule is that no prejudiced need be shown why does this court and even bother talking about the fact that there was precious there that's what i don't get well i believe  the district court's decision in this case found that prejudice was not necessarily to be shown as the court decided and levy and then and  court has shown that when it wants to go it will very plainly say by way of a holding that an insurance company now must show prejudice as it did in the if the montana supreme court wanted to issue a clear ruling or a pronouncement that and sure it's companies under a commercial general liability policy must show prejudiced but let me try again though i'm with everything you said makes perfect sense but i'm still stuck let and i'm left wondering why then it was the  the discussion of preciousness eagle i agree there's no clear holding but if it were that cut and dried then why even get in the present so do you have an explanation in i mean we're not mind readers but do you have some explanation for why you think the court nonetheless went forward and talk steidl because that's how i read it and i thought in effect they kind of threw in the prejudice kind as an after statement to what i thought was the holding at least i thought that's how i read newman and then it seemed a new man of six that they characterize stede oh and then they say colony argue the lack of notice of the claim severely prejudiced ye we observe because it a lack of notice it cetera et cetera and then it goes on to say and therefore suffered prejudice so it seemed in a way that they possibly characterized their holding and then i'm  to complain about the lack of notice because it than my coverage and i did not include as one of his reasons for going to file improper notice and to try to come back later and do that the court decided the case on waiver the supreme the supreme court ruled that insurance company in newman waived this right to complain about the late notice and so it did discuss the montana supreme court would do so when it drops a little crumb you know like well clues here and there all we can do is try to piece them together and i'm looking at the same language that judge mchugh i just read to you and i am left with the same feeling like well if this is a clue as to their interpretation of steidl it seems to point against your position right that prejudiced was no that but if it is not it doesn't take the next step it doesn't say in montana insurance companies  must show prejudice like the court didn't sorenson and with with the holding and leave out there in two thousand and eight if the mountain supreme court wanted to issue a holding that for commercial general liability policies that the insurance company noster show pratchett us those two cases were  golden opportunities from what his reports do so do you think that we should certify this question to the i really don't know how to answer that question are you here have to get quite a few as you know insurance cases in the circuit i'm diversity jurisdiction and in large part we try not to write opinions where we don't need to because we don't learn or basically hogtied the district courts from figuring out what is well call law but it could be enough ambiguity here i mean i realize  human court says well i'm not going to address prejudiced i don't even need to get there so prejudice isn't really on the table and human but i suppose we have different interpretations  where the incident involved a minor traffic incident it was a small dent and the that wasn't even repaired the damage estimate was ninety four dollars the other driver said he was fine at the scene there were no citations issued and so three years later the insurer receives a claim from the case and so on appeal this court so we have looked at the underlying case and we do not find the case to be clearly wrong i believe that was a lot of what happened was the judge i'm just looking at the said prior to trial the district court ruled that state farm must show that it was somehow prejudiced by the delay notification and then later we said geez that judge is an experienced montana lawyer we don't we can't find any other state law that speaks to this question so right we basically can't say it's clearly wrong so we're going to go with that rule and that's the last that our court seems to have spoken to this issue in terms of montana why that's why i say i read that as saying we've determined somehow that prejudice what's required we haven't gotten any crystal clear clarification one where the other from the montana supreme court since just as you said it's kind of a muddle and so if we're not going to certify it and i don't know why we would just say ok we're just going and the issue of prejudice apparently was a factor in determining the affirmative defense of excuse that the untimely notice was of use in our case  there has not been and offer of excuse or an affirmative defense raised an affirmative defense of excuses being raised and no one the insured you i think it would be helpful and was all mean questions about this case given the lack of complete clarity from the mind tennis supreme court think about the protective purpose of insurance to help resolve exactly how this should be decided that is the question of whether there has to be a showing of prejudice in other words are we going to are we going to allow the lack of notice to be a protection for any insurer who's received the premiums or we're going to  offer some protection to the the victim who doesn't have control over whether the insurer gives timely notice and in view of that protective purpose then i think we look to the purpose of the notice now why is there a requirement for a notice that's allowed the insurance company to come in and investigate and do what it needs to do to protect its interests and in view of the defense in the case and so the purpose of the notice requirement is met if we just allow the insurance company to practice by default and it's like well we got our premiums and you didn't give us what is  of insurance and the purpose of the need for timely notice if that is met which has been we think in this case then that should resolve the case in in favor of coverage speaking to the was material but that's still a fact question that wasn't addressed in this case because the court ruled it doesn't have to address the materiality and that's the legal error that we think it made and that's why we think it needs to be mandated to address the materiality and finally with regard to predicting what the might have a supreme court might do there's also the case out there of state farm mutual auto insurance versus gibson in that case with the state court i don't think there's a clear indication from the montana supreme court with the with regard to that issue i mean clearly the uninsured motorist question has been specifically addressed but that question hasn't come down on all fours and any of these cases and it hasn't been ruled on all fours and there's never been any guidance from the montana supreme court as pacifically said we think these casualty insurance there's a different protective purpose for casualty insurance it's only property and so we're not going to worry so much about it it's never specifically said that and so i don't think there's any more clear direction from that perspective than there is from the rest of the know me and i repeat the question that we didn't really get a good answer to and as you do you think we should certify this you're i think that would be a reasonable way to deal with it i think that this poses for the my test supreme court if you do the specific question for it to answer one way or the other  majority of the cases now that have dealt with this i think there's sufficient indication to indicate that the supreme court would follow that we wouldn't have any sort of grounds to object and would object if that was the course judgment