summary of the key law in this area the major issue here is the duty to defend and in washington defense and indemnity are two separate benefits of a liability insurance policy indemnity is paying the claim the defense of course is the insurance company's obligation to provide counsel and all the rest that's necessary to defend a covered lawsuit the washington cases all make an issue out of the difference between the two coverages in possibility it's conceivable in looking at the complaint that there could be an accidental shooting so therefore it's duty to defend this trigger right that's that's the gist of your argument on why the  that's a lot of it yes your honor how do you deal with the piece leak case in which the shooting was also accidental but the washington supreme court said that it was still a criminal act for purposes of the insurance policy you are it it's really hard to come here exclusions from one policy to exclusions from another policy and i think it's easy to  lost when you look at coverage cases from other states and coverage cases from washington that involve a policy that's different than the one here this policy is a little different and on page forty two of the excerpts the liability coverage is are set out and they're very different what the policy says is we the insurance company will pay up to our for which an insured is liable by law ok that's standard they all say that because a bodily injury or property damage caused by an occurrence they pretty much all say that the next sentence is unique quote we will defend a suit seeking damages so the first sentence is indemnity the where i'm at now is  defense we will defend a suit seeking damages if the suit resulted from bodily injury not excluded under this coverage you'll notice that the word ocurred ends does not show up in the duty to defend ensuring agreement as it does in the indemnity sen's this was one of a number of things that western national simply overlooked when it analyze the coverage and when it did deny to the chase in the policy that we're talking about one of the exclusions or the exclusion that we're focusing on is bodily injury or damage that is the result of a criminal act of an insured correct yes you're adding and then you go to peacefully and though that's an exclusion a loss that is not covered and then on peasley they say losses we do not cover and that would be bodily injury recently expected to result from the intentional or criminal act of an insured person so criminal act of an insured person in your policy seems to be parallel to peasley well it is but the but the sentence that preceded that is quite different from peasley and you know exclusion one i which we're addressing here on page forty seven of an excerpt starts out by saying we don't cover bodily injury which is expected by directed by or intended by and insured that is the result of a criminal act of an insured does it say semicolon yes it does ok or that is the result of an indication well there are two ways to read this and one of them is to read it that exclusion i two stands by itself that any criminal act of an insured  disqualifies that insured from coverage the other way is to say which the rainer case said although the policy language was different that an accidental criminal act can be covered by the liability insurance so let me ask you this do you think you have this piece lee case in ninety seven and then you have the rainer case ninety nine later do you think there's any inconsistency in the washington supreme court analyzed this chromo exclusion between those two cases not really i think the policies are different and you know both of them speedily didn't seem to confine itself to the four corners of the to the four corners rule right not to the extent that a modern court because remember in two thousand and two we got the wu case and were sets out extremely clearly leaves absolutely no doubt about what the insurance company's supposed to do when it's faced with a liability coverage issue you look at the four corners of the complaint you look at the four corners of the policy and you don't look anywhere else unless it's by the way that might do let me ask you this question about about the rule and moves case which says insurer has a duty to defend when the complaint construed liberally just facts which could if proven imposed by billy what facts are alleging this complaint i don't mean legal conclusion but facts from which liability can be and imposed happened in peasley yes because it's still a crime could be a crime could be right well what distinguishes that crime or that scenario from them the bare bones pleading in question that's not really that's why i asked you the question earlier whether you thought there was an inconsistency in the way which an supreme court has treated these because i think it kind of comes down to whether your allegation that there was a negligent discharge of a fire falls under the criminal act exclusion and we know from peasley criminal act doesn't that it includes unintentional  acts i guess what we don't know and this is what i think the dissent in these various cases we're concerned about is is there any limit to that because if you construe it liberally which i think we're supposed to in terms of the of allegation is excluded because it's a negligent criminal act versus just a negligent act which should be included in the duty to defend so how do you make a distinction between the two with what do you think you have to allege so that the reader of the complaint meaning the insurance company can figure out in or out this is a pretty bare bones complaint it is it and maybe purposely so i understand why that might have been tactical and we have the competing interests considering the complaint literally liberally to create coverage and considering the policy liberally to create coverage strictly not to school coverage all of that was developed so i think the passage of time and the opinions that came down since peasley so are then or email is your answer i mean you're what you're saying is you think the wishes from court actually shane just the standard for bench marking i interpreting the exclusions because just because a case is old doesn't mean it i mean it's still binding and when we're trying to figure out our job is to figure out what is the lesson in law and t best divine that from the recent supreme court cases you said you don't really think there's any inconsistency in them so reading them all together you're still stuck with piece wait for what then what do you then where do you go i think you go to the modern cases that address the word conceivable and you know you'll see in the in the briefing that at the deposition of the claims attorney who handled this  i asked her about the word conceivable and you know those on the defense side aren't quite willing to admit that conceivable means what it really means  said something like why i don't have to imagine every possibility you know and that that's incorrect they do have to imagine every possibility and that in part i think the reason for that and the reason it makes sense is that the duty to defend can be a temporary duty that ends when or if a court finds no coverage at all well if you if you have just pure negligence here but then you go on because they say well these acts aren't just negligent but they're beyond the pale of human decency and the toward of outrage by combining that with the word negligently have you really tipped yourself over into the criminal arena i don't think so your honor washington allows alternative pleading this is an alternative pleading and i think it's absolutely acceptable you might want to save the remaining time i do i have two minutes left thank you your hon good morning dana first you know on behalf of respondent western national insurance company let's not appear before the federal court of appeals and i want to thank the court for taking the time to hear this case there's no doubt that the facts  this case are both tragic and extraordinary but it's also true that this is not a close call on insurance coverage there's no doubt about what actually happened here why but that's not the rule is it at the four corners of the complaint and if if there's an ambiguity it's unclear then you look to the extrinsic evidence but it's important in what i said i think is accurate in talking about this is that extrinsic evidence is relevant to this appeal because there are two orders that are on appeal t let me ask you this so you're only looking at it plus whatever the law is and trying to figure out the duty to defend and washington's very liberal on that so what if you had somebody like you've got a gun and he like trips down the stairs and shoots the lady and her baby pretty accidental why couldn't that if that happened do you think there would be a  well those are certainly facts that in the right case might be alleged or could be alleged assuming council was meeting their obligations under rule eleven and the other acts which were one of the yes yes or no if if that happened if that was the allegation that you trip down the stairs and shot the lady would that trigger the duty to defend maybe it would depend on the totality of the complaint and whether holding it up against the criminal statutes and still constitutes manslaughter f scenario we had a complaint right doesn't just say negligently intentionally or recklessly it says a lot more than that i think is relevant to the duty to defend analysis and the court already pointed to that language and i'll just remind the court then paragraph two point three the allegation was that disturbed conduct in shooting was quote in callous disregard for the safety and well being of descendant of defense and marie were gagged he and her unborn child and are not only negligent but so far beyond the pale of human decency that they constitute the tort of outrage it's not conceivable but that's an accident somebody falling down the stairs and all but letting go of your guns mr will again sure to that was that so it's you know to be in the alternative to negligence doesn't intentional or at least you know reckless when you say intentional negligence or reckless you are saying in the absolutely this is clearly not a laughing matter and i don't want to make light of it the facts and this is a terrible tragedy but all the same it's not a cover claim and judge leighton said whatever herbs actual mindset or motive the shooting was an intentional criminal act which is excluded from you know these are this is known to all he's obviously referring to facts or allegations outside the four corners of the complaint right which is appropriate to consider when the complaint is unclear ambiguous well but the case is that it's only appropriate to consider if the consideration is necessary to give rise to the duty to defend not to defeat the duty to do i have no i haven't come across a washington case that says you can look outside the complaint for facts that's going to defeat the duty to defend no no argument but but it's still relevant in so far as western national did look outside the facts of the complaint to see if there might be something that indicated that this was an accident what they found confirmed exactly what we thought this was it's a tragic intentional murder suicide and so file you raise an interesting question i mean that goes to their just charge of whether they acted in good faith if  if the complaint would give you the possibility of a duty to defend what happens if you look outside the complaint and realize that these facts are just so egregious that it couldn't possibly be anything other than a criminal act is that if your hypothetical circumstance which is different than here and let's just say that the plaintiff's attorney in this case had alleged this was an accident and then they went and found a news article that said no it's not an accident it's a murder suicide in that different circumstance the appropriate recourse would be to defend on a reservation and follow declaratory judgment here but we don't have that here instead what we have is somebody waving a magic wand over a complaint calling it intentional reckless or perhaps negligence then saying it's just not just negligent it's outrage and then saying oh but by the way we think it's an accident you should cover it anyway and that's just not the the the duty to defend supposed to be liberal it's supposed to be broad supposed to stretch it out but at some point there's got to be a limit and if you work to say there's a defense obligation there's that's really the end of the limits in fact i think what when when mr williams was trying to get away from the peasley case he was trying to focus they say might not be just negligent but it's a tort of outweighs so that you have in washington law a civil tort of outrage that resulted in death that also was not a criminal act i haven't analyzed that but the important aspect of the tort of outrage is that one of the elements is intentional conduct and what we have here is a shooting and when you add shooting and intentional conduct together it is not conceivable that that's not a criminal act at that point shooting conduct plus death and intentional conduct and at that point there is no emphasize because the court brought this up those are the cases in washington and there's no subsequent case whether they want to talk about wu or a leader or the recent g a decision that say anything that in any way retraction the outcome in those cases that is court and i'll just add that it's not just washington there's no case anywhere that says there's coverage for a murder suicide now counsel didn't address the issues of bad faith or coverage by stoppel but recognizing that he's going to get up for a couple of minutes i want to briefly touch upon it because i think there's a couple of important points to keep in mind failure to defend alone does not warrant coverage by a stoppel it's not bad faith in order to find coverage biased stoppel which is a discretionary remedy and it sure has to act in bad faith which means that their conduct has to be unreasonable frivolous or unfounded and the the evidence that's in this record for this record on summary judgment indicates that western nationals conduct was careful and reasoned keep in mind they were approached by mr herb's the state's warrior and he freely admitted this is a murder suicide comes to me says i i've got a murder suicide we're being sued and then gives them the complaint they look they investigate what they find is news articles confirming that it's a murder suicide and then they get a complaint that says we've got a shooting with outrageous conduct i respectfully submit to the court that on that record the only reasonable conclusion is that it's reasonable to deny and not defend so there's no bad faith here which by itself gets sort of covered by stoppel that the second point that i'll make is that covered by a stop or as i briefly said before question of fact i believe that there's enough on the record to still rule that no no reasonable jury could find bad faith based on this evidence but at most the point you make is an actual one at most this court if it were to disagree with the dress or court on the defense obligation would remain in this case that's the most that can be done here the other point that i'll make is that coverage by a stop all is argued to the court and obtaining this judgment that it was a murder suicide i think is his words were something along the lines of mr herb's conduct was motivated by the fact that his girlfriend was pregnant clear indication that we've got murderous intent no accident what they're now in effect saying is give us seven million dollars on the judgment that we obtain because this was an accident and they should have defended those are absolutely inconsistent concepts whether you want to characterize it is as judicial a stop or merely saying it's inequitable i don't believe there's any way you could ever get to an outcome where covered by a stop would be an appropriate remedy in this  number of thank you thank you about two minutes consuls last argument had to do with ben barcus trying the underlying case in superior court in peers county and the problem with the argument that was made here is that did not represent michael erb at that time or his the state then barcus represented the estate of the young lady who was a victim of whatever michael or did so what he says happened or what he argues happened does not in any way bind these state of michael per his opponent in that trial in terms of whether it was a suicide  murder or anything else to we have to remember i think that in washington the insurance company must defend the entire case if one allegation in the complaint can conceivably be covered under the policy what do you do with the damages section of the underlying complain paragraph four point one it says quote as a result of the aforementioned negligent acts of the above named defendant plaintiffs have suffered and will continue to suffer in the future the following damages what do you do with that the problem here has been the same since day one and it's the same problem that occurred in woop the insurance company can't look at the totality of the circumstances and make a judgment that says all here's what happened judge layton made the same mistake it works on indemnity it doesn't work on defense because the four corners rule says you look at those two documents and nowhere else and only look at experience in evidence to find coverage not restricted for those reasons and i urge the court to reverse the district court thank you thank you both for your arguments this morning the case of leicester national versus