good morning a please the court i'm jeffrey erlich for the appellants and i'd like to reserve four minutes for rebuttal the core issue in this case is where the insurers could determine based soley on the contents of the underlying complaint against the city and without conducting any investigation that there was no coverage for the cooties claim is a matter of law and before i address the merits of our coverage position i want to very briefly discuss two important aspects of the decisional framework that this court needs to under dealing with the duty to defend in california with respect to summary judgment and the first is to take note of the fact that the burdens on the insurance company and on the policy holder are not symmetrical here the insurance company has to show that there is no possibility of coverage as a matter of law it has to negate coverage by contrast the burden on the policy holder is simply to show that there is a potential for coverage and any factual dispute any factual dispute that pertains to the insurance company's coverage position or coverage defense is enough to trigger the duty to defend so if there's any disputed facts there is a duty to defend the second important point is that in evaluating whether there are any disputed facts the court has to look at in the insurance company has to rely on the information that it had at the time it made the decision to deny coverage which here is october seventeenth two thousand eight so in the apple these brief the insurance company essentially relies on a whole lot of information that was produced during the trial and that's not legitimate with respect to looking at the duty to defend now apparent that of the carrier could have relied on that after required evidence to come forward and terminate the duty to defend but if he did that it only terminates it prospectively it doesn't go back and retroactive knock it out so in evaluating whether there's a duty to defend here the court has to look at what the carrier had in front of it when it denied coverage and since it didn't do an investigation all it had were the allegations of the first  and progressive destabilization of the slope ramage plaintiff's properties and continues to reason as well why doesn't it fall within the exclusive that takes me right to the issue and our position is that in essence the first amid a complain describes two kinds of damage there is the damage from the sliding is that the complaint says that even though the bulk of this is true even though the bulk of the hillside never moved in other words you've got a fundamentally for the most part hillside that hasn't moved yet parts of it as if have moved there has been a removal of lateral and subjects and support and as a result there is a risk that at some future time the land is unstable and there's to be more movement that would be excluded well that's if if that's really i should just i mean mike my effort today is to try to say no it wouldn't be excluded and you know it's  maybe a fine distinction but i think it's an important one and i didn't make the rule up but the rule that i'm relying on is that in insurance along california there is a distinction courts recognize a distinction between a covered or some identified condition let's say collapse because that's the case i'm relying on from the california supreme court if the policy says we don't cover leighton de facto termite damage or whatever but if if your deck or your house collapses we will cover it and then in the rosen case there was latent problems and termite damage whatever and the deck was on the verge of collapse and the court of appeal said for public policy reasons an imminent collapse has to be treated like a collapse for the purpose of coverage because it would be dangerous to make people wait until the thing actually fell to pieces and the california supreme court said no collapse means collapse it doesn't mean imminent collapse on the verge of collapse these are distinct concepts here the same logic would apply if the carriers had offered coverage for subsidence and we had come forward and said our land is on the verge of subsiding because the labyrinth of jason support is about it has been removed and now we're at risk of subsidence the carrier would in all likelihood based on my dealings with the carrier say different thing that that it hasn't subsided yet there's no coverage and it works the same way with exclusions if you're going to exclude earth movement which is what they did then the risk of future earth movement is a distinct it's not the equivalent they're two different things and so that is the essence of the argument here that right now if someone comes along and your downs downslope neighbor puts in their swimming pool and essentially carves out all your and subjects and support even if your land hasn't moved yet it's been damaged in that we have cited the hughes vs potomac case where that was a a house that was there and then as a result of  storm it suddenly is now on the edge of the precipice of a thirty foot cliff isn't that how they define house well i think it was a physical loss in that case in the in the insurance company said well the house hasn't been damaged just the house is fine fifty dollars of damage all cosmetic and the court said no you've got to pay to stabilize the land and that the policy there covered physical loss well so anyway our position is that these are two distinct forms of damage that if the the exclusion is framed clearly very broadly with respect to subsidence being land that moves doesn't say future doesn't say risk it just says it means  point right now and listen you know i'm not a geologist and i don't really understand if the land is weak and at risk of future movement but that's that's the issue is that at this point it's sort of like if you're paul if your home is red tagged because not because it's damaged but because the authorities say it's not safe for you to stay there because it could move but there hasn't been movement the policy is very clear that it defines movement at the at the moment so to the extent position only the ones that i've discussed with you and discussed in my brief i think the one issue that i do want to make clear is that in california the fact that we understand that to the extent that some of the land asleep already that that wouldn't be covered the problem for the carrier in california is in this kind of case the third party case liability uses tort principles for insurance coverage purposes so as a result if you have covered and uncovered damages that cannot be allocated there's coverage for the whole loss in this case the state versus allstate and that case dealt with  release of pollutants into the groundwater from the stringfellow acid pits which mean nothing to you but it was a big toxic waste thing that the state had created this this mess and some of the pollutants it was a waste dump some of it leached into the groundwater slowly and progressively and that would not be covered under the state's policies some of it however was released suddenly because it was overflows from a dam or releases and those would be covered and there was no way to go back and figure out which part of the pollution was was the result of the gradual leaching and which part of the pollution was the result of the quick releases and the supreme court of california held that in that case the carrier was on the hook for the the remediation cost of all the damage and we're relying on the same rule here so in other words we have land that has moved that is within exclusion acts we have land that hasn't moved that in our view is not with an exclusion acts the damages are that you have to repair and stabilize the hillside even though it hasn't moved yet and therefore the carrier is on the hook for all of it now the carriers say oh no that's prophylactic repairs and that's not covered and we've addressed that saying it's not prophylactic because they're already is damage if you do repairs to stop damage that has already happened from progressing further then under the supreme court precedent that that is the case that's mitigate of not prophylactic and that's covered damage that's already happened i mean to the extent that there is this sliding that judge has talked about that there is already damage so you have a mixture of covered in the morning rosemarie springer i represent a police insurance company in the state of pennsylvania and lexington insurance which you speak up a little please i'll try think i'm going to start where the appellant says we should start which is the underlying complaint and the allegations and the underlying complaint and it's already was pointed out by the court the critical paragraph really for this case where they lay out their allegations of property damage is paragraph seven and that paragraph which was cited by the district court in his opinion is well described sliding in all areas all areas not some not  apportion sliding in all areas this was a landslide that's why there's property damage from sliding in all areas so that same paragraph also refers to ongoing movement are damage was caused by the sliding and the ongoing movement that's what the plaintiffs alleged that's what they're seeking coverage for property damage caused by sliding in all areas and ongoing movement so you look to the summary judgment motion and the city said it was undisputed that all the property damage alleged in the underlying action resulted from earth movement so they said that's undisputed the complaint it makes sense that it's undisputed because that's what the underlying complaint says so then you look to our it's our exclusion and our policy which excludes all property damage arising out of land subside it's and subsidence is described fairly broadly to to describe all forms of earth movement including settling shifting sliding so it's lateral and subject a sense support but what that says is oh there might be a part of the whole site it's not alleged and it's not disputed that all the land moved but if there was some that didn't move because it lost support how did it loose support because all the land around it moved so if you have an exclusion that excludes property damage arising out of earth movement and there's some piece of the hillside that didn't move but all the land around it moves so it's vulnerable to future movement that's excluded as well because what appellant seems to be leaving out is that this exclusion does not just exclude earth movement it excludes property damage arising out of earth movement and cases in california both california state cases and ninth circuit cases have construed arising out of broadly it doesn't even  proximate cause or result of buyer because of it's related to flowing from emanating from so you have a a broad exclusion you have undisputed that allegations in the complaint only allege property damage caused by the earth movement that the district court on that record found there was no duty to defend here we are to the court to affirm on that basis and there are also alternatively two grounds supported in the record that support affirm and says well that i'll briefly address one is that these policies have as a condition precedent to any coverage at all that the city paid two million dollars in defense costs before there's any duty to defend the city does not dispute that as of the time of tender no such pain that had me the city does not dispute that it never produced invoices during the entire pendency of the underlying action showing any payment on summary judgment we  raised this argument saying it was the city's burden to prove payment and there was no evidence of payment the only evidence they presented in response was a defamation that they had incurred certain defense costs and a summary of those costs without any explanation really of what those costs were and with absolutely no evidence of payment that failure of proof on that issue of which they have the burden of proof is a further ground enough they could have incurred five million in defense costs but until they pay something it doesn't exhaust the self insured retention and the final is that there was also no occurrence a negligent act by the insurer during the policy period the policy period was two thousand and four to two thousand and five which is when the property damage the landslide occurred but the negligent act attributed to the city was the trail widening project and documents produced to the insurers at the time tender showed that that negligent act that the carving into the hillside happened in one thousand nine hundred two the policies require the occurrence have happened during the policy period and the record shows that that could not have that that did not occur and that the undisputed that the city's actions did cost subsidence and it's also there's no i guess there's no evidence in this record that there was not subsidence that any land that didn't move was as well damaged by subsidence the key is that the exclusion does not just exclude subsidence it excludes any property damage arising out of subsidence for any reason whatsoever that's the wording of the exclusion so even if there was land that was weakened due to the land around it moving that would still be barred under the exclusion because it arose out of the surrounding subsidence so the board in any event it would be barred in any event  if the land did not move and was not damaged at all it would be barred by exclusion why because exclusion y bars all claims for inverse condemnation which is what this case was for except for physical damage to tangible property so if there was some piece of land that wasn't damaged at all didn't move that's part by exclusion why and that's what the district court resumes as well thank you  versus glen falls and hartford versus with distribution but mullen makes it clear that you can't resort to hindsight and the risk is that if you do that if you don't do it what is it what's what's resorting to hindsight if you look at this damage cleanness properties and continues to present a hazard the point is if they'd done an investigation they would have been clear that there was it wasn't the whole slope didn't move parts move parts didn't and that parts were a risk they didn't do an investigation but they're charged with knowledge of what an investigation would have shown to create the factual issue best against him are they supposed to do when when your complaint seemed to negate they well that's a choice that they have but they can come out and they can they do a full investigation and they come look at the site they hire experts they they look at and decide what they want to do if they don't do that that's fine but they are charged with what the investigation would have shown which is here that it wasn't a case where the entire hillside slid over here that that the earth material is semi elastic so when you cut out a hole it was to rebound into that void that's created by the hole and so you get what we call a stress release and so what it does is loose  loosens the soil basically yes it makes it less strong and it makes it move so even when you're the expert i don't i don't i maybe i missed something i don't see where the point that i was trying to make here is that the the complaint i think alludes to and reasonably you can infer from and if you look at the testimony of the expert it makes clear that there are these two types of different damage here you've got parchin port parsons of portions of the slope that have slid those fall within the exclusion acts and then in our view and just the factual predicate for that is that there are other portions there are risk and have to be stabilized but they have not moved and therefore they have not subsided that was the point with respect to the conditions proceed and we do address those both in the reply and since i'm now out of time i guess i'll have to rely on the argument