court good morning my name is linda sue i'm here representing not alyson shirts company so we have roughly three broad issues that are before the court today the st is whether or not the district court was correct in granting my client summary judgment on whether or not it had a duty to defend its insured access and mr wood as well as floor annoy in the underlying switzer case the nd issue is whether or not the district court committed error in refusing to allow the nautilus to seek monetary relief as a result of its decision agreeing with novelists that it never had a duty to defend and therefore not list never had a duty to pay any of the defense fees and costs incurred in defending access mr wood and for noise in the underlying case and then finally the question of whether or not the court has jurisdiction to hear the insurers appeal of the district court's decision declining to entertain yes i realize that as i was preparing for this hearing that it's my fault i got confused about the nature of the cross appeals and i thought there was going to be a separate opportunity to address the cross appeal and so i just was a mistake that was made that fortunately we've we've addressed the issue pretty clearly in the underlying briefing and so it hasn't been we certainly are not waiving that argument and so i'm more than prepared to argue orally as to why the district court's decision was tracked if i may was correct if i may say thank you so this case is clearly controlled by the california supreme court's decision in hartford versus swift the issue here of course is whether or not the cross complaint filed by mr switzer in the underlying action made any allegations of defamation or  and we know that the cross complaint contained four separate causes of action for intentional interference with economic advantage which is not the same thing as a definition or excuse me a defamation or  disparagement case there were no allegations of that anywhere in the rather complete comprehensive cross complaint and i would submit that there is no no  law that actually requires an insurer to look beyond the four corners of the complaint so the other side cites united national insurance which follows california's rule engrave is direct that rules so do you have a case and i and that clearly said no and it may not even really matter in this case frankly because the record shows that my client did actually investigate facts beyond the complaint it was the one that found what we're calling the we e mail which was an e mail written by a representative of the insured to a rd party basically soliciting its business it did not reference mr switzer or his company know from the consolidated appeal that rule sixty appeal the district court pointed out that mr switzer in response to in a rather tori's very clearly stated that he was not making a defamation claim against  the underlying proceeding in california or proceedings are they all concluded at this point or there's is there still underlying litigation going on that's a good question so there is there are two sets of underlying litigation still going on and i'm sure that my adversary will would be able to give more information on one of them my understanding is that there was a trial in the switzer versus access matter switzer prevailed in that action and got a monetary award that was appealed and i was actually just this morning speaking with my adversary he advised me that the court of appeal has remanded that case back down to the trial court to award trouble damages and possibly punitive damages and that's been appealed favor of switzer in favor of switzer and that's been appealed to the california supreme court  and the reason why i ask is well there's a number one it was sort of hard to understand exactly what novelist's was looking at in making the determination of whether they needed to defend but some point in some of this litigation there was an amendment that alleged a defamation claim is your position that nautilus would then be on the hook to cover that claim if let's say for example  the cross complaint was amended to state a cause of action for defamation or let's say that mr switzer testified in deposition that he was intending to make a defamation claim against the insur for well that's why it's so your position would be that only once that becomes clear not of this is duty kicks in you would not then have a retroactive duty even though you've paid those costs already you you would still be here in court arguing that you're entitled to reimbursement of fees because as of today or whatever date there is there was an evidence that he was trying to bring a defamation claim right filed no i would say no because the complaint the cross complaint does not allege defamation and before that point not a list neither knew or reasonably could have known that mr switzer was intending to bring a defamation claim and that's the standard for an insurer is what if he filed an amended cross claim that would relate back to the date of the original cross claim so i mean it's interesting i just think it undermines a little bit your position that you've started out with that you can't go beyond the four corners of the you know the regional complaint because it does seem like there are advocating the position that nautilus should not have looked beyond the four corners of the complaint because in fact it did in fact that the district court in ruling on the rule sixty motions noted that in in a situation where an insurer files a declaratory really faction and then brings a motion for summary judgment and wins the duty to defend is determined for that period of time only and then if new evidence comes out afterward then novelists very well may have a duty to defend from that point and what i was going to advise is that in fact as we speak there is a nd lawsuit filed by access and would against not elias for alleged breach of contract and breach of the implied covenant of good faith and very dealing arising out of the very issues raised in the rule six shin's the deposition testimony some point or another which is they did already has been decided by the district court here right at least in the in the the other appeals are up before as if there's a question i want to address that are asked about that because there's a question about whether there's merits of the emergency motion basically what it was is after the summary judgment had been decided the the insureds said well well wait a minute we have new evidence that  testimony just came out last week that said this or that or in the trial this and that happened and the the court although it commented on on whether or not that would rise to the level of a duty to defend as a primary ruling it determined that it wasn't going to hear it because procedurally because it was a issue that the insureds could file a separate lawsuit for which in fact they have so this court does not have jurisdiction to hear a procedural decision and there's plenty of case law that we've cited in our briefs so i just so i understand the implications of that if we would rule in your favor  position then that those the subject matters of those four appeals would be able to be rebranded up to the district court at that point and access and floor noire would be able to argue that the despite the th circuit decision in that the district court should somehow rule differently because of the new evidence that has been addressed here yes your honor if if this court rules in favor of nautilus that there is no duty to defend rules in favor of that it should be given the opportunity to present the relief it seeks in the forms of the fees and costs incurred in the underlying case and that it does not have jurisdiction to year the rule sixty dollars appeal then this would go back to the district court to decide whether and how much money novelist could collect from its insurers for the well but it would also go it would also go back that they could make these additional arguments and that is right that is correct and so there would actually be two separate cases in the district courts to separately filed cases there's the case that novelists filed that's up on appeal right now and then there's the separate totally separate case and again if if the court would like i can still provide you with  i think before the same district court the same judge no i don't believe it is before the same judge so it's a different judge yeah so there would be two cases going on in the district court and i think at that point the parties in the court would need to determine if those needed to be consolidated i think they would but that but there would be so the issues would be number one does not a list get its fees and cost back and if so how much and number two dollars was was there a breach of contract and bad faith by nautilus for failing to pick up the defense at the point that it was advised of deposition testimony and or trial events let me turn you back for a the main cases a hard case which is a california decision of the united states district court in this district and then the  house international which trying to remember what you know that you're you're on a park that did also come from california i believe that nevada case law on the issue is from unpublish decisions frankly so frankly i think your honor raises a good point that that might be something that would need to be certified to the nevada supreme court i'm not saying that that's the primary position i'm taking i think that it's it's more of a something in your insurance contract i apologize i misunderstood that the issue of whether or not an insurer is entitled to reimbursement has been decided by the united states district court district of nevada in the capital inde corporation versus blazer decision which was cited in our brief and then in that particular case the court found that because the insurer did not submit a reservation of writes a letter stating that it was reserving the right to seek back defense fees in costs that the insurer in that case could not collect but so is negative of this one but even so that's a federal district court as opposed to a state court decision yes i mean your honor is correct that i don't believe that there are any published nevada decisions on point on that issue i would state however that nevada courts have expressed lee stated in more than one case that when there is no case law on point they look to and rely upon california law in rendering its decisions and the california cases was at a california supreme court cases to court cases it was i think those were just federal cases and to bring california law as well you know we have the bus versus period court case and we have the scottsdale versus and the transportation case both of which are california supreme court decisions  i say i have two minutes off i'd like to reserve my time all right thank you thank you may please the court margaret fully counsel for floor no wait management l l see my co counsel and i are are dividing our time and we've broken it up according to issues so if it turns out to be a little courts you never when ever the nevada courts have not yet addressed it so that would say in fact under california rules the insurer would clearly be entitle to reimburse based on the is far more protected of the protective of the insured than the insurer and gives the insured benefit of doubt on most things the other issue is that under nevada law there's no the the right to you know contracts are read very strictly in about a contract law and it wouldn't the idea that you could imply something here and international agreement for reimbursement that was never included in the insurance contract it was a very hard sell if if the district court was correct that nautilus had no duty to defend then your client was not entitled to to any amount of defense costs so strictly reading the contract your your client would have would have to provide restitution i've added and isn't that right isn't that just as a state law principle it's it's an equitable consideration that potentially the district court could apply in that situation however position as you know is that the duty to defend question was decided wrongly and in the in the cases unpublished cases and just to court cases in nevada federal the talk about this there's they were usually very clear that there was no duty to defend as a matter of law that the court had on the other way so is this a issue that should be certified to have as supreme court in your view we would we would welcome certification to to clarify the law here but given the as i said the nevada courts sort of protection if you will of the insured i'm not sure that it would it would turn out to be something but right now i grieve for but he but it but we decide this question that we send him back down and there's this new evidence that has to be considered and everything we say could just end up being for not depending on what that new evidence is decide those those indicative rulings on appeal i think you do you because they are now final and we appealed them independent there were final post judgment orders and we appealed the judgment timely and we also appealed each of those orders e is he lied and i think i'm sorry i don't have the case in front of me but i have seen where it's not necessarily just a jurisdictional question and also if it's independently appealed changes the landscape so such that it is that correct yes there are definite overlapping issues in the current bad faith case in the district court now before a different the pills for him to give rulings around the whole case i think that would that would be sort of an issue by issue basis might why would we why would we appeal to wait to see what the district court did why would you stay or ye sorry why would why would we stay these appeals to wait and see what the district court did in it in a different case in order to avoid you know some kind of piecemeal resolution so yeah issues are slightly different overlapping so because we're appellant on another case i will i would like to reserve three minutes and if you have further questions for me on the issue is that what you're saying no that's not why that would come out of your time now right no i mean i think that i've covered my issue and if you don't know for the questions versus andrew and there's a quote from that case that says the issue in that case was whether or not the insurer can be responsible for consequential damages when it doesn't defend when it's later found out that there's a duty to defend what that they would have said in that and your case what they said was you know the right to pull coverage later but you don't have the right to reimbursement as you can actually address the reimbursement issue is that correct that is correct but i think i certainly think i implied in a she said we would welcome certification because i'm confident that that's the way that about a supreme court would go on that's valid it is much more protective of its insurers then in california we don't always rely on california for example nevada doesn't have the how will decision in personal injury cases invited doesn't have to have the genuine dispute doctrine when it's in the insurance favor they go that way for example they adopted cuba's counsel but in the case they rejected the california rule about consequential damages based off the breach of the duty to defend and so we don't always follow california so i think that's really what it is this only goes to the reimbursement rate so after the district court's decision that novelists didn't have a duty to defend your claims if you believe there's the potential here's the issue they've got they've been a legend in the complaint you can't just skip to process and say ok after all this i'm just going toward an unjust enrichment claim you have to have a trial on the merits on that what you're saying they cited they allege in their complaints when you look at the pro builders case that they cited they left in their complaint they didn't allege it in their complaint here it never came up until after summary judgment but if we remember this down it can actually just amend their complaint to add that  well the court actually already denied their motion to amend saying we've already gone through some rejection i think they'd have to file a new action if they want to go unjust enrichment claim and then we could just the merits of whether or not they're entitled to it under nevada law that would be my position for that several things you know you notional frontier case says that the ensure there's a duty to defend whenever it ascertains facts which give rise to the potential for liability so ever it's possible but it's possible that the insurer could be liable you have to defend any doubt has to be resolved in the insurance favor but doesn't that just give your client the opportunity to always claim that there was some set of facts i mean in a weird way it incentivizes your client to actually go out and defame someone this is so that so that then you can say well you have a duty to defend because i sent this e mail granted they didn't think it was defamation but we meant it to be defamation so therefore you have a duty to defend i think that's well it's not that far that's not that far stretch from what the facts here are well i think you're claiming defamation based on an e mail that nobody understood what the heck it even met and tell there was a deposition testimony about it well i think the part the underlying parties knew what it meant and that's when we get back to the duty to investigate but nobody else did i mean i don't think you're defending him and i don't think you not mentioned in the in the e mail there was no publication of to the extent saying that he was and in california was a false statement and and damaging to his reputation i would disagree with that because cottage hospital knew who had sole supplier of alpha tech products was so if i say to college hospital your supplier is banned from selling the products now cutoffs will those that's publication college hospital knows who it's talking about so there's investigate and the issue is is there potential for coverage jackie why he is saying i wrote this email it's about ted's with a college hospital knows who the sole supplier of alpha tech products are so when college hospital knows who you know is about that's that's the publication and so the opposing counsel argues that the complaint as an alleged defamation libel slander i don't know if it's during the course of the trial a right career so so as the trial prospective economic advantage here we are interference with prospective economic advantage and so so the argument they make is that there was no allegation of  ninety six and ninety seven and in our except records the judge said well this was after the e mail came out and the talk about the relevance of these communications and the just as well i think it is relevant to their charge that basically they used floor annoyed as the instrument to take over the account for access which is their argument maybe that's my interpretation of their argument i was craving to them so even the judge is saying councils having a hard time articulating a case that that does not legit any independently right my point is that the judge was having a hard time understanding what they were trying to articulate but ted ted testified quote i was not banned dixie testified quote i was not banned and then we go to the jury instruction and again the attorney wasn't asking for the right instruction he's asking for a false statement instruction false representation and this is what representation are you talking about and lawyer said the representations that were made by miss white and all those emails i was reading off it doesn't matter what his cause of action is the test is whether or not there's the potential for coverage if you'd said that's defamation and let's amend to conform to the evidence then in this coverage not only is your duty to defend their coverage and duty to defend doesn't turn on whether or not the underlying counsel articulate his cause of action but that's not the test the test is or the facts in the record throughout the course and there are that sure potential for coverage and has a duty to investigate so if the if there's a duty to investigate that means it has to look at its what we're looking at something outside the complaint so i don't  the key here is whether or not there are facts in the case that show potential disparagement that's it is their potential covered claim where there's a scene of the product or business and the e mail  banned it didn't say he's not selling it anymore or you know where the new seller that would be different if that he's banned and banning someone implies that something negative that's happened this cited in their brief to the peerless case where you know in court said well there wasn't damages to support your death you're just defamation argument and i would submit if we're talking about whether or not they had enough to prove damages then they've already lost because there was a potential  you i'd like to make just a couple of points with respect to florida i i think it's important to keep in mind that st of all following it for lauren i did not oppose our two thousand two hundred and two motion at the district court level and i think that's an important factor to keep in mind also for no it's not actually have a defendant in the case it was you know brought in as the real party in interest because it was alleged that florida i should have received the fruits of the partnership between switzer and access so so if even if there is a finding against knowledge as to access i don't think that should apply to florida where that wasn't something that that  that now that there's really any evidence to support that and similarly there is zero evidence in the record there is no testimony responses to discovery anything from cottage hospital saying that when they received an e mail stating that a competitor was was no longer banned from selling a product that they understood that to mean mr switzer and that is it just a clear factor that's required in a defamation claim it's obvious i believe the argument is it's obvious if you have one supplier that supplier is and then we don't know who it is i don't know there but i don't know that there was one supplier i don't know of cottage hospital knew that there was one supplier and saying that someone is is banned from selling a product i don't think that would rise to the level of defamation anyway there was no