lee this case involves a general question of insurance coverage and insurance coverage law under a standard commercial general liability insurance policy of which the operative coverage for is a standardize commercial general liability coverage for and it was issued by to the apple t v association of apartment owners of the mornings inc and all refer to the  predicate question that it's based on my curiosity somebody who used to do insurance coverage cases in probably not covered by the record there was an arbitration here yes did the insurance defended it's a little bit speculative but to answer you directly i think the fairest i can answer that is it's very possible there may have been a defense on a reservation rights the reason why i say that is there were two type of basic claims made in the arbitration against the association one was a breach of contract claim based on the governing documents of the association to the unit owners who were claiming against them the other type of claims were characterized by the arbitrator as tort based type claims including a negligent infliction of emotional distress type claim and some other tort type claims so underlying claim was seem to me property damage there's really well that's true i mean in terms of the facts that another contract to do so but that's right so as a practical matter what we may be fighting about here is that this way you're going to pay more than you want to bend the law or you want to employ but to be very clear the attorneys fees we're talking about here as to whether there is coverage of the policy reading a policy language and so tell me why you think the policy right excludes attorneys fees when i look at the language it's this because of any obligations that some incurs because of property damage not just any property damage obligations with obligations because why isn't that broad enough to include fees because our position is simply this the operative portion of the policy that we're all looking at is the ensuring agreement of this standard form coverage for and the ensuring agreement the phrase that your honor just mentioned in essence sort of cherry picks the breath of the entirety of the relevant portions of the churn agreement because you share many sure in agreement reasons follows we will pay those sons that the insured becomes legally obligated to pay as damages because of court bodily injury so that's a asked the question you did come to this this insurance doesn't apply to property damage to the property damage that was incurred in this case generally speaking that's true but the phrase i wanted to alert your honour's to which does very much apply to the ensuring agreement is caused by an occurrence so you have to read that in its entirety as opposed to cherry picking out the term damages for example or damages because of it all goes together and you have to read that in because of property damage it's clear that the attorney's fees are here because of the property because of the property damage the question is whether they qualify as damages because of property damage actually we dispute that they were because of the property damage ok in your view they were all awarded because of what because of the breach of contract the association lost on the breach of contract claim in the arbitrator very specifically in the award relating to the award of the claimants attorney's fees against the association preface the sentence by as the prevailing parties the award of attorney's fees are granted that phrase ology if you will that phrase to me keys in the application even though the arbitrator wasn't as specific of the what the revised statutes six zero seven dash fourteen which is or something that statute that allows either bodily injury or property damage as those terms are specifically defined policy and moreover even if you were to to allow that the seas might be damages because of property damage it's not damages because of property damage to which the insurance applies is caused by an occurrence and that's because if i can jump to that point that's because as i mentioned the arbitrator very specifically awarded the claimants damages and based on their breach of contract tell me tell me i'm looking at your arbitrators award yes tell me where i can find that he very specifically did it on the basis of which god if i may go retrieve my sure breach if the arbitrator awarded damages based only on to breach of contract claims it would seem they're not nothing's covered well i would argue i would argue that that probably is true but given the fact that you paid the judgment which could only be covered by the insurance policy if the eighty thousand dollars judgment was because of property damage how can we then conclude that the attorney's fees were not because of property  not because if they were really awarded actually as a taxation of you know we understand that when you don't have you're not waiving that argument i understand that your your views attorney's fees are never damages but you have different argument here said these are not proper these are not caused because of property damage there because of breach of contract property damage caused by an occurrence ok so if a big cause of breach of contract is what's your sense right but then you wouldn't have to if everything that the arbitrator says that you are now relying on goes to also goes to his basic awarded damages to well and if i can mention put it this way i would concede that that is a strong argument that perhaps if the insurance company had followed sort of vice probably shouldn't have needed to pay for that i guess i guess the question is is is there something going to stop all here you're paying them you're paying is eight thousand dollars because they're covered by the policy but you're saying all these attorneys fees are not covered because they didn't arise out of property damage even though we've paid for the property damage and i don't think so because from the  writings that i'm aware of the insurance company and relating to the association association as to what they were going to or what not what they were not going to pay had adequately reserved rights under the policy so i don't believe the stop argument would come into play because the insurance company did a reserve right specifically with respect to the attorneys fees and then one covers for the attorneys you know if this were a pure question of whether or not under the policy your company would be obliged to pay for the repair from the water damage and the repair to the roof on the line i and i read this and i said we will pay for property damage i would rule against you i mean this seems to me clearly covered by the policy or at the best i can say for you if not clearly covered by the policy the only is so slight that i would interpret term of the policy against your argument well if and when you say i think  absolutely obliged to pay the eight thousand dollars if if the claimants had sued with a tort claim against the association so let's say and see factually this is did not does not bear out the association was not the one who did the repairs and sense of  were not the contractors physically to the repairs i believe that's why the claimants brought those particular breach of contract claims against association because they argue the association had a contractual duty to make whatever ma i want to reserve at least a couple of minutes for a possible rebuttal ok and i pause you but if you course if you have other questions at this point i'd be happy to try to well why don't we have the other side and we'll make sure you have a chance to respond thank you very much n the briefings from what i've heard i agree with the court that is there these five there's one sentence we will pay those sums that the insured becomes legally obligated to pay that's not it issue there are some some there legally obligated to pay and there's as damages that's at issue and then because of property damage to which this insurance applies and i respectfully submit that they they paid this property damage but it's not just that they paid the property damage it's all the things that we put in our briefing which is you know arse concise statement of facts so we stated  that they paid it and the wording wording for that is that they are again knowledge coverage  look we're not going to fight about these two things even though we think we shouldn't have to pay and it will pay him out of the goodness of our art but as to the third we won't pay it i'm not sure that's a waiver of any kind is it i  mean they're not saying you're clearly covered for these two things don't worry about it they say after carefully reviewing it will reimburse them pay it and they go on to explain why they want to pay the attorneys fees may be  inconsistent position but it's not they're not saying this is covered i think they're not the actual email says it's a coverage decision that's in that i was able to speak with right so with respect to marriage this is a sorry with respect to the special damages tourney speeds and costs will pay the special damages and the costs but we won't pay the attorneys fees that's what they said that's what they said was their coverage decision yes that was their coverage decision now so you're saying that must mean that the first ones were that everything is covered because then i have more ok go that was the first thing that they said and then we put that in our motion for summary judgment and in our concise statement of facts we characterized it as acknowledging coverage for the special damages and costs awarded in the underlying arbitration they did not contradict that as they are required to under the rules regarding concise we covered those because those arose out of property damage but given the arbitrators award it's clear that the attorney's fees arose out of breach of contract and that's why we didn't cover them so could you respond  well yes because they covered them and we our position it wasn't just in this concise statement we said it in our memorandum in support we said it in our reply and it oral argument and the motion and the washington below motion for some cross motions for summary judgment the judge specifically said but here you're dealing with a cover damages right and the answer was yes that's right them so that's why it's not just the e mail now you know i maybe we're missing each other and i just i want to i'm not sure it's a winning argument i just want to hear your responses to your colleague's argument he says look maybe those  recovered maybe the special damages were covered ok but when i look when we go back and parse the arbitrators record the attorneys fees were awarded because of breach of contract not because of property damage that's his argument and so i want to hear your response to that the question is whether property damage to which this insurance applies and then they're taking that through all the insurance only applies to property damage caused by an inch and occurrence and there's no finding that there was an occurrence and i guess that's what he's saying there's no finding that there wasn't  curry i think what he's saying and i don't he makes the argument better than i but let me let me try to reconstruct it is that you made the arbitrator root for you on your contract claim or for the plaintiff on this contract cla sounds like he then and they throw this out the burlington case decided by this court in five thousand and four which held that in a construction contract if they that's what he's saying so therefore if it's a breach of contract claim it's not covered now if that's what they had said even in their memorandum in opposition to us or in their motion for summary judgment we would have dealt with that that would have been an entirely different case so you know i understand you're arguing waiver and it may well have been waived i mean it's not fair to fair enough but i also want to know what you really let's assume that we were to take up this issue what's your response to your calling well first of all other than that was waived yes first of all he said that you can tell it refers to six zero seven fourteen which is the whole you buy statutes on a subsidy claims but as we state we didn't really think they would make a big deal of this we stated in footnote but it is in there in our memorandum and in our answering brief six zero seven fourteen applies to us contract claims but only up to twenty five percent of the amount awarded so if it was due if it was awarded personally just six zero seven fourteen it would have been two thousand no one thousand five hundred a quarter of six thousand  they're characterizing as contract claims so as we state no this was actually a fear ward under our condominium statutes which actually provide for the duty to maintain and repair elements and provide that if the association doesn't it can be sued it and action can be brought and if thought of as i was thinking that we would have dealt with it we would have distinguished burlington this is not the reason this is a contract claim isn't condominium law you know way you have this statute and the all this out and so the plan of such arnie's often bring bring it as a breach of the bylaws rather than by the statute the record wasn't clear to me what they did or why said i'm not saying that was what it was but it sounded like that to me but that changes everything changes everything if they had said no this is a contract would have said no this is a condo  roof and then that we're paying this amount in looks to me there's no way to pay this amount is for damage to the owner to the owner's property rather than damage to pay to repair that on those records and that's how and that's why really arbitrators work right well i don't see anything on the policy that tells me that something either is or is not property damage depending upon the source of the obligation to pay for the property damage is property damage whether it's resulting from a contractual obligation not not to protect the property whether resulting from a statute resulting from a to obligation to refrain from damaging the property no way a property damage and there's only one nation to have refrained from damaging the property i see nothing in the policy that tells me that the source of the obligation to pay the damage changes the obligation insurer now that's probably an argument addressed to you that you may wish to address and rebuttal yet may well come out of a contractual obligation but the result yes property damage and i don't see anything in the policy unless i'm going to be informed otherwise that tells me that his property damage within the meaning of the policy well i agree with you completely your honor but i'm one of those who would have if they had taken a different position where of and the alternatives sa perhaps we should reconsider or we should distinguish burlington because burlington really focused on a duty that was only in a contract right there that's my question can you have gets covered by insurance i think the insurance and the insurance policy doesn't distinguish between contractual and tort claims whether or not to be contractual claims are not covered by the insurance policy that's what burlington holds a lot of other courts hold differently or distinguish it and that's what i would argue with if they had made all these claims i'm not sure it was you know in his articulate fashion is this  morning when i'm reading the transcript of the argument with a district court shot does it say there you know sometimes fees result from property damage and sometimes it results from contract damages and that's the doesn't the fairly implicate this issue not burlington no because if they thought burlington had applied they would have said we are going to deny this claim because it arises out of a contract then we would have had the opportunity to address that totally different case for their own purposes they decided to say that this was a covered kla and they made that representation to the lower court they didn't it was never gotten into it when i mean all of these question we ask you a question about your position i think i know what your answer is but i want to be sure let's assume that the arbitrator said this is a covered claim there's property damage here i'm paying a thousand over fourteen thousand dollars where but all the fees that were if he said that it's it's a breach of contract you know because well first of all under the kind of medium statute here what are their fees doesn't say anything about contract i mean it gives a duty a duty association and it says you shall maintain and repair and if you don't your suit for it you're going to have to pay attorney's fees it doesn't say anything about contract or tort although all this statute makes it because a property damage to which this insurance applies they answered that they said it was property damage to which the insurance applies they're now trying to say it wasn't property damage as to which insurance applies but they didn't tell that to the court below and they didn't tell that to us man over time unless someone else from the benches for the questions if you'd like to give us a quick little summary were ok and then as damages i would just like to say we  fully briefed if damages has two different explanations and we they gave one definition we gave another in our answering brief always clear that if it could go either way it goes for coverage and we have cases where if they had read the policy if they had changed for example this allows costs if they had said costs exclusive of attorneys fees we get them ok all right question of a stop a waiver that issue i wanted to direct the court that in terms of the order granting summary judgment and the ultimately the judgment that you hold from waiver it either waiver or stop will was not a basis for the ruling my memory and i'm just i would say that i'm going by memory my memory is that during the oral arguments we've heard a stoppel i don't believe were addressed but even if they were as i point out the district judge did not rely in terms of ordering a lien against us based on we were stopped and i don't believe those apply the second point i want to quickly bring up is and partially in answer to the point you were making just fletcher and it was been mentioned about the burlington case so i understand the temptation to describe it that way to say well that if there was some property damage because the insuring agreement refers to coverage for property damage it would be covered the governor if i could describe  way almost like a governor to a vehicle or a motorcycle is the term cause or the phrase caused by an occurrence and that's where the burlington case comes in because and how is occurrence defined in this policy the standard definitions are basically is defined as an accident quite simply and in the burlington case there it was a construction defecates so there were a combination of contract breach of contract type claims as well as contract  such as negligent mr prince misrepresentation it cetera as it related to the construction contract and i want to point out because this court specifically noted that in the claims asserted by the plaintiff in burlington against these contractors is size alleging generally breach of the construction contra there were allegations specifically that oceanic the primary contractor improperly designed or constructed the foundation of the residen which caused earth movement and resulted in physical and structural damage to both the residence and the retaining walls so minimally there was at least allegations i don't know what kind of evidence ultimately came out for that summary judgment but there were specific allegations of quote unquote property damage nevertheless given the nature of the claims that were being asserted and because of the importance of this definition of occurrence which serves as kind of a gov if you will to the rest of the insuring agreement this court ultimately ruled that those claims were not covered because they did not constitute an occurrence under the policy even though there were allegations of property damage so that was a point i want to make so unless the court has any other questions i want to thank the panel very much for allowing this chance to argue thank you both sides were very helpful arguments association apartment owners the moorings and versus don