secret versal summary judgment interred in favor of happily our ally insurance company is just such a can i just confirm one thing please before you get yours here substance you are not disputing here that ellen only law applies are you i know there was an issue seek reversal of summary judgment in favor entered in favor of our ally in this case presents a single issue of insurance politician and the issue boils down to whether or not payments that lexington in national unions insured mutual insured our ally a company called new prime trucking company whether payments they make in satisfy and satisfaction of their aggregate court order detectible then it would decrease the limits if we determine it putting aside labels now if we determine substantively that it is it detectable that it with then reduced limit under the on in your brief on page twenty one you need to look at it out i can tell you ok you make this statement absent policy language to the con to the contrary to doctor bills or road policy let's track all self insurance pretensions do your field in other words it it seems like what you're arguing is that what you're pointing out is look everyone understands in the insurance industry that deductibles overrode policy  well is that notwithstanding forget what's written here is that kind of the way the world works the way the insurance industry was there's an exception everybody and i think that policy is completely silent and that's actually one of the challenges in this case there's some case law on this doesn't come about but it typically the case the policies in those cases will specify payments do or do not the insurer defends it if suits filed meaning it hires defense counsel it pays defense counsel it controls defense strategy when settlement time comes if settlement comes the insurer would pay the claimant and seek reimbursement from the insured but if you look at the our ally policy specifically in the e c b endorsement and the payment of cost provision as well and in conjunction all of these chooses defense strategy pays for its lawyers but isn't that just a reflection here of what they agreed to contract isn't that just a reflection that they wanted this to be different and they wanted the erodes the policy limits could they i would say it's a self insured retention that erodes a policy that specifically in other words there would be that's a situation where you would have language contrary to the typically ending of the so that contemplate that our arms are that new prime can satisfy this two and a half one million dollars a cd by paying one claim ok that's in the payment of costs provision but more importantly it's in the aggregate court or under the district court's analysis and our allies reading that is an impossibility that cannot happen because according to our ally and the district court the most that new prime could ever pay on one dollar claim is two million dollars  we've got a fair amount of evidence in the record concerning the negotiations that led up to both the our ally policy and the lexington and national union  policies is there any evidence from before this policy was issued indicating that your clients thought that the lexington coverage would kick in only a total of seven and a half one million in liability on the  let me try to get ok certainly is there any evidence from before this policy was issued that your clients either one of them thought that this aggregate quarter deductible above five million a liability right that's what it says repeatedly it says that on the declarations and schedule underlying trends that's a pretty good place to look right well there's a couple points i'd like to make about that and the st is that generally speaking the declaration doesn't control the coverage under the policy have to look at the actual policy itself so even if even if that's reflected on the declarations or the schedule of underlying insurance that would not be dispositive and there's actually the klein case the kind the gulf insurance  circuit they've actually they made a point where they are facing a similar issue is this there is actually under that scheme that our ally in new prime have there is no fixed amount that would apply in all circumstances it's not always going to be access because of the cd there's a certain amount of underlying insurance self insurance for one claim but then later if you lower the last right but i don't i don't see any indication anywhere here that your clients cared or had any interest in how new prime and our ally between them got up the coverage were or with anybody else got up to five million dollars in payments oakley i am not the so if that's the case and given the extrinsic evidence from the negotiations and the responses to these claims which apart from as mertz as one misunderstanding who apparently retracted within a couple of hours on april th two thousand and fifteen even with your textual arguments and even if there's room for debate you know we've got people saying oh this policy doesn't look as clear as we thought it was  give a date it's mid december i believe it's shortly it is of cost provision and it didn't mention that so in the actual case he endorsed which somewhat undercuts our allies argument in their apple these are essentially the payment of cost provisions blass important in other parts of the policy and so you don't lexington a national union's interpretation here is really the only one that gives a fact to the our ally policy as a whole the district court said that well it's impossible for them to to pay the  don't decide the case based upon a label right i understand that but whether it would have been a lot easier to just say look the way the self insurance retention is working years it's kind of working in two layers to try and choose two buckets policy when clearly they knew what an essay or less and they were calling the three million dollars an essay are it's funny you raise it your honor because actually the definition of self insured retention in the policy easily applies to limits policy language to the contrary and then the policy language that is to the contrary employs the word to dr bill that's but the deductible again you're on it is a label and you have to look at how the policy works as a whole wrote the policy limits is self insured attentions do not that's not only a quotation out of a i g s brief though that's also the rule that was applied by the district court and with good reason there's a lot of case law that the district court cited recognizing that that is an is do all that i know you can bring in a whole wheel barrel of treatises and say that in pile up a whole bunch of cases and all that is that because does that reflect an understanding that comes out of the language in policies like in other words policies describe how deductibles work and and people write treatises that mirror that understanding or do you say no no no it's not because the doctor bills or policies explain to  insured retention does not but many policies are silent and then you just go back to the industry understanding and there's evidence in the record of they don't wish the next odd to me is because the this policy takes pains to defin every even defines the word you re right but it's silent on deductible and i think that's because it's such a well understood and accepted industry principle and as between new prime and our ally and new primes broker cunningham and butler they all understood what had to talk to police and how it works they all understood what a self insured retention is and how it works and the affidavits from our allies underwriter and from new primes insurance manager and from new primes broker testified of the fact that they had an understanding his new kind never contested his new prime ever contested that to the contest it in the underlying litigation i know here there's evidence that was suppose at the summary judgment but in the underlying state court litigation they never contested it and in fact there's evidence in the record that new problems brokers on behalf of new prime went to a g and said we can never have this happen again we're in a mediation and a i g takes a position that they attach excess of seven million five hundred thousand we need to get this clarified now so that it doesn't happen again as it did at the time understand the word aggregate i understand the word deductible i don't understand the word corridor in the phrase aggregate corridor deductible that's that's a very good point and that gets to one of the points that a i g tries to make that deductible zur not compatible with or there are anathema to an excess policy that's simply not true there is no precedent anywhere says you have that seldom and so my question yes the cord or deductible talks about once you're above down one year in the last quarter or hear above the three million dollars self insured retention now you have the next layer a loss corridor or where that the dr bill applies so that's what a quarter really means it's a political to an excess logical level yes why they use cord or i'm not sure but that's what is being indicated there that we have above the primary policy where we're going to have a deductible  obligation and there's no reason why you can't have a deductible a political to an excess policy it's just a matter of risk transfer that's for the parties to decide how they'd like to split up that five million dollars level of careen with what the district court found that the language about one or more losses which would be actually impossible to satisfy here the one last that that's boilerplate language do you have a different argument for that language boilerplate i think is is a fair characterization of the language by the time of the policy it issue here that language was drafted in two thousand and eleven when new prime st became insured with our ally drafted by the parties and but by two thousand and fourteen when this policy went into effect it had been in place for several years and it was really just boil on a single claim if that the deductibles limited to two million dollars per currents which it is so the language should have been changed from one or more claims to two or more claims is a i g's argument that may be true but that doesn't prove what the suggesting that therefore the deductible does not erode that language that one or more claims language the purpose of it was simply to say new prime you're responsible for costs until you have exhausted the aggregate court order dr bill they said on one of your claims but that's the purpose of it your response you new prime responsible for costs not our ally until the deductibles exhausted the purpose of that language was not to calculate the minimum number of losses that it takes to exhaust the deductible that effort was really just an ancillary point in that language so the fact that they may have neglected to change the word one to two can't overcome the fact that this is a deductible that the word deductible was used separately from the term self and ripped insured retention in the policy the parties understood what they those terms meant and they meant what they said and i think what's particularly right at that level i think there's no question that it is characterized that way and there's some distinction in the tax policy but it's also true unwritten silent term in a policy like because the whole world understands it i don't think it's silent that the word deductible was in the policy that means it's deducted from the limit i think that's what that word mea the term deductible is not defined but the policy says in the ensuring agreement there's a two million dollars aggregate limit urt to two million dollars per current limit excess of the self insured attention not i would think not to know why would an insurance company leave it to chance like that i wouldn't say book policyholder here's the way this works you pay the st five hundred and then your policy kicks in but that hundred is netted against the policy limit i just expect to see a sentence like that something perhaps in a stock consumer policy like your mentioning your hypothetical with a auto policy or something like that you might expect to see that language in the policy here however we have two sophisticated commercial entities drafting a policy together they understood as the affidavits testified to what the word deductible meant they didn't need to and in two thousand and seven when the relationship started new prime wanted the right to control its own defense one of its own money so they drafted the defense indorsement as your on a reference to say that if our ally is no potential responsibility for a loss new prime controls settlement and i g and so the only way our ally can have no potential responsibility for a prime still had to pay two million on that occurrence under dr bill payments those reduce the two million dollars limit to zero because there deducted from the limit and therefore our ally had no potential responsibility for that cl for the next claim in the policy period there's only five hundred thousand dollars left in the aggregate corder deductible to reduce the two million dollars limit to one point five million dollars on that nd claim our ally does have potential responsibility controls settlement itself new prime lost control of that nd settlement because our ally a potential responsibility a i g cannot square its position with potential responsibility language other than to rewrite it to say well that's just practical it's protect you know reasonably likely to have exposure but the parties didn't want a subjective standard here that's why they said potential responsibility they did not say new prime shall control settlement when it's not reasonably likely that our ally will have exposure so you can't square their position with the policy well that renders the rd paragraph that we're talking about with that language potential responsibility a loser and if you go back and look at the basic form of section two b it's called defense that therefore you know under a legal principle that endorsement should trump the policy basic form that rd paragraph is more important and should trump anything in that st paragraph and the rd paragraph is where you find the potential of practical matter in the in this horrible tragedy in new mexico which this couple was given you've got multiple layers of insurance who's in control of settling the account in that case our ally had no control over a new prime head control within the five million dollars layer but when the settlement goes above that it  then the terms of the lexington and national union policies control and you have to look at those policies to see who has control over making an offer of say eight million dollars or ten million dollars  attention st of all i think as you noted you know the fact that we don't have a duty to defend isn't because the deductible is a self insured retention it's because we're an excess indemnity carrier above an undisputed three million dollars per current self insured retention no excess indemnity carrier whether they have a deductible or not has a duty to defend when there's a three million dollars self insured retention below it we talked about  say citations omitted they've all made it a sentence by the court and the sentence which is highlighted in our brief on our inner opposition of page sixteen as a swallow's once a self insured  our allies arguments you know i think it's important that this court this court's repeatedly stated that you know extrinsic evidence is certainly missing the true and ambiguous con but there is a strong policy goal like to point out that with respect to the merits that you know the the key policy or the key provisions of the our life policy with respect to how the