there is quote no evidence that duane khiam the builder in this case intended the property damage that resulted from the beetle infestation this case involves a infestation of powder posed beetles to a log home and these beetles are particularly harmful because they have the ability to continually reinvest the logs over and over and they will continue to cause aesthetic and structural problem damage until the home is  compromised in northwind brief in support of plaintiffs motion for summary judgment as document thirty three in the district court in admitted that there was no evidence that came intended these beetles to infest this home i make sense he actually didn't know about the beatles until years later because north and policy started the scope of coverage under northants policy is defined by the term an occurrence and an occurrence is defined in the policy as done might pose a question for you course just to try to see if i can encourage you to spend some time on the issue that's bothering me i think that they've got a pretty good argument here that there's an occurrence but the question in my mind is whether the the various in the policy exclude coverage and i know the district court didn't address that and i thought your brief said we shouldn't look at it because this court didn't rule on it but our it was a really well established case on the exclusions i believe that is clear our argument is that this court should exercise discretion not to because there is no discussion from the district court the court disagreed didn't point to any exclusions that it thought applied the court simply said in a footnote that one of these exclusions likely applies and so there isn't any consideration by the court for this court to review and i would direct the court's attention to a couple of cases that we cited  but that were brief below but that the nicer ordinarily will not do so unless it believes for some reason that it is judicially efficient for the court to consider those issues i would assert that in this case there are numerous exclusions and enough sort of complexities that remain in the case that it would be judicially inefficient to have this court reach all of those issues that were not decided by the district court and it would be much better for the case to be simply  on the grounds that there was no sorry there was an occurrence here because the conduct was accidental and remand for consideration of those remaining issues and let the district court sort it out below thank you do want to take the time to talk about some of these well that's a that's a sufficient answer to my question and i don't want to get you off your planned argument of occurrence because  could be two two others who see that one differently than i had understood it i'm happy to take it out of order and i want to make sure they reach the exclusions because i recognize that some of them are a little bit tricky and i to talk through them and so i might actually just do that in order and talk about the solutions and then if i have time i'll come back and address the currency issues so we raised our arguments about every exclusion that was exclusion j five coverage for property damage only to that particular part of real property on which the contractor is working directly or indirectly on your behalf or performing operations that arises out of those operations it's a little bit confusing they were did but we said the newman versus scottsdale case for the proposition that that phrase arises out of is ambiguous and must be construed in favor of  coverage if at all possible we maintain that doesn't apply because it's limited to that particular part of the real property on which the contract was working here the beatles were in the logs before the home was ever built so it wasn't any work that the contractor doing time actually did to the home when it was being built that caused the property damage and we also maintain the j five doesn't apply for the simple reason that would be work of the contractor if the contractor made a mission to treat the logs with the kind of insecticide that would get rid of the yes your honor although those are not the facts that we have here here the contractor did not perform any work in treating the logs and he stripped and peeled and not just the logs and prepared them  the log home but he did not end up treating them and if you're referring to the last exclusions exclusion l it's the your work exclusion i don't believe that that applies to work not performed so yes it would apply if you actually affirmatively did something did some work but yes i think what i was wondering is whether in a mission to do work it is work it doesn't you know and i don't believe that it does because  the way the policy is worded is it says property damage bars coverage for property damage to your work arising out of it and again that ambiguous arising out of it language or any part of it included in the products completed operations hazard ok thank you your work is defined as worker operations performed by you on your behalf and and that's important it's a conjunctive test so th your definition is both work performed by the contractor and materials parts or equipment furnished in connection with such work northwind would have the court just focus on the word materials and say that well the damages to the logs and so this exclusion applies but when you read the conjunctive definition of your work and the actual exclusion itself it's clear that it only bars property damage to work that the contractor actually performed and there's no language in there that would suggest that it would apply to work that wasn't performed or some omission that happened during the course of the building project if thank you so your view wouldn't apply  use the logs in his work he did purchase the logs but that was not the cause of the property damage or the cause of the property damage was the beetle infestation and because he didn't put the beatles in that caused the damage it doesn't make sense to interpret this exclusion as as applying and in fact until this case happened i had never heard of anyone treating the logs and so for each and every home that he built up until this one he had not treated logs and he had purchased the logs in the same actions without any property damage occurring and so i think that highlights the fact that it wasn't anything that he did specifically to this home it was in his work that caused the property damage that gave rise to an occurrence that bring us here today in in exclusion that has the phrase products completed operations hazard which has its own definition correct then how does that read into the exclusion of products completed operations has or just has to do with the timing of when an exclusion applies because it's exclusion l is included in the products complete operations hazard that means that it applies one to the project has been completed and leave so exclusion l would  apply if its language applied to the fact whereas exclusion j six would not be so exclusion day six specifically says that it does not apply to property damage included in the products completed operations hazard so as a result six would only apply to work that has not been completed or abandoned and since this home was completed and sold and the damage was discovered for a few years six would not apply but if if its terms did ellwood based on the good many cases that support your reading of exclusion we cited the newman vs scottsdale case for the phrase that arises out of being ambiguous but i don't have any in your view because in your view we're dealing with an omission right then and therefore the arising out of doesn't relate to his work his actual that's correct your construction that he did and that was the focus of the district court as well as that the court focused on the failure to treat the logs and the district court read some intentionality into that failure to treat the logs we don't think that the record supports the district court's finding that he somehow made an intentional business decision not to treat the logs but that is what's at issue here is the fact that doing time didn't treat the logs and should have which was the basis for the negligence case before the district court before the district where the question was whether or not he had violated the standard of care in the industry by countries a lot of us all by the way if you want to reserve back and talk about the occurrence and what the argument here is and and with respect to the previous exclusions j five the real property and the work those were really raised because the bugs were eating into the logs at the time that they were installed in case there was an argument that that is when the damage occurred it just wasn't found somewhere here have not made that argument and they have conceded that what we're talking about is the your work exclusion because the project was completed and so the damages occurred after the products were completed and what they have argued is that somehow this conjunctive with worker operations performed by you and materials parts or equipment somehow makes their case for them when in fact what we have is we have a contractor who was doing work in operations he was building a log home and he bought these logs any notch them he stripped them he prepared them to build into a wall and the materials in parts these logs were infected with these beetles it is his work and his materials and his pride his product now it's not the product in the in the products exclusion although it could be but here what we're talking about is his work he got these logs he incorporated it into his building and those materials were defective now whether he knew those materials were defective really isn't the point whether he it was an admission of his work there's no you can't the the exclusion itself is clear that it's you or a book arising out of it or any part of it included in the project completed operations and we've got to keep in mind here that this was a admitted judgment or a mid liability based upon the contract that was filed in the underlying state district court and in that allegation the allegation was the standard of care was to treat these logs and he failed in that standard of care that is his work he made whether it was the right decision an intentional decision will talk about that or negligent decision there was a decision or a omission there that he failed to do his work it's no different then if a contractor was supplying supposed to put a particular birth into this structural steel and he omitted that bolt is that not his work that is his work and here the contractor didn't treat these logs that is his work and that clear in language of the exclusion is that property damage to your work arising out of it or any part of it and your work means operations performed and materials parts and equipment how do you answer the appellant's argument that although we have the power to make such a ruling firming based on exclusion it would be a better procedure in our discretion to send that back to the district court thank you your honor as as counsel noted the case is talking about the efficient its use of the court's time and here these exclusions were all argued to the district court and the district court while it didn't give us a several pages of his thought process into footnotes in the two different opinions he said even if there was an occurrence these exclusions the business risks are going to exclude this work here and so it has been fully the record has been fully developed before this court and the district court did look at it and made a decision but didn't expound on why he decided that and the constant constant no good case as well as golf usa side in our brief says that this court may address principal arguments raised below but not explicitly addressed and judge christiansen didn't explicitly address those but he did in that footnote twice and said that these exclusions would apply and of course graf usa says you may affirm summary judgment on alternative grounds that the record supports and that's why it's important that it was fully briefed under in the district court so that you have that materials and it's a did novo review and you can take a look at those exclusions and you can make a determination here because to send it back and to have judge christian and say yeah i said it was excluded under your work exclusion and then we're back up here again for you to decide that same issue so we think the efficient way and this court's it's clear that the ninth circuit has said that this court has the ability to do that so  exclusion and should there be any question about whether or not this damage occurred while this log home was being constructed then you would take a look  at exclusion j six and exclusion j five which involves real property if you want to call this house real property after it's completed but it's clear that the  so you it's only relevant to the extent that there would have been an argument by mr maule roy that this damage occurred while the house was being built and it really it they have not taken that position i think everybody has agreed that the house was completed and the damage occurred after the house is completed so i think exclusion l is the proper our primary exclusion that we would want the court to review ok removed those are not kinds were they no your honor they are not however you have to look at what the underlying judgment was for the underlying judgement was fo stripping the logs and repairing the logs now there was some property that's in the way that they could not get to in to the logs unless they remove that property but that property was not damaged what was damaged and what was clear from the underlying judgement is only the logs that he constructed and there's about two hundred eight thousand dollars which does include moving that stuff out of the way but it's the repair only repair to log and because it's only the repairs to the to the log that's the property damage that we're talking about here and that's the property that was his work so what i'd also like to address a little bit is the idea of the post summary judgment decision deposition of mr kahn time in his testimony with respect to well i don't do it that way i've never done it that way that's not a standard of care that i'm aware of i think it's important for this court to understand that there was a confession of liability and that confession liability didn't have any factual findings but it was a confession of liability of the complaint that was filed against mr khan and that complaint allege that the standard of care was to treat logs for insects and that he did not do so this is relevant also for our argument on occurrence argument here is that there are stopped from coming in and talking about a deposition  really for other parts of the case and we're still left after the district court granted the summary judgment that when mr khan and if you look at his page eighty five of his deposition in the record it's really not that clear what he's saying with respect to whether or not he didn't do this is a part of the business as a choice but what he but certainly he said i've never done it never seen it done but that's not what the confession was and just as an insurance company is a stock from arguing a related gaining facts if they didn't defend a case when they're trying to get coverage the plaintiff or the insured in this case can't come in or facts that were determined in that underlying judgment and that's important with respect to the current because what those facts are is a there was a duty or the standard of care and i didn't do the standard care even though i knew about it that's the allegation and so what we're looking at with respect to the fisher decision he did that with the intent of causing the damage he that that's not that's not what i understand and  absolutely the intent comes in the choice to not treat the intent comes in with respect and so when counsel argues that we stated he didn't intend these beetles to destroy this house that's true the intent is the choice to not treat the logs that's the intentional act it's felty workmanship that's it's a decision i'm not going to do this and so what fisher then says is what are the damages even though you make an intentional choice is the consequences of that intentional choice is it not forseeable and here if you if the standard of care is to treat the logs to avoid insects doing exactly what they did in this case and you chose not to do that then what that results is a chance that your logs are going to be infected with insects and so it's what the montana supreme court has done is set up  test based on the expectation of damages and the objective test of the expected damages now they want to argue throughout their brief that its intent it was  intentional type damages such as hitting someone you know those are things that you know you break their job when you hit someone that's going to happen but here it is the expected damages and what is a reasonable expectation of these upon when you read the complaint that was filed in the underlying case and the confession of judgment there aren't any factual issues out of that they have tried to say that well it was negligence some sort of negligent failure to do that but they're they're trying to make that argument with the deposition that was taken after that decision was determined and i don't think that that is a fact issue because when you read that complaint and when that they say you violated the standard of care you knew what the standard care was and you didn't tell us what standard of care and you misrepresented this that you did it then that is sufficient for the district court in this case to determine that that was an intentional act and then the next step is what is the consequences of that intentional act and just like in the blair decision where a guy dug a gravel pit and the court said but if you dig a gravel pit your neighbors are going to be upset if you don't treat logs for insects then when the logs get insects that is an expected result so we class i'd like to start off by addressing the point that judge fischer raised about the damages here and i just want to point out that the damages clearly include costs of remediation such as removing if each fixtures it set apart and treat the logs and put it back together and removing the fixtures was a part of the treatment process and so that it's all part of the same same damages as a like to briefly address the issue that you raised about whether or not there's a tribal issue fact to have we also don't believe there's a tribal issue of fact but from my perspective that's because northland has conceded that there is no evidence in the record that actually intended the harm here and because the fisher case set up a two part test and that under that second part of the test if the damages were not expected or intended from the standpoint of the insured and there's no coverage they've essentially already conceded that factual issues so on as have the two of you mediated in the district court or mediated up in our court through our facilities and is there any chance of course i don't know if my colleagues would have any interest in this but if both of you thought you could use our mediation facility of course you know we can do that  yes your honor we did mediate the case and tried to settle it before this argument and we were not able to settle the case right ok thanks ben we appreciate your arguments and i particularly