between outcomes it's a case of extremes the insurance company that i represent essentially takes the following position that it's thought judicial guidance concerning it filed a notice of chance away sion with the public utilities commission well i think we know what the facts are here and i think procedurally we know what the courts have done but i mean the california supreme court held in the converse just spewed here that your policy was an effect in one thousand nine hundred nine and it didn't qualify that hold in anyway so i'm just wondering why is that not dispositive and then i know that you make your surety arguments but how can you get around the duty to settle did to wrestle with you're in the first place when you look at what the california supreme court held in the friends of america first case what it held was that by virtue of the endorsement and there's also an intermediate case called smith c h m i t t that was decided i believe in one nine hundred ninety one ten years after sampson it also deals with a bond much pretty close to what the kind of obligation were dealing with here which is essentially a performance bond type of obligation to the state and we decided when sampson it was before the court this mansion opinion is silent with respect to the impact all obviously i hate the sampson case speak for all for she since you pointed out but i think that the truth of the matter is sampson didn't consider this issue nobody argued this issue cates and schmidt hadn't been decided most were in their shoes but it just doesn't deal with with the issue that that is now before the court i would submit which is what is the effect of this reimbursement obligation and the not i gree not in this context but i think that the the concept of a couple things number one this is liability insurance this is not  not getting any protection that's true but what sampson says the insured is entitled to the rights into the protection that come with a policy of insurance that's what sampson says and  is clear under the federal m c s ninety cases there's no duty to defend the honor that endorsement it's equally clear that under the california p c endorsement starting with kennedy and it's sampson recognized there's a duty to defend it because there's a duty to defend there's a duty to settle now it may be that in fact the transamerica would have been successful would have gotten its money back and in fact if transamerica had availed itself of either the provision in the endorsement or the rule that johanson against cal state auto sets out which is pay your money with a reservation of rights litigate with the insured here they didn't even have to do that they could have simply paid the money and sought reimbursement from tab but because they did not tab was in a position where it was unable to obtain releases from i just i think that that by looking at the principles of bad faith by the principles insurance laws of developed in california looking at kate's which is the case of counsel cited on the surety reimbursement sort of issue case and so on the argument is this by issuing the policy of insurance to which attach the endorsement transamerica undertook certain obligations to its insured those insured those obligations under california law dual purpose for the motor carrier act right the secondary purpose be protecting the motor carrier from ruinous liability right is that but you don't find any of that in the legislative history of the prior case law do you it's not right is this child was going to be on the hook for the six hundred thousand dollars true now whether to have had that money or didn't have the money the fact is they were entitled to have transamerica come in and put up at that point in time when the demand was made when ted was in a position to obtain a release of liability from all of these pointers who had claims for in excess of that six hundred thousand dollars in essence they were entitled to a loan of that six hundred thousand dollars right then and there because they are insured or even though their insurer was entitled to recover that money back did not honor its obligation to not make the payment been in a position where he can't settle the case anymore for that six hundred thousand dollars now it's facing judgments that ultimately ended up being in excess of one million dollars so it's a very significant in court doesn't make the endorsement stand alone incorporation of the provisions of the horsemen into the policy converted it from a one year term policy to a policy that remained continuously in effect until cancelled what are you after all cases make them stand alone but the california supreme court incorporated it and so it's not standalone i believe so and the reason i say that is that when you look at the bobeck case which has arisen no duty to defend under the m p s ninety that would be inconsistent with a finding that in fact all the endorsement was part of the policy and all the other policy obligations were incorporated into it sampson on the other hand says oh yes it's the whole thing the whole policy it's the normal party's ability to enjoy the benefits of the contract now the benefits of this contract included the payment of that six hundred thousand dollars on behalf of tab and if that it happened i understand that the lamb's trying to deal with this  and i'm assuming that you're really putting it in the same place so i mean it's our interpretation of what sampson actually held that because we know what the supreme court held and you know we're not really talking about whether you know i mean it seemed endorsement that was that old and hadn't been paid on would bring this into play but that's really off the table at this point so it's really about sampson isn't it i think that's exactly right  i think that what happens is that when we we wind them all up together and i'm sorry to keep coming back to the same point but the fact is that the implied going to good faith and fair dealing is just crucial and california  and when there is an obligation to defend there is also an obligation to accept reasonable settlements now that settlement can be accepted with a reservation of rights a right to  its coverage position by paying the money subject to a reservation of rights and litigating with the insured and getting reimbursement in the event the insurance position is correct the insurers position is correct so i think that if you to pay on that right that's true there was home who had the coverage at the time of the last put its money up federal who was in an identical position to t r g except a year later put its money and then sued know gee makes an argument that they say that because this was sort of a hard fought battle and they i think to add up the judges that went one way and the judges that went the other way what do you know what does all that mean i mean obviously as i've said you it may be that the final result was counterintuitive but it's what the supreme court said so that's that's step now that's over but but the fact that they did have i think that there d c it went one way the first went another way until it finally worked its way up can they finally as of the time transamerica the demand was made and as of the time transamerica had turned it down and in fact transamerica interestingly tries to to say that well that's true i was just trying to respond to just a scale and i mean it and the only thing i would say you've made a comment about the first going the other way the first one of the other way in this case in the supreme court took it so there is only one policy i don't actually think about that's leaving these town but that one could come to the conclusion that there was a duty to defend as part of whatever the application is without dealing with the reimbursement answer to that question i mean i happen to think the federal cases which of course of dealt with this many more times than the california state courts have it's really the same indorsement just a federal versus state version of federal decisions represent the more developed thinking on it and they may hold that there's nobody california supreme court's language and you say and it says it would represent an undeserved windfall for to have not to reimburse t o g for whatever t o g advances that's hard to reconcile with a duty to defend  sampson does come to this conclusion  the reimbursement aspect and so on but they said nothing about it beyond just quoting the endorsement so i think just sort of fiat that i would have to believe that the supreme court didn't answer that question not that they would like to do it differently or that they might do it differently as far as that goes if sampson answers that question then whether you know i don't think it's that big brother federal court i can say well you know i think you really want to walk a l that we have in our arsenal and that post dates sampson by ten years so there's there's no opinion that attempts to reconcile sampson the case for example and i think given the stakes in this case that th and that we just ignored it that's not true fireman's fund case dealt with a mid term cancellation of insurance policy by the insured and then an accident happening happening within the original term of the policy and the question was did that mid term cancellation by the insured require the insurer to file a notice of cancellation with the p u c that's a very different situation to the half year it's just apples and oranges the genuine dispute standard which i think is what your question went to  way we talked about that as if the court needs to find a way to evaluate this case within the existing california bad faith framework we don't think it belongs in the failure to settle daily with all the reasons we've been talking about if it belongs anywhere we're dealing with here is you know what we've said is sort of unique it's not third party of liability insurance it's really more a kinda of first party relationship as to anything dental beneficiary if you will of the fact that the bonds performed upon just like tab would have been an incidental beneficiary here if we had decided to write the plaintiffs a check for six hundred thousand dollars but that doesn't mean that the purpose protect tab or to loan money to tap so it could make settle