policy period the two south thousand and seven two thousand and nine policy period for twenty nine cases that were served and filed in two successive policy periods and the court did so because it determined that all of the allegations in those cases were either subject to a notice of circumstances given in the first policy period or that all twenty nine cases only alleged claims based on wrongful acts that were somehow related to the wrongful acts and the notice of circumstance as those terms are used in the policy or review of the cases would show as a matter of law that that is simply incorrect so first i'd like to look at the language of the notice of circumstances in the policies the notice of circumstances has to give a written notice to the insurer the circumstances and the reasons for anticipating such a claim with full particulars as to dates persons and entities involved that notice here did not give those specifics to most of the cases that we're talking about and i want to make clear at this point what we're talking about is coverage for defense cost many of the cases have been dismissed either voluntarily or the the defendants the parents have prevailed simply talking about defense costs in this case at least for the presenter there is true there are some cases that are ongoing but the issue of indemnity for any settlement or judgment if there were to be any is not work so let me give you a few examples of some of the cases that that are different from what was in the notice of circumstance and i just insert a question to the notice of circumstance that we're talking about is that in essence the motion for entry of order can be a motion for conversion order it's actually the motion to convert itself  honor which was in the first policy period the right length goes into quite a bit of detail that's gerry and i'm happy to address that and it when it's a lot of detail it was filed by the by the creditors committee seeking to appoint a trustee and then the the insured centered on the national union and said please treat this as a notice a circumstance the insurer did not give any other detail so what it the motion to convert talked about is it did say obviously the creditors committee was not happy with the way that the debtors and possession were handling the est once the bankruptcy has been filed it complained that the trust that the creditor that the debtors were getting a plan together to complain the debtors went turning on information over it talked about post petition expenses that were being charged they thought improperly to the debtors and it talked about six specific preposition transfers which the debtors committee allege were distributed to one of the debtor affiliates empire partners and the dates of those six specific transfers were in may and june of two thousand and seven the motion also said you know that they thought that the the debtor the debtors principles retrieving the debtors financial accounts as their own personal piggy bank but again most of that was in relation to post petition conduct they also said a trustee should be appointed to investigate and pursue causes of action against debtor principles and affiliates but it doesn't identify what the other transfers might be or what the causes of  is it your view that if a transfer was inadvertently omitted from the notice of circumstances then it's not included if that were your argument is that the notice i think it's not quite that extreme here on or when you look at there were six transfer specifically identified by the creditors committee as what they thought the problems were that was sent on to the insurance company and my current in the notice  circumstances be read more broadly as saying there were on off the rust transfers made regardless of whether or not each and every one was articulated explicitly why wouldn't that be the  law notice that was given i think because that is not how it was transmitted by the insurer to the insurance company the insurer just said here's a motion by here's a motion to convert and to be addressed one is first of all whether the acts that were later raised are in the notice of circumstances and then the next is whether or not they are related wrongful acts so it's really a two step process so with respect to come within the language of the policy related to arriving right that's true but the way that yes but so first under the notice of circumstance it's really a two step analysis under the notice of circumstance you have to give written notice to the insurer of circumstances and the reasons for anticipating such a claim with full particulars as to dates persons and entities involved i think in this case to me a little bit of it is the devil in the details but these are incredibly complicated transactions that clearly have an interrelationship with each other given the way that the and that these were structured and so under those circumstances are essentially involving the same transfers there's an overlap forensic accounting dead we figured out all twenty nine of these cases overlap an isa representation by counsel made  assessment of the into relationships between the transactions and you then you look at the broad policy language how how can you under those circumstances argue that it has to be more specific than that because in this case the think it really you have to look at the burden of proof and how the duty to pay defense cost is assessed here in this case you'll notice a circumstance is used to deny or to limit coverage to one policy year and under the if all that we need to do whether you're looking at this as a duty just to defend our duty to pay defense costs we have to show the potential for coverage the tension for coverage is that the lawsuits were filed in served in the second and third policy years so the claim was made in the second and third policy years national union that then has to show that they are excluded from coverage because they were the subject of an earlier notice so it's their burden of proof to show that there was a subject other earlier not the earlier notice or that that related acts with respect to that argument counsel that you refer to the record actually shows that that was done in the context of the cases had some of the cases had initially been assigned to a judge who knew mr privacy and she transferred many of the cases away to another judge the counsel is making an effort to have the remaining cases transferred away and with a display name in fact in the fall context that on the face of the cases they did not show overlapping transactions and there were statements made that after some forensic accounting it was found that the cases overlapped but that is not a ruling that for the purpose to advance defend caught sense cost that the other context wasn't there with the seventy five thousand dollar retention when counsel at that time said we don't have to pay the seventy five thousand dollars in tension over over again because these cases are related we only have to pay it once they were related for purposes of avoiding the seventy five thousand dollars payment but not related for purposes of the policy yours and your honor that was within the context of a legal argument that was made union it's not evidence of how the policy should be construed and it was in the context of arguing whether or not the retention should be if gnashing and conceded there are multiple claims which it never did how the retention should be applied evidence of how the parties at least construe the policy only in the context of the retention your honor and not in the context of the other claims and again this was a legal argument it's not evidence under a r u under the rules of construction you look to evidence of how the policies construe the policy how the parties construe the policy before policy formation how people describe the policy afterwards is not evidence of policy formation so and i think also when you look at how the ninth circuit has applied case law when they're looking at similar cases they have never used there's never been any situation it's a california case upon my circuit case where you think about there is a notice of circumstances there is no ninth circuit case that addresses the situation here and in the context of a notice a circumstance those cases talk about the notice of circuit cases which talked about notice of circumstances like the m g m case they were very or the xcel case were very specific notice of circumstances of specific transactions were given during the first so tenuous that they should not be considered to be either later arising from the same circumstance i look at them they look at kenya waited to me at all they involve skullduggery involving fraudulent transfers it was all going on was all basically the nature of concerns that were described in the notice of circumstances give me an example of a claim or controversy which came up during the second or third policy period which you say was completely different from what was were not only fraudulent conveyance as they were also preferences they were cases which said hey this money was transferred it may you know they didn't have to prove that it was transferred improperly it could have been it was transit that a debt was paid consideration was proper but it was done within the period of insolvency so it had to be brought back into the state automatically under bankruptcy provisions that isn't skullduggery that just people paid making payments that later found to be improper and if you look at how nice circuit law looks at the related acts you look at financial management where there was a set investments in the same funds the court found those were not related acts you look at the a eureka case where there was an end grest of loan policy it's true that the case there did not talk about common nucleus of facts but they did say you had an aggressive one policy that then you have to intervene in business decisions that actually cause morning your honor suing michael hartley on behalf of national union what i'd like to do your honors in explaining why the court's decision granting summary judgment for nash and should be affirmed is to emphasize briefly the breadth of the policy language that's at issue here and the differences between that policy language and all of the cases that plaintiffs are talking about as well as the uniqueness of that in the circumstance notice or in the situation of a notice of circumstance in the policies here and then be able to explain briefly how those play out in the facts in this case here you have a policy language both in the notice of circumstance provision itself and in the related acts provision of the policy which is essentially identical which allows for various types of connections very slight connections each of which is enough under the policy language in the law to tie a notice of circumstance and a subsequent case together they include not only the arising out of relating to language which under california law is given a broad plain meaning construction it includes alleging it includes what the policy defines as related acts which include not only related which is also defined under california law as including causal and logical connections on their bases but also the same transactions that are the same transactions that rise out of a common nucleus of fact all of those concepts each one of which is enough to create the necessary connection here are all part of that same definition and they're all imposed together and so you have just as an example the xcel special details where they looked at a policy language that was somewhat similar that had all those fraud ties and so say yes you apply that according to its broad meaning and you apply it looking at all of the different strands that are part of that definition and how it comes into play in eureka they didn't have the definition of related acts they had purely arising out of language  in bay city again they didn't have a definition of related wrongful acts on the night of the planet's case is that the other key issue is that this is a notice of circumstance case and that does make an enormous difference and there are california cases and ninth circuit cases dealing with exactly this issue in the breadth of it so in the continental the m g m decision which is a ninth circuit decision the court looked at a notice of circumstance and then noticed a circumstance there all it said was we have a merger transaction that we think will have sank claims arising from it relating to producers among other things there was a claim that came afterwards that was different from the producer claims that have been filed at the time there wasn't reference specifically in the notice of circumstance in the court looked at that and said yes you gave notice the amount of information that you had at the time that there would be claims coming from this merger transaction that was enough and in that same case m g m they cited another california case where it was even brought up continental insurance where in that case the notice of circumstance just said the company is engaged in various acquisitions we expect there may be claims relating to those acquisitions and the negligent management and handling of the company a claim comes up several years later the claim relates to the management of the company that was enough by itself all of those cases deal with being able to relate a claim back to get coverage under the first policy period or counsel counsel for the issuer seems to think that financial management ways against your argument was that not true it's not at all true  first of all it isn't a notice a circumstance case so there is no umbrella that ties the two cases that were in front of f e m a together they just had one have they we had one investor case and then a second investor case together that were trying to be related there was no notice of circumstance that said hey if there are any investor cases coming down the line we're giving you notice now that they may be coming so it's a it's enough as a factual setting it's a completely different circumstance the language that was there was narrower than the language that's involved here and in addition to that we have here exactly the admissions that the court has already identified here here we have counsel saying in letters that were exchanged during the case that the court looked at saying those two transactions those are related so it's like the end of the counsel for the investors in m m a saying i understand that there's two cases there but those two things are related admissions are is that those facts those cases have the necessary ties that are what then implicate the policy language is a valid case tells us we can use that as a we have several cases that we cited in is they don't have to be judicial admissions and stoppel typesetting but that they are admissions themselves and what we're saying is if you look at just the pleadings in the case if you want to analyze it from from the different evidence if you look at just the  the pleadings themselves demonstrate that everything is related the evidence we as insurance also look at the extrinsic evidence that's involved in the only strands of evidence that was presented to the court was extremely seven against that these cases were related in some way there's nothing that was provided by plaintiffs on the evidentiary scale on their side at all so what the court had in front of it was the policy language itself which was undisputed the notice of circumstance the contents of which are undisputed the underlying complaints the contents of which were undisputed and then the evidence that these if we look at a really complex fraud case involving many many different and ts lots of transfers and zack's and and maybe even profit the policy language as in the answer is yes to both of those concepts or on the the breadth of the policy language provides the umbrella to collect all of those cases together number one but number two the the the transactions themselves are also related at a specific factual level with respect to the different transactions at issue and that also ties them together so as an example with respect to the pando case and p i two you have within that case a series of transactions now the transactions are related together and a factual level not just because they are alleged to be part of a grand scheme which is true and the purpose of those transactions relates them together but also as an example because they all are part of the same ongoing refinancing transaction the e p i two complaints and the p complaint together both allege that there was a refinancing transaction that had three parts which everybody which the palmdale investor and which the preedy parties agreed to upright the palmdale investor would invest in order to invest they need to extend the indy mac long and the purpose of doing both of those things was to get refinancing for the existing in the max loan with the second bank so those those are those are transactions which regardless of any unifying purpose which they have were all part of a one transaction that the parties agreed to upfront would be occurring in a continuous manner in a three month period all of which were designed to refinance the properties so you have you have both said and i transactional level ties and then add a number on a low level you have all of the transactions falling within the broader scope of what the palmdale litigation which involves basically investors claiming that there was a shell game these people engaging in to move money back and forth to make one entity  giving the the notices circumstance except itself describes the financial strain and against it that were a main part of that scheme the seventeen point five million transfers a specific transfers that i mentioned are the transfers that are specifically alleged in both the palmdale case and e p i two and those play out through all those transactions what happened is that had you have in the allegations and e p i one you have been saying the investor we need money to invest to survive in this particular project we are going to have an investor come in invest in order for that investor to invest we need to extend our existing loan because the maturity date is coming up in two months so in order to do that we have to satisfy the liquidity and net and net worths requirements of that loan in order to do that we engage in the transactions that are specifically alleged in the notice of circumstance and then those those same representation is of a liquidity and the same representation is of net worth are then made again three months later to the second and they're made to that second lender because that was what the party specifically agreed they would do in the first place three months earlier when they refinanced the indy mac's loan and got the investment in the first place so they all tied together specifically based on the references in the complaint itself which if your honor wants to know the specific paragraphs it's it's at the are two zero four six two zero one five you are two one two three and two one two one all of those are the specific paragraphs in both of the complaints where they specifically references the ties between those transactions notice of circumstance and going backwards to bring a case into coverage their position position here is that while you can read the language in one respect going that way you can't read you have to read the language differently when you're talking about limiting pardners to just that one period there's no authority in the world where of under california law that allows that and to the contrary there are several cases applying exactly that same broad language to exclusionary language and those include the metal case and century transit and the language going both ways as it does is beneficial and fair to both parties it both expands the coverage period for the plaintiffs it allows the that coverage into particular policy periods and not only that it also provides benefits to the insureds in exactly the same way that they've tried to take advantage of it here which is that it allows them to get single retention for what would otherwise be a very substantial amount of retentions added together for twenty nine different actions i have nothing further your honor unless unless you have questions i think you counsel thank you very much  are some transactions and we believe for example that other people will file lawsuits the trustee here did not say he was going to file other lawsuits he said he was going to investigate he complained about these six specific transactions and again going under k p f f which is california law where during the first policy period the the lawyer for the insured was saying i think there may be more stuff out here i think there's going to be something else when the new lawsuit was filed the court found that these statements there may be something else out here we're not specific enough with the palmdale cases again because we're talking about defense cost there were wrongful acts alleged in the palmdale cases such as failure to pay contractors after the investors invested in the project which could form the basis for separate claims for wrongful acts that were not related to the so called shell game which is really a hypothetical on the behalf of the