is not proposing that the insurance companies should have a full opportunity present at present evidence whether it be by way of a trial where the burden is on the carrier or whether it be to the court where there is an equitable allocation  suggesting they should have an opportunity to determine whether a settlement and the components of the settlement are covered or uncovered what we're suggesting is a court take of consideration the real world what happens to insurance when they get sued and sometimes i think as lawyers we lose perspective as to how significant it is to a small business owner or an individual when they're sued and their insurance company abandons them and the practical position they were in for makes it fair for the insurance company to have the burden of coming forward with the evidence to show it's insured wrongfully refuses or the insurer wrongfully refuses the tender that this is part of the consequences of its wrongful refusal it's now has to shoulder the burden of the allocation mediation is going on right now within a few blocks of year in some of those mediation rooms there are insurance who've been denied a defense in some of those mediation rooms and that'll that the fence may have been wrongfully denied and then it sort of sitting there let's say it's a it's an accountant who is being sued for millions of dollars by one of his clients he's scared to death because he doesn't have an insurance company behind him some part of it might be covered and some not and he said and they're having to say you know for goodness sakes i'm so happy they'll take one hundred thousand dollars m should settle this for hundred thousand dollars right now we haven't done any discovery and you told me it's going to take a hundred thousand dollars to defend this case so we're going to south which you would ask for us to do is to order read and so that the allocation of the settlement should be determined in the first by the district court that's correct wrong and that the standard be that the burden is upon the pose of counsel to come forward demonstrate the evidence that would have been generated had they defended the case they would have hired accountants and done all the things that the defense counsel does when they're defending the case or the court can take into consideration all of the issues and without the burden being on these jurors the main thing and make an equitable allocation that's correct is it your contention that the entire amount would fit within that burden it is your hon certainly within that if the court finds that the appropriate rule is that the burden is upon the insurer because the insurer didn't refute or put on any evidence that there was some component of this that was not covered there was no allocation done by the sure in the underlying the court would conclude that the what i think the appropriate rule is that the burden should be on the insurer since they had control would that include the eight million or four million i forget what the number is in inventory that peterson  carrying it would not your honor because we would that would be an extra contractual damage that would have been claimed at a bad faith case and we are not appealing because it struck me that one of the things that happened and i don't in my question i'm not faulting your client for doing what he did what you suggest the tractors etc etc and the question is whether or not the insurance company has to pay all or part of whatever that financial outlay would be for that the terms of that settlement correct and we're not asking in the underlying matter for the other negative repercussions  about because of the settlement only that was primary evidence to show that there was a significant component of the settlement that was what they paid we could all get that all of that to non covered items that was the point there was money that was paid and then there was other repercussions that could be allocated to non coverage claims because of the total economic impact that the court could sit and reflect on and say well i say they had all these bad things that happened because the settlement they had a right jack they had to have all the cemetery that lost a bunch of money so i'm going to allocate all of the uncovered hypothetical i was dealing with the accountant because this issue with regard to allocation really is a real think that causes poses a problem to insurance so we have the account saying it was or i want to settle for one hundred votes if you can't do that because we haven't any discovery we see we have to go get evidence because i know this is your kid's education fund you're paying and you want to get one hundred back from the insurance company i think they're wrong but we have to go to discovery and figure out the multimillion dollar plaintiff what part of that would be covered and what part would be uncovered the accounts we can't do that that'll settle infuriate him and they want to settle it today and i'm ready to pay off so i got to pay a part of a hundred thousand dollars to not to settle a case but to do discovery and maybe i won't be able to sell it for a hundred thousand dollars well then says ok let's go ahead and pay the hundred but will ask him to allocate it in the settlement document t hopefully satisfy the care we'll ask so the mediator goes into the multimillion dollar plaintiff and says they want to allocate the settlement fifty fifty to these particular components a claim so they have some insurance coverage has and the plaintiff has assurance coverage insurance i'm not going to demand one hundred now i want i want more than one hundred or if they make it insurance back not only do i not want that i don't want to settle it at all because i didn't think about the fact they had insurance or i want if they're going to sue the insurance company i want them to pay the hundred i want part of that money back so you can see the defendant who is in the position of having to take into consideration the insurance issues that they will be facing after the settlement process is over actually isn't a prejudicial position and i must close planets would be sufficiently savvy to know there might be some insurance coverage that the insurance company had not appeared yet so you know you know we understand i understand the real world of mediation so that you know you're right in many cases i'm an insurance coverage lawyer who also doesn't but fifty or sixty mediation may or may not be coverage it's disputed and takes that into consideration i understand your practice on a case i think i think we understand the realities of mediation too well in the realities of different kinds of policies you may have a homeowner's policy where they refuse coverage because they think it's all damage to the insurance property because it's a landslide the plaintiff's attorney is not sophisticated in insurance coverage of this property stuff and i'm actually very frequently retained by plate of attorneys because the defendants are referred to coverage down to the plaintiff as being told you should take a lot less for this case because there's no insurance coverage and they're retaining me to say is that is that right should we take a lot less money because there's no coverage for this and many times i think you're obviously right you are sophisticated plaintiff lawyers are going to recognize there may be an issue with regard to insurance but the point is the defendant was in a position where they're not being defended and this this could happen in so many different contexts in the millions of different kinds of liability policies have it's hard to bring all of them into the courtroom but you can imagine the insured who has a plate of  anything with regard to insurance but in fact may think the insurance company is right with regard to the denial of coverage they learn the defendant had and the defense saying you know i really think i have a right to get my money back and that does happen this demanding it i'm now that we're on to the practical logistics of resolving the thing if we really manned it and we send it back for proceedings in the district court to allocate isn't a substantial amount of evidence in your client possession that would need to be known in order to assist the court in making that allocation and why isn't it more fair to put the burden on the insured with regard to the allocation for that reason to preside over this hearing there isn't any discovery at this point and you know how can we officially man age what i'll call the allocation hearing when kelly  there and the insurance company didn't participate so the only party that participated in the settlement discussion is peterson so peterson's in the best position to know what competence went into the s think the issue is that for one thing we have two different standards we propose one is the burden is on the carrier one is their communicable allocation the information really isn't in our client's position as the whole point this is the if the duty to defend is not  carriers in control is providing counsel you can say we're going to go forward and defend and hire the accountants and do all things to ask kelli because that's really what you're trying to do tell me how much of this is because of loss of profits or because of thing  income you're saying we took from you because we bought stuff wrongfully we can allocated among all those things that's a kelly's position that's not ours so that's the whole point if you're being defended just like the insurer who's sitting down at the courthouse now having a company defend them on the reservation of rights they get a verdict and they have had all the discovery done and they know exactly what the damages are and they can compartmentalize them into different components or wouldn't let me ask a more practical question would it be your position that there wouldn't be any reason why the district court could jurors company and any of these companies chose not to hear but the insurance company any time they there was an allocation issue with a settlement whether it's an equitable allocation or the burden is on that they can then do that discovery they can choose to go to the plaintiff in the underlying case and depositions and find out what the basis of their claims were and what the economic justification was for whatever the value was and if there isn't a bill of the for the carrier to now do and have the exact same kind of discovery that they would pay for now in the coverage case that they side and then you can cover the coverage issue and anything else that comes out thank you thank you counsel agreed that his position was that under california law part of the consequences of a failure to defend would be to shift the burden to the insurer to show how much of the settlement is for cover damages but  california law has in fact addressed this issue and is to the contrary the the prajna case talked on page five hundred fourteen about the fact that when there's a settlement the coverage issues remain open and insure can assert any defenses to coverage that it would have it is not bound by any underlying judgment or the underlying settlement i can assert any defenses to coverage on the very next page the same court talked about the effect of us at all meant and the presumptions that gives rise to and mentioned that there were two presumptions one was a presumption that the settlement freeze was reasonable and the other was  presumption that the insured was liable in the amount of the settlement there's no presumption as to coverage that's created and so we simply fall back to the standard rule under california and i believe most if not all states law that the party seeking relief has the burden of proof and in a breach of contract action which is what this is the party seeking indemnity has the burden to establish not only the breach but also their damages and in order to establish damages from the breach of duty to defend or in this case the breach of between them if i the plaintiff has the burden to show how much of what they paid in settlement was covered under the policy and therefore subject i was specifically the judge why do with respect to the settlement all right armstrong says we judge him so i do with respect to the settlement what judge armstrong did with respect to the settlement was she found as a factual matter that she could not make any allocation she pointed out that the parties never discussed any allocation at the time of the settlement that peterson in its internal analysis of it had not come to any conclusion as allocating between  infringement of the logo versus defamation versus holding itself out as an i n t dealer and so that there was there was no way to do and that's what others mean it seems to me that the the indemnity is not zero it's something more than zero i may not be the full three hundred whatever thousand was but it's certainly not zero that's exactly the case as in the golden eagle case as well the golden eagle case a california court of appeal the only difference in that case in this one is that it's a judgment rather than a settlement for the reasons we discussed in our brief that doesn't change anything in the golden eagle case it was not a duty to defend case and it was not a duty to defend case but as we've discussed and i just pointed out in prying deal the breach of the duty to defend does peterson's peterson's attorney testified here and said that they thought that in general the various causes of action four five and six were significant cause of action if you had done an analysis to say i think cause of action the fluid process people agree on numbers sometimes arbitrarily and you can't allocate and we're not saying it has to be a precise allocation judge armstrong found as a factual matter that she was not able to do any right you don't you task of finding out where there is coverage and i grant you have to see if there's true coverage but be if there is coverage then you've got to allocate the settlement yes and the various versions of separate question but i think if you say a rule that you have that if there is a cover if  judgment is covered let's take that as a hypothetical if there is what is covered no no as part of it yes that it's unquestionably covered the rule cannot be that the plans gets nothing well in golden eagle the the they could not establish their damages now the fact that there was a breach of duty to defend it if we assume there was obviously i dispute that as well he said later the fact that there is a breach of a duty to defend does  rise to any presumption as to whether the settlements covered that's been addressed and i hope in case in the end we are in caps that as a as a proposition is understand the record here your adjuster conducted no investigation we just made a legal determination that we thought we weren't on the hook that's right in fact that he did it subsequently determined that that refusal of the tender was wrongful and that the that your client should have defended peterson and why should the insurer benefit by having peterson and shoulder the responsibility for allocating between the covered and covered claims the insurer is not benefiting from the fact that it denied defects if the insurer had been defending and the case had gone through in a settlement proposal had been made and accepted would still be in the same situation peterson would still have the burden of showing how much of it was covered versus uncovered the fact that they weren't being defended by travelers doesn't make any difference i mean if they were being defended by competent counsel there's no argument that the settlement came about because they couldn't and they know probably be the case i mean we may have situations where the insured can't afford to hire competent counsel in which case we've got a real problem in the amato case where there was a default judgment the court held that the judgment can be considered a consequence of the duty to defend in that case there was also a finding that it was a bad faith refusal to defend both of those factors are not here and i suppose if you had a case where they hired incompetent counsel and don't have a default maybe that gets into a little less of a clear cut area but the fact is in this case and in i think the typical case here where they're being defended unless you can show that there's something seriously wrong with the attorney that's defending the case which i certainly don't these are here and we're going to have to start ineffective assistance of counsel well i just don't think that an issue that's going to come up but i think where they are being descended better at night because i have analytically when you carry this out let's assume there's a full trial on this on a general verdict on all counts general verdict general damages you're in the same boat on allocation i mean it's right you know it's no different from this sort of default judgment if the plaintiff says look we're just going to lay down on this thing we can't pay we're going bankrupt you can get something from the insurance company if you won on assignment i mean those are those happen every single day and can it is possible to allocate and i guess it is it is often possible to allocate in many cases i don't see why it's impossible to allocate this case i just have to ask judge armstrong i mean i can i can tell you why i think it was impossible allocate she found as a matter of fact after a trial that allocate she didn't tell them they don't get to try to allocate they don't get to present evidence of allocation she said come on and bring all your evidence of allocation in here tell us what you considered at the time tell us what you talked about with kelly tell us how you analyze tell us what information you had about the damages give us all the evidence you have about allocation she looked at all that evidence and she concluded there is simply no way to come up with any number that makes any sense for this and in fact she pointed out that the evidence shows that peterson did not have any evidence at all that kelly had in fact lost any sales whatsoever kelly said their last l's but there was never gave any evidence of it well so to allocate a problem that they settled the case before they spent the money conducting the discovery well i just i certainly gone to a number of settlements and i'm sure you're familiar with this as well you know you're not going into discovery but you just say to the plaintiff just show us what your damages are give us your damages american ask what happens in that case i'm sorry i mean i get a feeling that that's what happens in a number of cases and the fact is what we're looking at here is california law in california law says i'm talking about what happens in the mediations in california and how people work things out they may not they may in fact work it out that way and mediations people work things out in all kinds of different ways in the nations but that doesn't guide what the law has to be for the burden of proof going to trial right now which w their own internal analysis to show what their risks are on the case and why it makes worth settling and that internal analysis can be used to allocate what was in their mind at the time of the settlement here the peterson's attorney didn't do any written analysis he came you know a couple of years after the fact and said you know i thought those cause of action in general were of significant concern that's all he said that's just not enough to do an allocation  shift the burden to travelers to do that when peterson is coming forward saying we have no evidence whatsoever sorry travelers i guess you wanted all counsel weekly the position of dick you're down about seven that is me you may want to cover the coverage issue yes peterson had been using i m p s logo and it's advertisements now the court's job in determining whether infringement of title was alleged in this case is to predict how the california supreme court would resolve this issue we've  cited and discussed at length the california supreme court case of palmer which did involve different language but came to the conclusion that infringement of title refers to infringement of the title of a literary or artistic work and does not refer to infringement of a trade name now that was based on the fact there was an exclusion for infringing a trade name that that came into play but the court distinguished but but what we're needing to do here is predict what they would do if they were faced with the question presented here a policy that doesn't have that they chose not to address that but they did say and they distinguished the touch of class case from new york because the court in that case failed to consider the policy language as a whole and if you look at the policy language as a whole here and give the plain an ordinary meaning to the word title in the context it's used it's not the same thing as saying name name is a broader word than title name refers to the designation by which anything is known in common usage title is used to refer to the title of a book the title of a movie the title of a song it's not used to refer to the title of a company the title of a product it's just simply not the way that ordinary people use the word title in common language and that's the standard to be applied the fact that the drafters chose to use the word title and not the word name must be given some meaning the only way to give meaning to that is to give title its common ordinary meaning of referring to the title of a book a play on the movie literary or artistic work to say that it can refer to any inane including a business name is really just a lawyers argument based on finding a dictionary definition that's broad enough to include what they're looking for and then inserting it into the policy without regard to the context or how it's used in the real world  the former court also recognized that the title of a copyrighted work cannot itself because you write it and therefore concluded that it made sense that when you have an infringement of copyright title or slogan is to cover defense that the word title there would refer to the title of a copyrighted work by looking to the terms around the word title they are able to give meaning to the word title itself and indeed they cited the code of federal regulations which refers to and titles and slogans as being items that are too short to qualify for copyright protection thus distinguishing between names and titles to say then that the word title is used in the policy somehow is broad enough to be they rely on the label of the argument instead of looking at the facts california law is clear you look at the facts that are alleged in order to determine what what is being alleged whether it's a cover defense peterson cannot cite any authority that the label determines coverage that is directly contrary california law and there's a good reason for that that would make the third party the arbiter of coverage which is rejected by california law the third party can allege all of the facts that they have to  allege without getting into any false allegations or anything and then just stick a title on that would create coverage and in that manner create coverage for a claim that really should not be covered i'm not suggesting that kelly intentionally did that here i don't know whether they did or not but the fact is to determine a duty to defend in california if you look at the facts that are alleged and looking at the facts here there was no allegation of any statement that was derogatory of kelly in any way the only statement that was referred to was that peterson was holding itself out as an authorized i m t dealer or even is exclusive i m t dealer for a particular area and that doesn't say anything about kelly doesn't purport to say anything about kelly and the policy does not say that it covers any cause of action labels defamation it says that it applies to injury caused by publication of material that libels or slanders or disparages here there was no allegation of any material that was published that libeled or slandered or disparaged kelly peterson has argued that we're saying the allocation issue there was a lot of argument in peterson's papers about the difficult situation that insured will find itself in trying to settle and a lot of it boiled down to they won't know how to manipulate the coverage and the allocation in order to set it up for coverage if they don't know what the covered items are before hand and that's not what they should be doing they should be honestly approaching it if not at the practical consequence if claims that's the practical consequence of saying you have to allocate it settlement as opposed to saying let's allocate letter later based on a true and just examination of what's really covered and not i mean that's the reason and they can allocate later based on a true or just examination as well if there is evidence to support it and the court didn't say they can't do that the only question is who has the burden for that and it doesn't mr bendings argument that settlements would probably tend to go higher if it becomes obvious that the parties are trying to allocate because insurance coverage well if they go in and make it clear they're not being defended by an insurer and the insurer is not participating i don't see why that would make it go higher in fact they probably want to let the other side know we don't have any insurer to finish here it's just us so you know we're not going to be able to go any higher than the small amount we're we're and kind of why we need to allocate because that we're going to let it get coverage perhaps or they could i'm not saying they have to go and talk about allocation that's something that can be used to show an allocation they can also show their internal evaluation of it and when they showed that here the court concluded it was not sufficient to carry a burden of showing really even an estimate of how much it was because they didn't have any evidence of damages at all thank you counsel your time is expired thank you mr bennett has some reserved time  you know i want to be sure that that the record is clear with regard to what george armstrong did what she found was because the burden was on the insured and the insurer laurie honestly said hey look  of settling this case i didn't sit down with precision and say fifty thousand dollars for this cause of action and forty thousand that's what that was and what will i was doing i was recommending i could see cause of action or a problem and clearly represented exposure i knew that there was a whole bunch of defense costs that were going to be incurred and and that's what we didn't settle in that case i didn't do something with persuasion she said because there was not some allocation made at the time of the settlement which of course they're focusing was all and particularly insurance and not being provided with the defense should be focusing on dealing with the risks that are attendant to the litigation as opposed to thinking about insurance coverage he didn't do an allocation but had the burden benefit on the carrier i'm assuming that the award would have been fully in our favor because indeed they would not have been able to show that there was some component of the claim that wasn't allocated i think the court's point is good that some part of this is covered and so if the burden would have been on the carrier the the i would propose that the judgment would have been exactly reversed or if the judge would have imposed a standard that she was going to make an equitable allocation she could have looked at all the factors that the lawyer talked about the risks that were attendant each cause of action which he thought w work which facts were compelling with regard to the liability and which weren't the fact that they were trying to avoid the significant amount of attorneys fees in the future and make an equitable determination and allocating what the outcome would be is not that there was no evidence that would have allowed the court to come to a different closure had to the burden of proof and the fact that such armstrong did not choose then to use an equitable allocation approach she chose to put the burden upon the insurer only and as far as giving a logical extension as to what california law is and the case law that is directly in front of the court the print case and counsel makes a good point that the burden is upon a party seeking indemnity to prove all the conditions of and then the end normally of course the indemnity obligation is not triggered until the of the issue that you fail to defend the thing they didn't have in print was an allocation issue there was nothing in print no nobody was claiming that some part of it was going to be uncovered and some part of it would be covered so the question would be wouldn't the print court actually have the exact same extension on the presumptions and say well we know that some part of this was covered in some part of this and we've we've decided for these two conditions of indemnity liability and damages we're going to give a presumption covered and some would be covered but there's also a presumption that the damages that were paid were covered in the carry can come in to demonstrate they can do discovery they can evaluate what the plaintiff was claiming the underlying matter just like they could have done if they were defending the case and coming to demonstrate to the court pursuant to their burden of proof what components of the claim was not was not covered so this isn't depriving the carrier of a real and adequate opportunity to come forward with evidence as to what is covered and what isn't covered with regard to the issue else's logo that they claim they have an exclusive right to use and advertising it in a manner that is wrongful i'm not sure what an advertising injury or an advertising injury claim could possibly be but what about the title issue well of course the case they're relying on is so distinctly different because they have a specific provision in that policy that that identify that the kind of trademark that they were asserting a title to was excluded which of course is not in this case and i think of research actually really thoroughly identify the term title is broad it's not defined in the policy in this instance kelly had a license to exclusively use this i m t logo it was their exclusive property right to use it in this country and the cases are very clear title doesn't have to mean like you're holding a deed in your hand it can be that you have a property right and they have a right to use this i m t logo exclusively and and my client mistakenly used that logo during a period of time that they thought they had a right to when they didn't and in fact it kelly's exclusive property right  now the golden eagle case that was cited is a case where number one the courts rights not a duty to defend case but even more compellingly it was a case where everything in the world and everything was excluded and then there was an exception to the exclusion where as opposed t case we know some component of this was covered everything was excluded and they failed to demonstrate any component of that exception to the exclusion that applies to the world of things were not covered and they fail to show that something came within an exception to the exclusion which is