thank you your honors my name is michael tone i represent greenwich insurance company may please this court there are two documents that are relevant relative to the issue of whether there's a do to defend of greenwich insurance company with respect to this matter the first is the policy itself and the second is the complaint addressing the policy itself there are really two provisions that i will concentrate on the day the first is the ensuring agreement in that provision in the ensuring agreement which is on the first page of the policies one forty three when terms of the record  agreement reflects that in order for coverage to be implicated or triggered at all there must be an actor omission in the performance of real estate services as your hono no under oregon law if apply if the terms define that that definition is operative and control and real estate services are defined in this policy as your honour's no services all dealing with real estate this definition does not of all talk about financial advice investment advice anything of the like we don't you know the problem with your argument i think that the district of financial and investment service it quickly if i'm wrong but after the sale of that property was completed or when they were making when they were carrying out the sale and implementing the sale it was arranged in such a way so that the exchange could take pla the sale of the home was negligent restructure and that sounds an awful lot like the kinds of things a real estate agent would do but it was structured in connection with the financial investment advice your honor it wasn't there wasn't there wasn't a criticism that there was a real estate service i e something was wrong with the sale dead that am i right that real estate agents are needed to do these ten thirty one the question is as you know does this policy cover that sort of activity and that's that's the issue it's just like there are an analogy would be lawyers can render a vestment o financial advice but a legal malpractise policies not implicated by that advice and that would be an analogy that i guess i would use your honor but i think you're right i think that that's as alleged the the relative to wrongdoing are in paragraph in both counts one and two are in the paragraphs a a through f i'm sorry a three g all of which talk about common and what is this call them count one it's called financial abuse it's an elder abuse count but the financial abuse is the phrase to choose and i think i counted something like eleven times in the complaint the alec which is controlling and if we if we just go by the four corners of the complaint which is we all know which we have to do i think there are a leavened different allegations relative to needed is just that one part of the claim relates to arise out of real estate services right if the if there was full access act or omission if the act or omission relates to the real estate service is our position with all due respect you're out of that the actual missions here relate exclusively to the tenants and calm that's there that is our position we understand and recognize your hono correct that the duty to defend is broad but we don't think and we'd argue that this is not implicated well let me ask you this then in terms of the damages request how do you square the counterfeits they're asking for three million dollars in damages when only a million dollars was invested in the tenants in common so how do you square that with the notion that this was all about just the investor because all of the damage is a flow from the tenants in common and hot are reading in my reading or our reading of the advice relative to the sale of the home and yes except the structure negligent structuring of the sale which can't get any more closely tied to the actual just straight up real estate transaction had a real estate agent would do but the structure of the sale performed very well i've lost money and wright has told me that i was going to get these great returns so how do you win the maximum damages if that were the sole theory be a million dollars and you lost all the money that i invested well there could be a motional distress damages personal injury damages that deal with or relate to exclusively the investment of the tenets and common if if the if the sale of the whole more the only thing involved we recognize those are real estate services but when they go on to render investment advice and financial advice which is and the complaint obviously triggers or doesn't trigger depend on your point of view the ensuring agreement the complaint drafted by a stranger to greenwich insurance company in our view highlighted emphasized to the exclusion of everything else the the investment in financial advice but the second argument i would make has to do with exclusion j s your honour's no and exclusion j is also the two things of three things your honor about exclusion j one it the preamble is the company will not defend or pay any claim based on or rising out obviously based on arising out of has been broadly defined by oregon case law flowing from etc it's a very broad preamble property soon occasion real estate investment trusts as your honour's know are also defined terms by the policy when we look at when greenwich looks at the operative complaint with respect to either of those both of those association this clearly a trust or association what is the the gibson trust and so is the association as the tenant in common investment that is an association fight by a paragraph eleven because paragraph eleven in the complaint talks about a t i see is a highly risky and illiquid investment but it was money from investors to purchase or own a single property that obviously is the language of the complaint and we are but we're all bound by that language so we don't have the gas what was met there were these tea i c's let's put aside your theory that the gibson trust is let's focus on the seas your argument is that what they qualify as an association or an entity under this definition yes it qualifies it would qualify as an association and it goes on to say design or use it doesn't need to be formulated for design it could be designed or used to permit investments in real property which are held or manage their allegations that these are held for the trust to the beneficial owners of the trust what this is arguably meant to and again i know we're restricted to the complete and the policy but as your a there are i think statutory and or common law definition of wreaths and this was designed argue would be broader than that particularly because of the based on arising language when we jump down to the  still do you know let me ask you this if the language in the in the definition of real estate investment talked about such interest under which such interest are held and managed for the beneficial owners of the trust or other legal and or other entity right yes so are we talking about the gibson trust her we're talking about the it would be the end that talks about formation or engagement in a in a general limited partnership unincorporated association it appears to us that because a paragraph allowed on as i said before this is the c is it's a definition there were presumably there are some complaints where we you know there wouldn't be a definition but in this in this particular complaint there is a definite deposition definition  it's you know policy interpretation is always an issue of comparing the policy to the complaint and particularly when in this case that there really isn't any i understand it and under oregon law if there's a term and whether there's a possibility of coverage under the policy and so there's a record i don't believe complaint this stays states a claim against exclusion  ensure that may still have a duty to the banned if certain allegations can impose liability for conduct covered by the policy and here are the allegations concerning the bank offers that but go ahead if you can you have a quick response to my quick response your honor is if you look at paragraph twenty two in the preamble paragraphs the grab a minute this is financial investment advice this policy by and exclusion jay does not it is not to meant to cover it investment or financial advice and therefore there is in our rule all due respect your honor is no there is no possibility of coverage and then there's th state court complaint says that that sale was negligently structured and what are we talking about here negligently structured this was as we know at ten thirty one exchange in the purpose of a ten thirty one exchange is to avoid capital gains tax on property that is held for business or investment purposes now the underlying sale here involved a personal residence and what the state court complaint ca the pasture property the personal residence didn't qualify under section ten thirty one but the pasture property did and so in connection with the sale there had to be an allocation in the price that was paid between the personal residence and the pasture property and the state court complaint alleges that that was negligently done the state court complaint is saying in effect you should not have allocated a million dollars to the ten thirty one exchange in it would not matter whether that's an investment in a tick or any other real estate business or investment real estate it was the one million dollar allocation that alone it's negligence in the sale of the property those are real estate services there's no debate and i think i heard council acknowledge that they recognize that the representation in the sale would involve real estate services now there's a second point to be made here again a very straightforward point based on the sale and your h under oregon was a negligence claim for purely economic loss that's the negligence claim was for the million dollars only requires a special relationship you cannot if there's injury to a person or property there has to be a special relationship something that gives rise to duties beyond the common law for c ability that arises under common law negligence  special relationship is specifically alleged in the state court complaint to arise out of the bank affairs representation of the trust and gibson in both the sale of the trust property and in the purchase of the tax and in fact it that allegation and that's paragraph thirty nine of the complaint it refers to the organ real estate code not advice that someone who's just representing you in the sale of real property would well i think that there's a there's a confusion and it's in it's drawn here by greenwich between eight which under oregon law certainly is real estate a tenancy and con in common interest is real estate and the state court complaint allege that the purchase and so there's there's you want to talk about the complaint speaks of ticks occasionally in referring to the totality but what the what the grant what the trust acquired here was an interest in real property if it had not been in interest point eight one zero which again governs a real estate agent in connection with the purchase of property ok if it had not involve real estate there would have been a ten thirty one exchange you would have like kind property is trying to do is manufacture some sort of an association or entity after the fact that wouldn't a qualified make you couldn't you can't invest in in an entity and say that i get i get a ten thirty one treatment here i have sold real estate that was held for business or investment purposes i've got to acquire property real property can acquire  and interest in entity i can't and that's why most clearly the tics involved real estate and so no i do disagree with that your honor but wholly aside from that wholly aside from that there are the allegations in this complaint that are clearly relate to this sale of the trust property and that's that was the point i was making in addition i think that's the simplest point i think that if you focus on the ticket purchases it gets a little more complicated but no that's got to be a real estate transaction it's got involve the bank of fears as agents for in acting as real estate agents for the trust in the purchase of the tendency in common as the state court  says a real estate transaction what about the exclusion well that well that again is that's my point those exclusions are you see that exclusion j speaks of property syndication based on arising out  transaction it wouldn't qualify it as a ten thirty one exchange and the same goes for the real estate investment trust and i would note by the way the council has changed his argument here the argument in their brief in their opening brief was  mean exclusion is much broader than that it just says the claim has to be based on a rise out of any buddy who's in gate either formed or gauged in property syndication right and it seems to me that if long as the c i c interests that this is conduct that the that the insured would assume is something they can control that they are engaged in the formation or in gauge one of and that's that's the  that we cite in our brief that's the only case that i saw that really focused on that clause but it assumed that and i think that's a reasonable interpretation which is of course is what the organ supreme court would look at to assume that it's the insured that engaged in or formed this is so she can and so i guess i would disagree with you on that but even if even if you say no i don't i don't buy that well then you've got to look at what they what are they in gauging in  invest or are forming and it's a it's a partnership or and various other sorts of associations or some organization for the purpose of investment again they didn't do that yes but even if if they had that would have qualified for ten thirty one exchange again that stake or complaint alleges that the purchase was of interest ok it's a tendency in common interest i'm just looking at the language and i'm trying to that if they were investing in an unincorporated association when a qualified under section thirty one that's that's the point i'm trying to make and this we'll go back to that this was a ten thirty one exchange that's what the state court complaint says and that's why i say i think again and we've got to interpret the ambiguities in this complaint and in the favor of the insureds here you've got to interpret that to mean as i think it does that this was a ten thirty one exchange and we're going to go back again to the sale that's where this was structured for ten thirty one exchange and again that's a separate allegation that says that it was negligently structured so an organ law the stake or point has to be read in favor of the insured to determine whether any allegation any allegation gives rise to coverage if there's any possibility then there's coverage any ambiguity has to be resolved in the insurance the bankruptcy or saver i guess i don't see why you think that the even if we assume that the transaction does constitute a ten thirty one exchange i don't see why you read that as being mutually exclusive of the properties indication definition seems to me that th is very easy to say rather than tendency in common and i do think that that's an ambiguity throughout the complaint there are different references to it and so you're on there are some references to in the sense of i'm going to association but there's also re as this is what the bank affairs are alleged to have done it's the representation of the trust in the purchase of a tick which is a tendency in common interest as the complaints as a real estate transaction so that's what i think that if if if there if you were to take the reading and i respectfully have disagreed with some aspects of how you've read that i still think that there's that the state quote complaint is not clear enough to suggest that it would fall within that that these allegations are ambiguous enough even with respect to x and i want to go back of course to the fact that we've got a negligent restructured sale here that