armstrong yes thank you ron good morning in may please the court stephen weiss broke for pan am equities were here this morning because we believe the court below erred in granting the motion for summary judgment of lexington and in denying the motion for a partial summary judgment of pan am and in denying in the alternative additional discovery concerning industry custom and usage i'd like to begin by talking about the pla meaning of the policy then move on to industry custom and usage and finally conclude with what the court should do with any ambiguity under the plain language of the policy it's important to keep in mind that this policy differs from policies that have been considered by this court and other courts before now like all policies and ams covers what are known as perils which are basically insurable risks that can cause a loss in this policy that policy establishes a general deductible one one hundred thousand dollars and then for the specifically named perils of earthquake flood and wind storm in hail there are special deductibles hear him suffered flood loss but not wind loss at the subject property of the subject properties are seven flood loss is subject to the policies deductible for wind storm and hail there are two main reasons why that is incorrect the flood deductible plans to flood loss and the winter storm deductible does not apply under the plain language of the policy st the policy says that the flood loss is subject to the flood deductible regardless of any other calls now flood is actually defined and i'd like to point out to your honor's that flood is defined not just in a long list of definitions it's defined in a special section on flood which says that this governs flood references to flood and the application of flood references in application so it tells you how to use flood when it appears in a deductible nd and this is consistent but it's an independent reason the wind storm and hail deductible applies only to wind of sufficient violence to be capable of damaging the insured property when storm unlike flood is not defined and this court like virtually every court in america has made clear that if windstorm is not defined in a st party insurance policy it has the meaning i just said when storm refers to the insurable peril of the force of windsurfing to damage the insured property there are variations on of that in different courts of this court corps which involve louisiana law but there are plenty of new york in texas and other decisions that say the same thing now lexington does not deny that lexington does not deny that the general rule applied by courts across america is that when storm does not include flood that refers rather to the force of wind the violent force of wind sufficient to damage property ordinarily but lexington says that this policy is different even though winter storm is not defined here lexington says that there is a named storm provision within the windstorm inhaled adoptable that supposedly quote creates close quote a broader deductible then woodward nearly be indicated by the undefined term when he likes to use that word create there is no regardless of the number of coverage is in perils involved expressly including flood wind wind gusts and rain now lexington's partial quotation really begs the question to what does the windstorm inhaled adoptable apply and the answer is found in two places your honour's st you can see the answer by looking at subsection  applies regardless of any other cause and then subsection d that's the top of the very section that lexington is relying on says the following some shall be deducted from any adjusted lost due to wind storm and what that means is that everything that follows is subject to that deductible only if you start with the premise that it's wind storm or hail hail is not an issue in this case but when storm was made for me once  what we do pardon me for hitting the mike what we did is we actually inserted the definitions into the text precisely to answer your honor's question if you look at pages four and five what you'll see is that the leading language of the provision about which us is an altered it says the following some shall be deducted from any adjusted loss due to and i'm inserting the standard court derived meaning wind of sufficient violence to be capable of damaging the insured property inhale and then you go on from there so we're talking in that about that kind of law so if you start with the premise as usual that when storm means the force of wind then the provision to which your honor refer makes clear that even if there were some other loss flood that you wouldn't apply you would still apply this to the wind damage the other way that you know that this doesn't just trump the flood deductible is the lead in a language to the flood to dr bill which incorporates the anti concurrent causation clause again as i indicated i would any other cause or event contributing concurrently or in any other sequence of loss and remember that regardless of cost comes in a special provision that says this is what flood means and this is how you  district court was relying primarily on cases that said that certain hurricanes qualified as wind storm meaning that they were fast enough wind speed so that the wind damage from them fell within the parameters of the wind storm coverage in those cases so the district court was misapplying those cases and let me make this crystal clear there are two kinds of understanding of wind storm warning is how you speak every day is a hurricane a wind storm the other is an insurance specific understanding that has been followed by courts for decades and so to say well yes katrina a wind storm is a non controversial proposition and we would agree that any wind damage from katrina would be covered by wind storm coverage absent special definitions in a policy that's all that those decisions were referring to there are other decisions that the th circuit has also applied regarding somewhat similar issues i think the most noteworthy are see cork and six  flags i want to start with six flags actually it's girly or in time it helps explain sea corps six flags involved seven insurance policies six of them went one way and according to the th circuit and one of them  another in basically with the th circuit says as in six flags you had to apply the flawed provisions not the named storm provisions absent special instructions on the th it said it's ambiguous under that policy's language because there was language that said if there is a nother specified peril in the flood is actually caused by that other specified peril then the flood provisions don't apply so that's how six flags came out under the language which is a little different from our language but it's somewhat instructive and then seek or did something different it said there is a provision here  that establishes a specific name storm carol and it applies to not just force of wind the typical meaning of wind storm but to i want to make clear there was a separate named wind storm peril and that applies not just to typical harms caused by wind storm but to all the kind of happiness of europe disturbances in results that can result from a named wind storm expressly including in that case hurricane so seek or turn on the fact that there was a specific peril that embraced both when storm and flood that's absent here and you can see the absence of that here from the leading language well is the fact properties at issue in this case your honor is correct for the rd property that is not an issue there actually was some wind damage and so both sides of greed as to that post oak property which is not necessarily a tip we're not addressing we're not addressing that exactly your honor here there is just a flood damage and so that is why rain caused flow yes now it's part of harvey i'm not disagreeing with that but what the public there isn't here and i think your honor alluded to that is there is nothing blowing against a building that is harming these two buildings and that's why we win here now that the district court's opinion is not just incorrect it's dangerous because all of the national flood insurance policies and many other policies well we cover flood but we exclude damage from wind storm now if you were to issue a ruling affirming the district court that would create a certain degree of chaos here because suddenly you have hundreds of thousands or millions of policyholders who bought policies that cover flood but by their reasoning don't cover flood if it caused it's caused by a wind storm which hurricanes colloquially speaking are that would be a terrible result and there is not just fema policies to all kinds of policies that rely on this distinction that we're talking about now i want to talk briefly about custom clear we have argued in the alternative and we go through the reply brief several places where we made that argument in the alternative below that if it isn't found plainly to mean what we say it means then it's ambiguous and there should be discovery on we asked for two issues below discovery on custom and usage and discovery on the draft correct your honor and we want you to send it back even if you'd say we're right because we still need to have litigation over damages so we only move for partial summary judgment now let me just say this about custom in usage all of the cases that were cited by lexington and cited by the district court about extrinsic evidence those are talking about things like what did someone so say or what someone so think or what was the conduct of the parties before this contract contract got a policy and you know we your honor in new york and texas both of you look at custom and usage unlike that other kind of stuff to figure out whether there is ambiguity you have to understand what the terms mean in the industry in which the in there and all of that in the shore and say well you know you don't tell us what we really mean when we go she's not in any easy country you know like ordinary policyholder you want insurers you buy you and the language is quite straightforward we have a deductible for wind storm and half and it says that that's one hundred thousand dollars per caren's except hurricane regardless of the number of coverages flotations for perils involved including but not limited to all flood wind wind gusts storm surges tornadoes site from tail or rain now that's it if you have a name storm it doesn't matter what this policy covers it's subject to that five percent deductible so long as you have a loss arising out of a name store policy within a priore conception that windstorm only means when the cases that we've cited the texas supreme court new york courts they all say that how do you interpret policies how do you  contracts you store with the words that the people used you cannot except hurricane and flood from when storm in hell unless it's in there to begin with that's how you read it  adjustable maybe you could have flood associated maybe you could and he talked about when storms in east texas could be associated with heavy rain and he's right we happen to be at issue here in east texas and it team during wind the doctor will applies regardless of whether it's with that doesn't make any sense and that's not how we read contract contracts to not make sense so the point then basically is that you start by reading the contract and what this deductible says is that name storm is basically a subset of wind storm so when storm take your type and what name storm does that it gathers regardless of language in the flood definition really does not bind up against the regardless language in the name storm deductible the regardless of the language in the flood deductible is a causation it's an anti colon current causation clause which this court has seen many times before and what it's hawks about is that it takes flood creates a little flood box and says regardless of what it is not cause a flood goes in the flood wind and wind gusts and rain what do you do with all those little boxes all those little boxes together get a five percent t i v deductible so there's no conflict there they're not operating against each other they actually operate rather well toget now this is not new language to this court this court saw almost identical language can see for which involved win hurricane damage from hurricanes katrina and rita and the damage in sea core was a three types there was wind damage there was wind driven water damage and then they were just plain old gra and the question in that case as in this case was well what's the deductible that applies and the court went through the analysis of the deductible language the name storm the duckbill language and  which is structurally identical not close structurally identical with the name storms adoptable in this case and n c core the name storm deductible started off with in respect directly by the peril of when storm as defined there was a twenty five thousand dollars deductible except in respect of loss caused directly by the peril of name when storm there was a three percent t for all coverages combined basically it's certainly functionally identical now goes and makes the next you know an extended argument well seek or went off on the issue of there was separate named wind storm peril that would be an interesting argument if in fact the decision reflected that in any fashion it does not what the th circuit didn't seek or was to look at the definition of named winstone and then the question is because the exact same issue was raised in c corps the insurance company commonwealth said no no no the flood deductible applies to flood damage but the court then went on to say but wait a nd this policy also has this other language are identical to ours and they said you cannot then just stop at when storm you have to understand how that word is used in the context of this policy with regard to name one store in sea court the court held that a name when it's going to dock the ball just like this one applied was to the one building four thousand six hundred dollars post oak and we're not talking about it's not it's not an issue on this appeal but this brings us to a related issue which is this e in this case the flood the name so the fact that it's flood damage the fact that it's that in this case it's just flood and not when it's not this box because the name storm deductible tells you that regardless of how many you have or h if you have them and it arises out of a named storm then you get the name storm to have counsel spoke for a few minutes about custom and usage  declaration the main problem with mr faiz declaration and the main problem with the entire custom and usage argument here is that you cannot use custom and usage to contradict exactly what the contract sets and council tries to get around that argument by saying that well they were really two types of extrinsic evidence there's custom and practice or custom and usage and then there's a kind of exchange of governance about what people said when they were negotiating the contract and he said that the cases that we cite don't really deal with us been usage that's incorrect the you are i case that we cited from the texas supreme court the c b i case that we cited from the texas supreme court st bank texas supreme court all of that discuss explicitly custom in practice and that you do not go to custom and practice when the policy or the contract is clear and unambiguous to begin with in another case that we cited the court said experts have a proper role but it is not to morning i didn't hear anything to that effect when you look at the name windstorm deductible we've had four actually five judges look at this language the district courts in both this case and see court the th circuit and see court and now this no one no judge has looked at that language and said that it's ambiguous so if it's not ambiguous and you apply it to the and then with regard to the two or more deductible language of the policy tells you that if there are two or more deductibles that apply to a single occurrence the one to be used is the one that results in a higher amount the larger deductible that's the one that you apply in this case there's an argument that the doctor bill applies that really is in a sense it now the reason why the flood deductible does not apply quite frankly is what the doctor tells you what applies to hafe what way that's good but then you've got the name storm deductible which tells you what do you do with the name storm it's a specific piece of language that tells you what you do in a particular instance of a named storm of the flood adoptable under this policy applies with regard to whether to a flood that doesn't arise out of this does not involve loss that arises out of a named storm once you get to lost that arrives that have a name storm you then go to the name storm deductible that's another straightforward answer  at the end of the day the name storm deductible operates as it gathers for office it just brings together everything into one place and it says that if you have any peril or not it's just the language that's right there and it's the language when you read it it gives you the answer to the question so unless the court has any of the questions i would conclude my remarks  thank you your honor i agree with mr vaness on one point the court should actually read the policy and go from there and if the court does that we clearly will we lexington cannot rewrite the policy to include a named storm deductable a phrase sprinkled throughout the argument in the breeze when that just isn't written in the policy now what mr dennis refers to is that name storm adoptable is actually just a provision but it's just wiener observed you start with the leading language in the leading language includes an undefined term when storm and when windstorm is not defined under the laws of new york texas and every th circuit case that  is addressed that it means force of wind now mr dennis made an interesting totally incorrect argument when he was urging you to read the policy he said look at ten b he said that that provision tells you to apply the largest applicable to dr bill well two things are in work st it doesn't say that and nd it doesn't tell you which deductibles are applicable maybe the nd point is more important than the st but here's what it says if you're quark if you find it too tedious to actually look at the policy for this i will read it aloud if two or more deductibles provided in this policy apply to a single occurrence the total to be deducted will not exceed the largest  applicable there doesn't say you apply the largest applicable to dr bill it says the total will not exceed it and it is not saying at all that you must apply the windstorm deductible when there is only flood now again i would urge your of the court to look at pages four and five of the reply brief to see how wrong this this was of these provisions when you inserted actual definition you will see that nothing says in the name storm provision regardless start in the in the in the name door provision that it applies to any adjusted loss due to name storm or to flood due to name storms that's what you typically see in a named storm deductible that it applies to any adjusted loss due to name storm or due to flood from a named storm that's actually what it said in wake foreign policy a case involving their own policy that's what something suggested in six flags for the commonwealth policy doesn't say that here and then mr dennis also tried to distinguish the regardless of last language in the opening sentence the leading language for the flood deductable when he says well that involves causation not applicability of provisions but actually the flood definition section says this tells you what the word refers to and how it's applied and it does not say that such and such is treated as flood regardless of any cause or said incorporated the common law meaning of winston it had a name storm dr paul which we incorporated a special definition that said this applies to all loss from name storm including express that's totally different from what we have here what we have here is what you would have if in c corps that deductible didn't exist but instead somebody increased the windstorm deductible above it in the event