per those governing standards are that a complaint need only provide it short and plain statement of the claim showing the pleader is entitle to relief the statement need only give the defendant fair notice of what the claim is and the grounds upon which address the court must accept asked true the complaints factual allegations and grant reasonable inferences in favor of the non moving party they were familiar with that the just and interesting point of this case is that you've got judge gerard writing an opinion interpret a nebraska law and for the most part he wrote the nebraska law so how how do you expect this court to be correcting just your art on the brassica law well your honor a couple of things here judge are odd was one of many who was involved he did write the opinion it was in two thousand and four the specific issue that is at issue in this case was not specifically addressed in our owners audrie owner stated that occurrence would exist in the context of faulty construction if there was damage to other property and there is not under the business risks business risk issue exclusion issue if a contractor own work is defective and it can simply be remediated replaced that's not covered but if other property is damage that constitutes an occurrence and that's covered the issue that was not before the card and auto owners w issue of damage occurs in the process of remediation always mcshane's status as an insured in this proposition on the shane was the general contractor correct and  mallory mallory was a sub contractor that they hired to help them perform the general contract they were a specialized subtype tractor on or for fire suppression or yes for the general contractor for your client yes and this there was a stipulated indorsement making your client a named insured on maoris policy is that right additional insured your honor did correct and the policy provided general comrie comprehensive liability coverage for both parties your party in and so the sub didn't do their work and you had to take it over and i had some expenses and what the occurrence was the fact that this didn't do satisfactory work in the fire suppression system didn't work is there right there was negligence in the design and installation b occurrence says is the accident is you can understand that you'd have to replace pipe if the pipes the wrong diameter it wasn't it was was an accident of sorts it would just fold the workmanship wouldn't it but that's not something that makes chain would expect that it be ripping up buildings lose their coverage yes not for not for the actual replacement of the fire suppression for mallory's own work which is the fire suppression systems there's nothing being claimed for that i just want to be clear about it was there coverage under the policy that your your inch client was a co insured for its negligence in the design installation yes and your client designed and mallory installed now my client has no fire protection engineering staff whatsoever that's why mallory was hired it had a pretty piece under law it had a duty to have certified qualified people who could do this and do the engineering design and is part of this under the law the installation because it's very specialized and it's something that somebody has to have qualifications and meet both statutory administrative code in nebraska so you're asking got them for insurance coverage for whatever happened and the district court said you don't have any coverage is that essentially what he said we are for they did for the property damage in our vicarious liability as a result had to redo the work and we had to we had to do part of it or something like we did redo the fire sprinklers we did the having to tear out the was and get drywall contractors in there and and ceilings floors and cut chain and if  's damages collateral to the failed fires yes separate the consequence of their negligence and you're arguing it you are covered under the gun policy yes absolutely yes absolutely ok now occurrence is defined as an accident and they've been interpreted accident due to something unexpected and unforseen by the insured and so on and so forth and i think that's what leads one of the things judger are got into and just said well this is an x and it's for seeable do that to that extent why why has these extra damages not they're the accident another words fire suppression failure you had to replace but you're saying it was an accident that you had to tear out walls and so forth ordinarily you expect that you have somebody who's doing it properly but if something's wrong for example it was first discovered just to show because the specialize by captain dickerson of omaha fire department and interstitial spaces namely cavities that are between the floors and the ceilings and that was found  before something in an area where it could just simply be taken care of without ripping out watts and things of that or we weren't expecting that once it was room closed and this was done that we would later learn that something behind was and behind ceilings chain that's in there that used to put the drywall has to be cut to access this no one foresaw that this was something that an exchange of spirits no one had ever seen before they testified this was a fiasco of you know unparalleled circumstance for them but this loss was covered in your view by the gotham policy absolutely absolutely because gotham spent six months adjusting this directly with mcshane as it's it's is insured chain also has liability highway twenty which is nebraska supreme court says a general will be liable to an owner vicariously for the subcontractors negligence but even with a contractual indemnity the be implied them ity because it's the primary party the sub contractors negligence that's responsible but that is what that has to the general and that's why this policy that the ship got them is covering an exchange for that kind of liability if for example the drywall contractor and putting up drywall had cut through electrical lines and caused the fire well that would be an insurance with a drywall contractor and vicarious liability as a result of what  virtually every single state supreme court and federal public court that has considered this kind of issue in the last half dozen years all have uniformly said it's an occurrence and this is the kind of damage and the way the iso policy was written was to give general contractors coverage in the count there's a sup contractors doing this because this is a perfect example of generals not going to have the knowledge has been even mcshane looking at the sprinklers doesn't owners but the recent last year drake williams decision which is controlling that is what governs this case comes from the brass the supreme court a number of the justices who were involved with otto owners now specifically considered the issue in a context that is virtually identical to make change and in building the arena in lincoln there was a general contractor and they were putting a pal cash to support the arena a subcontractor provided rebar it was the  because it was not cut properly as a result of that defect some of the structural supports were insufficient they did not meet the requirements for structural support and the question then became how do you remediate that and  the nebraska supreme court many of the same justices and additional one since then since otto owners in the private is passed specifically consider the issue of what happens when there is damage that goes beyond in the remediation process and drake williams they had the option of either demolishing these pile caps but then there was an alternative that was available that doubt with being able to put a band to reinforce them so as a result of that band reinforcement were not damage but the brass a supreme court was express and saying it would be occurrence and it would be property damage if the power caps had been damaged and demolished as part of the remediation which is exactly this case covered by the insurance policy absolutely absolutely and i ought to add to that while this was the updated version of the c g i which ah the state supreme court cases that have come down and federal appellate court cases in the last half dozen years uniformly finally coverage in this context got them one further and put on that has to be a state approved form the insurance department has to approve that form right it varies by state by state you know there's there's a there's a there's a file and use and then a proven versus pre advance filing yes it's varies by state but yes i suppose the insurance services organization which provides these forms and the is i recall the occurrence language that you're referring to as it was really dictum because there was in it what kind of man i thought the issue in drake williams was property damage whether or not it was property damage not whether or not there was a current now the court made specific reference to our owners and the finding of occurrence and rick williams probably damage was was part of the issue going hand in hand with that but that was there's a specific reference and drake williams to auto owners in the fin because it went beyond they would be on the contractor's own work product and therefore the petition properly alleged an occurrence and stated the cause of action for physical injury tangible property and it concluded in the conclusions your honor said because the cost for which he ws reimbursement were not derived from any physical damage to the pile caps here would be the drywall and the walls and everything else or their temporary loss of use here the things were loss of  occurrence there would be property damage and if it threw off the construction schedule there would be loss of use which the policy covers doesn't the me doesn't this policy require gotham only to pay that the insured becomes legally obligated to pay as damages that that language found in the well legally obligated there is an eye which found in the pot legally obligated is language that's found in the process over yes there's there's no no court as rendered a judgment here that creates a legal obligation to pay so how do you get around the limitation of that language while there's absolutely a legal a legal obligation comes as no surprise that we had to provide a code compliance system in these buildings that had to be done if that were were not done tenants were putting their furniture temporarily tenants were starting to walk away from leases because these buildings could not be made available and their units cannot be made available so if mcshane had not taken the steps it did to get this moving and to get this done and to mitigate the damages and make sure i mean the law at the end of the day your honor when we all went to law school our understanding was the law was to incentivize good conduct publicly beneficial conduct m shane did the right thing it went in and mediately it said this had to be fix these these fire suppression systems have to be made code compliant malory didn't do proper work mallory's you know not to be paid for it shoddy property that's what we have here other property beyond the malory fire suppression systems and you argue that all of this extra work you had to do a bird from mallory's failure to adequately specific scott hoppa who is the person in charge of this project they were for six months phone calls and documentation got them said it's reasonable it's proper and it promised that a half million dollar five hundred thousand dollar payment was coming and then rhythmic and said a final report and it used the rounded off number it was four hundred ninety nine dollars and some hundred but it was it would be used with me saying it's a five hundred thousand dollar amount and then didn't pay morning mr o good morning may please the court my name is ross rohloff and i represent gotham insurance company mcshane's position that it is entitle to recovery of approximately five hundred thousand dollars as an additional insured under the gotham policy is fundamentally incorrect mcshane's claim is not an insurance claim instead mcshane's claim is a claim against mallory gotham's policy holder in which mcshane's status as an additional insured has absolutely no bearing exchange claim was properly dismissed and the district court's march twenty ninth two thousand and sixteen memorandum in opinion should be affirmed to do ensure gotham issued a policy to malory malory is the one that didn't do the right word that is correct mcshane was listed as an additional insured under the gotham policy but the gotham policy is a liability policy so to the extent that there is any coverage for policy holder that coverage arises out of a claim made against the policy holder not a claim made by the policy holder millry have any obligation to rectify any of the improper installation or who's seen here mallory had no obligation well let me rephrase that if malory had an obligation to rectify any of the faulty workmanship your agreement is that only male re would be covered with your posy then if there is coverage only malory would be covered because it is a claim by mc shane against mallory that claim against mallory may not be covered because there is no occurrence causing property damage but the fundamental distinction that mcshane misses here is that the gotham policy is not a first party policy it is a third party liability policy and under is you think the spring lawsuit had been filed against mallory and make shane yes the analysis would arise about whether the alleged duct is an occurrence due to the defendant not her duty to provide coverage is that what you're need to tear up the walls and so on and so forth and that the third party action would the gotham ensure that and cover that would give rise to the analysis that the district court engaged in was there an occurrence giving rise to property damage but yes in that situation the analysis would be our malory and or mcshane covered by the policy for the claim made against them if there wasn't an occurrence what was there here if there wasn't an occurrence you know what would you call it i would call it faulty workmanship that under well established nebraska law is not in occurrence under a liability policy there needs to be an accident causing damage to property other than the work itself for there to be a truck thing to or something like that is that what you're saying in this specific context i suppose that the analysis would be different if the faulty falta lee installed sprinkler system had leaked and caused damage to furniture to rugs to property other than the work itself but here there was no accident in the drive in this stuff that had to be  but that still does not arise out of an occurrence that's why the district court properly found that replacing the dry wall and the insulation is not property damage caused by an occ the drake williams opinion well i thought there's some case law that says that that if your current there is an occurrence of you don't get the property damage for the pair of the system but you do have in the in the repair of the system you do cause damage to other property and i thought that's what i thought that's what i meant but chain is arguing here is ok we have this other property that to get in there and fix it we got to tear it up but it's not caused by an occurrence that's the problem in auto owners the court found that the duty to defend was triggered because there were allegations that the fault only installed shingles fell off and caused damage to roof to the buildings and the roofs adjacent to where they had been installed and the court found that those allegations were sufficient allegations of an occurrence causing damage to property other than the work itself in the drake williams opinion that is cited by mcshane the court did not get to the occurrence question because in drake williams the parties dispute that there had been an occurrence but this was mary's work it was a machine that's correct this was mallory's work and so this entire analysis of whether there is an occurrence causing property damage really applies to whether mcshane's claim against mallory is covered such that mcshane can recover against mallory which case was tried in state court and a liability policy and in fact nebraska law is well established that that a claimant cannot recover against a tortfeasor insurer that's why i keep asking the question  i i understand that it's a big distinction but if you take it if it springs late at legacy we're suing i think you'd have a tough argument to say that you don't have coverage here if i if and i understand you're saying well that's not the situation us here you got to contracting parties or suing but go ahead why you can tell me why would you not have coverage under the normal circumstance well i think i can't stand here and say that there wouldn't be coverage i think a claim i think the claim that you're describing would trigger the analysis by gotham as to whether mick shane and or mallory are covered under the gotham policy for a claim that the owner makes against either either mcshane or mallory again that's the third party claim that's the purpose of the liability policy to backstop the the policy holder in the event that the policy holder gets sued in a liability policy there's no right under the policy for a policy holder to bring its own claim for damages against the insurance company and that is exactly what mcshane is doing here one of their arguments is really a matter of policy there's so and you know we did the right thing we didn't wait you know just walk away from it and and let springs that legacy sue was and go through that whole process we stepped in and fixed it and for that i was getting to was ok they avoided the third party action by stepping in and solving it so as a policy matter why would that should that be recognized in covered i think there are two responses to that and they essentially go back to the occurrence issue a general liability policy provides coverage for an accident and it specifically includes contractual liability if there is no claim made against mcshane and if that claim or if there is a claim made and it is not presented to gotham for defense and in then any payment and i don't think the record reflects that the payment was made on the owner's claim but any effort by make change to pay that claim is a prohibited voluntary payment under the against as will fix it if they hadn't done that they'd have been sued and probably you'd have to pay certainly have to defend you'd probably have to pay but here they said you know what will do the right thing move pay for it so why is you know i were i were getting out of that out of what is an occurrence but it seems to me that they all but i i understand your trouble and i believe  and my response is that that that's a business decision that's a contractual obligation to situation that is a business decision made by mick shane to as they characterize it do the right thing that is not covered under any liability policy making that decision is not an occurrence that's a business decision that's why that's why policies like gotham's policy exclude contractual liability we have to read the policy don't we to find out what was in the policy you say that under a comprehensive general liability policy there must be an accident but it's my understanding maybe i read this someplace else that there was some loss of use coverage in involved here and some of the things that went along with this and certainly there was a loss of use here there was a loss to use of the apartment complex  if this hadn't been done so you yes loss of use loss of use is typically included as part of the property damage definition under current general liability policy forms but again there must be an occurrence there has to be an accident causing damage to property other than the work itself so to get to that loss of use portion of the policy there still has to be an accident to use is an occurrence of loss of use is not an occurrence loss of use is an element of property damage and if there is property damage caused by an occurrence loss of use may be covered well let's say you lose that that argument it is that occurrence or it's determined to be an occurrence i asked the question earlier about this language policy language that there's that got them is required to pay the insured that the insured becomes legally obligated to pay is damages is that provision satisfied here no it is not in the district court was correct when the district court found it was not the legal obligation to pay again also comes back to an occurrence but assuming there was an occurrence there has to be a legal obligation to pay and there is nothing in the record that reflects that there was a legal obligation for make chain to pay as best i can determine what's really at issue here is the owner's claim and if you there was a moral obligation like judge riley was talking about the do the right thing that again comes back to the lack of an occurrence and whatever decision that was made by mcshane is a business decision that decision is not an occurrence that there's also a policy provision that says the policy holder is prohibited from making any voluntary payments and so i would say that that payment is also a voluntary payment in addition to not being an occurrence well i understand  tell us contracting bartie day will fix everything we'll take you out to dinner and we'll do all these things it's all on the insurance company i mean i think that's the policy argument coming back the other way about it i  agree with you your honor but it's it's still requires an occurrence and it still has to be a liability claim against mc chain there is no evidence there's nothing to suggest that  a claim against make chain that would give rise to an analysis of whether macshane is covered under this policy this is this make chains effort here is an effort to recover under the policy under which it is an additional insured but its status in making this claim is not as an additional insured it is as a claimant so the damages that we're talking about are really the damages that make shane would be asserting against malory in the trial court action in the state court litigation involving breach of contract claims between mcshane and mallory there is one final point that i would like to address relating to the statutory of the statutory relief claim mcshane argues that gotham omitted to advise the district court that it engaged in the business of insurance without a license and without being admitted insurance company this argument has no merit government policy states on its declarations page that gotham is a non admitted carrier in the brassica regular insurers also called standard or admitted carriers must follow statutory regulations controlling the risks that they insure and the premiums they charge non admitted or unlicensed carriers sometimes referred to as surplus lines insurers fill the need for coverage in the marketplace by insuring those risks that are declined or cannot be insured under the standard underwriting and pricing processes of admitted insurers this does not mean that the policies that they issue are invalid or that they are engaging in some sort of improper conduct it simply means that surplus lines insurers are subject to different regulations from those that govern standard carriers and as this allows them to insure the risks that standard carriers cannot or will not insure gotham is approved by the nebraska department of insurance as a surplus lines carrier and mcshane suggestion of anything improper based on gotham status should be disregarded in conclusion the district court's march twenty ninth two thousand and sixteen memorandum and order should be affirmed because the district court properly found there is no private cause of action under the nebraska unfair insurance trade practices act or the nebraska unfair insurance claim settlement practices act the condition preceding of an occurrence causing property damage was not satisfied the condition preceding of mcshane becoming legally obligated to pay damages is not satisfied mcshane was not a third party beneficiary under the policy the doctrines of waiver and a stop will do not apply and there are no direct actions under nebraska law for these reasons and for those set forth in the brief government surance company respectfully requests that this court affirm both the district court's order granting gotham's motion to dismiss and the corresponding judgment in gotham's favor thank you thank you mr roland martin has some time here i'll give you two minutes if you want to show through roll up two minutes they're not fifteen minutes there we go thank you your honor i want to quickly get to auto owners and drake williams which is specifically in there and it said we reason the damage the roof structures and buildings represent unintended unexpected consequence of contractors for faulty workmanship went b and the contractors work product and therefore the petition properly legend occurrence in contrast in great williams with the power caps were not damage it the court said unlike auto owners the amount it seeks the costs to make them conform because it was simply a band that was done there was no damage to the power caps was not damage to other property and concluded because the cost for which the s w sought reimbursement were not the price derived from any physical damage to the pile caps or temporary loss of use there was no property and thus no coverage under this year's g l policies so they went hand in hand but i have to get fresh mandrake williams was out a shirt and insured against an  expended were reasonable there was no check in picking people to dinner and mcshane did not want this headache trust me your honor it went and did what it had to do gotham went through it there are written communications confirmations from got got them saying it's documented it's reasonable it's proper seventy one days were appropriate and scheduling ninety seven thousand five hundred eighty eight dollars and sixty four cents for the honor claim that's why there was not sue no litigation because it got them agreed to pay this and then reneged so the reason you don't have this suit is cause they wanted to change to mitigate the change did the right thing they looked at everything the chain did said it was proper to reasonable it's in writing and scheduled and