adams we're ready when when you are and to show you why that's clearly what colony intended what they agreed to call me to ask questions about the protective safeguards in the insurance application calmly then included a far protective safeguard endorsement to the policy which read and i quote as a condition of this insurance you're required to maintain the protective devices or services listed in the schedule above call me also add an exclusion to the policy which reads we will not pay for walls or damaged calls or resulting from fire if prior to the far you failed to maintain protective safe cars listed in the schedule above incomplete working order and finally the underwriter on this file testified that colony would have rescinded the policy as soon as its procedures are wild once it learned the power and heat were never continually the instant the report hit the desk it calmly calmly should have read it and reported to them on what was in the report and take whatever action it was going to take we contend that there is no law in north carolina on what the grace period should be or how long at least sixty days and maybe longer to review the report and take action on in the capital of case they actually it was a year before they actually had the insured n result can't be that force or can make up a law and then you then apply that to north carolina which you have to do is you go in and look at the north carolina cases and give it your best guesstimate of what you think north carolina do and so that's where we are left here and that's how we slide in this whole business of is this a condition proceed and it was a forfeiture and you get into the whole north carolina which is different from maryland in terms of how you construe these policies and who when something is ambiguous and that's kind of where we are on this and maybe what a judge submitted this in a week i don't believe he provided any guidance and didn't tell the jury what how many that's colonies could that benefits insurance company the insurance company so insurance company can go and have someone review the property and make sure that the representations in the application are correct and make sure that the insured is in compliance with the protective safeguard conditions and that's what the and specter when there was inspected the property send it to colony colony fall that standard operating procedure for processing the report and take the report according to the undisputed testimony in this case she and she was not required are obligated or supposed to take the report so let me go back and look at the application and see is the application consistent with the report because as the jury found it wasn't they misrepresented that the heat with regard to the condition preceding the points i was making show how important the protective safeguards were to colony in fact we contend that protected safeguards were an essential requirement of the insurance contract i don't recall that language but i would not disagree with your look at the harrison harris construction case when you get a chance i mean it's pretty clear i mean i've been reading it for years and i think it's particularly nice to me at this point but maybe you can convince me otherwise is that they ought to be constricted construed and that any ambiguity is construed against the inshoot that's norco but there's no ambiguity here i mean i didn't go to yeah i just want make sure context or could we make something up like that i mean maybe that's what i want i don't want your daughter they be the fourth circuit could make something like so i think you maybe we already did that's what you're saying and what i believe there is there is the capitol office for circuit authority for  in the state on a kind of a theory that they know more about it that maybe appellate judges from other states like to exploit me if you are that principle i have your honor seems this one may read we were not paid for in a lawsuit if you fail to maintain any protective say god it seems a little different in a condition proceed because it coverage and but you can forward it if you don't do these things not in this case your honor because this was the heart and soul of this contract they were only insuring a building that had protected say courts they were an insurance any building and so if you don't keep that they had already tried to all the companies i think that it turned them down the other building had burned down and here's this one bird down by employee i mean it reflects well up but i'm not sure that when you think about it what does that mean from an insured is that even if you deal with a sixty day thing so if you know that who would wait sixty days or you can thirty days or one day if you know a report is coming then only one word is rigged flags up week and that was an issue that got confused in the trial court level of belief we didn't know in one day we didn't know in twenty seven days under the process followed by a colony which i believe the court kept also was a reasonable procedure t ake it didn't get to the underwriter who has her supervisor says handling at any given time two hundred to four hundred task it didn't make it from the assistant underwriter it made it into what's called her task wor person who's doing these things and you know what you're doing and you think this condition is so important it's just a condition proceeded the first thing you do you go through then at least reflect any things that violate a condition proceed i would think that's that's not the percy juror that was not testified to be the procedure avonlea has changed now to health i don't know but that was not the procedure calmly follow a reasonable procedure in this case and twenty seven days after it had thank you your honors minute please the court patrick kane representing appleby's charles peterson evergreen composite technology and your honors i'd like to start with the idea of condition precedent and judge when you're absolutely correct that under north carolina further your honor and say that it doesn't matter whether this is under north carolina law it doesn't matter whether this is a condition precedent a condition subsequent a condition of forfeiture whatever you want to call it under north carolina law waiver and the stoppel are appropriately sent to the jury and that's what the district court did in this case and that decision should be affirmed and that jurisprudence starts all the way back with the horton case in eight hundred ninety eight your honors in which the language of that that case can't be much more clear it's on page twenty seven of our brief and the supreme court of north carolina stated there that any condition any condition in an insurance policy may be waived by the insurers conduct and notably the one specific type of pritish of condition that the court mentions in horror and is a condition precedent so under north carolina law any condition be a condition precedent condition subsequent you don't need to figure out what this was because it is appropriately submitted to the jury on the issue of waiver in a stop your honor turning to the questions that you asked counsel for colony regarding the capital off case and whether or not it was in fact dependent on maryland law i would respectfully disagree with mr adams that there was no review of maryland law in coming to the determination in that case in fact this course said that one of the bases for its rationale in capital off was that to apply a waiver in a stop all under the facts of that case would create a duty that is not found otherwise in maryland law so the court was clearly cognizant of what maryland law was when making that determination think we were applying maryland law i think absolutely you are in maryland correct and to the extent that colony contends that this court in capital off created some sort of absolute fourth circuit federal common law that should then apply to this case i think that argument is misplaced that  know so business with the maryland law was a plot in capital you know when i read it first and i didn't think it was in a doubt about it just stated that in maryland insurance policy is i'm not in the first instance construed most strongly against cited for the sixty day escape provision that county would like to have been made an absolute federal common law rule by that case basis of not construing policy against the insurer even if it is sixty days in maryland you can understand it that makes sense you wouldn't construe it against the insurer but it is totally the opposite i'm not sure how that comes out in the state that goes the other way correct your honor and  what the way it comes out in north carolina is that that question the issue as to whether there was appropriate time to review the information in the files is a question of fact that goes to the jury and that's precisely what happened in this case and judge o'steen was correct in submitting that issue to the jury and the facts of this case are clearly different than the facts that were confronting this court in kapil off in capital off the court determined that the insurer who at that point was adjusting a claim and therefore was subject potentially to a bad faith claim that wasn't the case here there was no adjustment of a claim there was actually an inspection as your honour's have noted that occurred as part of the policy bargained for part of the policy two hundred fifty dollars that the insurance paid for that colony undertook a duty to inspect the property they did inspect the property they received the inspection spectrum i think that under north carolina law that is the black letter that is a black letter law that insurer is charged with knowledge of what is in its files i don't think we would go so far as to say that under certain facts that it takes place immediately that that as soon as they received that information they waive their right to that they needed to act on it immediately but it's a under north on a lot of question for the jury and join appendix page question for the jury your honor that was there sufficient time to review under the policy or the procedure that county implemented and what the facts of the case were here was that they received the policy or they received the stop i don't know where you get net for if there how these additional facts that are here correct your honor and the additional facts are what were presented to the jury what the jury found those are not in dispute and that is what the jury used to find th charged with making this decision in reviewing the inspection report and who waited twenty seven days or so this data was in columns five because that's the presumption the presumption is is that cognizant that a official fowls of the com i presume to be known by the church company and it seems to be the other side is indicated there's some question as to whether this data is in the files of kali some third party someone else will twenty seven days and call it really didn't know about it after the file if that's not a question of fact your honor in the jury conclusively found that this inspection report was in the end box of rose and out the a from  and she chose not to look at it because she was too busy doing what she called premium generating tasks ya know i see my time is up so many yield to my colleague mr bryan for randolph thank you very much thank you you're on of coverage mortgagee coverages for the building last pay you coverages for the business personal property business personal property lobby the limits is three point five million the limits for the building was one million jury said value of the building is six hundred thirty five thousand and the value of the business personal property was i think one point six million something like that so we're both we're both but the analysis is different under both and the jury had the issue of was the bank responsible for the misrepresentation and that was funding this building before you as follows the history behind this is that the building was purchased in two thousand and seven and at that point the bank loan money for the purchase insurance policy was in place with another insurer from two thousand and seven to two thousand and nine the policy lapsed the bank didn't know about it mr peterson didn't know about it and then a building burned down at and you know there's a policy and assume the bank has read this policy and they've seen it conditions with those of all of it you and whatever seems like you would have an interest in making sure this compliance yes you're on yes your honor and so with the first policy  they all recognize when the first building burned down that somebody made a mistake not sure who but the order of the day was let's get another policy in place and it was first built was ours of the first building was arson it went to  probably this is the same situation same situation so yes so when the colony policy gets put in place the bank feels like they are acting properly in getting well mr peterson can't recover as a last pay the bank cannot recover as a loss pay is asking the issue right right right so that the building the personal property tower of coverage is gone for the bank  then it falls back to ok let's talk about the mortgagee coverage for the building and so the issue that went to the jury of was the bank responsible for the misrepresentation of the jury found no the banks not misrepresentation i think that the key fact that was in evidence was that the bank had no control over what mr clayton was going to put on that vacancy something because remember the facts were that  the bank talked to mr clayton and then mr clayton the agent went over to mr peterson's office and they talked about how to fill this form out and then mr clayton submits the form thereafter in the jury must have concluded with their no that the bank could not control what got put on that they can see something so we contend that judge o'steen properly denied the rule fifty a motion on that issue and the other issue about the substantial change in risk which was jury but clayton and in both phone calls mr hammond understood that mr clayton was saying that mr peterson had a letter that said he taking care of the power he had to turn back on and so that was in evidence to show that the  so the bank did not have knowledge of a substantial change in risk and that and that's why judge o'steen properly denied the rule fifty motion on that issue  which never went to the jury so let me fill in a couple of gaps from the questions and presentations about the utilities condition and capital often and  as you all have noted north carolina laws should govern this case not maryland maryland laws different in several respects one of which that hasn't been discussed is that in the capital of case the court said a vacancy condition cannot be subject to general assembly has to take care of that obviously well for the general ok you're right you're right you're right but nor should i look said it in a broad sense that if the building is in the policy and the risk of fire is apparel that's insured accounts then the risk is within the coverage and is subject to a breach of a condition is subject to  on the capital off case regarding the skate clause the sixty day period the north carolina standard for bad faith and unfair trade practices is reasonable miss and so the insurer is not given a sixty day grace period under north carolina law there's no immunity given for sixty days i mean a new church can be found to have acted in bad faith and unfair trade practices on the second day of getting a claim in i mean that's the north it's a reasonable not standard and so that would be another reason not to have not to have the majority rule around the country i don't know you're on i think it is but i don't have a case underwriter ms go to testify clearly that the inspection report was in her inbox she had access to due to review it she chose not to because of calis adopted policy of not reviewing those inspection reports it was at the bottom of the list and this is undisputed and at the top of the list was matters that generated new income or profit so calmly instituted a routine business practice or business policy of essentially not looking at these inspection reports are essentially waiving the obligation generated by the two hundred fifty dollars and otherwise to analyze the risk in addition to that at trial colonies witnesses clearly testify calmly made the decision as to how many underwriters to hire and they certainly could have hired more personnel or cut back on the cutbacks of personnel so these tasks could take standards and that that was presented to the jury under appropriate and not challenged instructions and that the jury verdict should stand on those points ms goes the way the underwriter for conny also testified which is a key point that had she taken the time to look at the inspection report and read it then she would have taken immediate action to cancel rescind the policy so that your position colonies  was commies actions reasonable in connection with not reviewing the report that it had in seattle and the listing of properties all focused on new business even though this was connection with waiver in a stop on that point and again ms go today said this goes to capitol had she done that she would have taken immediate action to cancel rescind the policy wouldn't have to been any delay at all and that's not disputed commonsense analysis to show that the condition was indeed a condition that could be waived under the a political law as a believe your honor judge when indicated in the bronze brother's opinion in that opinion where there was conditional language that was deemed to be a condition precedent that was in the initial ensuring agreement in this case the policy begins on record on appeal page seventy three and runs directly on appeal page one thirty two the ensuring agreement is own one home page eighty four i believe close to the beginning the policy say's says we ensure this and then you get to the fire protective safeguards indorsement that back half of the policy in the section for exclusions so we already left or right in front to back so in addition to what my colleagues have pointed out to the court the simple structure of the policy shows that it is definitely a condition that could be waived as well as collies act actions business practices because there are multiple examples that came into evidence where there are different factors only applications  that were later discovered and there was no rescission colonies business practice was not in fact to sand it was to work with the insured and rectify anything thank you for your attention  focal points real quick the jury never was asked never made any determination on whether what colony did was reasonable that was i'm not arguing about we have it there was no objection to the instruction they were not instructed on reasonableness greve instruction they were not it's not a condition preceding i don't even think it's that judge when i think it is us it or i think it the the say court conditions is part of the basis of the bargain it's part of the contract as part of the fundamental agreement between the parties and we argue there was no contract there was never a meeting of the minds because we told them in the first instance there had to be this days or properties we were sure in because that you have the safeguards in effect they can have an effect i think there's no contract and that's why i think we are entitled to rescind the contract and get the waiver and stop but if you get the was sent to call me it was received in colonies possession so it was in common with us on the navy state i think it was the twenty first of april and it was an assistant underwriter who dealt with it was not her responsibility to see if the conditions were thirty every report i'm happy with thirty because it it the fire happened after the twenty seventh and i have to take twenty if you get it would i have to disagree but first i don't think mr braun is correct in stating that mean we could pick in a time period when public or stock picking time is things like you need some scientific data something to support the basis for have it done so other that it feels good or i don't know you i don't know what that number why not twenty not twenty eight i mean the jury makes the determination and we make a lot of them make some of the most difficult decisions i've got a question you know as capital case but that's not what does look like my own law is being a is no maryland law on this point and he was coming up with a commonsense approach that in the future insurance companies could conform their conduct and he said if you look at everything it all would be it would be sufficient bright line and made everybody know what the law is doesn't change that doesn't change the fact that that there that it's appropriate for this court to want to adopt the rule and have a lot of number to recognize that there is need for conformity in the in the that there needs to be a state bright line it it's least persuasive authority we under your ear we can't make up law for the reason i was arguing your honor is a problem because i said then what's reasonable is going to be different in every case every time you put twelve people in the box and