morning your honor i would reserve five minutes for rebuttal time in this case and i'll keep an eye on the clock my name is philip pillsbury i represent pacific coast builders the appellant in this case made please the court and council this case involves a policy provision that says in essence this policy will cover the loss unless there is other insurance providing coverage for the loss in which case our policy will be excess to any such other insurance actually providing coverage the policy is quite specific we're talking about the a r u policy and access polic access issued by the respondent the policy is quite specific it requires that a r u can only ovoid coverage if there was another policy either scheduled for unscheduled that was providing coverage of the words quote providing coverage close quote for the last is at issue here it is undisputed that one a r u rejected pacific's claim there was recall that there are eighty claims over seventeen years each of the years has first liar access second layer access third and fourth layers of access going up to an average of eighty million dollars or seventy seven million dollars per year all of which pacific coast builders purchased the court will recall also the pacific coast builders he was in the business in the construction business our community redevelopment and put the concern themselves with a retained limits clause the language in the retained limits clause in each of those policies is very different than ours ours is the most specific type of retained limit clause you can have it says the access policy will pay when the underlying schedule policy exhausts and when all other insurance providing other insurance kollek to bull by the insured ours is the most specific type it actually requires that there be actual coverage provided at the time you make the claim so we make the claim to a r u a r u says we're not go pay because there are other policies that are triggered in you need to go talk to the other policies in many instances those were sister companies national union being one of them we went to those companies and in every instance they said we don't have a present obligation to cover you we will not provide you coverage now he's not and that's a strange way is that the what it words you're derivative of the of the definition coverage in other words if they have no coverage coverage comes goes doesn't coverage mean what the policy is written and what liabilities or risks are covered under the policy may not be triggered but coverage is the scope of the policy a as the supreme court in california says it is where you have damage in a continuous from progressive last period and then all of the policies on the risk are triggered but the supreme court says we want to be clear that does not mean that they're providing coverage they are potentially a pleasurable but they do not provide coverage until all the terms and conditions of those policies and the net when i look at the are you policy it says we can only of void paying if there's a policy providing coverage not a policy that's triggered not a policy that may someday be available not one that may be collectable because it's not insolvent providing coverage and the  e i may be wrong on this i don't remember a case that we read year that talks about triggered being interpreted exactly that way or i'm i'm missing something the california supreme court says exactly that and this is in a might be wor minute just to read that language i have here before me this is what they said in montrose in the case of successive policies bodily injury and property damage that is continuously and progressively deteriorating throughout several policy periods as potentially covered by all policies in effect during those periods stated in the insurance industry's parlance we conclude the quote continuous injury close quote trigger of coverage should be adopted for third party liability insurance cases involving continuously or progressively deteriorating losses the term trigger of coverage should not be misunderstood as a doctrine to be automatically invoked by a court to conclusively established coverage in certain categories of cases or under certain types of policies the word trigger is not found in the c g policies themselves nor does the insurance co to numerate or to find trigger coverage instead triggered coverage is a term of convenience used to describe that which under the specific terms of an insurance policy must happen in the policy period in order for the potential of coverage to arise the issue is largely one of timing what must take place within a policy defect of dates where the potential of coverage to be trigger whether coverage is ultimately established in any given case may depend on the consideration of many additional factors including the existence of express conditions or exclusions in the particular contract of insurance under scrutiny the availability of might defeat coverage and a determination of whether the facts of the case will support a finding of coverage the point that we draw here is the exact error that the district court made judge hamilton confused trigger of coverage with actually providing coverage she drew no distinction the california supreme court draws a specific distinction and the policy issued by a r u says the underlying policies must be insurance providing coverage here they weren't now how are all these claims being handled answer as they were being handled by pacific coast builders on its own through its uninsured pocket t bought a primary policy there were no primary policies here at all it's not unusual in the construction industry to have very large s o i ours ours were about two point four million dollars on average in those years that is not considered insurance so the program we have is we have a layer of the self insured retention then you have first layer access then you have second layer third layer fourth layer and the courts are very clear that we're entitled to exhaust we can select a period of horizontally that's why you're vertically and it's a fair rule the reason it's fair court in the supreme court is once we go up vertically those carriers that are triggered can then allocate with other policies that they believe have been triggered and have some responsibility and so there is an element of fairness that's what the allocation rule of community redevelopment was intended to do but judge hamilton applied it here in a case where it was an action the court said no that's not insurance those are self insured retentions and the allocation rule doesn't apply by an insurance company against its own insured no court has ever allowed in surer to be shut out of coverage by using this allocation rule the allocation rule is soley to be used by in between insurers determining the priority of their payment of the l so to wrap up this because i'm coming down to five minutes that i'd like to hold back for rebuttal community development and the dia have different language it's much broader than our language ours is very specific in both of those cases there were insurers that were actually providing coverage in our case there was no insurer actually providing coverage and that's undisputed thank you all written the rest of my time fo are you agree that the focus should be on the contract language of its policy the problem with the facts argument is that contract language has already been interpreted by the california court of appeals in community redevelopment and saying that that's materially different and that should change the result they say that the underlying primary policies are not providing coverage because they have an exhaustive essay ars the problem with that argument is the term providing coverage has been interpreted by the california court of appeals in the world fargo case i didn't know in that case the court looked not to specifics about the policy involved but the term providing coverage in the insurance context on that so they say they're not actually covering at this moment because they have been exhausted as they are is that that's not what providing coverage means under california law and the wells fargo decision was also the holding in wells fargo was reiterated in the thai court title case which is also cited in our brief and again the court looked to the dictionary definition of coverage in the insurance context providing coverage and found coverage to me included within the scope good primary policies to get to this question of the access maybe they do as if it did here you exhaust your primary and then you look to the access and then you have to look to the access language and say are they access only to the one policy underneath them or the access to all these triggered policies you're not going to have all these triggered policies in your standard one occurrence in one year case but in the montrose case we have lots of triggered primary policies that's where this comes up so to look  contract interpretation but more importantly for this case it rejected it as being completely unreasonable and if you look at this case and you see how this argument would play out you have ensured that purchased the more expensive primary insurance and the less expensive excess insurance which isn't supposed to have a duty until all the primary is gone and they say well we have all this more expensive primary insurance we'd rather not use we want to horizontal exhaustion and what if the insured didn't tender and said well these primary policies aren't actually providing coverage because they have no duty to actually cover into we tender and we didn't tender w it completely turns the concept of less expensive access coverage on its head and you have the access carriers dropping down and defending were the first line of defense is traditionally the primary carriers so greater of either the total of the a playable limits of the underlying policies those are all that long gone left in the schedule of underlying insurance and the apply of limits of any other underlying insurance providing coverage insured in comparison if you look at the language in community redevelopment that same retain limits clause is not identical and it shouldn't be construed the same development says company shall be liable only for the ultimate net loss in excess of the greater of the insured underlined limit an amount equal to the limits of liability indicated the side the underlying insurance listed in the schedule of underlying surance plus the a pleasurable limits of any other underlying insurance collectable by the insuring the need to use the word available to the insured every retained be collectible available means that at some point in time you have available insurance over seventeen years from one nine hundred eighty nine to two thousand and six we have first layer access i mean you're saying that that's what the terms require him to do when you buy a policy then you don't know whether you have coverage unless you determine the solvency of the insurance company and that's one of the wells fargo case wells fargo had an insolvent company that was actually had to provide coverage it didn't do it because it was insolvent so what the retained limits clause is looking at is that's a whole different world when a company goes insolvent then you go down that route and one of the insurance commissioner picks it up and all completely has nothing to do with the underlying legal responsibility in determining horizontally exhaustion this is the difference the difference in this when you say providing coverage there must be a current obligation to defend  claims when you say you failed and isn't that's the ultimate question you say you're looking to the ultimate question this time the primary question in other words whether you really have to pony up the pants on whether there's horizontal exhaustion no no i don't think so at all and forgive me for saying that i think this is a very specific retained limits clause and don't forget committee redevelopment says when it is that specific it may be that the horizontal exhaustion rule doesn't apply we don't i'm right back to the specific clause says we are excess of any company providing coverage that's an that's an active verb that's a verb that says there has to be coverage provided right now there has to be a present obligation the understand how a reasonable insured you know what i mean when you get to i mean we can go through all this but it sounds like we're trying to distinguish words like collectible available as it's turning your phrase different than the others than i am i'm current obligation to do that and often what i'm looking at is pops up right there yes home community redevelopment the same thing happens they go to the company and say we want to collect money but no they couldn't collect money because they have the self insured retention on the community is different because the insured  allocation rules between insurance companies but if you look at what's the reasonable expectation of the insured is that a reasonable interpretation of providing coverage means that a company has to actually be providing coverage and when the first lawyer access says we're not providing coverage to you because we have no obligation isn't that a reasonable way for us to interpret that a i you then has an obligation to defend us and indemnifies and if that's so if it's reasonable then this should be construed in favor of coverage the problem with that is the judge hamilton made two errors one is she made an error in confusing trigger with actual coverage and the second one carriers here there are no primary carriers in this case how do you kind of that because the ads try are is not insurance and ninth circuit and california supreme court cases instead when you have that circumstance there is claim the tween two carriers the insured had a very small as high are twenty five thousand dollars are not two point four million dollars we have in this case so there was no primary insurance in this case in which there are endless i r now how would you expect to collect on well what you do is for a period in which you have a single occurrence you pay through your s o i are and then you go directly up to your recovery in equitable contribution or up equitable subrogation against other policies that have been triggered but what they can't do is require pacific coast or a company like this if a coast to exhaust you have to select a single period in your entitle to all the coverage within that period going up in a construction defect case once that happens you can then select the the excess carriers that pay that then have an equitable right allocation better horizontally trigger carriers that's the only way that you avoid stacking and the only three or way to resolve an issue like this this is an insurance this is a company that spent millions over seventeen years and is now frozen out of coverage because of misallocation and mis application of now acacia rule that's what's going on in this case i'm well over my time thank you for your interest here so we appreciate the guidance from both counsel