may please a court my name is jim i represent plaintiff appellant service and resort i'm here with client representative ron logan i'd like to jump right in on the proof of last issue i believe there is a way to square the court's decision in wagner in a way that doesn't involve any perceived appropriations clause issues because the funds won't come from the us treasury counsel forgive me for interrupting i'm over here before you get to the legal question i just need help with which i don't know what he submitted but all of what he submitted was accepted april one thousand and sixteen he said that he would send the inventory in the dry logs and i request for a review and i think it's pretty clear that it wasn't saying that anything was going to be covered it was in the basement but anyway may have the proof of loss was filed right elise according to mr butler's declaration and then there's a partial denial in june and then of course your letter dollars that the other nationwide concedes was paid mr i don't know what mr valencia submitted the briefing from your team seems to say that that something that held you up was in his refusal to submit but but fema denied something and then decided to send out a an engineer in response to your letter so i can't tell what was filed and it matters to me because mr lehrer no mr hickman steckler ation says that a proof of loss is either that form or something that the adjuster has he used the word verified and mr valencia's note says yes he checks the box yes he had  damage so i'm i'm i don't know what what was submitted that's correct you are so i think i can help on that so ok when mr valencia showed up he said i represent the insurance company i'm i'm their agent he said i'm in charge of this process so give everything to me represent the insurance company correct he said even though he was not employed by them that's correct he said i am in charge of submitting the proof of loss so my client's agent submitted everything all of the all of the damages all of the repair documents to mr valencia mr valencia made the decision on what items were to be included in the proof of loss ok but we don't know what he in other words i have a proof of loss that totals ninety thousand dollars and something dollars and then you got a check for that amount and i said that wasn't that wasn't rejected that was accepted so what did they retract that's and that's part of our issue here is even though what the nationwide is saying is that hey you submitted ninety thousand and proof of loss and that's what you got i don't know why you're complaining the insurance company when they responded they said here's your check for ninety eight thousand dollars and  to deny the rest of your claim for anything that we believe was in want to misquote him do you but that you don't want to misquote the record no absolutely well then what you just said is not what they said that's not what they that they did they denied it i don't have the exact language they denied the remainder of the claim because they felt that it was a basement under feel right it's all right if you want to to  generalize it but don't don't don't don't attribute it to them as a statement because what you just that was not what they said i didn't mean to be quoting them i'm simply saying that they denied that based on their belief that the bottom floor the was a basement so i don't take up a ton of your time i'll just tell you both i don't have the june rd letter i can't tell what was partially denied or an on what basis i'll just leave it at that but i can't tell us about it that's correct and that was part of our stipulated facts was that it wasn't in dispute that what they had denied him what they hadn't and so i think that's why we didn't submit that we had stipulated what what was denied and what wasn't if you position what they denied was in effect a proof of loss therefore you move the pre condition well i think we have complied with we have strictly complied because we followed exactly what the insurance company instructed us to do both for mr billing surveillance and the insurance companies so when we received the denial that any time refuse to forward a proof of loss as to the greater amount of the beast he he i think it's a little bit different from that so i don't want to miss miss characterize fact the record what he did he he received the documents and this is from the affidavit and you are one hundred and nine dollars he received all the documents and then he made the decision about what documents to include in the proof of loss and it's interesting did he did you know  not forward approve of loss as to the greater amount yes when did you know that well would have been at the time of the why were you justified in relying on him because he's the one who said i represent the insurance company and i am essentially the gatekeeper and i'm not quoting there but i am in charge of providing the documents to the insurance company and then your company your outfit didn't send an additional proof of loss when he said he would put on his proof of loss he he didn't say one way or the other he simply said i'm the one who determines what goes on the proof of loss so there wasn't a conversation where we said hey you need to do this and he said no he simply said i'm in charge of this process and he made the decision about what of the entire scope of documents he would further submit to the insurance and you knew at that point that he wasn't submitted movements as to the group well and i think the part of the issue is there were statements that accompanied that proof of loss so what mr valencia said in addition what it to that he was in charge of the process and decided what to bring that the proof of loss would only act as a minimum of items that were flood damaged and mr valencia also said that any covered omitted or reasonable cost could be addressed with a claim for additional payment now there's there's no such thing as a claim for additional payment that term i'm unable to find that in fema anywhere in the regulations in the authority cited by nationwide and in the rules they say that any any amended proof of loss would need to be filed within sixty days of the loss when mr valencia made that statement to my client that time had long pas what mr valencia said i believe is actually consistent with the policy which says if we reject your proof of loss in whole or in part you may accept our denial of the claim exercise your rights in this policy or file an amended proof of loss as long it is filed within sixty days of the date of the last sixty days of the data loss had long process through phoenix regulations which we did follow so when mr valencia made that statement to us according to defendant's authorities that is false that there was not an opportunity to file an amended proof of loss at that point there is no such thing as a claim preditions payment and we were in charge of founding proof of loss not mr valencia so all of those statements we believe are false now nationwide has said repeatedly we were to be held to constructive knowledge of these but if we were certainly held to constructive know think there's no question that the insurance company and its representatives should be held to actual knowledge of these regulations and the policy terms so i don't think there was any basis for my client to disbelieve what mr valencia was saying at the time it was consistent with what the policy said as when clients knowledge of what they paid in premiums usually what you pay in premiums kemah give you a clue as to what you are insuring and almost always an insurance company a premium on what it assumes it's insuring and did that give you any clues as to what was covered what was well we continue to believe that the bottom floor of the service and is covered so i don't think there's anything about the premiums that would have suggested that that it's not covered well what what might be what might at least raise a concern is the language which which excluded the basement didn't that cause you some concern well no because factually we believe that we we meet that standard that under the facts of the case that this is not a basement well one of the reasons you would exclude the basement what wouldn't that have some relation i shouldn't say would i'm asking you but it seems to me it would have some relation to how much premium you pay if you pay when you when you when you've got a situation as you have here where you say it's not a basement he says it is but anyway it's a ground floor it's the beginning of the building and you've got a wall to keep the water from coming which means it's a risk not something that femur will cover period so i don't think there's an adjustment to premiums based on whether you have a nick there's no negotiation about whether it's a base or not fema has a rule as my understand you can't pay extra to get a basement cut they  and the reason that the cases that we've cited suggest that that's why you determine when you exit the building do you step down do you step level or do you step up and the reason is if water comes in and it's in a bowl it has nowhere to go here it's undisputed that there is a slight downslope on the patio when you exit the back of the service and resort and the the facts show that when the water came in in the flood it did in fact receipt out the patios and out to  according to the regulations i would like to get back on the last issue and i know that this court has struggled with the appropriations clause issues so in wagner they cited a standard for in flick they felt compelled to to restrict that holding based on the supreme court's decision in richmond now the st test in wagner was affirmative conduct going beyond mere negligence now the reasoning in richmond and pretty much all of the cases cited by the defense suggest that the reason there are limitations is because of the appropriations clause and because funds are coming from the us treasury and that's not necessarily the case that c cards state that if litigation is grounded in actions by the company meaning insurance company there is significantly outside the scope of the arrangement and or involve issues of insurer agent negligence then the female office of chief counsel can find that the litigation is significantly outside of the arrangement and under circumstances they can that any award or judgment for damages and cost to defend will not be recognized under article three as a reimbursable loss cost expense or reimbursement and that's forty four dollars c f r part sixty two dollars appendix a article three subsection d for in my view if we meet that st standard in wagner that we have affirmative conduct going beyond mere negligence then there is a process where fema is not going to reimburse the insurance company because they acted outside of the arraigned the arrangement with female and or there was insurer or agent negligence so what's the affirmative conduct going beyond me negligence mr valencia made several statements that were contrary to females regulations that he was responsible and would be in charge of submitting a proof of loss according to fence authorities and famous regulations that is not correct and that he actually took control of the process so this is not merely an allegation or a representation that my client relied on this was affirmative conduct that that he took control of that the proof of loss would only act as a minimum items that were flood damaged and finally that any cover demitted or reasonable cost difference could be addressed with a claim for additional payment all of those statements are false what does that mean what does that  statement that the proof of loss would only act as a minimum was there the expectation that they could file a supplement correct and then the problem became that that had to be filed within sixty days yeah it would have been had to have filed  let me start by addressing some of the questions that this court had st let me talk about the process the process here was did not involve an adjusters report if you if you look at the scheme that as set up in the regulations of forty or otherwise that an adjuster report is very say something very different and there's never been any proof and it would be the appellant's burden to show that it would be that there was an adjusters report but it's essentially something that has to be agreed to i don't have any of this in the record so yes and that's my point your honor is that there is nothing in the air record at the only the discussion and the only evidence on the record is the payment on the proof of loss so that there is a record that establishes well it's not quite right there's also correspondence coming back from fema that seems to indicate that they've rejected something in this june rd letter something was rejected because that's what prompted in a plaintiff's lawyers  letter is what prompted freeman to send out the engineer and so that's that's where i struggle if i understand the it's a very complicated scheme in terms of the federal program and so as it works out is that a you fill out a proof of loss and if it's after the sixty day time period the wy insurance carrier cannot pay it and lessen it it's not that complicated the problem is just that we've got holes in the factual record the scheme doesn't seem very complicated and they were allowed to file after sixty days they had already had a week waiver right and there wasn't any dispute about that the may filing yes your honor that that that what the there was a waiver it wasn't an extension it was a waiver yes and so that they have to have the burden after a properly supported summary judgment motion if they were going to say that there is something else that they had to prove that they were entitled to it so they would have that in their argument all along ram is that is that they filed representative from the defendant indicated that they would be allowed to supplement that but they weren't well the appeals process is what we're talking about your honor they defile in fact file an appeal with fame and at that point in time and that  could look at it in fact look at the additional evidence they presented and at that point in time fema would have had it within this store to then decide to allow another proof of loss to have been final and then and let me for i understand the point and i always understand that an appellate is there's always something a little bit more but i think that here the issue that the both parties have agreed to is that there was a pain the issue is whether or not equitable stoppel would would be the basis for preventing the application of the sixty day proof of lost probation done that and that's why it's a very factually intensive inquiry has to be conduct that goes beyond negligence and then minimum under ragnor that's what we're trying to get at but i think there's been issues even before you go to get to wagner your honor that you have the appropriation clones issue and that there is a specific under both slick and the other cases that we have  cited that even before you get to that is whether or not there should be an appropriation clause analysis and we believe that there would be and if you look at flickr as well as the comings and kids dixon case as well as forty four dollars c f r six thousand two hundred and twenty two dollars that the idea is that there that if there is a statutory scheme that is set forth about how things are to prevail then this court has no authority or the lower court has no authority to go against that scheme i fully appreciate that and yet what you're telling us is that they feels process was triggered and that the would have had the authority right if fema house the authority to do many things they have the ability to in they would have the ability to waive the sixty day loss provision there are certain things that they cannot wave under the but that's why it would be really nice to know what was submitted to fema what with what were they responding to when they were when they denied something and i don't think we have that right and i would argue that that that that is not relevant because it would have to show that not what the issue is not what femur did or did not do but whether or not whether there was a waiver and the fact that there was only the waiver as to the ninety eight thousand dollars that is what the scheme entitles them to do is to go if they didn't raise an issue or fema didn't do it then that that's the issue and so the but so that we believe that you look at that and i think that if you look at also kind of a separation of powers or administrative function issue that you have the idea that if you've got a waiver scheme if you've got a way that there is like someone can get a waiver and if you look at i believe sixty two twenty two that it it is the federal administrator that can wife certain things and one of the things that can wife is said if there was if somebody wants to bring to attention an issue relating to the adjuster or the w y o s conduct and i can see conceive of situations where female may very well decide to allow a person to extend  discuss the adjuster's conduct now he could have race that is an issue and so we would argue that he absolutely raises the adjuster's conduct and that's what the estoppel is about and it's me i'm not trying to be argumentative i'm really just trying to report from mr valencia and he we don't have what mr valencia submitted that's all and i think that the e mail that you're referring to you're on a fairly read it's documents from the insured has been sent and that's not unusual in the claims process people submit documents all the time but i know i know that there's no evidence in the record that there was a verified adjusters report that was submitted it i don't know what was submitted that but i understand your honour's points let me turn to the issue of equitable stoppel that i think that that if you even applied to this court decided that equitable stop hole has to be is still available under in this jurisdiction we would say that it's not available for  marilyn richman but even if you would are going to be able to use it in something this is not the appropriate case there must be affirmative misconduct of a serious nature that would to impose a requirement would that would offend the concepts of decency and that would be i would cite the heckler in the flick case and mere error is not enough and it's a heavy burden and based upon the cases that we have cited phelps pichler wagner and some of the other merely telling somebody that they that i'm going to take care of it or the sixty days that doesn't offend the sense of decency particularly because if you look at the policy provisions which are thirteen and otherwise and if you are thirty nine dollars that they would be insured was on notice that there was that requirement in fact the letter from the adjuster that was sent to the insurance and unfed on december  thousand and fifteen indicated that it sure responsibility use your judgment and i think so based upon that notice it does not offend the concepts and i said here's the strongest argument and it would be helpful to me if you could respond to his strongest argument and that was that an additional claim could be filed later i think but that is not an accurate statement because through the waiver process there is a inability to tell fema and which is exactly what mr cruz did he said i want to file for more and fema have the ability to do that now whether it's called the using the appeal process or what have you that is the way to do it so if you combine the two statements that you hate fema is going to have to do anything further at this point but you can look for additional information by following something additional with fema we believe that statements and accurate but even if it wasn't it doesn't offend the sense of decency because even the insured if you look at the e mail and when they signed it they knew that they had that they were not getting paid for the basement and so they could have said adjuster we're not going to do it we're going to file our own proof a loss but they signed something under oath that said this is our claim and so we would argue that it doesn't offend the sense of decency now but isn't this isn't what relied upon until it got to district court right this you before you got to court well i think is it implicitly issued because there's an issue of asking fema for a waiver for the st proof of loss and so that w y o carrier explicitly asked femur for permission to pay the ninety eight thousand dollars proof of loss which it did but even if that wasn't the case under the case in the sands case it does matter when you waive it during the process that it is it is you can write waive it in one case in the proceeding because i think that's appropriate because only the fema can waive that provision so i'm just trying to get his strongest argument is your position that mr valencia was wrong when he said that an additional proof of loss could be filed or supplemental proof of loss could be filed or is it your position that he was right what my position is that that he didn't use the word proof was he said claiming ok fine fine supplement whatever you want amended but was he wrong or was he right i think that the fema appeal procedure of wells people to go and say i want some additional money and that makes me i'm i'm just trying to get a yes or no is the answer he was right  if you look for because you're trying to say it's not a proof of lawsuits no contention that i'm just not answering my question and it's really pivotal to my vote in this case my finding that it would be accurate to say your honor and that you if you go through the appeal process that fema could decide to pay you additional money so in that way it would be accurate in that circumstance so but let me kind of one of the other quote and i just follow that up in your position is it's not there it's not a basis for a stop all because the th argument because even though he says they can file an additional or supplemental proof of loss you or your position is they could have my position that wasn't raised until you got to court that's not what the insurance company relied upon you know my my position is that this doesn't rise to the level of even offending the sense of decency so as to trigger a straw poll and one of the things that this court also has to look at and which we rely on is whether or not this would have an adverse impact on the public because in slick and some of the other cases that you cannot use an equitable stoppel when it would have an adverse impact upon the public here this is a very high bar in this type of case and i fully appreciate that so you don't have to influence me that i'm just trying to figure out whether or not they have an argument even under the wagner standard that something this person said really misled them really was incorrect and misled them and they could have relied upon it to their detriment it's kind of hard because at the time he made the statement about sixty days sixty days have long since expired yes your honor and so you think he was right or wrong about at that point when he made the statement that they could have filed an additional i think he was both accurate if you look at the federal scheme in terms of appeal and it didn't matter because at that time there could have been no reliance upon what he said because the sixty days had already passed and therefore that you know and if also that they they followed the procedure and that about the additional amount and fema ultimately decided to waive it not waive it he only waive it as to the ninety eight thousand dollars and therefore if anything that even if he said was inaccurate there cannot be shown reasonable reliance or the types of character or that it would not have adverse jest think your honor i've got thirty seconds left but i just want to kind of say that i would like to ask you to think about the process if an adjuster that is applied for supplied as a courtesy that insurance could say so much orally told me that this is what has been there by  defeat the sixty day provision this finite procedure the scheme set forth in the federal legislation would essentially be thrown now there needs to be certainty and finality so with that i've asked the court to affirm th decision of the district court thank you thank you i just like to touch on it in a couple of manners one about you just are or really saying that isn't refuted so they've had access to that adjuster if he didn't agree with what he said they had perfect access to them we did we  cite in the stipulated facts which is seventy five dollars with nationwide what was what happened in the process with the appeal and i would like to point out because i think it's a little different from what my opponent has said and that is the only issue that was at issue for a better term during that appeal process was the basement insurance company denied on the basis of their belief that the lowest floor of the service and was a basement they denied that they told us we could appeal we did there's a nd round of appeals that we also followed the lack of a proof of loss did not come up at all during that time at no point did they say hey this is all moot anyway because you didn't file a proof of loss all we talked about was the basement issue and it wasn't until we got in the middle of the summary judgment proceeding that they said oh by the way it doesn't really matter what what fema did in your appeal and what you did and what you said you didn't file within the supplemental proof of law so you're out so i think that's important to note and the comment that we could have later filed something is completely contradictory to everything that they say in their pleadings we have been dealing with arguments from the beginning that say follow is an appeal which is what we did and we continued to talk about the basement and then this this notion about that you didn't file proof of lawsuits too late that was raised when summary judgment so that we wouldn't have course have brought  up in a significant fashion mr valencia's conduct during the appeal process because they hadn't raised that as a basis to deny our claim we just fighting about whether was a base correct and i believe that is consistent with strict compliance and i think there is an argument that we did strictly comply so even if this court is still struggling with the richmond decision and the appropriations issues i think there is an argument that we did strictly comply because the policy says you can accept or deny or if we will if you want us to rule do we have to just ignore the fact that the insurance contract is a contract no i think i want you to follow the insurance contract what would be the result in this case on this record i think mine was made le that it's not an all or nothing proposition so that was for the undisputed amount of damages that were not there was no allegation or suggestion that that was that was basement related we have to be ri one because we follow the terms of the policy meaning that the procedures set forth in the policy says accept their denial file a supplemental proof amended proof of loss which we were couldn't do because of the time or exercise your rights or the policy which is the appeal process so we followed the process that one is in the policy to that the insurance company told us to follow so i don't think you have to rewrite the policy at all i think we have complied with the policy and i think it was