this appeal is whether we're going to allow an insurance company to sell an insurance policy that provides explicitly that it is going to cover intentional a to find as intentional acts in the policy and then allow the insured to turn around and deny a duty to defend based on an interpretation of inten exclusion whereby they interpret the word intentional as meaning volitional in other words the interpretation by century insurance company says that anybody listen will act by the insured is an intentional act under the exclusion so you're not going to be able to get the coverage that you were promised well the exclusion really applies only to high level officials that  the exclusion applies to the insured yes that's what that's that's what applies to it doesn't just apply to the the principles of the company but the interpretation that century has tried to come up with to provide an ex explanation for why they have come up with this idea that you know i'm going to read this to you them employees that's what i was referring to i think all right but the exclusion itself the entire exclusion applies to insert that portion of it but if the intentional act is committed by an employee of the insured of the company then doesn't apply right the purpose of that language and i'm just yes appalled does or doesn't apply yes you're correct ok you're correct that language there however talks about the fact that the language  perhaps the federal trial court judges here deal with a situation where that may be from my perspective at least and i'm from louisiana understand that how do we interpret what i conceive to be some conflicts in interpretation by the california courts particularly the california supreme courts and i've got one gray how do we reconcile that and does that imply ambiguity your honor there are a definition of intention ing policy in this situation is explained very well by the supreme court in the great case in particular and the courts provide the general approach to interpret an insurance policy in california is that if there isn't any ambiguity in the policy it's supposed to be interpreted against the insurance company in favor of coverage and the approach that's taken is that the coverage opinion the coverage provisions of a policy first are analyzed and their broadly construed in order to accomplish one primary goal ok i understand that but didn't oh god oh  great conflict in the sense one given a definition which says intentional is very broad it covers every intentional act regards to the consequences of the the knowledge of that he should have known this was created some type of harm and  no it should include intent to commit not only the ad but also the resulting harm from the act isn't that a conflict no i don't think so you're on the decision in gray has has never been criticized it i law the law is that if you promise to serve under the coverage provision of the policy that something is going to be covered and then if you go to the exclusion you have to  interpret that exclusion in light of the promise of coverage of the policy delgado doesn't doesn't change that analysis and when you in this in this situation promise to cover intentional  when you look at the exclusion in the policy you can not you cannot decide that that exclusion bars all volitional wax when you promised to cover intentional acts under the policy you know the word confess i find it capable of ultimate meaning and it actually is really a different word from purpose i may intentionally perform an act although i may have very and purposes and i impact that i perform intentionally may do things that i did not have as a purpose agreed your honor and that's part of the point that i have that that we're trying to make here in part the point of why california law interprets exclusions narrowly because a word like intentional can have different meanings and under tort law the word intentional means an act that's committed with and in an understanding and intent a purpose of committing a wrongful act when you look at the language of this policy to be the acts that are defined as being covered first wrongful termination wrongful termination is defined in this policy as terminations of an employment relationship in a manner that is against the law or in a breach of an implied agreement to continue employment  harassment harassment is another act that's defined under the coverage provisions of this policy is being covered the definition is unwelcome advances whether physical or verbal requests for sexual favors and other verbal or physical conduct when under subsection c such conduct has the purpose or effect to interfere with an employee's work performance or creates a hostile or intimidating work environment this go far beyond the listener will conduct this was promised to the insured but they would get this coverage they paid extra money for it they paid for this extra coverage the cases that are cited by the insurance company in this case all deal with occurrence policies those are accident policies they cover accidents this insured paid extra money they paid more money for this additional coverage and under california law under the supreme court decision in haynes when you interpret an exclusion in an insurance policy you have to if the product there was a representation by the insurer where they would be a reasonable expectation of coverage when you interpret the exclusion it has to be conspicuous plain and clear and i submit that when this insurance company said to the insure that it was going to cover intentional acts of wrongful termination and harassment that that insured had a reasonable expectation that they would be covered for the very acts that were promised in counties will suck gould if i could interject a question of establish what the exclusion means and to establish unequivocally that under its interpretation of the exclusion not only that it means what the insurer says it means but that there is no possibility under the allegations in the complaint that there could ever be a possibility of coverage that's the insurer's very heavy burden and the reason the insured has this heavy burden under california law is that we understand in california that these contracts these insurance policies are contracts of a eason the insurer drafted this language we didn't have an opportunity to be involved in the language and that's why the hate in paynes the supreme court said the insurer has to draft the exclusion in such a way that it's clear conspicuous and unambiguous and the interesting thing to note your honour's is that actually what we have in this case is three different interpretations of the meaning of this exclusion the first interpretation which we believe is the correct one is that the exclusion only excludes intentional this exclusion still covers negligent and reckless conduct so we have three different interpretations i believe ours is the correct one but the district court here after reaching its interpretation separately and differently from the insurance company reached the incorrect conclusion that even though the policy according to the district court covers negligent and reckless conduct this district court found that there was no possibility under the allegations in the complaint that there could ever be a potential for coverage and that frankly is just a wrong and a mistake good morning your honour's elden edson for a police century select insurance company may please the court your honor the district court's ruling that there is no duty to defend is consistent with the expressed terms of the century policy the rules  it was within the confines of this policy it's very clear exactly what intentional means the dictionary definition when when it when a policy terms are specifically defined within the policy we look to its plain ordinary meaning and if you look at dictionary definitions of the word intentional it is done in a way that is planned or intended or an act that is done with purpose in this case we're talking about an intentional act act is also defined in the policy as conduct so what we're be understood from the meaning of the words the surround it that is to say of the same variety and the words to surround intentional are actually very interesting words any dishonest malicious fraudulent criminal are intentional act now that i've just given you four words that are terrible things dishonest malicious fraudulent criminal and then i've given you a word the use isn't terrible at all just anything that you intend to do it strikes me that you some generous at least suggest to us an intentional should have some meaning more precise and at onset a little worse than merely intending to do the act that you did because if you can to put the their own intentional acts well but i understand that but the question is what is the word intentional me and i understand that the exclusion is if the people at the top do certain bad things we're not going to cover you we're going to cover your employees because you may not have such control over the behavior of employees i got that but that takes us back to the question of what intentional means and charges of a bad thing that we're not going to insure you for intentional meaning i fired this woman and so that would mean under your interpretation of the policy any time a high level person in the company defined here in the exclusion of fire somebody you say that when intentional act whether it was a wrongful act or proper act you're not covered that's a very surprising reading of this policy to me but that's exactly what the policy says your honor well yes you either even if the act was not wrong phone other words it was based on some cause that he's yelling out of because he thinks that she  is sister misappropriated some company data or what have you write your order if another good question it doesn't matter whether the context long for it doesn't matter whether you know she deserved to be fired fifty times over the point is he did the he fired her and this policy by its express terms does not cover him for that act as the employer when i get insurance i think there are two different risks we're looking at here one is the risk that i can't control my own behavior i get  because of something i do and there's another risk that my office manager may do something that i have less control over this policy covers that second situation where in my example my office manager gets me sued because she does something that's that's a different risk it's a materially different risk than risk that as the as executive officer i do something i've got a question for you if i yes your honor and i will not ask you to ambiguous or does burns have the burden to show that intentional is ambiguous you're out to thank you for that question your honor generally the  insurer has the obligation to show the application of the exclusion however it's up to the court to decide based on the plain reading of the policy language how it's to be interpreted so in this situation it's for the court to decide what intentional act means it is however sentry's burden to show that the policy exclusion applies to the facts of this case and in this case the facts are absolutely clear and not in dispute we have a her claims in the underlying action thank you counsel if i may go to do you agree or disagree that california courts have given different interpretations of definitions in the insurance context as here to the term intentional your honor in the insurance context i think particular if we're talking about intentional acts there is considerable amount of interpreting intentional acts outside the scope of an employment practices indorsement and intentional acts very clearly means purposeful acts there are out of state cases which have looked at this exact policy language w not intentional results if the policy is a drop rated as requiring a showing on behalf of the carrier that there is you know you have to show intentional wrongful acts or something that would be an improper judicial construction because you'd be reading language in the policy that's simply not there are you familiar with the ninth circuit case in our state versus callaway it's not so close to the front of my mind that i can remember the exact facts or are  get the impression from reading that case an intentional acts exclusion was ambiguous because it did not make clear whether the phrase intentional act referred me to the intent to act ought to be intent to cause the consequences of  wanted there are cases which look at similar type exclusions that there really are three groups of cases that were cited by the policy and i'm glad you're on to raise this one group of cases looks different types of language where for example there's a mark held decision that the council cited to the court the briefs it was materially different language it was it was the intention to cause a result and we do see some of that language in some policy solutions that doesn't apply here  there are other cases that were cited by the appellant that deal with insurance code section five three three and there are other cases that deal with the express policy exclusion for bodily injury or property damage which is expected or intended from the standpoint of the insured if we look at the scope of the various types of recall general exclusionary language you can look at is a v and at the the bottom of the would be insurance code section five three three claims that these are these are the narrow this is the narrowest application then above that you have the expected intended damage exclusionary language which clearly focuses on a result that says it's subjective it says from same point of the insure at the at the broadest level we're talking about exclusionary language you have straight intentional acts and exclusions like the one in the century policy and if we apply that the clear plain and unambiguous language of the policy it applies to clearly exclude coverage for the claims in the situation and if i make i don't want to overdo my welcome here but in the sense of californias interpretations of  if there's a potential for coverage there's a duty to defend its centrist position that the clear and express language completely eliminates that potential for coverage and again it just comes down to the policy language reliance on the legal authorit think who do you think they were buying the coverage for meaning there are going to be a lot of lower level employees are going to the firing is going to be the people named in the exclusion are going to do the firing it's going to be somebody like a partner or a director or an executive officer and you say anything they do isn't covered by the policy they just bought because they're such a small little company i don't think there are any employees who are not excluded  that i think i'm right there given the size of this for this this company the only people who are going to do the firing will be characterized as a partner director executive officer but you're honest questions the next one raises a number of important  whenever somebody says it's an excellent question that lead me to suspect i'm on to something so what am i on to here ok i'll explain it's not up to the carrier to determine the structure of the insurance  and discussed numerous possible ways that the central policy would provide coverage that it wasn't a loser e coverage and your honor had upon some of them earlier which referred to the intentional acts of the employees exclusion does not apply who's going to be doing the firing well your honor there was actually another claim which is part of the record in this case in which the insured was sued as a result of harassment among the different employees and based on the nature of the claim it was impossible for us to exclude the potential that the employees were engaging rassmann i guess one example there's also the potential for negligence exposure there is the potential that even an executive officer could be faced with a negligent hiring or negligent supervision claim which is in fact the absence of an intentional act i'm not doing something and in those circumstances there would be coverage you know hence i get so it's not a and so the language is changed the effect did not change that but the language is changed the language is changed but it's to bring in the it's a what's happened in this context in the insurance industry is that employment related practice policies move toward a definitional change where you would refer to one full x and within wrongful acts you would have discrimination claims you have harassment claims or you have wrongful term claims so it's merely a definitional shift as opposed to any shift in the substance of the the your honour's you picked up on a point that i think is interesting and that is that the language of the policy did change there was the two that the two thousand  endorsement which was the one that my client purchased and was in effect during the acts in question and then my client continued to purchase through this company and purchased the two thousand and nine indorsement and  employment practices liability endorsement policies and century insurance company when it submitted to the department of insurance an application for approval to use this new form represented to the department of insurance that the change from the words intentional act in the exclusion to the terminology of the slitting intentional wrongful acts and of the exclusion had no change to the coverage and that doesn't make any sense if what the insurance company was saying was their intent and when they developed this policy was to exclude all volition course not because the term wrongful acts is defined as the wrongful termination the harassment which as a matter of definition are not just volitional they are much more than that we went through that in the first part of my argument and they also submitted the answer didn't just make this representation to the department of insurance they made that same representation in a notice to all policyholders they said the change in the language doesn't change coverage it's just a clarification well i agree it is a clarification it did show that the intent was to cover all intentional wrongful acts which are defined as intentional in the policy and you  asked counsel for century whether the term intentional can have different meanings in different circumstances there is never been a case in the history of california law were a kit where a policy that promised to cover intentional acts ever was allowed to have an exclusion for intentional acts is barring any evolution atlantics never never never it couldn't happen because we try to have the reasonable expectations of the insured the achieved in this state we don't want insures that have complete control over the policy language and the exclusion to pull the wool to pull the rug out from under us after we spent the extra money and then have them say oh no no we don't cover volitional conduct i know we promised but we don't sort of counsel you asking us to root them out of law on this issue respect this is not a close call and i'm surprised that we had to be here because this policy clearly you went through that the terminology of it those words in the