offices that i've rented and i would have to say it would be that it would be an unusual thing to say that any one of those commercial at lords who rented space from us for us all those body hears caused me because the nature of the business that went on and my clients from the scene was a little more often than lawler manufacturing or printing or other of us the people who rented the space  engaged in production of pornographic materials now they did so with all state low regulations they paid their taxes i suppose your money was it was anybody else's well they didn't comply with the  so that was obviously hotly disputed the case is ultimately settled we're now after that litigation and we're talking about what happened is that it would be a minute to offend for most commercial landlords to have a duty to  go in and inspect exactly how it is their commercial tenants perform their businesses whether they're conventional or in this case on conventional business but that was the theory that was raised that they should have done that that's really that issue of the connection between what a landlord did and was supposed to do and was alleged to have done and they single exclusion that is that issue in this case is is what's at issue we have two actors not to use protective measures why doesn't that directly fall into the exclusion under the policy of sexual acts caused by the i'm sure it might be for purposes of  we're here talking about the duty to defend and here's here's the key thing your honor the evidence is undisputed that from the declaration mr major that he only studios itself had no are what he was was it struck with is a financial man he's not sitting there  your number two we're talking three plaintiffs poken multiple events over a series of years in a company that had over one hundred employees on helped clear evidence of that it would have been from time to time and certainly there's certainly plenty of other directors listed in place as having undertaken things in fact a lot of the allegations are that they didn't keep track of what their their actual directors were doing if i recall complaints that there were some directors who in the heat of the moments such as it were let things get out of hand in their peculiar productions and that was three hundred and fifty thousand dollars is relieved that i say that you believe we will have some additional costs that we will ask the insurance company to reimburse ok but getting back to judge almost questions i think it's important it's important to recognize that in order for the duty to defend to be defeated by this exclusion the hypotheticals of the questions your honor was posing would have to apply for every injury in every case over every over all the hears there's a lot of allegations here so the exclusion would only apply as as has often been quoted in the atlantic mutual versus j lam inc case it has to apply in all possible worlds and wuornos there are a lot of possible worlds in this case but there are there are a lot of sexual  clearly but it seems that exclusion that in road into it policy was intended to cover the entire universe of the production of videos of sexual acts that cause the injury to the insured and i'm having a hard time understanding what isn't covered under that exclusion based on the conduct of these entities  just the standards in your oath the only reason the only reason this policy should not cover armory is if on lake itself caused directed or instigated sexual acts and nothing that armory did caused directed or instigated sexual acts certainly not in all cases and your honor was positing that maybe mr grech work was involved in a direction somewhere in the many many issues that were involved in the allegations  everything i got sued on short of that in this case the allegation that we have to focus on for purposes of the duty to defend is whether the commercial level or have not had a duty and i don't know who all the ownership interests are o other entity or leave it's called cybernet that entertainment area i think dot com is one of its various fifty dishes business names which is not insured here and this conduct is not at issue here although focus of the litigation and it was separately assured by other companies we're talking about here this is solely armory its interests and it's judy to inspect the premises and in this instance the court is correct the complaint alleges that peter at were in his capacity as owner army studios herb's a member of army studios in his capacity as a member of cyber nat  capacity as a member of studios directed these actors to participate in sexual acts with untested members of the general public and in so doing cause them to take steps to prevent their tenant from placing the actors in in a precarious position while i'm getting in sexual acts whether those allegations are true for purposes of determining the duty to defend is not in question the question is whether if those allegations are proven true those claims fall in with both in the scope of coverage and here because of the sexual acts exclusions they because they were directed by the lander or because some omission on the part of the landlord we don't have to prove that what we have to prove is that that's what the complaint alleges and if those allegations are proven true that their coverage would be are i think that because the complaint alleges both that armory studios directed the conduct or through their own missions allowed the contract to occur exclusion  implies i believe that a ten has met both aspects of the exclusion and the exclusion applies across the board under these facts in the particular facts of the case in the allegations in the complaint parties evidence is concerned but the problem with the mediation privilege is that our memory lane did and i also waived it and because that because they didn't consent they had a right to assume their own defense and that's correct i didn't tell them that and the reason i didn't tell that is because they said go ahead and son because the market despite all of this is a map i think it's a good settlement in their briefing they submitted a declaration by the insurance personal counsel in which she attested to what went on during the mediation  but i don't remember seeing yes i did and when she waved it i also raved to pile responding to what she sa and she says yes that's consent what we do with the way which i think is from the california supreme por basically says this is a really tough evidentiary privilege but there is no during mediation but this is this is a communication about whether the parties want the insured to paramount has nothing to do with the actual settlement of the underlying instance the rule is not so limited counselor will basically says any statements made during the mediation are excluded by the evidence and they are trying to s because they're the ones who who raised the issue in the st place it i think that the answer to that question is under blue ridge it fell in terms of are only required to inform me ensure that they have the right to assume their defense when they disagree without having any idea whether they might be carrying s t d i know that she alleged something like that your aunt but i don't think that's all s and she did also specifically allege of premises l between this premises normally about what your monster waiver argument oh i don't it was raised in the papers for one thing but the short answer is your honor that tang's theory  f reservation was that everything happened during a confidential mediation and they would do stocks based on confidential mediation to satisfy the blue ridge only and the requirements