referral and essence this case all turns upon the drilling contract in question cutie is a natural gas producer side cornered in pennsylvania but has operations in west virginia pennsylvania kentucky and ohio this is your contract it is your honor and that's a very important point i think in this case the way you keep t like like most natural gas producers is that their natural gas producer and instances work where they're going to drill a new well the services as far as that are being provided for drilling and completing the new well are provided by contractors and with regard to these contractors contracts or are devised in those particular situations that that that ensure that when ever these folks are performing either drilling or completion on a well site that they're going to be responsible for whatever they do and certainly e q t drafted this drilling contract in such a way to make war on responsible if there were any claims arising from the drilling and completion it doesn't it very carefully sets things that they're responsible for problems stemming from the surface and you're responsible for below surface problem that's true your honor if you look at just it if you look just at paragraphs eleven point five and eleven point six in a vacuum which is what the district court did and their initial opinion those are the only two provisions that they discussed in their reconsideration opinion they did mention in one sentence eleven point three what they didn't do is that or excuse me and what they put they didn't do is they didn't mention what we think is the very core indemnification portion of the contract and that is section eleven point one which requires war on to a court procure insurance that were recover any claims relevant that's it that's a general provision followed by specific provisions don't usually doesn't the specific user trump the general i think that that is correct your honor but i think the eleven point one number one eleven point one  provides for a very specific obligation on part of the warrant to prepare insurance and that that the parties contemplated certainly that if there were any claims that that insurance would be primarily responsible general if you look at section eleven point eight of the drilling contract it very specifically says in instances where there is a claim related to water damage if that portion of the contract initially was put in there and said if there's a water damage claim that's going to fall on e q let's let's stick with the first argument eleven point one half yes if we read it as broadly as you read it what independent worked as eleven point six still two how do you do you say it's a swallows up eleven point six service eleven point six still have work to do i think your honor that eleven point one is a catch all provision that addresses an independent obligation on behalf of warren to procure insurance which would cover any claims now there might be instances for instance if if they procure insurance from a company who becomes insolvent and they can't satisfy claims then yes you have to look further into the agreement in those particular situations how are power is indemnity going to be apportioned between the parties but i think that eleven point one if you look at it it establishes a an obligation for them to procure insurance that's going to cover any planes and the record reflects that they went out and that that's what they intended to do they talked to their  agent their agent said yeah i was going to get a policy that that would would satisfy any claim to claims including the type of claim that was made in that west virginia district court action that even after   claim was made against policy the agent said you know i thought it covered it so does eleven point six apply to insurance at all i don't think it does your honor i think that that applies i think that you have to review eleven point five and eleven point six together and construe them together and if you had a contract that did not include eleven point one nor did it include eleven point eight or eleven point three then i think that the district court got it right if you look at it in fact you and that's what the district court did they just looked at eleven point five and eleven point six they said if you look at a letter eleven point five this is not something because that occurred and still say ok i lose on indemnity but you had an independent of litigation to carry this insurance and therefore i have a claim against you but these are two different things but if your honor if you look at eleven point one half in the event that warren procured insurance or didn't prepare insurance the insurance didn't cover it in that instance eleven point one ass makes more and the contractor solely liable for any claims ok so let's look at the insurance it says what they have to mean it says what they have to procure general liability including premises in operations in those it tells you what they have to cover i assume you're under eleven point one c that's getting you know they recognize their obligation to just just stay with me on that i'm sorry i pollock it's it says what they have to cover what they have to happen type of coverage is that they have to have  ok did they have these coverages they thought they did it not asking that did they have these coverages the insurance company said that they did not there was a there was a dispute about that they sued the insurance company that that issue was never decided whether or not they took it but it seems to me that if you are trying to maintain an action under this section then that's what you do you say to the court they were obligated to have these coverages they didn't have them for whatever reason because they didn't have them we have suffered a loss and therefore we want to recover under this provision and that was planted in the complaint your honor that they did not acquire sufficient insurance that would have covered the claim so then fall down to eleven point one that says if they did out water and that's a different argument that says ok maybe i were liable but you were supposed to get insurance to cover that liability and then you have a trial over  r as a standard in the industry whether you know general liability covers that is separate apart from sudden and that's a mental pollution but that's a different counties i mean did you argue to the court that ok these and seventy provisions may say this but they had a separate obligation to ensure us against this liability yes we argued that under eleven point one that they had a separate obligation to do that that's part of the complaint ok and what evidence did you present to show that the insurance is set for were not procured we presided testimony from the agents that said that they thought they were preparing it in then the fact that they were not prepared that evidence is in the record by see i think these are two different arguments it's one thing to say the indemnity provisions don't apply because we have an insurance provision then i think the answers that you're hearing from the from the judges all of them who've been involved is to say well that doesn't make sense because you haven't done any provisions what why would you have indemnity provisions if they didn't mean anything so the answer i would think that you that you can present is that no these are two different things we're not denying liability under indemnity we are saying that they had an obligation to insure us against that liability and then you wind gauge with the insurance section but did you or give that to the court we did in part i mean we argued that and then we argued under the terms of the agreement and perhaps it was not very artfully done because what we did is we said that if they didn't provide the insurance number eleven point one that was a breach and then when you look at eleven point one f and it says if they don't have the insurance then they become solely liable i guess  did you ask the court to address that we didn't specifically ask that because at that time the pleadings reflected that the ace insurance company had denied coverage  not obtain we did say that and we pled that your honor ok thank you i'm sorry to they did raise this issue in their pleadings below but i don't believe that it was raised on appeal they didn't make the argument on appeal that we acquired the improper coverage on it and it wasn't argued on appeal in addition to that we did obtain the proper coverage ichi t knew about the insurance that we acquired beforehand we think that they approve the coverage that we acquired beforehand and and if the declan the declination letter from ace is i think attached to one of the pleadings if you look at that they say the reason why we didn't get coverage it wasn't because we didn't get a we didn't get the right coverage is because there was a requirement that we had to notify them within thirty days of the discharge and  t received complaints about the water quality from the from the landowners and they didn't tell us about it until after the thirty days were over so that's why the insurance company denied coverage so they keep trying to say the argument well the fact that the insurance  company didn't provide coverage means you didn't get the right insurance well that's that's not true we got the correct coverage that the contract doesn't require us to get coverage at risk that covers any and all claims that might ever be asserted we it's it specifies the coverage that we were required to obtain and we did so we did not breach of eleven point one f and as as you pointed out judge sudden it is a general provision that is overwrite it deals with just any loss or damage  provision that deals with pollution or contamination point six an insurance well it is it's a number of things that there's for obligations there they're required to to defend indemnify hold us harmless and assume full responsibility for the for the claims that are described in that paragraph i'm not sure whether that was that constitutes insurance or not i mean certainly the duty to defend is a component of insurance d to inde fy is a is a component of insurance and this kind of leads into the cost appeal we had asked for recovery of attorney's fees in connection with this case and the district court initially granted that and then reversed himself on the motion for reconsideration but we think the district court got it right the first time their argument is about the american room we understand the american rule but even they admit that  you can the parties can agree by contract to pennsylvania follows the american yes but not but you're saying there's an exception because the terms of the contract here right is in pennsylvania point you know it's kind of hard to find a case where the language is exactly the same as it is in this one what's your best case ok there's a couple different cases the the mall resist philadelphia case the name again e attorneys fees were awarded in that case now i should point out it is true that the the clause did say in their attorney's fees unlike our cause didn't use those exact words but the court was the the court didn't focus on that fact with the with those magic words were in the in the clause when it when it came to his decision what are the good words in yours that hold harmless harmless is one yes  certainly but i think maybe just as important even more important than that is the duty to defend the duty to defend includes the cost of hiring counsel i mean if you think about what the duty to defend is another way of saying it would be if i get a little for that you're going to  contesting that that they're that they owe attorney fees for the underlying case right but but like i said the there's four components and the district court gave us the settlement amount because they had  they gave us our attorneys fees extra ministries and all that because they had a duty to defend us but but that's it the indemnification cause has more to it than that there is the hold harmless there is there is the obligation for them to assume full responsibility for the endemic causes are sometimes unclear there are obviously contracts and the norm is when you have a debt judgment action or some kind of action about what a contract means each side pays its fees i think and i know can contract out of that but i just seems to me yes it's all this very broad language an eleven point six that's all broad language that goes up to four pollution of contamination and that's that relates to the underlying suit that really holding harmless with respect to the indemnification clause right which is which leads me to my the second case that i wanted to mention grow there's a number of cases but principally chemical enterprises versus commercial union insurance now granted this was and this was a case involving insurance contract ok but what the court held in that case is if the insure insurer has a duty to defend and doesn't do that and basically guessed wrong you know you thought you didn't have a duty but you did then the insurer it is going to be held responsible for that and what we're what we're trying to argue is that the duty to defend is not that different under insurance contract then it is setting and that's kind of a bigger picture issue and then there's the issue of ok what about the language of this contract and what kind of cases are there the talk about similar language but on the first question dispense of a new fall of the american rule and has it had they done setting i guess i feel like this pennsylvania supreme court case boy the range and engineering and supply company in one nine hundred seventy one seems to suggest with the first question not the second but the first question that we start with the assumption that pennsylvania courts are going to apply the american rule even an indemnity setting unless when you look at the contract they've clarified the fees apply and i agree with you clarification doesn't require magic words of attorney fees but i getting it right in terms of the orientation you're in your look at the boat boiler case yes i don't think that that case can be read to create such a broad rule there were some i think some important differences between that case in this case the plaintiff in the in the boiler case was not the real party in interest it was the the plan of action or had already received payment in reimbursement for his damages from his insurance company so this is really an action for the insurance company in attempting to recover what it had had already paid out and there was no contractual relationship between the insurance company and the defendant the company in that case was required to pay the benefits whereas you know warren really did not is not contractually required in this case in so the fact that there's that they weren't dealing with the real party in interest in that case as it is significant and we pointed that out in the end and our briefs the predecessor case to boiler engineering the one that were engineering reversed there was even a case that said you know we're not going to follow that rule when when when somebody has paid their for their own attorney's fees out of their own pocket so i don't think that it can be read that broadly and i also think it's significant that the supreme court of pennsylvania has problem at all i mean it it seems to me that the mole case in the winston case support your position but they're both federal cases right moans the district court case and are you and this picks up on judge set are you arguing for a rule in indemnity cases generally which seems to be the alaska and delaware rule or are you arguing that this particular contract of indemnity covers it or both i think it's has more to do with this particular contract i mean we cited those other cases because they talked about the word hold harmless and what they mean we think that that that does has have relevance here but our case our our clause is i think even more clear that attorneys fees should be included because not only does it say hold harmless it also says that they're supposed to assume full responsibility  and in we we just disagree with the idea that it's just a look a search for magic words whether that whether it's uses those exact not exact phrase or not under pennsylvania law the construction of contracts is supposed to be made in light of the situation the parties in the circumstances connected with the transaction and the words are supposed to be given their plain ordinary meaning and you're supposed to give meaning to every word based on the way that this the district court has interpreted the closet it just seems like he gave meaning to indemnify he gave meaning to defend but he didn't the fact that it also said hold harmless in assume full responsibility that well that didn't seem to make any difference in and  i'm not i'm not sure that he gave any meaning at all to those words all of that relates to the claims against the right not the claim i'm not sure that that's the case i mean again given just giving the words their plain meaning hold harmless i think should mean that at the end of the day you know i shouldn't be harmed by this and what indemnity contract does not have the phrase hold harmless this rule would obliterate all of these other cases that because that's classic wording that appears in all indemnity case i don't think it would obliterate all cases because for two reasons one it's not just the hold harmless yes we're talking about that but it's also assume full responsibility those two in conjunction but also the fact of this is this contract included a duty to defend not all indemnity clauses include the duty to defend that's pretty normal because it's not very useful if you have to defend take this case it's very costly to defend that water pollution water contamination case it's incredibly normal but that is what it covers i mean i'm pretty confident that's right well i don't i mean there were there were cases that we cited to in the brief that are in that they cited to it in the brief that were distinguishable because they they did not have the duty to defend in their one the one that i think they raised for the first time in their reply brief it was  best products i believe they tried to say well look at says hold harmless and you get your fees and therefore your whole argument hold harmless doesn't hold any water i disagree there because that clause unlike our clause did not have a duty to defend so i think you're concerned about you know if if user were in this case it would it would create a huge exception to the american ruin i don't think that's the case because because of the specific language that your principle is if the language has hold harmless and there's a duty to defend that it does you do get fees whether that jurisdiction has the american role or not that's that's you're a meth victim for the fairly characterizing if is if it has if this is hold harmless and assume full responsibility and if it has a duty to defend i think i mean i don't know that it's fair to say that there is that every single clauses drafted in the way that up the hours it is so  contract that it should be construed against them and also the the idea that you know this is a breach of contract case and we're supposed to give effect to the intent of the intentions of the parties in the words that they chose and if there's of parties expectation damages and to be put in as good a position as you would have been if the contract had been performed well i mean as of when mr bayh's gave his testimony we were eighty thousand dollars in the hole on this case and it's more than that now because of the appeal if we win in if the courage of the affirms the district court's decision summary judgment but but there's not a word fees we're not going to be in as good a position as we would have been if the contract because of the american role that's that's true but we have an agreement here that's that contemplates the payment of attorneys fees that is i think somewhat unique and so therefore that that was the intent of the part  the court two issues i would like to touch on number one there was discussion in the district court opinion in there's been discussion today about the application of the specific over the general and with regard to that particular issue i think that it's important to look at paragraph eleven point eight of the drilling contract because in there as as we've noted in our briefs and it's been discussed today there was a section in there that talked about in the form contract that e q t would be liable for any issues with regard to damage to water and it's that once modified that property rights right property right in you know it still leaves room for pollution and can him a nation cases with all the water but i think if you look at the pleadings which were part of the record in the west virginia district court case i mean and it is in essence if they claim saying you've damaged our water which is what eleven eight point eight eleven point eight want they also seeking recovery for health problems caused by drinking contaminated water well they they thought that was a you know that's not a property right in water that's related to pollution of contamination and that's a personal injury claim that agree that if you look at eleven point three is addressed by that but that one says except as otherwise provided it does but i think if you look at eleven point eight the way that that was dealt with with with crossing the water out i think that expressly provided in an instance  where there is a claim for water damage that any obligation of the form contract that would be go to e q t would would be altered and i and i'm i guess our primary argument is that the court should completely reverse summary judgment holding that there was and that was owed by the cutie to warn and you might not reach the issue of whether or not they had to indemnify us or not that's our primary argument but  you or due to the to the court that look i mean there's an ambiguity here there's a uses in the industry there was an understanding let's take parole testimony we didn't argue that and i don't know and i'm not arguing that ok i'm not arguing there's an that it we're arguing that if you look at eight point lead one point eight that you reach that result as a matter of interpretation i have to tell you when i was first going to this case i was thinking to myself that it is remarkable that you could be using this contract if you want it to say what you are arguing for me and all the money in the world and whoever drafted this it's a mess then one would hope that you're no longer using it and you get something that says what you want to say that's a good point your honor it is it is a former agreement and that that was part of the reason we asked this court for argument in this case because this this agreement is an agreement that's been used widely throughout the industry so it is it's an important decision thank you thank you both for the argument the case to be submitted with the c