please the court map look consider for on behalf of the appellant appalachian appalachian regional health care your honour's the district court erred in dismissing this action for lack of an article three case or controversy because first but not yet decided as your honour's are well aware of the article three case or controversy requirement in titles or involves a three factor test first of all that the injury in fact it exists is concrete and particularized here their injury in fact as i indicated was a an alleged ongoing breach of the contractual relationship as well as a dispute about the interpretation of that contract is not an academic issue the contract was implicated in a pin dean litigation so this was not a hypothetical exercise injury that was alleged second constitutional requirement for a case or controversy is that there's a connection between the injury and the conduct and issues such that the injury is fairly traceable to the defendant's action that's easily satisfied here it's the defendant apple ease action in the underlying litigation in kentucky state court that is the cause of the injury alleged in the complaint third constitutional court requirement is that the likelihood that the alleged would be redressed by a favorable decision by the district court this one is also easier there's a ruling in favor of appalachian regional health care would have resolved the breach alleged and would have interpreted the contract to resolve the parties differences about what that contract required the district court's air was in treating this case as nothing more than a potential future injury that could occur only if several subsequent conditions were met almost as not an insurance case i'm sorry was the last part just batchelder that it isn't a coverage action because this is not an insurance case correct correct it's not it is not we have analogized it to one because it is for this reason the similarity between the two types of actions are what's at issue is the duty to dim the fi and in most cases seem that there's any breach of the duty to indemnify yes as i read as i read the complaint there is an argument that the duty to indemnify has been breached or is at least been jeopardized by conduct involving in the underlying litigation ok explain to me how the theory is that what is going on with the assertion of the borrowed servant defense and the underlying litigation in the part communications back and forth about is that the carrier is attempting to avoid liability here and to keep it residing with so did you just tell me though that you think that the threat really comes from us nursings insurance carriers if it's behind the scenes we believe that's why be would it not you don't care whether they have insurance they agreed to indemnify they want them to find they can fight with their insured but that's not a threat to you is it it is in the sense that they may not be able obligation isn't that sort of a has not happened and i mean in any contract you can't say that somebody is breaching the contract because they may not have the money to fulfill the contract in the future i don't disagree with the points that either you're making judge batchelder you're making judge boggs i think i don't know that that's a winning argument ultimately but the argument is the conduct is threatening the viability of that program i was more interested in the question of whether you feel that they that their statement which as i read it just reiterate the contract means that they will  litigation costs as i understood at least the most persuasive argument to me was that your litigation costs at a minimum are being increased they say you're in this case anyway which is correct but if they are undertaking tactics that in matthew more deeply and require more defense then that is a damage to you are you concerned about whether they're going to pay your litigation expenses eat yes because of the the concern just expressed that we're not sure that all your concern is only because of their or their ability not their desire i was asking when then they when they say in one of their answers that  we will honor our duty to to indemnify do you have any concern that that's only going to be money money judgments and not litigation expenses are you satisfied with their assurance there y know i'm not sure side is entirely satisfied with the assurance because the assurance was contained in a proposal to settle this this aspect of the dispute and it's heavily kavya to be frank so i think an effort to evade the obligation altogether and generally the how are they attempting to evade altogether when they have explicitly said that they will and i'm fine because they may not be able to they may not be able to to comply for purposes of where we are at this stage of the proceedings to sort of seeing that if we had some ham we could have a ham sandwich if we had some bread in your concern about this and well i think there's an element of that on the indemnification aspect judge batchelder but i don't think there's any element of that on the ongoing  each of the duty to defend and whether or not the assertion of the defense copy have had they yet they haven't yet breached that have they i mean they're there i'm s hold harmless appalachian regional health care in that if this were didn't have this borrowed servant sort of part and you were sued would you tender the defense and they would simply undertake the defense if if appalachian region health care had not been sued if you know if you were sued but but us and wasn't going to a certain borrowed service that is simply that they said well you know that your nerves of i was injured i was in the hospital i'm going to sue everybody in sight including you because you were in they were in your hospital would you normally have simply tendered the defense and they would have undertaken it i think i think that's likely in that scenario barnes i mean obviously it would depend on other things in the context of however that rose but i think that's likely and of course you can't do that here if there are effectively adversary to adverse to you is that that's right in you know to put a cap on my answer to just batchelor's question and we think that the assertion of the defense and taking that position just cannot be reconciled with the duty to defend it i mean it's it's the antithesis of defending something different as i read judge the pars opinion on the motion to reconsider which is sort of the first time that he deals with this argument about the litigation expenses and basically he throws that out saying you didn't raise it the first time around and therefore on a on a motion to a fifty nine motion to reconsider you know i don't have to deal with it what's your answer to that that is how how did it how did you in fact raise it in your in the initial pleadings to be perfectly can a judge by as i think touched the par is correct about that it was not raised expressly what was raised expressly was generally breach of the duty to defend and on an ongoing basis the specific that was discussed in connection with that was the broad search difference i mean to me it wasn't trial counsel so i don't know where you're so i'm looking at i'm looking at the document which is the supplemental objections to the motion to dismiss which is  document twenty four page id starts at two seventy seven at two eighty five which is page nine of eleven at the heading there's a long paragraph about  your litigation expenses and i guess i i had thought that that was the best place that would be a refutation to a judge the part but you're not relying on that well i thought your question was had we raised it because if he's right to the new you should lose even if you're right on the merits if you didn't raise it initially i thought your question was about an earlier stage of the litigation judge  apologize this this did come before the the drudge meant this was not a post judgment argument wrecked that's what i was looking at looking to see because as i read it he didn't in effect knock you out on the merits so much as saying you didn't raise it the first time tough luck that's right so is that paragraph on page nine of eleven is that the place to look to confirm or deny i judge the pars ruling in the motion to reconsider i think it certainly is because i don't think it's i don't think the issue of litigation expenses is raised prior to this year well but you don't need to be prior to this this this is prior to the judge's understood ok understood  right the issue of rightness was raised in us nursings motion to dismiss wasn't briefed in this court because judge the par didn't rely on that and the british were more focused on the district court's order to go to the issue that iranians were just discussing discussing with opponents counsel whether there is a breach of a so called duty to defend under the staffing agreement for ongoing defense costs your honour's the complaint doesn't allege that us nursing should pay for the defense costs of air rage so there is it there is no allegation of a breach based on the failure to pay what it is a duty to defend typically include well your honors it depends whether you're talking referring to the contract in this case because i think there is some conflation of the contract here with an insurance contract and there is a there's a critical distinction here because applies to liability that has that arises no ability has arisen in the profit case so no obligation or that provision of a contract has even arisen at this point so nothing has been breached because there is no obligation under that provision at this point in time let me ask you about you know what you your statement in so you forgot and which document it is where you use your reassert that you will honor that clause you don't interpret what that clause means do you interpret that or door are you willing to state that you will reimburse them for their litigation expenses or do you say what you don't know it unless they lose or while your honor ther e's there's never been any claim for their litigation expenses in the complaint so the we as i read that provision maybe a better way to answer this is to refer you to the complaint because if you look at the exhibit c to the complaint which was incorporated by reference in the complaint the very first paragraph states that  ok that's back that's back to your letter this is this is the letter from a r h which they incorporated in their complaint it did this makes it clear that what area is concerned about is indemnify quote indemnification of air rage in the judgment and all other costs involved does it just as in the well another place in the complaint where this may be more clear is paragraph twenty seventy which is page eighty seven right that's where i was actually  created a situation which to me become liable for damages which they are incapable indemnifying ok i mean that says what it says but it doesn't say that we're not concerned about litigation expenses because twenty eight says as well as the prospect of significant legal expenses in the many thousands of dollars but when i asked the first question it was not what's in the complaint it was what's your position and  you can say well as part of the argument at one level we claim that there's nothing in the complaint so we should win throw this case out but i'm asking you if we have the case before us are you willing to assert or commit to paying their litigation expenses come hell or highwater your honor that's an issue that hasn't arisen what i know is position to say that because it hasn't it hasn't arisen ok well if the answer is no because you're not willing to go it's a risen now because i just ask that it hasn't arisen between the parties in our age has it pursued that in hold harmless well it's interesting because air rage hasn't alleged has never alleged in the complaint or explained in this litigation what additional obligations it believes that imposes if any beyond ind typically insurance contracts that included duty to defend the duty to defend provision insurance contract specifies that the insurer will defend the insured against allegations of negligence even if those allegations ultimately prove to be facto word defend is the prefect anti facto word that if the obligation to defend means anything it's got to mean something  having to do before the result is reached isn't it it's uncommitted may not be as broad as an insurance i don't think that's not coverage but it's got to mean something doesn't it  i don't i don't know that that's necessarily the case in here's why because it includes deprivation includes for terms indemnify save defendant hold harmless well hold harmless as defined in black's law dictionary is synonymous with indemnify so you already have two words that are synonyms being used together it's unclear what saved means but in that context it wouldn't be unreasonable that these are this is boilerplate language why doesn't paragraph twenty eight explain what  action as well as the prospect of significant legal expenses and many thousands of dollars to not only defend itself and said civil action to a much higher degree than otherwise would have required but it is in there to the retention of legal counsel why isn't that a pretty clear harmed because now we have indeed we're having to pay defense costs in the profit case and that argument that doesn't state a claim for breach of contract because to state a claim you have to allege breach you also have to allege damages caused by the breach and the complaint doesn't responded to a position taken by us nursing because the barred servant doctrine didn't expose a r h to any additional liability that it wasn't already exposed to it didn't put in harms way as a defendant in a profit case because it was sued by the plaintiff in the profit case the plaintiffs sued news constance foote as well as a nurse who was an employee of u s nursing and also sued her in nurse roxana parsons who are employees of rage in the  live claims in the profit case that's the reason why air rage as a defendant in fact even if nurse foot were taken out of the profit case in got summary judgment us nursing would no longer be a defendant would still be a defendant because it's facing liability in that case for two of its own nurses were not at that point yet i'm sorry i'm sorry your honor we're not to that point yet in the state court oh no you're right we're not a trial hasn't occurred in state controversy that's premised on something that might happen in the state court case is totally hypothetical at this point because that trial still hasn't occurred when you said that you're didn't put them in harm's way help me with that clik their argument i thought was you put them into greater harm's way obviously a person can always sue them and they have to deal with that but my analogy is you when they are both inside a for being besieged by people who are attacking the fort and you say they're already in harm's way and we just open the door and let the other guys come in and attack them that put them in greater harm's way your honor that's not what happened here what happened is that liability claims for a nurse foot if the bard's her if the summary judgment motion the u s nursing filed in which it argued the barred serving defense had succeeded then us nursing would no longer be a defendant but whether it succeeded or whether it was denied which is what happened area faced a vicarious liability claim for his foot either way and combined with the fact that u s nursing has promised in writing in writing that incorporated in the complaint and in multiple federal court  your borrowed servant dr and succeeded they would be there all alone whereas when you're in that case not only would potentially you would defend them but the course of the litigation might be that you would bear all the liability that might be what the judge and jury would ultimately decide but doesn't change the harm the air each faces because to the extent that air rage is held liable for a nurse foot us nursing will bear the liability for that and the cost of defending it if you're out of the case the issue is it's only one of the three nurses for whom eric is alleged to be vicariously liable was employee of us nursing and it's a hotly contested issue in the state court whether nurse foot was actually the nurse who interacted with mr prophet so if the nurse tell it it was not if if you're out of the case then you're not going to defend  are three minutes you may proceed thank you judge bars i don't think i'll use it all i just want to make a couple of quick points nancy and the remaining questions one is that one of the take issue with the applebee's interpretation of  duty to defend language their argument that the arises from language means that the obligation doesn't kick in until after liability is determined makes centrally  a redundant term that is illusory i think the better interpretation of that language is that what arising from negligence of one of us nurses employees means is that they are attempting to distinguish a claim that might arise from sexual harassment or anything else that might occur in the workplace the second point i just wanted to make your honour's was that at the end of the day maybe our breach of contract theory is right and we succeed maybe it's wrong but an awful lot of the arguments being proffered by the apple leave are questions about the merits of that breach of contract argument  as opposed to arguments about whether there was a live controversy here between the parties and given that that is the issue on which judge the par decided the case