good morning your honors and may please the court my name is tom fein and i'm counsel for appellant pitzer college i'd like to reserve two minutes of my time for rebuttal in this case your honour's and insurance company on a pollution remediation insurance policy is denying coverage for any remediation of a covered lead pollution of venting because of a technical failure of notice and you harbor makes three basic arguments for why those facts give it the right to forfeit pizzerias coverage the first argument is that indian harbor contends that new york's common law strict notice rule should apply despite california's strong public policy against technical forfeitures of coverage in the insurance context in the harbor second argument is that it contends that the consent provision bars coverage even though the emergency exception applies here and even though the normal rationales for strict application of such provisions are absent in this context and third indian harbor contends that they noticed provision placed within the consent provision is strictly enforceable even under california law because of where it appears in the policy none of these arguments are meritorious this court should reverse policy of the form state is implicated in would be violated by the use of the chosen state's law and if the form state has materially greater interest in the the outcome of this particular item of dispute then the same insurance policy actually with a different shirt in her reverse a san diego city san diego in new york under that case the new york's common law strict notice rules and not the notice prejudice rule but rather a strict application of the notice provision would apply because the policy in question was issued in delivered outside the state of new york now the court below applied new york law here but california law should have been applied because of the many statements by many at many different times that california has a strong and abiding public policy embodied in this president he court said it's a fundamental that the notice prejudiced one of the fundamental policy under california not that i'm aware the i'm not aware of any court using the word fundamental there a difference between something that's important and significant versus fundamental no your honor not i'm simply put your honor the the test doesn't exclusively previously which the court sided with approval and in three of those four cases california court of appeal cases the court used the formulation strong public policy and that word has been used repeatedly to describe in the conflict of law arena there has not been to my knowledge your honor a choice of law case on california's notice prejudiced while there is a case from the texas from the from from a bankruptcy court in texas an adversary action in the court did determine that texas is notice prejudice rule which is the same as california's was such a policy that would overcome a choice of law a contractual choice of law provision that's the a t p oil case very recent twenty fifteen as i looked at this was whether or not the parties could contract around the notice approaches they can't your honor they can't they cannot there is in fact a new york case called steadfast the steadfast insurance case in that case the new york's new york's intermediate court of does not the court of the confusingly named court of appeals or so the highest court in new york but in the intermediate court applied california law and determined that an express provision in an insurance contract which said that we're not going to apply the notice prejudiced rule here we're current we're contracting around it was contrary to california's public policy and was void the court if that was an intermediate court of appeal decision from new york in the state of new york is there any indication in california law that the part parties could contract around the notice bridger's room there not that i am aware of and additionally your honor it should be pointed out that that new york court was applying california law so to the extent that there is any and  i should point out as well there's been no authority cited by indian harbor for that proposition either if there were a case law that did recognize the party's ability to cut a contract around the notice prejudice rule that would seem like it's not a fundamental policy right it would potentially be problematic yes your honor the ned ludd lines case says that have a fundamental public policy is one that the parties can't get around by contract that's correct but that's not the case here again the california strong public policy is such that you can't contract around the notice prejudice rule if you're going to have a generalized notice provision in an insurance contract california law requires the insurer for the camel case fifty years ago to show prejudice before that before that provision is going to be enforced to forfeit the coverage of the insured the second prong of the ned lloyd slash restatement test is materially greater interest wrong and this doesn't merit much time it's very clear that california is paramount interest in protecting its citizen insured from technical forfeiture of insurance coverage should greatly trump any minimal interest that new york might have in this case particularly given that there is no new york party in this case whatsoever turning to the second issue the consent provision it's important to start with the policy in language the policy provides that for pollution remediation insured your pits are decides what type of remediation general standard third party commercial general liability policy it's the insurer who controls and chooses from the range of reasonable alternatives what to do and for that reason there are two reasons that the consent provision should not apply to bar coverage here the first is the emergency exception the natural reading of the emergency provision is to understand that where the words where any delay on the part of the insured would cause injury to persons or damage to property or increase significantly the cost of responding to any pollution condition those words explain define what emergency basis means in this policy let me spec of this one step do we apply the conflict of law notices to the consent provision as well that depends the first depends on the court's russian rationale for decision if the court rules based on the emergency exception there's no conflict between california and new york law and the court need not decide the choice of law question california law are in accord and how this should be interpreted if the provision is unambiguous then you go with the plain meaning but if the provision is capable susceptible of more than one reasonable and non strained interpretation then the court must choose the interpretation that favors coverage and here this provision is we contend the natural reading is that emergency basis is defined and explained by the the language that directly follows it describing any delay on the party in the insured causing injury to persons damage to property or a significant increase in the cost of responding to any pollution condition and pits or showed in connection with any harbor s motion in the court below that indeed had pits or delayed in immediately getting environmental consultants out to the project and choosing to remediate an option and ultimately in treating excavating and removing fifteen thousand tons of lead contaminated untreated soil within just over three months that this would have resulted in increased costs of responding to the pollution condition and for that reason squarely within the emergency exception the indian harbor contends that the the emergency exception should be read such that the emergency ends when the pitcher has the opportunity to contact indian harbor they talk repeatedly about the ability become aware that there was coverage of this simply put there was a misunderstanding fell asleep they didn't understand the policy yes your honor that's correct standard yes but he paid the attention nobody looked that's correct they didn't understand the policy they did not understand that this provided coverage for this type of remediation but that's not that that fact the mindset of the insured isn't relevant to whether or not this will comes within the emergency exception and nor is it relevant to the question of whether or not california law would apply the notice prejudice role here but in the interest of time you  know that's laid out in great detail in our brief and i just wanted to jump to the indian harbors last argument which is the idea that the notice provision which is buried within the consent provision would bar coverage independently then they determined after going some soil testing that the lead in the lead levels in the soil were too high dangerous very clean up the soil that's right as the saying do a right on side that's right and they were just lucky that one of them was all one cancellation that's right so they jumped right on that want to see some temporary but i did your honor i have about two minutes left and i want to say bye to miss i guess my last ten seconds here at its core this case is about an insurance company trying to find a way to turn a technical failure of notice into a two million someone pfizer and explain them this policy that you issue is pretty complicated lotsa words and they have lots of fine print i mean what was the premium on th e premium on the policy if you look up here it's twenty seven thousand five thirty five but they really say that again twenty seven thousand five five thirty the year i believe that's the risk manager and said we spent this money want to report it to an insurer they said it's too late you can you're not going to get coverage when it's went to its broker who completely understood how these policies work they said it's too late you're not going to get question you would have to establish that you are prejudiced in some way and that's a pretty hard burn it is a hard under california law it's a hard burden it's generally thought of that way it's not such a hard burden when the entirety of a resolution of an obligation has been reach california law has found prejudice many times when you have those through a trial and you never give notice and afterwards you give notice when you don't give notice through the course of a case and settle it the fun project them for the project is a matter of a long piece like well here done cheaper and this is even more important prednisone i want to point this out right here the right of recovery against third parties was lost and this is at our two sixteen is the expert report and  points out the fact that the clean up was done in a not and c p non compliant way that waived the circle contribution rights against their parties so there was no opportunity by not giving in the harbor of the not trying to get in to see it strikes me that if california district court found that new york law applied absolutely and the reason is because the notice prejudice rule isn't a fundamental policy why not the reason is because i mean there you know i need a look at california supreme court cases and they talk about the importance of insurance shifting you know cost and whatnot i think is too important point i want to make on inis is really part of that whole idea i say this isn't part of that because the noticed last project rules important policy it's scribe's a strong policy it's been around for a long time but it only applies to certain policies as we explain it doesn't apply to all policies and when you put notice provisions into other parts of the policy like would put it into an exclusion on a unconscionable whether we're violating the statutory or constitutional rights it's very much like what this court did in general starr where it said the higher burden of proof for proving fraud isn't doesn't violate any fundamental policy because all we're doing is exactly that you know i asked councillor a question can they get the parties contract around the notice residence in california yes i don't think so i would say because i think that that would be it in as far as the notice fundamental policies it's only an additional element of the defense after all and if you look at the context here which if you look at ned ludd carefully they look at the context of what was decided they said in this context is this really such a fundamental deprivation of rights to be under hongkong law and the context here it isn't just the kind of notice that california has always wanted to protect against which is i can finish this one point for california has  these two parties but the allocation of risk was in their contract environments protected in this situation that's not a question of that isn't that there's no dispute about that it's a fundamental policy of the state of california protect the environment went ahead and did remediation without consent or expert show that that hundreds of thousands of dollars could have been saved and rights against third parties could have been preserved if only they had sought our consent if they had done some different things they california in like the los angeles area that were capable of doing the work on site and they had to make a they had to make a prompt decision about whether to pursue them but they or else prompted or else  insurers got to move promptly if you can't delay it can't refuse to respond but in this situation where they don't contact them at all how for you all is very clear moreover new york are again strictly enforces that consent provision and there's no reasonable basis no reason why you can say that this was done on emergency basis when it takes two months to decide what to do in fact there's a two week period the way down to five where nothing is done whatsoever is an activity  provisions especially with two sophisticated parties who've been in the market over a decade of experience with this type of insurance who had any real presentations and who actually did understand this requirement let's not forget that quote any if any california court read into the decision and the reason it's not similar is because notice is izmir on two uprising the opportunity for investigation the consent is where the rubber hits the road it's when money is getting paid and the insurer doesn't have to pay for things it didn't have a chance to object that's been recognized uniformly in both states and remember if we look at what we have to we can't impute this prejudice requirement for protection of insurance and it would  the very first case the court is saying we don't care what your contract says we're going to enforce our prejudice requirement second as to as to the question of whether or not prejudice was shown here you know  that there are some real issues as to prejudice and that's true but there are factual issues that can't be decided on some rejected this is a very you know you could prevail on on the notice prejudice problem but consent he's got another argument that that's right and you knew the one concern well in the end we don't lose on consent your honor because the consent provision here includes and written emergency exception which is distinct by the way and this is my third point from the california emergency case law which describes a situation where there is no exception written with the policy here there is a written emergency exception it's defined by its terms and it applies here to to allow coverage for expenses that are incurred to avoid an increase in the costs of responding to the condition ok your time is almost up so make your last point last point as to the consent provision counsel says there's no california case that would that that says that you have a no prejudice rule that's true for third party cases there's