sought damages from clark because of property damage that had occurred during the american family policy period i agree with that general statement but the so called critical issue here is really dependent on two more precise questions both of which i submit are answered by a law number one how does a court determine the scope of this lawsuit and number two how certain does the court need to be about its interpretation of the age away lawsuit on the first question the state that it is a question of law as to the application of the legal principle regarding a duty to defend to the information that was before the insurance company and that  judgment that the district court takes on the standard importantly is whether it is a rational possibility from all the information that had been available to the insurance company and that i submit is an exercise in judgment based on legal principles the novo review is appropriate when the reviewing the issue you're reviewing calls for an exercise of judgment about values underlying legal principles and in requires consideration of legal concepts i submit that's exactly what the district court was doing when it decided what is a rational possibility because that it going back but isn't the rational possibility here really a question of fact and that is the allegations allege that something occurred and on what date did those actions occur right and so the determination that that's outside of the coverage period that's a fact question isn't it i mean other than it doesn't take any all we're looking for is if there is an occurrence alleged and it happened on x date you know pick a date it's either in the policy period or not the determine what the date alleged is that's that's the that's a fact question right well determining what the alleged date i guess what the question isn't though what the alleged date was the question is whether there is a rational possibility that the claims and all the information supplied suggested a claim that would have included damage in the coverage period here in fact as to the question of when exactly based on the evidence submitted the damage actually did start the parties have stipulated that there is no evidence to contradict the report saying record was that there was no evidence to contradict the conclusion in his report and there is other side that was this they did not stipulate and then the stipulation not credible but i understand the there is no other evidence as to the timing or inception date of the damage there was parleys report provided to the insurance company before the litigation commenced that these twenty sixteen report was not that was evidence developed in the purpose of coverage as often happens and notice pleading in iowa and frankly common sense happening and many construction disputes homeowners don't understand and don't know about a number of the amount of hidden damage they have they on first notice take the least intrusive repairs and there eventually something manifest itself that causes them to at all the information not just the complaint but let's just say they made the right determination but then you open it up and you find clearly preexisting damages did do you have some obligation at that point  to tell the insurance company hey you know you made this initial determination but now we've got some additional evidence and did you tell the insurance company about the additional i think there's two responses a legal response in a practical response to that issue and they that's something certainly underlying american families brief is hey we could have told us more the legal response is once they've denied coverage an erroneous lee done it and done so then there is no obligation for us to continue to comply with any conditions of the policy but the practical answer also is if you look at the coverage denial letter it raises a host of different arguments including the argue the position that there is no coverage for defective construction because it's not an occurrence it took six years later in the westlake case for that misconception to be corrected and so as a practical matter there wasn't much to supplement as to the timing of damage because there was this threshold problem about the initial coverage and first place or what we think the about because it is clear from parleys two thousand and ten report they knew about advanced deterioration hidden damage and that for but the idea that a homeowner don't make a federal case out of every the the idea that the homeowner would know of events deterioration and damage that had been happening for years but not claim repairs i don't think that's not how the claims but there is there is no evidence that the real the real problem exactly the day the real problem i'm sure they went back in and did over the early repairs but that doesn't mean that the claim was for the early  point to one other piece of information that suggests i think i agree with you that the underlying cause of the water intrusion clearly wasn't addressed with any of these minor repairs but a point to one other piece of information  a point to one other piece of information that suggests even the lawyers at the time and this information was passed along to american family did not believe that the un understood the broad context of which this lawsuit was being pursued and that is but one of the emails from the homeowners associations lawyers sent in october these are pages two seventy seven and seventy eight of the appendix and in particular one discussing drainage childish developments it's on quite a slope and so some of these units in order to have to avoid water building up around them have drainage tile in it where they were being blocked and the homeowners association was claiming these were part of a lawsuit totally unrelated to the high standing you can't reconcile that really with american families narrow view of these claims and the ija way says quote we are seeking damages in this lawsuit or we will we will seek reimbursement for the repairs to this issue so even the age away at that time is telling us and this information gets passed on to the insurance carrier they understand the broad context which is that as the homeowners discover the true extent of their injury in a water intrusion case the claim is we want you to fix what is damaged  relatively there's no there was never a dispute in the record as to the timing of the actual damage for that reason we've always said and we've said in our briefs this is a loss that it is exactly what american family issued insurance for this is what clark bought insurance for and ultimately when the loss happened american family benefits ensured hours of the rest of my time for rebuttal by me thank you police court counsel i'm mike weston i represent american family i want to start with a question judge loken asking mattis what is fact and what is law american family necessarily put the standard of review front and center of its brief because it's required to by rule and so why is there not a case that clearly says that the findings that the court made with regard to what was pleaded and what facts were available is because all of the case law calls those fact decisions all of the case law that determines the duty to defend and ultimately perhaps indemnify in iowa look at the facts that are pleaded and the available facts that are in the record at the outset of the litigation necessarily than the court made two important fact findings of this case and and clarke's counsel in its reply brief made made light of the fact or pointed out the fact that there were two sections of the court's ruling one finding of fact in conclusions of law and that some of the facts were interspersed with the court said it was going to do that on page three of the decision does it doesn't because it's stuck in the conclusions of law section doesn't mean it's a conclusion of law there are facts ok first big picture fact finding there was no pleading of property damage nor any facts available to american family that rationally triggered coverage because the alleged events all took place after the sunset in september of two thousand and six of the american family policy interestingly the court in it footnote on page five hundred six of the appendix says better than i ever could how clark has confused the issue in this case very succinctly when when the court points out that clarke made an argument about when the damage occurred where the focus of the court's inquiry is when was the alleged damage pleaded and what facts were available so the first big finding was no allegations finding a fact no allegations that would have triggered coverage the second which we have not talked about yet is that there were no facts that supported the notion that the settlement paid in this case was attributable to any damage that could have occurred during the american family policy period the record is silent on that effect the court made another factual finding and that is there's no evidence to support the settlement that was paid well let me ask you this i think if you look at the complaint and if that were the only document in front of the insurance company it would be pretty hard pressed you'd be pretty hard pressed to find a claim for anything other than the damage caused by the water infiltration in two thousand i do agree your honor but there is one document that i the gives me pause and when i ask you to talk about it they submitted a timeline that was prepared by i think it was by hubble realty or hubble construction not sure which that talked about the fact that the homeowners have been compa complaining about the water damage for years now why didn't that put you on notice to at least investigate further as to whether the years of water damage would extend back to year your policy period because of what that paragraph and this tonight because what the the statement goes on to say the homeowners hired an expert at that time and consulted with an expert in this would have been in the summer of two thousand and  and as judge loken pointed out they determine as a group to do repairs to those portions of the skylights and windows and other areas complained of here to remedy the problem there is no suggestion from that point forward that any of the complaints made it in the petition in this lawsuit had anything to do with those as the court pointed out insta cision for whatever reason and the records not clear they chose to focus on the winter of two thousand and nine and two thousand and ten in fact if you go on to read the same timeline it talks about the significant ice damming and problems in the winter of two thousand and nine and two thousand and ten and all of the photographic evidence that is sent to american family to those events but is there any duty on american families so some of the inches of the plaintiff says we've been having problems for years which would extend arguably back to the american family time two thousand and eight we hire an expert we think we've solved it by now we obviously did because only a year later two thousand and nine we're having even worse problems is there any duty to work and see well did did you really solve it in two thousand and eight and now it's a whole separate incident or is it is a continuum a problem from two thousand and two to two thousand respectfully the court made a factual leap that was not supported by the record and the material that clarke provided to american family and that is that the problems that were repaired in two thousand and eight somehow reoccurred in two thousand and nine and two thousand and ten this document does not say that and that's the universe of information the american family had asked supporting factual information to go with the very clear lawsuit that pinned all of the problems in any way you read it on the problems in the winter of two thousand and nine and two thousand and ten on a someone before you can have a lawsuit and then there's a requirement for disclosures on your record that they have to schools or damages was there anything ever discussed three suits or early in the lawsuit that would put american family on notice that they were plainly damages for loss of part of two thousand and eight in any kind of pleading a demand letter or anything of that nature not that is in the record that was provided the tr and nothing that that was just really doesn't make any difference what was fired at the trial court is what was provided to american family right i mean if there's something up there that that should have put american family on notice but for some reason it wasn't sent to you that's not your fault any of that documentation where the plaintiffs in the underlying lawsuit why their damages the only communications that come to mind today are some filter through the filters of what hubbell wrote in the timeline that we've been talking about and two e mails that we saw in october of two thousand and ten between i think counsel for either hubbard or the homeowners association and counsel for clark where they talked about damages generally and mr lance talked about this notion of a blocked tile but when the court looks at that that those e mails if they choose to do it and they're on page two hundred seventy seven to seventy appendix that talks about the fact that there could be potential liability this upcoming winter if we don't remedy those those drainage tiles forced from slipping falls that's really the basis of our but this was a trial  stipulated facts the universe of what the court considered is in the stipulation facts by the parties and the record that was provided the court and the kind of early discovery or disclosures in the case of druid homeowners association versus clarke is not in that record in fact after december first of two thousand and ten american family received nothing with regard to the ongoing lawsuit and jeff loken brought up another important point and that is the the activity of acuity insurance company acuity insurance company came on the risk immediately after american family in the fall of two thousand and six and was on the risk during the winter of two thousand and nine two thousand and t excepted in september of two thousand and ten the defense of the case and a reservation of rights but what's important is when the court looks at the reservation of rights letter that acuity wrote given these facts it could have very easily have said that there were damages claimed that predated the acuity policy nowhere in that reservation of rights letter is there such a statement further there's nothing in there is nothing that reservation of rights letter other than reservations some of which were the west like case which changed whether or not a construction defect could be an occurrence under sea g l policy but nothing question the timing and so these litigants went forward perhaps in the back of their mind thinking someday we'll go after american family but as as judge logan pointed out being defended being defended under siege l policy the remedy that they ask american family for and sell getting back to the principle question this court has to decide whether the trial court in this case was cuckoo clearly a rony yes in making the decision that there were not facts pleaded in this case to trigger coverage the court found there was none and on the settlement in the case the issue of the settlement that was paid the record is devoid of any evidence whatsoever about what was paid for what damage and that's the burden that burden is on clark to do that they have to they have to prove under i will law what damages were paid in startlement what damage or pain so much that would have been to attributable to the american family policy  the the i was supreme court addresses the notion that the possibility of an amendment to add negligence claims or claims that would trigger cover in the future in the future does not necessar case both of whom both of those cases stand for the proposition that the burden is on the insured in the case where there is a coverage question and coverage is not afforded it to show what portions of the damage  attributable to the insured the insurance carrier that did not cover the the initial lawsuit and those that would be uncovered and in this case the truck court correctly pointed out it had no evidence to determine what damages was paid for anything out of the five hundred twenty five thousand dollars settlement so if you do you reject an expert report on a stipulation or record without ever seeing the expert without over hearing the expert testify without any cross examination i i found out a little puzzling that's that wasn't the stipulation the stipulation was that in the stipulated facts that american family had no facts available to it to the contrary that doesn't answer the question of what facts were pleaded in the case of what i'm what i'm talking about is for a purpose you said there the then of that card has a duty to show that some of the settlement was for damages that occurred during the  when you're doing a trial on a stupid record well the court did so in its ruling but there's there are some facts that the court found that would be that would contradict the report on its face and the first of those is the very fact that the pleading in th case pointed to damages that came from the two thousand and nine two thousand and ten ice dam any event and the reports in the timeline that talked about the the damages that came from that event and the e mails that we discussed previously where in another unit owner had found damages emanating from the i standing event and so the court knew in that context setting aside what the court thought about the opinion on its face the court knew that there were allegations proof and factual record to suggest that there were damages outside the american family policy and it really had nothing to go on otherwise and so when when this court looks at the fact findings of the trial court it will conclude it that the court was not clearly erroneous and that there should have been no coverage for this case thank you for your time this court sees a number of legal standards month in month out i'm betting that not many or is generous as the rational possibility standard that exists under our law in this context the petition filed by the age away did not address when the damage first started because that's not an element of a claim they ever had to prove but that left open the possibility went there that the damage certainly had started much earlier than they knew they in fact alleged that they had uncovered hidden damage the question really that all the material particular that time did it undoubtedly and only ambiguously exclude the possibility of damage during american families coverage period and the answer is no in order to prevail here clark doesn't need to convince you that american families view of the record isn't reasonable that's not the issue the issue is whether clarke's view is rationally possible based on the entire record that were submitted to american family nor do we need to convince you that the all of those two hundred pages of reports and notes and photographs disprove the limited view that american family has offered instead it's possible both sides interpretations here find support in those two hundred plus pages and if that's true american family owed a defense because our law is well settled that any ambiguities any uncertainties about coverage have to be construed in favor of the insured so in as much as the court believes that those materials and during the period on that point i think the stipulations submitted provided enough information for provided all the information that was needed to understand what damages were settled in particular because it excluded every other