summary judgment finding that hard for did not owe a duty to defend its insured for claims involving false advertising under the lanham act and unfair competition that ruling was based on california insurance code section five forty three which precludes in fication of willful acts and a professional services exclusion within the policy dealing with the rendering of financial services it's important to recognize at the outset that the context of these rulings was in the duty to defend which is you know  triggers when there is a potential for coverage there was no finding of fact in the underlying with a geisha in the natca action as to any of these claims they case settled by virtue of not having insurer find it or insurer funded defense  and that settlement admitted no liability on behalf of the insurance and that settlement was approved by the court here the lanham act claims i'm sorry here the lanham act claims of the unfair competition claims were simply allegations to therefore trigger the duty to defend the predicate issue here it's also that both this court and the district court on remand did find that potential for coverage in those allegations ok can you help me understand i have been struggling with the california case law some of which says that if a covered claim is inseparably intertwined with willful contact then section five thirty three applies others seem to parse it out and look at two different takes two different types of conduct which seem to be in twine and separates them and so i guess one of the questions i have is the complaint since that's the use conduct one kind of colorful khandala horrible conduct or allegations used to bolster those claims so i think the distinction that your honor is recognizing is this where the underlying claims and necessarily require as an element of those claims  finding of willfulness then you don't necessarily have that potential for coverage triggering the duty to defend this is necessarily is the at the standard in the california cases yes your honor if you were to look at which cases actually do garman tarzi and they're saying well they were negligent i mean they're actually that the accusation was negligence in caring for this person but the court looks at the context of the case and the factual context and says well in this case negligence was really willful because they were holding her as a slave right in that case and that's when you get into this kind of subspecies of the inherently harmful mann you know with the child molestation they separate them out so it's as i said i didn't see a necessary component in the california cases i'm not sure what the line is however i would argue this with respect to horace mann they did they parse it out mean i suppose it could have been their babysitter that they were negligent in not caring for but they looked at the court looked at the facts and context a simple everything is going to fall so why can't so i'm just not sure why we can't look at what the court just reported here and say well everything has to do with this fraudulent scheme there's no there's no percentage for first one to use the name of the na e if it wasn't to learn customers in for their fraudulent scheme i would say that the actual conduct which i was referring to earlier in the land of that claim is actually that first one misrepresented or made false statements regarding the nature of both its services as well as the affiliation with natca so you have to look at the complaint as a whole and you can't look at particular allegations in isolation that's the duty to defend standard and so going back to say horace mann in that case you were able to distinguish between what was necessary to prove the claims versus let's say j c penney which was another child molestation case in which there was not that separate those separate allegations for which intentionality or inherently harmful conduct was necessary to prove those claims so so in in the lanham act they would have to prove damages that they were harmed in their theory of harm is that they were harmed by the fraudulent acts of learning clients in using their name and  that it is part of that claim so let's talk about the specific fraudulent or not fraudulent false affiliation component of nachas lanham act claim that's actually a disputed issue of fact if you look at the record in particular the eges that mr astaire or or first one were intending to defraud consumers by affiliated by a rep by creating a false affiliation as they say with the aca that is not a finding of fact and that is not necessarily something that is a necessary element to prove that claim so after diarra he orders and sends out an order saying stop charging ants fees for any of your services and after that  alleged loan modification conduct whereas the aca action refers to documentation service which post dates the back of the d r v order so it's it would be a leap particularly at the duty to defend analysis stage to say that you can presume intentionality when frankly it's not even the appropriate test because it's not a necessary element for the kalam fourth version of it it says section five thirty three precludes an indemnity for a lost cause for a lost cause my conduct that standing alone could be characterized as negligent rather than intentional but that it is so closely related enough that it's inseparable the intentional conduct of the word i don't think it is your honor but if that it would just put it is the standard percept for me how you still come within that well i would i would first say that the court of appeal because not all of the causes of action required that required that alleged inherently harmful conduct here and here we have both alleged false or misleading statements  fact regarding not just the affiliation with natca but also the nature of first one's own services and we have disputed issues of fact as to whether or not those were in fact actionable or decide or actually are for which they would be liable at the duty to defend stage you can't necessarily negate the potential for a defense because recall within the do to defend context it's entirely possible that insured will not have damages assessed against it will not be determined to be conduct unless you cannot in any conceivable world prove up that claim without proving or without establishing that type of willfulness beings in that line in any of the cases i mean that would certainly be helpful had the california courts presented that sort of line i mean i'm just looking at r c m they interpret whoreson and saying that the reason they parse things out was because the alleged negligence standard is really articulated in the in montrose in this course anthem electronic opinion finding that the duty attaches whenever a protest with third party complaint potentially seeks cover damages so that's the bedrock princip applying the duty to defend with respect to the temporal component here very minor that's one of many allegations found within the nafta complaint on which mack is alleging that they have been harmed by false or misleading statements regarding both the nature of first one services as well as the affiliation with with first or with with natca kelso word is our case in the united western gross case they said they allegations and diligent conduct are not in separately intertwined with the allegations of willful conduct but we recognize that that was the that's the standard morning your honor please the court and johnston for hartford casualty insurance company the appellant's here articulated standard as follows they said first in the opening  they've said that five thirty three can never barguti defend i think we've seen lots of case law that shows that that's incorrect then in the reply these said if intent isn't a required element of the claim five thirty three can't bar a defense that's also not the standard the standard here is the fact is there's lots of different standards for the application of five thirty three and a duty to defend situation there it applies when there is inherently harmful acts which case are you relying on among the different standards well that the the etna casualty case articulated the standards quite drapery articulated the stand there is a potentially non willful activity possibly negligent activity and so here we have first one and in the hypothetical one would say the first one believe that hell would at a advisory business helping homeowners put together their documents and then as a registered referral agents refers it to aca and they just merely negligence in the use of the acas name leading to the lanham act allegation violation allegation well all the allegations are in probably enter trying your honor i mean paragraph three if the complaint makes that very clear the action they then articulate the purpose of this scheme is that they wouldn't have had to prove all of that to prove the lanham act claims would they just because they allege it doesn't mean they have to prove it that's true but the lanham act claims only exist in this complaint in the context of the scheme not to now go was upset about the fact that there was this entity that was that was out there defrauding distressed homeowners and that that any was somehow affiliating or tying itself to natca making it look bad making people get confused it was part of the scheme there's no separate and independent your honour's were asking the appellate counsel here what's the claim that they're going to you're going to separate out that they're going to proceed on where none of this other this scheme doesn't matter and it isn't a case of going to trial though and you know and you know has gone to trial and all the claims including the lanham it claim i mean you don't honestly think do you that false affiliation had to do with this scheme they were using the scheme to falsely affiliate so those that got me is going to simply question when the if it gone to trial the jury gets instructed on the went on the elements liniment claim it's not going to include anything about intent right well this fit gets into the the relief that was being sought i think there would be an intent element that was relevant to that but that had to do with the kind of relief that they were seeking for the lanham act claim talking about how they go about proving damages i ask you about what the omens of the claim are you now be instructed on and yeah i would agree ok yeah but it is in i think my point that is that that claim is inseparably intertwined in the context of this lawsuit and there are many cases that go to the inseparably enter twined claim and there are cases sitting knowledge that those negligence claims can be like rizzo where the court was talking about  claims that risen so negligently enrich himself at the expense of the city and negligently approved contracts wasted public funds under california civil code of procedure five twenty six a those could have all been separately proven and pled but the court said those are inseparably intertwined with non covered conduct and that is the context here all of the conduct that's pled here while you may arguably have separate negligence claims the facts are part of one course of conduct and that is what the cases say it should be the inquiry counsel let me put it this way i could not have prevailed claim even if the jury did not find that first one acted willfully because there's no record with him yes i think so but i'd again there for coverage no for duty to the firm no if they're inseparably intertwined meaning that the entire case is dependent upon these allegations of inherently harmful conduct and i don't know that there's any dispute that this was inherently harmful conduct in the context of a mortgage scheme at the height of the mortgage crisis crisis those those separate claims they aren't that's the point they aren't separate they are part of the allegations of what nacar not if not going to go forward and litigate this case without clients simply would normally get but that doesn't mean that was a willful act i don't know that that was the that was what they were alleging what they were alleging was that they were soliciting these clients and then referring them all into natca so it was it was less about taking clients away from natca and making everyone think that they were associated with natca because the allegation is that they took the money first one took the money and then they passed them on to not could actually do the work that they had already paid for so that for the other that's the document compilation service which opposing councils was to stop collecting advance fees in any form and under any conditions with respect to the performance of loan modification or any other phone form of loan mortgage loan forbearance services in connection with loans on residential property etc etc so any other form and this was part of it in fact if we look at when john basara the principle of first one first reports the claim he characterizes it as such as a financial transaction and part of assisting on mortgages so i don't know that there was any question i mean they can say that but i don't know that that that's reasonable to to make that argument so you do want to say think about the financial services and the first financial services exclusion is  the same with similar analysis in terms of again it kind of goes to this this first car that john basara made when he and how he characterized the claim and in that first call he says you know the nec action arose out of a financial product that we prepared specifically a financial analysis that the consumer of where they are friend nancy their income their debts et and we prepare it in accordance with general lending underwriting standards that's the insurer talking so to say that they had a reasonable expectation of coverage when he's basically characterized it within the exclusion i think is is is heskey in a lot under that record the these were this did all arise out of this this mortgage scheme and for that reason that the financial themes resulted from the provision of financial services will fight resulted from an arising from i think we've briefed that those are thirsty the terminology has similar meaning in the context of the exclusion and i think here  again it gets back to this this the problem in of the action which is that this this fraudulent mortgage scheme providing taking money from the homeowners in order to give them the this advice about how to put your documents together and then you're going to get some kind of mortgage forbearance that all that activity qualifies under within the financial services exclusion and every other allegation in this complaint is related to that activity that activity is the basis for why anyone's complaining  suing them so the argument that they make is that swallows any insurance coverage because everything they do is related to the rendering of financial services so they somebody comes into their office and slips on the floor and they wouldn't have been in the office sleeping on the floor of a for the fact that they were rendering financial services how do you respond to that argument no certainly no one would i think the i would not take the position that if you came into the office and you slipped on the floor that arose out of the rendering of the financial services i think if we take a commonsense approach the causation element there that there's no causation between the provision of financial services and slipping on the floor but here there is that caused that causal connection there is some connection between the prove it the actually it's the failure to provide the financial services and the injuries or damages that the the the relationship between the financial services exclusion and why that would apply to everything here is that the debased allegation is that first one failed to u to provide a financial service they failed to do the thing that they were being paid for and if they'd done the thing that they they said they would do if they helped out in any way or they hadn't charged those fees for nothing no one would be upset about anything so the false affiliation every other claim every other damage relates to that the heart of those allegations which again is the fraudulent scheme see my time is brief i'll be quick with respect to the five hundred three application if you look at the complaint in aca action there are specific allegations talking about things that are separately actionable if you look at paragraph thirty six b example talks about just the false affiliation of letters by themselves separate apart from the quote unquote fraudulent scheme is actionable under the lanham act i do defend analysis that is enough i'll turn briefly to the actually be felt to this is a effectively a competitor in the industry talking about i don't like the way you're advertising it's affecting me you might want to see something about the financial services going to right now that segues into it this was not a  homeowners this was not a professional services or professional negligence claim this was a false advertising claim it was for alleged false representations or misrepresentations regarding services and products this case is more akin to the and landtag lloyd mat case or the food protease where just because a insured is undertaking a business that may be captured within a professional services exclusion the actionable conduct and again getting back to the distinction between the actual conduct on the co conduct as i said the actual conduct was not what was within the the actual exclusion if i may just finish this point real quick here are that is the appropriate application of the standard for applying exclusions which is that must apply in all possible worlds meaning there has to be one hundred percent overlap between what the excluded conduct is and what the actionable conduct is otherwise it's not applying at all possible worlds and it can't apply thank you or did you respond to the