case but three of them center on the same basic legal issues which are the correct application of the organ rules of policy interpretation to the insurance contract in this  case and let me walk back a little bit and start with the facts as i was briefed by the parties this case arises out of an insurance claim made by the chad lanes for alleged theft and vandalism conversion and so you can have conversion can be part of theft right and theft is not is included in but doesn't completely encompass conversion that's correct those still have until your lover theft but have a conversion exclusion well st i'd like to back up real quickly it is at the definition of the theft peril although th same and the court took some issue with the interpretation that conversion is potentially broader than faffed now was wrong i think it depends on what jurisdiction you're in oregon it may be correct ok but where do we go from there and isn't that render the conversion exclusion ambiguous no because under hoffman ambiguity means something more than just being able to have multiple interpretations of a phrase and as hoffman court pointed out i think correctly lawyers are very good at finding different ways to look at the same piece of language but if you have two interpretations one of which is plausible but requires you to render parts of the contract language meaningless and another that is plausible but allows you to keep all the language then it is not ambiguous under oregon law you have to go with the interpretation that allows you to keep all the policy and lengthy interpretation that you keep all of the policy language that a conversion and that does not qualify as a theft under orgon law is not included and this case presents a picture perfect example of that the brawns had a contract with the chap lanes and one of the aspects that is common but not universal to conversion is that you've intrusted the property that is eventually converted in some way to this other party and that is exactly what happened here and that is the situation that creates greater risk than just garden variety theft because you are giving over control of that property to these other people if we disagree with your interpretation of the policy do you lo if you disagree with my interpretation of the paula the way you're reading this provision if we disagree with the way you're reading this provision do you lose not necessarily if you agree with the district court but disagree with me  you theoretically could come up with something different if we disagree with you if i want to speak for the other members of the pell if i disagree with you that would result in my finding the clause ambiguous right so the milk production issue the court in this case found that it was ambiguous whether or not the policy covered consequential losses and decided to include loss of milk production is a specific category of damages for the jury the grant of coverage in this policy specifically states that it covers direct physical damage and the organ courts of already interpreted that language and said that the use of that phrase expresses a specific intent not to cover consequential losses the district court in its analysis did not look at the entire phrase in the grant of coverage declared it ambiguous and construed against the drafter that is another issue yes i believe that is correct did you submit a counter proposed instruction i mean i was not the underlying trial counsel my best recollection i think that's the case but i could not say for certain i don't well as a as a benefit and right at all and if it is a benefit under the policy yes that's correct why why couldn't they have been titled to consequential damages for breach of the insurance contract it is my reelection recollection from the record th specifically stated that that is not what they were looking for so it was not before the court well did you did you and did you really did did the insurance company did your client raise that issue at trial i'm sorry i'm not well question so they were seeking damages for loss milk production correct yes all right and so there was an argument i guess about whether or not that was covered under the policy under under a theft yes  ok so there must have been some uncertainty about whether or not they they should have this court should have just focused on consequential damages for breach of the insurance contract but i guess that's not that wasn't raised at all by anybody though i believe that was discussed it and it should be in the in the record and my recollection is that the court asked if that's what the parties were arguing for what the plaintiffs were arguing for and the answer was no ok so there's suing for deny coverage correct so they're saying we're entitled to x y and z because that's covered in our policy but then they're also saying you as i understand your question at the trial level they weren't required to show the actual consequential damages the chad lanes replaced cattle but there was no credit so to speak a given to country for any attempt to mitigate damages in that regard and it was not treated at the trial level as consequential damages so if this court were to rule that the  to see consequential damages it would be our position that we're entitled to a new trial on that issue because it was not appropriately addressed at the trial court level in that matter well that's what i was asking about did you raise it in that manner before the trial cour here's some counter instructions that we believe are appropriate to cover this is we objected to the inclusion of those damages on both grounds both as consequential damages and as cover damages under the contract there's no objection to the instructions given which were correct it just didn't say it had to do with consequential or covered and then it's not divided up on the jury verdict form right correct ok so that is ambiguous as to which one it went towards but i guess the question that we really are interested in is what's your basis now to complain the fact that these weren't separated that is covered claims loss and consequential that was objected to and refused by the trial court we argued and the court ruled that they were covered damages under the contract so that's how they were treated i be object at that time and we lost so i said i would say that is our basis so moving to the next contract interpretation issue that would be the interpretation of the at payments clause which was used by the court to calculate prejudgment interest the court in this clause excised approximately half of it the court found that the construction of the clause was ambiguous and it could not tell how the provision was meant to be read and removed a large section of it if the court is not particularly interested i don't need to walk through the entire analysis of this clause but it required payment under the policy is do you want sixty dollars days after you've submitted a proof of loss and one of three things has occurred a judgment an appraisal or an agreement between the insured and the company the court found that that was ambiguous and cut the the or section of the clause so and being a junked event and or being disjunctive you're supposed to have one and either a b or c the court said no we're just going to have one dollar sixty cents days after the proof of losses is when payment was due and we're going to run pre judgment interest from that day forward that's not a correct reading of the paula see it is not ambiguous to require two things and have one at turn in your proof of loss and sixty days pass and the other be one of these three things you have a choice as to which of the three things it could be the judgment of the appraisal or an agreement between the company  but that is a common and understandable with the provision and the court should not have removed it from the policy and did not follow the correct analysis in that regard so if you prefer the district court erred in its interpretation of the policy regarding the coverage for last milk profits what's the relief dollars for that it was specifically set out on the jury form all of that should be removed from the verdict yes is there a need wouldn't there be so if there in time but if they're entitled to consequential damages for breach of the insurance contract and given credit for the cows that they bought is that a known quantity is that a known amount or an undisputed amount or does that have to go back to the trial court for a separate determination it was not presented to i don't believe it was presented to the jury  court properly determined that the theft provision is ambiguous you can't you can't put together a theft peril the theft coverage and the conversion exclusion side by side that they're just not harmonious because under country mutuals interpretation eliminate theft coverage altogether because the i like to think of these is then diagrams you have the conversion exclusion or conversion is a larger circle and theft is a smaller circle contained within would be to eliminate the f coverage altogether it's interesting that in their brief in their reply brief country mutual takes the challenges to task for saying that there is  conversions is simply incorrect and then immediately after that assertion they cite a case called which says all theft in compass the element of conversion which is precisely our point  i'll let you go on if you want to but i kind of interested in the last milk production ok so you guys had an expert who testified about the last no production that's correct your honor and that expert was challenge on a daubert motion pretrial but was there any argument raised with regard to if that expert was allowed to testify about the last milk production what that loss what that last evidence went to what claim insurance and nd that it was a consequential damage arising from country which was breach of its obligation to pay for the theft of the cows and i think the place to look there is the jury instructions i think it's  for thirteen dollars and for fourteen if i'm not mistaken and those jury instructions and then the the ones following talk about seeking coverage for con losses for the last milk production and or both the policy and as a consequence of damage and if you look at the verdict form the verdict form does have two items of damages it has the list of damages under the policy and then at the bottom of the verdict form on the same page there is a total for breach of the implied covenant of good faith and fair dealing which is where the consequences damages were reflected and those that number that's shown there is the sum total of all the component parts of for breach under the insurance policy on appeal country mutual argues that the consequence or the last milk production cannot be covered under the policy because it's not physical damage to property and the problem with that argument is it proves too much because if you if you take that definition of loss and apply it to the theft provision under the policy it would eliminate coverage for theft because in case of theft there often is no property or there's no physical damage to the property it's just here the cows were just relocated somewhere else where we don't know but supreme court held was a direct damage in the gallants case where it was the rule or reward for lost jewelry fast under the theft provision of the policy or or the brown case which i think is from nebraska and it's that's very analogous it's theft of sheep and then the last will production was part of the it was a direct covered loss under the policy but also what's the best case that sort of that you think well i think we have your argument here with the district court well underway if you look at under the policy if it's for a covered loss under the policy i think the gallants case is because it's from the oregon supreme court you have a limitation right is that two thousand dollars well your honor that was an argument that was raised for the st time on appeal that the supplement applies it was never raised by country mutual at trial and there was never any  consequential damages for breach of the insurance contract then the amount of loss as you said would would run from whenever the breach occurred to i guess whenever  whatever they claim last production for the consequential damages and that my point was though that the jury did not make that determination it appears that they the jury did not may well see it appears did the jury make that determination reason i'm call for the verdict form ask them to make that determination verdict form asked for damages as a result of the preachment coming of good faith very dealing so there is no specific  jury question on that on that front the jury was asked the jury instructions do talk about consequential damages arising from a breach of the insurance contract so i but i agree with your honor that it would it would result in a somewhat smaller amount but again like like the gallants case like the brown case this is a covered item of damage under the policy  insurance so let me ask you this when when the jury instructions were formulated and adopted by the court were there objections to the instructions or did where the agreed instructions my understanding your honor is that  the instruction with the consequential damages and that that the theft instruction there were objections but by country mutual but not alternative instructions proposed so i think that leaves them in a situation where they would be hard pressed to argue on appeal that those instructions were incorrect in fact they haven't raised that as a right as an issue on appeal i'm just what's our review is it i mean i you know quite trying to get so they raise that they say that you're only entitle to at most you're only intitled to consequential damages for breach of the insurance contract instructions are well i think i think what country mutual did argue below was that the it was not a covered loss so i think that's probably subsumed within that argument giving them some credit we were reviewing for error for legal error reviewing for plain error we were reviewing for abuse of discretion well what is our standard of review here in terms of whether or not they're trying to get out of should have said or directly your honor in terms of  determining whether the last milk production was a covered loss under the policy i think that it would be de novo review because it's an interpretation of the policy language and that you the district court ruled that the policy was ambiguous in terms of the scope of coverage and then resolve the ambiguity against against country mutual and consistent with oregon law i don't know if that addresses your question completely or not i have a question about the jury verdict form so the st question was which was answered in your client's favor with you folks proved products of the evidence breach of the insurance contract by failing to pay for any coverage losses the nd question then sets forth the losses this is a fair reading that you basement these are the covered losses that they should have paid for right so they specifically identify loss of milk production four hundred thousand dollars correct your own ok so that you would say is an award for covered losses yes ok and then three it says did they prove evidence that they breached the obligation of good faith and fair dealing under the insurance policy that's the bad faith claim right th denial of wrongful denial the wrongful denial of coverage for the theft and then apparently they just totaled everything up so the four hundred thousand dollars subsumed in there but it's just a total amount that's what you were talking about total just or it just coincidentally happens to the award damages as a result of failing to pay covered claims the jury did actually break out and say loss of not production was a covered claim and accounting made at four hundred thousand yes ok so on that basis could but then we would have the alternative of recovery for consequential damages so turning next to the award of pre judgment interest it's interesting that country mutual claims that  the payment provision under the policy was clear and unambiguous because below and we pointed this out in our brief they offered three different trigger dates for four prejudgment interest one is the date of the six months after that proof of loss was submitted to the country mutual one was the date of the verdict and the rd was i believe the date of the alleged use of the breach when they refused to claim so if the language there was so clear and unambiguous presumably country mutual would have had a difficult time interpreting it i think there are some other issues that are raised by if you and again that wasn't it was not an issue that they raised below it's a new new argument on appeal if you look at the provision the payment provision which i'm not certain really applies to you know should govern the award of pre judgement interest because it's a payment provision has some problems number one it's really antithetical to the way payment is supposed to work under the oregon insurance statutes we've cited in connection with the attorney f filed and and then the policy holder has to go to court to enforce a contract of insurance and beats the tender and the court shall award attorney fees at trial and on appeal that's the basis for  judgment is answered and sixty days after that so it pushes out payment way beyond the date where they're really obligated to pay under oregon law it also states that the alternative would be settlement but  if you getting back to contract interpretation if you look at the way the payment provision works it says will pay sixty dollars days after one country mutual receives a proof of loss from the insure to insure the policy holder has submitted or complied with all conditions of the policy and three then it's reached its agreement with the policy holder final judgment or i think there is a filing of an appraisal award  and if you look at the country mutuals interpretation would read read out one into the st two steps they become just mere window dressing i mean if you if they can wade into a country mutual can wait until after to pay until after their there's an agreement or a final judgment and what is submission of a proof of loss or compliance with the policy have to do with anything so under their own and they are pushing the principle that you have to give correct well with judge mosman did was he looked at the it in me as it did the insurance policy provide for pre judgment interest not specifically what what the district court does look at the payment provision of the should begin to run your honor it's it's it's based on common law it's based on case law in oregon and it's when a mount is readily ascertainable enough and now when it's readily ascertained so it's common for party structure mosman said well here it was readily ascertainable when they submitted their proof of loss correct and then he gave sixty days he said it was sixty days after they submitted their proof of lost applying the payment provision of the what does the case law say about so i mean like here they said well we submit our lives our loss was one hundred thousand dollars and the other side says well you know we dispute that it doesn't have a case law say about that is also the case law resolve that the case law says it doesn't have to be undisputed it doesn't have to go all the way to to a jury determination or probably being i'm sorry you're not a man never never i don't know that it would be a jury determination or court or for the court it doesn't have to get that far down the road if it's if it's an amount it's reasonably ascertainable that's the trigger i don't have the  and match up i don't understand well i guess i don't have the clear answer to that i need to look at the judge mossman ruling on the post post trial motions because he does deal with the pre judgment interest and he does i mean it was  assume that that has the the principal amount of the of the coin which prejudgment interest is based but i'm sorry just don't have that at my fingertips let me ask you this if we were to decide that it has to go back for a redo on the consequential damages they guess that would eliminate for the time being prejudgment interest or if it was based on the verdict amount it would subjected to recalculation yes your honor and again i  more subsequent to me is this did the parties try to take advantage of the th circuit's mediation service yes they did your honor did they did they decline or did they participate in a mediation there was a  phone conference usually telephone converse right there's a possibility that a mediation and a formal mediation would be beneficial and there was the parties were so far apart that it wasn't it wasn't standard wrong for a new trial it's a piece of discretion but when they deal with judgment as a matter of law they also fail to apply the bedrock principle that all inferences all evidence are in favor of the verdict  to the pre judgment interest that award was made on the verdict amount and that verdict amount is higher than the proof of loss for example the milk production information country actually objected to its tongue but i believe that it is a bit of a case by case and now listen it is easy when there is liquidated damages under contract but when there is an issue of showing an actual loss i believe it is when you truly have enough information just understand what the amount to what judgments when did was to use the contract as a basis of determining what was ascertainable at the time i pointed out in a trigger point is that what he did i don't think believe that the counsel raised for the st time during his argument that he payment provision is not an appropriate trigger for prejudgment interest if that is correct that is also an er of law and this court can review errors of law whether or not they were raised below if it so chooses and if that is another basis to throw out the interest  award and require proper application of the law then we would request that this court take that into consideration  we would also disagree that country mutual's reading of the payment provision removes meaning from the st conditions the proof of lossing and compliance with the policy those  issue no one disagreed that the chatlines did provide a proof of loss and no one argued they didn't comply with the policy there's very little discussion of those points because there was no dispute between the parties over the fact that those those conditions that st portion of the clause had been fulfilled and again with regard to the trigger dates discussed by counsel only one of those is actually connected to the payment cla and the fact that there were a number of different dates discussed i think speaks to the fact that the payment clause is just what the court latched on to to find a trigger point but it's not necessarily playable to a analysis of when there was an amount owed and when that amount owed was reasonably ascertainable such that prejudgment interest could begin i'd also like to quickly address a couple of the cases mentioned by councilor brown the idaho case use different language than the policy here was somewhat less specific it was a direct loss to insured farm personal property  idaho does not have case law similar to the case law an organ that interprets that phrase direct loss or direct physical loss so it did not include the term physical which the organ courts have found is key and i hope it does not have similar case law already interpreting that phrase all of that is similar to organ court so brown is simply not  here and then finally i'd like to address gowans which is i believe the only organ case cited on this issue at the cow means case was interesting because it wasn't a reward this was money spent in order to recover the property that had been stolen it's not a inability to use that property any longer because it's been stolen and that's a unique fact that thank you council the matter is submitted on the reasons or is just submitted at this time