that afternoon your honors there and then where you hear when i explained why we don't as we have in we have the two of us i was around her and i will speak as slowly and clearly as possible yeah i just want to be sure that when he gets  today a first of all i'd like to reserve five minutes my time make please the court to thank you today we asked the court to correct the manifest injustice in denying the board of education coverage for a defense claims is an overwhelming set of facts three different litigation three different contracts one the largest construction project in the history of the north playing field board of education for three different buildings and the five one yet there were again i didn't represent the board of education in the underlying matter so i have a facility with those facts but  they are not at the forefront of my my how but it is a very large project and the litigation has been ongoing for years thousands and millions of dollars it was amended but those i my knowledge for and my appeal is specifically related to the insurance coverage part of it i know there were attempts but i was not involved in any of those i was involved in some settlements involving the insurance coverage because there were other insurers involved at a particular time but the court here erred in several different ways first of all the me let me ask you the basic question errors  omissions policy issue to a board of education isn't that designed to cover mis steps that the board may have made and its role as an educator rather th in the contracts it draws for instruction no your honor is an emission policy to an architect i can see how that might cover problems with the functioning of the architect in that profession but errors in the mission policies are general liability policy right no they're not they're there specifically to cover wrongful acts of the board and that's exactly action in their profession but if you look at the policy itself and the exclusion of the policy you'll see that it contemplates far more than just in the educational realm for example fraud there's a specific inclusions an exclusivity you have or pollution you can have fraud you can have broaden in how you set up your student loan program and what you require of your students well this is a public school it's a it's a it's an i mean if public undergraduate at just saying that fraud in the educational professional sense  exist for example arising out of the failure to affect or maintain any insurance that's one of the exclusion that's in this case an insurance bond is in particular directed toward the most significant thing you would have gone for would be for construction construction is part of what the board of education does they don't just educate they have to provide the facilities it is one of the main functions of the board of education is to provide appropriate facilities there have been cases that have gone through all of the courts in the united states  dealt with what is it that the board of education must provide in terms of facilities so facilities is a integral component of what a board of education does and in this particular instance the main error the most obvious error of the district court is that it just failed to engage in a plain reading of the policy it also applied misapplied to who can't decision the district court also fail kid the third circuit decision of this court failed to follow the farmer help decision if the dish court improperly relied on american motorists and resultingly the district court if this or rated the insurance policy the board of education bought so easily create no insurance you surely you really read farmer phil as overturning american motorist when it comes to this issue  one being covered by the policy in one not being covered by the policy and i think that is a very different situation from what we have here where you're dealing with a straight breach of contract case with had was we had one count of breach contract and eight a fifteen tort claims what we have what your question really asked was the former felt over rural america motorists and the answer is in the context of concurren causes the answer is yes the former felt court specifically says this is an inherent ambiguity that prior to that case prior to the presentation of those types of facts it was an ambiguity that they had former felt says that there is that arising out of breach of contract is not in heron lee plain and clear and unambiguous but depending on the facts depending on circumstances the pending on the multiple causations that but you need go no further than the reading of the part of this policy in order to see that that exclusion didn't even apply to the allegations of breach of contract i pointed you the face of the policy and in particular i point to plaintiff's appendix a page to the letter the former felt were to use the visual analysis of supplying the policy side by side with the complain but i say to you look at page two eleven at the exclusions clauses and look at them side by side in your honour's will see quite clearly that there are exclusions that deal with and are triggered by allegations for example the very first one alleging fraud as opposed to the very next one arising out of false arrest when the drafters of this is made yes we don't i can provide your honour's with an extra copy which i have if you like but the visual imagery that the farmer felt court was using is particularly appropriate here what we have is we have a policy when they wanted to exclude allegations they knew how to write for example number one alleging fraud dishonesty or criminal acts the exclusion talks about allegations when they wanted to change it into a reimbursement clause they knew how to write that as well for example insured shall be reimbursed for the reasonable amount which would have been collectable under the policy if such allegations are not subsequently proven the  exclusion that we're talking about here the exclusion for arising out of the contract does not have that language we have very basic and well settled law with regard to the interpretation of the contract in our brief we refer the district court ruled by doing that you have to look at what she said to begin with she first said ice polit the district court first said that all of these were wrongful acts and that's what this policy was intended to cover wrong acts and in the very next breath the district court said but they're all arising out of breach of contract first of all that cannot be so for example the most blatant one is fraud in the induce that is based on pre contract conduct conduct that arose before the contract even existed and as we know under the eggleston case that breach of contract regardless and rather  a contract can survive even if the contract never takes place or if the contract is fully performed in either event you can still have a fraud in the inducement quite now how can that possibly arise out of a contract that didn't even exist yet  j smith case there's been a finding i believe we supplemented the record it by motion or by letter with regard to p j smith there was a finding there was no breach of contract that has not been proven and cannot be proven ok and more importantly in the  a one of the threshold your letters and in short i represent the carrier correct the you know carry one of the threshold or the threshold issue for this court goes to our motion to dismiss the appeal as being untimely application by the the board it's based upon what the trial court the district court had entered a final judgment  they prole of two thousand and eleven but we've noted that the true final decision in the underlying case was the stipulation of dismissal with prejudice which basically disposed of all the remaining claims amongst the parties at that point the time to appeal was triggered no application to extend that time to appeal was ever made by the board instead what they did was thirty one days after the entry of that they filed for a motion for reconsideration based on the former felt the session pursuant to the local civil rule seven point one you would have to file a motion for reconsideration within fourteen days however if we look at the federal rules of civil procedure the application to alter or modify a judgment should have been brought within twenty eight days of the final decision you raised in the m them all but there are some are more interested in listening ok well with regard to the two there are two notices of appeal which were consolidated first related to appealing the district court denial of the second motion for reconsideration which as i just alluded to one yeah exactly and that focused on the former felt the session whether or not that was an intervening change in the law of the state in new jersey with regard to insurance the law in new jersey is very settled with regard to insurance including exclusionary language found within policies ar ising out of is consistently been held to a quake to originating from growing out of or having a substantial nexus to that then ties into the american motorist case which flummery fell and no way overturned what flummery felt was concerned about was concurrent causes of a potential injury and this and when the flummery felt situation she went to a party she was drinking she had partake in some narcotics and she passed out and in addition to those problems we had the issue of she didn't get immediate medical attention so the new jersey supreme court was faced in that instance which of those causes which independently could have brought about injury was the trigger what what would be subject to policy exclusion and what you had in that instance was the subject policy it was a g policy a comprehensive generalized billeted policy the issue was did an exclusion relating to the use or presence of illegal or dangerous drugs did that in effect negate the whole issue of her use of out the hall and delayed medical treatment that's what the new jersey supreme court was focused in on and flummery felt so we did not have a intervening change in the law which the court the supreme court in new jersey reiterated saying the familiar principles that apply in the instance of insurance are there exclusions which are plainly and unambiguous lee written will be enforced will be narrowly construed but if they're playing they're out there they'll be enforced secondly the let me just that the reasonable expectations and public policy reasonable expectations of the insured and public policy likewise stead there's no change in pflum or felt to the existing law so was the district court in error and finding that there was no intervening change in the law absolutely not and this court has plenary review because it was a legal determination by the district court the second appeal goes to the whole issue of the district court's treatment of the two motions for partial summary judgment we had the initial motion related to the p j smith who was e o at tricia on the projects and the surety ai i am i see and those are two state court proceedings which were brought in two thousand and five against the board which grew out of the construction project that the board was involved with the second motion the partial motion for summary judgment related to the d n d action which started out as the d n d sued because of the terminations of one contract on the construction project and then later we have the determination of d n d the general contractor and its entirety and that resulted in the amended complaint where we had sixteen counts the original count was original complaint consisted of seven counts many complaint sixteen counts the claim when it came in as in actually for all claims they were to the carrier for review the carrier determined based upon a review of the complaint that these actions related to or grew out of breach of contract that's the arising you there are two issues two real issues in this case one is the meaning of the rising now and the other is they having substantial nexus with which the district or thought was contract that's right substantial nexus is a definition of arising out of as the term and by american motorist as further supported by former felt and as i understand th argues that the district court or in saying happen have or did have a substantial nexus with their lies in having that's the argument but if we look at way i see it if those two main issues will be sixteen things yes and so right if you look at what the district court with the district court did pursuant to new jersey insurance law was take the complaints and put them down side by side with the insurance policy and all policy now counsel is correct you look at a judicial proceeding if there are wrongful acts asserted ok then you look at whether or not that's covered under a policy however it is then subject to the exclusion specified within the policy and one of the exclusions there are multiple exclusions but one of the exclusions is arising out of preach of contract claims have been asserted as well but they all related to the contractual relationship between the plaintiff and the board that's what the district court found that's what th record reflects if we look at this the whole relationship would not have taken place but for the contracts which had been entered into by the board and allegedly breached by detriment we entered into this contract so everything is as i think the word used by the district court and the ties into the who begin to susan is an demick to all these causes of action related to the contractual relationship perhaps think stance on that or had it which is a very broad application originating from were growing out of it slightly different than substantial nexus but the supreme court in new jersey and looking at insurance said that substantial nexus was a definition of arising out of so that's where we look at all these causes of action which were asserted but they all were endemic to or arose out of originated from or had a substantial nexus to the contractual relationship and the breach of that relationship or  hundred right i believe that related to the allegation was the board was intimidating a witness who would have given counter testimony as to the contractual relationship or how the contracts were arrived at i don't have the complaint in front of me so i can check in the brief i think i addressed it when we went through the multiple  not involved in the d n d case i'm involved in the coverage aspect and i could suppose or offer suspicions as to what happened but that probably wouldn't benefit the court it looks like what happened was the board was dissatisfied with the content general contractors work and was looking for ways to negotiate either reduction in what was being paid out or getting extra work i don't know and like i said it's  just a suspicion or just me surmising not having that record i don't know for the most part these original suits don't seem to have been very successful against million dollars in liability coverage and unlimited defense if it applied because of the breach of contract exclusion there was an endorsement that provided despite the fact we don't cover this smith case and we paid one hundred thousand dollars through his head of the surety case after the court the district court denied the first motion for reconsideration back in july of two thousand and eight we said ok the court has spoken as to what our legal obligations are in the may two thousand and eight summary judgment decision denied the application for reconsideration by the board we will honor what the court  said and we paid our money immediately thank you thank you with where the district court went wrong the district court analyzed this using american motorist using arising out of the contractual relationship that is not what the courts and who can't tell us to do it's a rising out of the breach of contract in councils argument in councils of brief at page sixteen he refers to in demick to the contractual relationship the court the district court and there in the five fifteen zero eight summary judgment cision says the contractual relationship was in demick to all causes of action and that's it p a thirty four that is not what should have been analyzed for this exclusion it's not whether it's in demick to the contractual relationship everything's in democratic contractual issues of it's whether in a rose out of a breach of contract and the fact that who began tells us to look at those cases and determine but for the breach of contract do you have independently tortious claims and here we have fifteen out of sixteen tort cla substantial nexus test and therefore it in compas is what american motorist was saying but what it does do it does tell us that you have to look at these independently tortious actions now having hindsight having the benefit a farmer felt that is quite consistent with what who began it was st farmer felt was yes you must go back and look at the causes and it must be noted that it's inherently unfair the distance seem to court sitting in d n d went through piece taking analysis of the claims on the motion to dismiss and found independently tortious claims and allowed them to go forward and then in the same court sitting in the churns action says no and sweeps them all under the rug with swoop they're all arising out of the breach contract and all the district court says it what happened what you heard here today is exactly what actually happened she met she found that they were all a substantial  contractual relationship and that is far broader in fact that's why american motorists this distinguishable because that arising out of clause was not a rising out of preach contract it was a rising of the employment relationship there they were  exclusion a relationship the employment relationship here arising out of is an act the breach of contract is an act and much much narrower exclusion on top of that it's still it's not even triggered because of the allegations but wherever there are disputed multiple causations under who began under florida law it has to be resolved in favor of coverage and a defense first and foremost the defense is well settled law new jersey that if there are concurrent causes if there are potentially covered claims you must provide an unlimited the fence intil all of those claims those potentially covered claims go by the wayside even the language here in this policy talks about whether to defend any claim and i'm referring to the policy itself at appendix page two ten and defend any claim against the insured alleging a wrongful act even if such a claim is groundless false fraudulent and pam behalf need sure all expenses incurred by the company in the defense that we start with the broad coverage portion of this policy because if you don't you end up with a policy that just does not meet reasonable expectations of any insurer it is no insurance insurance you cannot say that they are all wrongful acts without analyzing them each one separately and independently see how when the district court wanted to do a searching analysis of each claim you can see it was on there and it wasn't done here i represent the north playing field board of education but only on the issue of insurance coverage this is a separate action it was removed to federal court it was originally originated in state court oh yeah ok i'm in for the question