thank you may proceed good morning you're on is robert marshall mayhap of the appellant's excuse me which i'd like to collectively refer to as mitsui i'm afraid this case doesn't involve groucho marx or the three stooges or anything fun like that just insurance policies which are unfortunately a drier subject pun intended for your honour's this case is a clear example of how insurers should not act well let me ask you this just to make sure i understand your do you agree that if the whole tokyo's policy is an excess policy then your equitable contribution claims fail i would agree ok i just want to make sure that that ok so early in the defense of this underlying case when council for serum erica that's mitsui is named insured was attempting to taint additional insured coverage from the parent corporation kaiser japan which was tokyo marines insured he was referred to a person  tokyo marine claims services this is in the record at page eight fifty one tokyo marine then ignored or deflected repeated tenders and requests for defense an  action by took a marine is reflected in the many items of correspondence found in the record on pages eight fifty one through eight ninety three tokyo or premium marine refused to respond misrepresented the facts deflected multiple requests for some kind of answer asked on his behalf the mediation be rescheduled then after five pm the night before of the rescheduled mediation informed by e mail it w complaint but it also goes to the meaning of endorsement number eight which i think will become apparent as i go through my argument well can i ask you about the bat faith coming if we agree that the claim in japan so it's important to kind of see america itself was involved that's found in a letter from tokyo marine at record page one fifty four where the author states that tokyo marine was in communication with sera japan's legal department who have valuated the tender had no time to talk you marine archivists here in japan identifier indicate that there was some underlying primary policy at issue other than the tokyo marine policy nor did they say every ten limit was a tissue and they didn't say that there was some issue with maintenance of underlying insurance ok so the one policy is for fifty eight and i was looking are you contending anyway you know just in terms of insurance coverage sometimes if the primary is costs more per amount and then the excess coverage you know you get an umbrella and you don't pay as much for that and i f i look at one policy it says it cost fifty eight thousand dollars a year then there was also a policy that i think was determined access to that policy which was it was a seventy eight thousand dollars a year premium and then the tokyo one less four hundred seventy three thousand right but did that interview the four hundred seventy three thousand it was for thirty eight million right right but for more people to you or are you contending in any way the amount of the premiums in any way indicate whether something was primary or access i don't think it's central to the argument because it gets very complex when you get into underwriting because you know there are more corporations involved but it's a more specific policy it's a products liability policy ok so that isn't really something you're arguing here it's not important ok what's important is that the tokio marine policy must be read in it entirety it's found at record pages seven twenty five through seven forty three the declarations page does not indicate that the tokio marine policies excess the title of the policy does not do so but got the problem of endorsement eight it will barely says clearly within the products to which this insurance applies in excess of the total sum of the upper limits of insurance for each occurrence of the underlying insurance you going to do with that well what we're going to do with it and why this information is important is that the case law as applied would favor mitsui the argument because in addition to things i said before the limits of insurance language reads like a primary policy without mention of being access to ultimately now loss or anything else in fact the notice condition requires a notice of any claim immediately upon receipt not any claim that may involve an excess policy it's explicitly written as a primary policy at the eleventh hour tokyo marine cites to this indorsement it's found that record pages seven forty seven forty three it's is written only when the scheduled underlying insurance exists no scheduled underlying insurance existed at the time of this claim this is claims made coverage it's the same as if that's schedule was blank so indorsement number eight would bar the obtain insurance afterward when the same provision would be no insurance was obtained afterwards you're talking with simultaneous is that what you mean there are two policies here well number one that primary policy was never mentioned by anybody it was never produced by kaiser japan or tokyo marine its claims made coverage it was in effect for only two months the first two months of the token ring policy but the claim came in six months later so this policy didn't even exist for all practical purposes at the time of the claim again it's at it would be as if that schedule was blank  and we have to look at california law right right on this i'm curious what your argument would be on if we're analyzing whether tokyo's policy is primary and not in excess of policy misinterpreted our ally and our ally the policy which the court found to be excess it was clear not only in the ensuring agreement but in the limits of insurance section that the policy would only respond  net loss which was defined as being excess of both the applicable schedule underlying insurance and all other available coverage whether primary or excess that  nothing like endorsement number eight which just says it's excess of the scheduled underlying insurance we know that doesn't work here because there was none in effect and it says or and this is three paragraphs later or if there is no coverage for a particular occurrence under the scheduled underlying insurance where excess of a retain limit of zero or simply other insurance well that scheduled underlying insurance again was completely absent this isn't a question about whether the scheduled on line insurance had an exclusion or a condition was violated or the limits were exhausted it simply didn't exist and in o number endorsement number eight doesn't clearly and unequivocally inform the insured that the tokio marine policy was excess over all other insurance whether primary or excess it just states that the policies excess of scheduled underlying insurance not both scheduled underlying insurance and any other insurance whether primary or excess all it does is make the tokio marine policy if it applies at all because this is a very strange endorsement written  malaysian currency for no apparent reason we don't know whether this was simply written because there was an overlap with coverage for some particular malaysian risk and so they added this indorsement to the policy we don't know what this policy is it was never produced the endorsement would do is make the policy excess of collectable other insurance this is no different than the other insurance clauses of mitsui policy the notion that a simple and undefined other insurance language that is found after and ensuring clause trumps other insurance language found later in a policy is unsupported by the basic law of contracts there is no rationale for prioritizing one clause over another by virtue of what order they are found in the contracts and no case law cited by either the parties or the district court is on point to the facts of this case because of how strange this indorsement is so no case holds that we can prioritize tokio marines other insurance clause over mitsui us additionally this case never should have been limited to an neither mitsui i have trouble with that argument council because it seems to me that we have two japanese companies so who signed this contract in japan and are agreeing in the form selection clause to have the dispute resolved in japan under japanese law well you know where that nothing wrong with that but this is not a dispute between that company in japan and that i'm sure japan this is a dispute between an american corporation insurer located in japan that american corporation was not a party to that insurance policy so the form selection clause should not be enforced against it this american corporation wasn't insured by virtue of an endorsement added to the policy that covered all vendors of chi assyria japan that is a very typical endorsement found in place a sure which is the policy the same when two insurance companies are fighting two japanese insurance companies it is i mean i think you kind of see here the irony of that statement that that you don't it's it's not like some poor little person that has nothing to do with anything that isn't well i mean this is an insurance company claiming bad faith against another insurance company right i understand that by way of subrogation and it's important issue and one acts responsibly and the other does not the court says we do not want to reward the recounts and shouldn't ensure by forcing the good and sure to pay of the whole claim and that is part a for that purpose correct your honor and you paid a million dollars right we paid a total of over three million dollars well two point seven but it wasn't there kind of an excess carrier t supremely policy limits are exhausted this coverage continues in force in the same manner ok so there was one million and then someone paid one point seven who want to point one seven the next policy we just continue in force just like that first policy ok so there was a million dollar policy then a twenty five million dollar policy and then a thirty eight million dollars policy that you know in question is that right and if you're not right i was tokyo marine right right ok and they're both first dollar ground up coverage if this case had involved it has to be for you to prevail for equitable contribution you know another thing right if that's an excess carrier then that excess coverage then that doesn't work right  that's correct and nothing else makes sense i mean if america had been sued this took a marine policy would respond as a primary policy there was no schedule underlying insurance in fact they retain limit our position that the district court correctly looked to the insuring clause of the various policies in order to determine the level of policy obligation adopted by the insurers and  understand that before moving on to the insurance conditions of the policies this is required under california law not only under the olympic case which is california court of before determining the level of policy obligation by reference to the insuring clause of a policy would entail both reading the policy backwards and that's what the appellants have asked us to do here and that's what the district court refused to do therefore dismissal of mitsui equitable contribution claim was entirely correct because an excess insurer owes no duty of contribution to a primary insurer we had a chart in our reply briefs under underlying this appeal piers that you are seventy two the record and i think it's helpful in showing in a graphic manner the way in which this insurance program was designed to work in short and this is also reflected in the to nocca declaration tokio marine issued a policy to the japanese parent company hi which policy was designed to provide coverage in the event that any subsidiary failed to provide coverage for itself or failed to procure the correct coverage for itself the policy was by design identified additional insured section of the tokyo marine policy each of those subsidiaries was required and expected to purchase their own insurance to insure against their own risks kai sarah documents america did that by purchasing the mitsui policies and the design of this program was so that they made so we policies would respond to the risks and the tokyo marine policy would be available in the event that there was some lack of coverage or some very large claim that exhausted the coverage that's perfectly reasonable and makes perfect sense indeed it would be absurd for katie ebay to have spent its own money purchasing insurance from mitsui if it was able to get identical coverage from its parent corporation without paying for it with respect to the us or would you help us out with endorsement number eight that  the least as i look at one of the key issues in this case and you've heard counsel interpretation of it i'd like to hear yours or so indorsement number eight takes a standard form of commercial general liability insurance policy and modify is it so that it will achieve the purposes that the insured and the insurer so it to achieve your if we flip to indorsement number eight which appears that you are to a one of the record we see that it says if damages from a particular occurrence is not covered by the quote scheduled insurance and that scheduled insurance described later in the door sman at your tool for stop there for a moment you heard counsel say there was no schedule insurance well the scheduled insurance is identified in the policy and as a other words dispute what your opposing counsel is saying these scheduled insurance is identified in the policy as a policy of insurance that was written to provide coverage during the period october thirty two thousand and nine to october thirty two thousand and that policy of insurance was in effect with respect to certain malaysian risks for sarah which is an international company that policy of insurance does not apply in this instance i don't think you answered my question the schedule of the few what your opposing counsel has told us in open court the scheduled insurance would not have applied in any event to the  was was there scheduled insurance and if so what was it yes your honor the scheduled insurance was is identified at tool for the policy and it was an effect at the time it was not in effect at the time that the leak that the insured becomes legally obligated to pay is damages because of bodily injury or property damage included within the products liability or rather products of completed operations hazard to which this insurance implies in excess of the greater of the retained limit which is zero in this case or the sum of an amount collectable by other insurance and the amount of any deductible and self insured amount of insurance so conceding that the scheduled insurance does not apply because it was not in fact we then move on to the second step which is to determine whether the loss is in excess of the larger of the retained limit zero so in order to adopt mitsui as argument we would not only have to ignore the expressed language of indorsement eight but we would have to read the other insurance condition and eat our one eighty nine  policy out of the policy entirely we would have to determine that the modifications of the insuring clause and the other insurance condition are surplusage and under basic principles of contract law we normally would not not be able to bring at subrogated that faith claim against tokyo is that correct your honor actually the district court found that japan does recognize or at least found that mitsui is an expert had whether under japanese law there could be a cause of action for bad faith it's not relevant frankly to the enforcement of the form selection clothes or an international agreement the fact that the causes of action recognized in a a form selection clause your honor i don't want has not been was not a case that was raised in any of the underlying briefings as far as i'm aware but for that matter if this raised or selection closes in international agreements and in fact there are several cases including locked in which have found that the tokyo marine is a rather japan is an adequate alternative forum for litigation where required by agreement well counsel you heard again the colloquy with your opposing counsel and they stand in the shoes subrogate and therefore there is interests have to be taken into account in terms of how we approach the farm selection was what's your response well my response to that is that tai you sara is an additional insured under the tokio marine agreement they're not a stranger to this contract and therefore under bremen or under this court's decision in farah they would be required to because they are part of the same transaction participate in the form selection clause although we've not appealed from the district court's decision with respect to the form selection clothes we would argue that because none of these claims would exist but for the tokyo marine policy and none of these claims can be proved but for the interpretation of the tokyo marine policies all of these claims is should have been dismissed for improper then you but certainly any claim which is derivative of the contract must be dismissed for improper venue and that's what the district court found but of course california law applies and we do have a vocation california point of the if this is going to any event the california public policy argument that the plaintiffs referred to is really not all that strong as the court alluded to we have heard you're conceding that it is an element in this the resolution of this issue i suppose it is an element that ought to be considered but it is not an element that would be dispositive we have a new jersey corporation reason that the japanese corporation tokio marine has any obligation whatsoever is a japanese contract between it and the japanese company in those instances and i should add that the k t a b additional insured has been fully reimbursed has no loss in that instance there's really no substantial public policy for california to enforce here and finally if i manage i wanted to address the the issue of waiver plaintiffs unilateral decision to file an amended complaint following dismissal of its derivative claims for instance does not fit the disc it the exception recognizing lacy because there was no instruction to the plaintiffs that they amend their complaint or withdraw their claims rather i would say that this situation is anything further counsel thank you thank you for the opportunity to appear here the case just argued will be