good morning everyone and welcome to the th circuit good morning your honors may please the court heather right from nashville tennessee also six circuit here on behalf of the appellant defendant auckland loan servicing i would like to reserve three minutes of my time for rebuttal and understand i'll be monitoring the fox i thank you as a matter of law auckland did not have a legal duty to the estate to ensure the property for the benefit of the estate to file an insurance claim for the benefit of the estate or to maximize insurance recovery from the insurer for the benefit of the estate yet in this case the district court in allowed those arguments to be presented to the jury on whether or not auckland violated the consumer loan act and the consumer protection act by breaching alleged duties and as a result the district court committed reversible error st the district court incorrectly denied auckland's motion for summary judgment on the consumer loan act and consumer protection that claims at summary judgment a judgment couldn't tell whether you were also arguing that the district court had heard in denying your motion in limine and there were also jury instructions so perhaps you can make clear as you've just been with ection c specifically provides that the consumer on act requires a mortgage servicer to promptly correct any errors and refund any fees associated to the bar resulting from the service or air our argument would be that it with no legal duty to file an insurance claim for the benefit of the estate trying to maximize coverage for the benefit of the estate with there no legal duty to do that there can't be an error is there any support for that argument because you didn't i didn't see  the hat and collect bother to collect them that that was to be at least a mistake that seems pretty reasonable conclusion so why what is the basis of any case or is there any statute or a framework that would say there has to be a legal duty you're out of there is not a case that specifically says that under a subsection a legal the air has to be associated with a legal duty however i would take issue with the conclusion that a lender has an obligation to obtain insurance proceeds for the benefit of the estate this was an insurance policy that was not procured by the barber for the borrowers interest in the property it was for cured by the lender to protect the lenders financial interest in the property and as a result of that as a matter of under the language of the deed of trust and or the insurance policy itself there is no duty on behalf of the service or this illegal to look at the insurance to protect the value of secured property and if you just forget to collect the proceeds or you law the reason that it's an error of lawyer honors because the the loan service service obligation with respect to insuring the property is for the benefit of the investors that the loans servicer is working on behalf of it is not for the benefit of the borrower number one number two the property insurance itself only insures the improvement on the property it doesn't insure the raw land so to assume that the insurance proceeds which to do here in this case it decided after the estate decided that they wanted the proceeds applied to the alone they they applied the proceeds to the lawn but what seemed to take a long time to get them on your honor it did take a long time to get to that point and the the the facts that were presented in the case below there is some confusion about whether a state was going to be paying the difference to pay off the loan as a matter of application of the proceeds if the proceeds had been applied to the loan immediately upon receipt then they would have reinstated the loan but then there still would have been proceeds the f a time of the loss the end paid balance was almost one hundred and sixty thousand the insurance proceeds into that being about one hundred and thirty two when you reduce the replacement cost value down to actual cost value under the and the estate could have continued to make payments on the one the loan itself those payments would not get any smaller that set forth in the deed of trust in order to get it off the amortization would have been shorter can i ask a more fundamental question here the jury verdict i hope you understand the special jury verdict form it came back and said that kwan engaged in unfair deceptive act or practice right yes your honor and it also said separately that number one under washington while the supreme court has been clear that whether or not an undisputed act which we have here is unfair and deceptive or unfair or deceptive is a question of all that has to be decided by the court it's not a question that that should be decided by a jury in this case if you strip away the errors that we say were committed with respect to the lack of a legal duty and you only look at to your honor's point the question of whether or not the proceed should have been applied at a at a prior point time then that leaves you with whether or not the issue of applying the proceeds is an unfair deceptive act and that is not an issue that the jury could decide without the court separately deciding back to the five elements of the unfair practices to prevail in a c p a claim you're arguing that the jury didn't have any information or couldn't actually decide that your client had engaged in unfair deceptive acts or practices you're saying that that always has to be a question of law when there are undisputed facts which there were in this case whether an act is  is unfair deceptive is an issue for the court to decide the cases that the th circuit has addressed has discussed in this issue are involved for example the collection notices and whether or not the language of collection at uscis and this is in phnom versus farmers insurance of washington one hundred and sixty six washington nd twenty seven the court specifically talked about whether the language of the notices were unfair and deceptive there was no dispute about whether the notices sent or whether they'd been received a solicitor we have to decide that it strikes me but for whatever reason dragging this out for two and a half years is effectively what happened how could you say that a jury couldn't decide or a jury couldn't decide that there was something unfair deceptive about that your honor i'm sorry go no i'm siding mean the cut off the judge but after that i have a question when you strip away the lack of duty i'd knowledge and acknowledge that there could be an issue for the jury with respect to the the time period that it took to apply the proceeds the problem is that that's not the only issue that was presented to the jury the jury was also presented with the acknowledge that the loan servicer when it when the proceeds were received there is an issue it could be an issue for a jury about what should have been done at that time that's not the case that was tried the remedy for that is to reverse and  with instructions that the c c l a claims as a matter of law are precluded because there is no legal duty to support those claims and then there can be a trial solely on the application of the proceeds issue  if we if we don't buy you argument that there's no legal duty and just that's just hypothetically understood then you still stick with the notion that as relates to the notion of undisputed facts obligations were with respect to the barber what they should have done which is a question of duty but they're also facts right that the facts were essentially and disputed as to when the fire occurred when the claim was made when the proceeds were received  the other that would support determination on or i agree that the with respect to when the proceeds were received and when the proceeds were applied to the loan that that is an issue of fact that the jury could decide the problem here is that we don't know whether or not the jury decided on that issue or whether they decided on the consumer loan act issue as being the basis for the end fair deceptive trade practice klein consumer because of the way the jury instructions were written to save the rest of your time yes your honor thank you very much and that is st and foremost whether worn on the motion for summary judgment should even be an issue at this point in time the motion for summary judgment was denied based on the trial court s determination that there were multiple issues of fact genuine issues of material fact on which the motion was denied so opposing counsel's there's no issue of material facts were st and foremost that it took two and a half years for an insurance claim to be settled when the testimony given to the jury was that it should have taken three months and a half years it was undisputed that it took two and a half years the question is whether timely in expeditiously processing this claim could have resulted in  being resolved in less time and that seems to be jury question how long should have taken what the standard should have been seems to be jury and what does that well the argument auckland has made is that they had no legal duty to do any of this the fact of them and they rely on the deed of trust and the statutes that they've cited what they've forgotten is the fundamental question is that what is it issue is an insurance policy well but i think judge could is question is if we agree with you that  c l a correct and i'm not sure any of them have anything to do with timing i have to go back and look and then you have the stand alone c p a claim which about unfair and deceptive practices which opposing counsels a that's a legal issue for the court so so it's say the jury determined or considered whether auckland took longer than was reasonable in this in assessing th all they were supposed to collect the payment and upon collection of the payment notify the estate what it was for and how it was to be applied so that that's correct and is there any support for the at they were specifically labeled as a payment on the loan that was what they were paid out as that's what the estate was notified document that was there is a specific exhibit notifying the estate i believe it was in october of two thousand and fifty it's basically a receipt i can't because  insurance policy was with i think you was the insurer and they they had a relationship just with the lender and then paid out on the insurance policy your honor i need to come back to that because that is that is probably the most important issue that i came here today to impress upon the court and that is is that this policy was a dual interest policy in other words there were two insurance under the policy this is the stand on the six hundred and thirty one this is the certificate of insurance and it specifically states the additional named insured is the estate and what the jury heard in terms of expert testimony from the state's expert david four is that because the estate was an additional insured under the policy then they were in tiled to be a beneficiary of everything the policy require getting away from the question here because the jury had as instruction i think that as recorder read the the statutory requirement right to the the jury correct and so the question is whether that violation required to timely make payments from our orders escrow account was applicable here and the did the district court rule on that issue it did not it turn it over to the jury ok so it'll it'll at the jury make this legal determination as to whether to ninety one c applied to the insurance the payment of insurance proceeds well that's not a question of law that's a question of certain rules that you have to follow says collect escrow amounts on a residential mortgage loan krit and so so that's exactly what happened so the jury didn't get any instruction whether insurance proceeds are deemed to be the collection the obtaining insurance proceeds is the collection of escrow amounts on a law because to me it sounds like a different something different is there is there a washington case that would explain to me that at collecting as ounce on a loan held for the borrower is the same as for payment of insurance insurance proceeds well i'm not assuming anything i'm just asking where where i would look to determine that a servicer that exercises if they're already to collect escrow amounts on a rest and chill mortgage loan held for the borrower for payment of include the payment of proceeds under the insurance policy that's the whole reason why you have insurance i mean i would rate this as when you make a payment on your mortgage you get you banned extra two hundred dollars and the lender takes them puts into an escrow accounts in is it to pay the insurance premium that is that the normal interpretation of that language that's one of the things that 's one of the payments that would made that would be involving insurance another payment that would involve insurance proceeds under the policy ok is there a case that you can point to that provides a perhaps they read it they might have been more detail that the pious participate and suggesting to the court where the jury instructions should be whether any objections made to the german structure is given by the court  i think the point that we made in our submission is a we don't believe that that was accepted to and b if you look at defendant's proposed instruction regarding the c l a claim it concedes that a payment a payment for insurance would include payment of proceeds and that is their proposed instruction can be proceeds would fall under that pro insurance the payment was to be made out of escrow for insurance not from insurance company there's nothing that's as from insurance company ok so this is what this is all that you're relying on this just tracks the language  statutes are as i can tell that's correct but there were actually when you go back and look at what the per se instruction was there were actually three prongs to it there were three aspects of the consumer loan act that could constitute a per se violation what the court is focusing on is one of those three things there are two others that would potentially be violations of the consumer loan act that would justify in the states but let's say there was an error on the consumer loan act do those errors carry over to the unfair that seems to be i mean as i understand there's the arc one is making two arguments number one unfair and deceptive pray act or practice is a legal question that has to be decided and the same legal errors that infect the c l a determination would in fact that regardless of the per se violation and then secondly it seems to be their arguing i almost got a concession that there is an open jury question about the timing of when to pay it but this jury was infected by a lot of a roni as information that should have been before it so how do you respond to both of those potential violations of of clickable statutes the jury considered well let's say we disagree with you on the violations of the i don't think any of you as defy the jury verdict that there was more than ample evidence to sustain a verdict under the hangman ridge under the st under the stand alone c b a claim you'd have to say this is the type of problem that could affect a great number of the public and it seems like this was a pretty much of a one off deal where auckland through negligence or oversight didn't do what it was supposed to do and the insurance claim  why i would say that there was any error was harmless and there was overwhelming evidence of the public interest component first of all it's there is no requirement that there has to be overwhelming evidence there needs to be substantial evidence well here because we think that the jury could have found if we if we think that the violations are not appropriate or not or improper  claim and the question would be whether or not there was a capacity based on all of the evidence for someone in the similar shoes of the state to be deceived it's guy just and i want just one minute i just want to be clear there is a stand alone c p a claim in terms of the verdict and then there are three bases that you gave had to set that aside or say that it was not properly rendered would that affect the very you agree that there has to be every man you know the other two would be the other two potential violations would be sufficient to sustain the verdict you i know you want to address some things but continue just answer one question to help with interest impact is a quite a quantum challenging that do they believe that the public interest impact prong was not satisfied you're on to th was no evidence presented at the trial that would support a determination that the public interest was at all at risk in what your honor has has characterized as a one off the typical cases that the washington courts have considered when you're looking at public interest are where mass mailings were sent to individuals trying to collect information are many from them to receive a copy of a deed that they could have gotten from the register of gates's office can't i cannot say that i have seen the phrase pattern or practice in the case law in the cases where those situations have risen to the to satisfy the public harm element they are  jury where the jury then decided alone whether or not there was an unfair deceptive act and the court should have made that decision as a matter of law tom is about to expire and i thank you very much i think for there are