tonight morning hours and yes it's good to be back may it please the court computer fraud coverage does not simply mean does not cover simply fraud commute it can be committed through use of a computer this is coverage for corruption of the system itself not old fashioned deceit committed through modern communication means why wasn't the system corrupted by getting into their e mail system and generating an e mail that put the president's picture on it so to the answer i think comes from both the language of the policy as construed authoritatively by the new york court of appeals in the universal case the language requires a fraudulent entry of data or information not an entry of fraudulent information and paragraph thirty five of the joint stipulation answers the question well first of all the court of appeals says what fraudulent fraudulent claimed that right is that what you heard about for john claimed or ball fraudulent information in the courts that submitting fraudulent information is not a fraudulent entry because the intent this is from the court the intentional word placement of fraudulent before entry and change manifests the party's intent to provide coverage for a violation of the integrity of the computer system itself and the court said entry means quote unambiguously applies to losses incurred from an authorized access that's the key unauthorized access to the a computer system not to losses resulting from fraudulent content limited by evidence that the sender hacked meditators computers or committed an an authorized intrusion into any computer server own least or utilized by metadata court appeal says you have to have an unauthorized intrusion metadata says extent the computer is simply the book the fraudulent invoice could as easily have been a piece of paper with seems to me to be different about this case is that someone had to know how to nip you late joy of paragraph ten now of the joint stipulation says explicitly the entire email creation process occurs on the senders computer there's no it doesn't do there's no instruction that sent in that says put up a false from  information the from field is written on the senders computer using a p h p script that allows the sender to just write information in the body of the message and write down a from address just like in a physical letter at the top of the the letter  from can be written to say anything you want nuff literally nothing happens on meditators computer that is different from what happens on the sender's computer with one exception all address in a moment but the from address is the key and that isn't a manipulation it's the computer's not duped it just reads accurately the meditators who was to because this came from someone who wasn't the sender and came i'm the president and he was not the actual center but the computer wasn't duped into doing it it wasn't corrupted anyway it accurately read the message written on the center's computer which put down a from which was not the sender it's just like literally sending a letter and to meditate a system that has from the method is president on the top nothing in the in the mail system changes and nothing in metadata system change to other companies entities of all kinds including our port have e mail systems that we expect to have a certain integrity and what happened here is that that integrity was breached by someone who albeit outside the device itself knew how to manipulate data and i'm concerned that you know due to always being seen in simple terms that one understands if i were to receive an email this afternoon that purported to be from the presiding judge and instead someone from the outside manipulated the computer i would i would understand how that could be characterized as a breach of our e mail system not just not just a detachment that's right but a breach of the system and the key is if you got that message nothing in the system would have changed the system didn't do anything the system accurately read the false email prepared according to the joints to peel ation entirely on the center's computer nothing about the system was corrupted it just read an e mail that said the chief judge inside only has now been corrupted by the outside that's not quite right the nothing when you say various means that's the key the various means you refer to to how they accomplish that one hundred percent of those various means occurred outside the system nothing about the system didn't occur you didn't facilitate the entry because of the fake false from information acting is putting false information into the system too so and you know you've written an insurance policy the question is whether your insured would understand that this kind of conduct is not covered because it's more now it gets to the fraud filling in for ways the tapping and i'm not sure that's obvious well i think the key by sending a letter that had the president's pedigree information didn't isn't that correct that's descriptively accurate but the entry wasn't gained by the false from statement if the fraudster had gotten into the system because it was locked and the his employees he got it in the same way anybody that authorized users all members of the public are allowed to send emails into the employees in boxes that's why many data says there's no unauthorized intrusion here it wasn't an authorized it was authorized intrusion that use false information that's not what it took information that was in the computer imported into the senders in into the senders computer stop me one arm when you think i'm wrong so far that's right right the record and please forgive me if it is is the president's picture in every e mail that goes out to every member of the public lucky public would be the other way around i think right now no the president's picture comes back on the e mail that identified an employee so the system operated like it was supposed to it wasn't changed or corrupted in any way it just said you know glenn dot devise at mt sol dot com that's what it is that you had to type in at the sending end was glen dr fries using the p h p script that's correct so they had to use a script a normal automatically picks up the picture at the receiver's them based on how that system works when it just reads whatever the from address on the message says it doesn't they didn't set their system up to do that based on the on below and the  not to show the true from so that my computer which is the same as judge rashi's when i write something and so is going to say it's for me so somehow some changed it so that the fraudsters computer could say for the president not quite there was no coding that changed any data elements or program instructions on the on metadata system the p h p script is just computer language allows you to write an email and using that language they wrote the false from line just because of anything just the way that in the body of the message there is false statements in the message the from field was false nothing changed  stored in a computer system and a computer system is a computer and all input processing storage etc that's part of it but it's computers so we're going back to the puter at the plaintiff's receives da president but it and sealed it was coming from someone else that's material information that's i'm not saying that wasn't fraud i'm saying there wasn't it the e mail didn't gain entry to the system that's the key to entry to the system through your definition is not from information misrepresenting the name of the center just like in universal there was frost false claim information was submitted but the entry wasn't fraudulent because it wasn't an authorized the wasn't didn't gain entry by saying i'm the president not somebody else defined here means information knowledge that are not generally but which are processed and dorthe in a computer system that might allow you to argue that just an attachment to inforce is not information process and stored in a computer system but now that you've identified who is the center of the mail and done it for oculus only that's now processed and stored in the computer system of the sender that's and then inserted into a computer system that's a fraud but because you because the system you don't have a fraud on entry because it's not an authorized it as long as it's an authorized entering you're not hacking authorized to do they don't want information in there from some somebody who's disguising his or her identity and they don't want false information either and they don't want false information either no more than the the insured in universal wanted false and from nobody wants false information nobody wants to be  method it's a point that suppose it's a virus it comes in through an authorized e mail but it's a virus that corrupts the system they think that proves their point but they're wrong because there had to be separate coverage for a virus because a virus that comes in through an authorized e mail i think there's a factual point nothing in this e mail in the scheme corrupted the president's e mail account it would be different if the s m t p on below had been changed in the destructions and sent into to say you know when the sender when  reply throw up a different address system do something different from you usually do that would be maybe corrupting the president's email account the present email account was untouched to the replies go to the re for its tr i went to that and it correctly said when you hit reply that's  discovered when you hit reply you didn't go to the president it didn't say it went to the president said it went to the fraudster so the envelope was absolutely accurate the message was just written in a way to make it to trick the recipient reading the message in the same way that fake information in the message you know body of the message would trick the recipient it didn't trick the system at all the system just printed the message that was sent with false information there's no difference materially between false information the body of the message it says you know i'm the president send send me money and the from field which says i'm the president you know read message send me money it's all false information but universal's an ambiguous on this universal says it doesn't cover the fraudulent and it doesn't cover the entry of fraudulent information that's what this was an e mail to any e mail address and that's true of any mail system your honor except where it's or is yes the answer is yes but then if you look at universal it defines the reads it reads one word of it but it talks about deceitful and dishonest century your honor so this e mail being sent into the system added i m f code which certainly were not authorized this was a deceitful dishonest violation of the integrity of the computer system and that's the language of universal in a very overly richard way to say only when you send you actually break into the computer system is a computer fraud it does not say that it says if there is a violation of the integrity of the computer system including to city full and dishonest entry  which dealt with both manipulation of computer logic which are the type of things he's talking about the hack of the computer logic we also paid for where there's fraud by entry of data or by change of data elements and that's what we're argu covered here the district court said both those things are caused here and we don't have a situation like a universal where the computer was completely incidental to the fraud were could have been just like you said it could have been a post office submission of a letter no we have here where the computer was instrumental crucial to the fraud so that they used the fraudsters used the computer system against metadata so a feature of the system if you look at page sixty two of the record is that an incoming email is look at this is this an internal e mail or is it not so it tries to the computer system is a feature recognizes internal e mails and when it sees an internal e mail it puts the name of the person in a particular way and it takes the picture of that person and as it out on the reply he says when the reply was made by ms evans that it's that revealed the name of the fraudster was fraudster dot com if you look at page two seventy four of the confidential appendix let's look at that page it says t sending lies to the employees of metadata so what we have here is not an incidental use of the computer with the computer was crucial to the commission of this fraud evans chin schwartz all said they only process this because they viewed these emails as being legitimately from the president of the company and that there's no defense been been raised by the insurance company that there's a defense against payment based on the negligence of the parties here and people take out insurance recognizing that employees are not perfect and the employees here said these were the type of transactions we knew that were being done on these that when i read these e mails they read just like they come from the president it has looked just like an internal e mail from him we would have not processed this unless we understood the president had authorized this transfer but on me also we talked about the entry of data we also have coverage for change of data elements and data is defined in the policy and we took out a broad policy to cover for just this kind of lost data is very broadly to include representation of information so what they're doing is changing the representation of information within the computer and how it's being displayed represent change exactly where the i m f codes change the way that the e mails look to but i was talking of the change of data that's a separate coverage so computer fraud is defined in two ways and tree of data and change of data elements if you find either one is true and two is no question that because data is defined as the way things are y for this very narrow reading of of entry they rely exclusively on universal american which of course is a case where the computer was completely incidental the fraud there or they didn't say that the coverage for data entry was limited to or you hack in and break into the computer the killing which is that the outlane which manifests an intent to cover a violation of the integrity of the computer system through deceitful and dishonest access so even when your own break in when your have dishonest access by sending a sealed codes i m f codes in there which are tricking the computer system that is a violation of the integrity of the computer system is your honour's already said you get emails from one another there's the improper tour that i a official internal e mail it might even have the picture of the chief judge you real do it as you're going to respond to it as if it is a real email because we rely on it because of the integrity of the computer system don't have pictures we c no protection you should talk to your enterprise system here for my colleagues but it wouldn't shock me that it came from them under this system so that the answer is that even if you can send an email into the system when f codes which are manipulating the very system you are treating all that language from the universal american that this is a deceitful and dishonest entry that is in the tax violation of the computer system and this is just common sense all of this is we have computer fraud coverage this is computer fraud universal american doesn't require you to ignore common sense or common sense reading of the provisions of the provisions of the policy  to touch on one of the thing about causation they try to throw smoke in the air just like they do about that reply coming from the wrong person that this was caused by the belief by an oral confirmation from the president mr de vries that is simply  incorrect the only place the confort world confirmation comes from is from the second fraudulent email so if you look at e mail which is a page two seventy nine the e mail that went to shorts and chin the e mail starts and re says well after i got that e mail i saw ms evans in the hallway aleesha and she said he says to her so you talk to him and she says yes because she didn't get that she didn't get that second e mail wasn't sent to her she thinks he's talking about  conversation that she had with the lawyer mr meyers so she says yes they hear two different things and all this is confusion intentionally sowed by the fraudsters by sending an e mail saying that he had orally confirmed it with  very very clearly that she would have never signed off on this deal she would have never helped the the wire being sent unless the president had signed up so mr meyers the lawyer says to her you know you should do these things go i can't do it unless the president gives me the number and gives me the amount and tells me to do it i can only do this with the president's authorization that's it page four zero two of the record and ultimately then the president  the fake president through the i m f codes looks like it's for him gives that very information to her and the thing is process so it's the people to the to gather in all three of them believe this is e mails from the president only one reason they're doing this if they believe the transaction is authorized by the president this is computer fraud and we should have coverage here on people have computers because they don't want to have to have communications all the time i will reserve comment on  that ok thank you and we have for you a firm to be clear honors all e mails have of code that's how e mails are written this one was written with false information i think the key point a couple of your honor's have raised as a question about the addition of the name by meditators system you have to go back to the language of policy first of all which requires a fraudulent entry in an authorized entry the use of the name correctly identify associating a name with the name written onto the message is not a false entries already into the system is not a change to the system because it doesn't change the data elements or program logic but it came from the president and it made it look as if it did the coding the spoofing the right the the false information sent in triggered an accurate association of the name with the false name but that didn't change any data elements or program logic no change at all nor was there a fraudulent entry was already into the system the false from information is not how it got into the system if the system were set up or you looked at before it ever came into the system it somehow checked the names and said ok that's the president it can come in and be circulated that would be different case this just came into the system and things happened frauds happened and nobody point and even met a day that agrees it doesn't cover fraud using a computer that's not what it's about metadata says that it's not just fraud using a computer it's about fraudulent entry which universal tells all of us has to be an authorized intrusion a a paragraph thirty five i don't understand why my colleague was resisting this it's his words it says there's no on authorized intrusion that's what metadata says universal says that has to be an unauthorized intrusion you put those two together and there's no coverage under this provision which is now the frightened voice which is now going to get paid what you're hoping for here is response including possibly response to the president check is this what you really want me to do and thanks to this entry of freud using the computer but the computer itself having been corrupted so that it gets the information back to the fraudster rather than the genuine present but there's no it's not just corruption generally nothing in system changes in any way it has to what them the message is the from field in exact same way the universal in the computer system i can also believe my colleague says the use of computers incidental and universal it was false information that the submission that false information caused the computer to pay false claims right the computer was used there but there was and was horrible for there was a horrible fraud right but there was no it didn't get into the system by faking the computer out and the same is true here there's no fake the they didn't facilitate access by having the return address the price that exists only in the computer and was put into the computer and that seems well it i mean maybe descriptively closer but you don't get to we didn't get there because of you didn't get entry you didn't gain entry because that false information that just came in that's a paragraph thirty five says we can all agree there's no authorized entry the only possible theory is and as a fraudulent change and none of the program elements change none of the program logic changes all the same and operated just as it was supposed to there's a false from information and the computer reads it it says you know glen de vries and the computer accurately reads that and says ok i'm going to sociate glenn to reset that there's no change that's just how the system works internally but it didn't get there because of that and this is not a unique situation this is the same kind of facts that were involved in taylor and lieberman and the court said with exact same language in the court said no coverage there because it was false sender information and the court said that's not what this coverage is about there are other coverages in fact there's exactly the kind of coverage your honor talked about judge raji in other cases that cover the use of any computer to fraudulent cause a transfer now that seems pretty broad but in past master in a in american tooling the court said in similar circumstances there is no coverage because there wasn't the kind of hacking or corruption of the data elements the system itself what there was is an old fashioned fraud scheme just as if somebody come to the front of the bank with a mask on of the president right and walked through the front doors and walked up to a teller and said i'm the president give me all the bank's money or give me a million dollars from the bank teller said well there's the president that would be a fraudulent entry that would be a fraud it would be a different case and one covered under a comparable situation if the security the money was standing in a pile in a vault and only the bank's president could get in the security guard said oh there's the bank's president i'm going to let him into the vault and let him take the money that's the kind of situation that's covered by this provision not just an old fashioned scheme of deceit that every single element which could have been accomplished by a letter sent in except here nobody sends letters anymore it was done by e mail but the e mail is authorized as metta data itself says and nothing in the system whatsoever was changed