my name is matt gallanter and i represent america reliable insurance company counsel could you give me just one minute sure to us quickly is not the best way to get yourself across ok and mr locker was contentious was consensual at american fishing society meeting the district court committed error and to regard st the district court should have applied the sexual molestation corporal punishment or honor if you look at our opening brief the st statement of issues presented was did the discord err when it declined to consider and imply american sexual molestation corporal punishment or physical itself yes so that was that was it raised in to exclude coverage worth regards to the statements where mr walker instructed his friend wait to spread false the conference that this was consensual and i'm going to talk about that st ok and but we go st to coverage on that and so right and so that's a court made a finding that those there wasn't an intention to harm or to damage but those were intend to harm mrs nelson we disagree with that based on the record clearly he did intend to our position is he objective lee intended to commit harm when he blamed the victim and said it was consensual it wasn't his fault where the discord made the error was the montana supreme court goes on to further say that you must subjectively determine that he did not intend to commit harm of course medic intent harm here he had his friend tell colleagues that mrs nelson that she was a liar that she consented to the sexual assault and more or less blame the victim so on that that part of the argument here on earth is we agree that the district court based on the record was incorrect when it determined that mr walker did not intend objective we did not intend to commit harm so if we agree with you there on this point there's no coverage and we don't get to hear exclusion that is correct you honor if the court agrees that mr walker objectively intended harm then there is no coverage under montana law and therefore the exclusion is irrelevant to the determination of the case if the court would s explained if if there is a term a nation of coverage our position would be now the exclusion applies to exclude the coverage right but what about the other what about the conduct the conduct itself and the cross appeal ok so on the cross feel even intentional conduct and can be an occurrence and accidental and currents if the consequences are unexpected or unintended i am paraphrasing to be sure but why doesn't that fit this exactly  to an offense that only required that he knew he was engaging in the conduct not that there's an element that he knew he didn't have consent he felt he pled guilty to a very special type of sexual assault that did not require that he knew that  and we have a fair and more importantly well we're only appellate court judges and so the judge close to the action made that factual finding and i think we are unless you can convince me that it's clearly a run yes i think we are bound by that i would submit it is clearly erroneous given walker knew that she was drinking he knew she was on sleep medication he knew that you want to sleep he interpreted according to the record because she gave him a long hug and a kiss if she wanted sexual advances he waits till she strong argument that under montana law that this was an occurrence and i would respectfully disagree because under montana law stryker i know you disagree somewhat but stryker says that sexual assault is talk about strucker because that's your st point and i want to go through all these structure i think is the one that arises where an individual admitted to sexually assaulting his stepdaughter for years and years on end isn't it that's correct and the montana supreme court  surprisingly had very little tolerance for it listening to him talk about whether this was an accident or an occurrence right in that context that is correct ok so that's why i said strecker aside because it seems to me to be wholly entirely different particularly because we have this finding from the trial court here that mr lockhart believed a rony of sleep to be sure but believed he had consent so that's why stryker doesn't get me for very far do you want to respond to that yes because the point i would make about stryker is the supreme court was very clear when it said you don't you don't look at the subject in front of the bad actor i mean of course and that's also been referenced in fisher right but your problem on this score is that you're relying on you know sexual assault a sexual assault you say that repeatedly in your in your briefing and it is uncharacteristic for me to be looking answer that except i'm bound by this statute of conviction that did not require that he mr lockhart intended anything other than to engage in the sexual conduct that's all he pled guilty to yes but i think the record of what he testified to was very clear where he intentionally says he doesn't have consent and then when specifically asked did you sexually assault and molest miss nelson he says yes he says that he recognized in context that he  afterwards that he didn't have consented use horrified but he doesn't say that he knew that at the time before he engaged in the conduct does he or if so i'm inviting you to tell me where he said that in the records or i think i think he he says it both ways so i think you could interpret that both ways and that's again though his subjective attent of i think i had consent doesn't apply under montana law because wrecker says it doesn't just because you say oh i thought i had consent of course he's go consent and that's why and stryker the montana supreme court is not just that he said he had consent it's that there is a legal consequence to the child quite making the finding and i understand that and that's where we disagree based upon the record fair enough you think of the position that the statements where mr walker and form s nelson after the sexual assault they're walking out of glacier national park won again he admitted that he made the statements to mr walker actually admitted that again it's an intentional act the district court was correct when it determined that on that occasion mr walker intended and expected harm hours or the rest of my time thinking good morning may please the court and it was terry mcdonald represent karen nelson in this matter along with the co counsel see johnston i will be handling the portion of the argument  defending our cross appeal cd will be handling the portion and argue in opposition to the carriers appeal nowhere does it say in montana of the supreme court decisions that a single act of sexual assault can't be negligent it doesn't say it struck or doesn't say that what structure says is that a series of molestations over until karen jumped out of bed and he made a mistake he did something very stupid and that's why we have insurance to cover such incidents when we do something stupid and make mistakes you could take for example well the the drunk driver the drunk driver intentionally drinks intentionally gets behind the wheel of a car  he may have thought that at one time the still keep thinking that he had consent when he stated the new york fifty five that he knew he didn't have consent after he realized when she jumped out of bed was the  tell she's indicated to me that i'll never consent that was seemed to me to be a pretty good defense you're probably right your honor but he didn't choose that he chose he chose to plead guilty and say i knew i didn't consent is not an element right what he has to do is intent on to our current one circuit law he has to engage knowingly engage in the sexual conduct and what we have said is that his knowledge her lack of consent is not an element at least that's where it's good but as of what's i find very significant is that that argument did not work at all with the district court because it's not even mentioned in the findings and conclusions and that's why because he didn't realize he had committed a  sexual assault until after she jumped out of bed is not very and is knowingly engaging in sexual conduct period a crime in montana no but knowingly engaging with someone who doesn't consent is a crime in montana yes your honor or ineffective should be a crime anywhere yes right he admitted to sexual assault only after he learned he actually didn't have consent when she jumped out of bed while he was in the act he never believe sexual assault he never believed he committed sexual assault he believed he had consent as mistaken as that was he believed it and he did not intend to harm her is key that in this case when you talk about objectivity versus objectivity if he had known she was half asleep and if he thought well i'm going to do this anyway and she wakes up she might be real happy with me there objectively i could see were a judge could find that in fact it was a sexual assault because the  finding in the exactly in what counsel argued with regard to subjective analysis versus object of ok see and what our position is is that the subject of any of it is the same as the objectivity because he thought he had and that's an uncontested factual finding it's only if he had believed that he knew he didn't have consent and he he when it along with it anyway thinking that when she woke up she might be happy with  negligent it wasn't intentional if you have no further questions i think i'll pass the baton to say to handle that the opposition to to their appeal may it please the court cd johnston on behalf of karen elson as the apple he as terry explained i will be arguing in opposition to the appeal that was filed by american reliable are you going to speak then about the statements made to the colleague i'm just trying to keep up yes so i'm going to be yes exactly are on are and in their appeal american allege that the district court should have applied the sexual molestation corporal punishment physical or mental abuse exclusion to those statements i think that based on how american briefs that st issue in their opening brief that even if the court had applied that exclusion to the statements that we would have ended up at the same result and i say that because their argument in their opening brief is one that any damages that karen incurred as a result of the instructions that mr lockhart gave to his coworker mr fred and burk arose out of mental or emotional abuse and i would say that that's not true but the exclusion is quite a bit broader if we get to the exclusion the exclusions for i agree your honor but i just wish to point out in clarify for the court that how it was actually argued in the briefing was a little bit more of a narrow construction than how counsel orally argued today just simply trying to make that clarification for the court  but i guess if we just start with coverage then i would say under fisher this conduct was properly afforded coverage because he didn't expect or intend to injure care and when he gave these instructions  and i say that because at the time that he gave the instructions to his coworker his expectation and intent was to please let it be known at this american fishery society meeting that you know what you're reading in the paper may not be the whole story and that at the time that this incident happened he did in fact believe that he had consent what he was trying to portray to his coworkers former coworkers and work associates was you know i i made a bad mistake here but i wasn't trying to for lack of a better word be a creep now karen was undoubtedly damaged by his conduct  testified at the hearing that you know after she found out that this had been told to people that are also her work associates  i would say that has it did in fact harm her your honor i agree with that and that his audience with his talk audience was her professional colleagues and his retired but she had retired right but they were also people that he had longstanding you know work relationships with as well people that he cared what they thought about him well exactly was the testimony what did he exactly say to tell them at the conference that there was another side say it was consensual and you're right your honor but i would say you know again it gets back to the same argument that terry was making that he did believe he had consent at the time the problem was when he i don't you know has his testimony and at the trial was that it was not in fact his intention to harm her when he made that he just wanted it known to his employees i can see how in retrospect he did acknowledge that he could see how that would be harmful and i can see standing here how it would be harmful because i know what has harmed her but at the time i i believe that his his intention was in fact to have a be known to his his coworkers that you know he thought he had consent  know you're correct your honor he has his contention was that he did in fact have consent yes yes your so having agreed with the district court at least in our opinion that they did properly afford coverage for this even if you were to find in the stores not coverage then you have to look at the exclusions and again when it was st briefed by american they said one you know that this what fall under the exclusion because it arose from mental or emotional abuse which is contrary to the court's finding that karen was damaged as a result of the incident self and lockhart's conduct  after and i don't think it has been disputed that the initial incident itself was in fact physical contact and not merely mental or emotional b s nd of all american argues that there is no bodily injury i think that also is contrary to the record karen testified that she has p t s d along with physical manifestations of distress including erasing hard and difficulty concentrating inability to sleep you know all of which i think would fit a a reasonable insured expectation of what would be covered under bodily injury and your honors i would reserve remaining time for a bottle if you have no further questions to me at this time oh yes yes ok thank you thank you of the record he knew he was pleading guilty at that time ok so he knew he didn't have kids said when he made that comment or when he excused me instructed wade to go tell her colleagues that she consent to this sexual assault with regards to the exclusion they sexual molestation exclusion it's clear that the exclusion applies i mean of any kind committed by any person and then under subsection three it also excludes sexual abuse mol station or sexual behavior of any kind committed by any person therefore it's american reliables position that the breaking you want to break right now and we'll take a ten minute break and we'll be back to take the last case on the calendar