resolved by the jury i'd like to first address address why there is a material dispute about whether mr evans was acting in his capacity as an accountant and providing professional services and second i'd like to talk about why the  fraud result in the state court case cannot be applied through collateral estoppel so beginning with that first question of professional services there's no dispute about which sections of the contract we're talking about professional  such services without compensation now the district court correctly found that there was a dispute about whether mr evans was acting on behalf of the charter jet company on his own behalf on behalf of harner evans because he used his and phone number he provided normal accounting services such as reviewing their books and he also with respect our clients provided investment investment vice and vice our clients and how to structure the investment normal kind of services that would be covered under professional services that's in the record at e r two fourteen two one for the r two at at at page fourteen fourteen and so the question here in the dispute is really about what constitutes pro bono services and whether the jury could reasonably infer from this disputed facts that he was in fact providing provided services and our position is that if he was acting on behalf of carter evans he was either acting  receiving pay or he was acting pro bono and as a partner he approved his own actions the exclusion here really would only apply if for instance an associate went off moonlighting on the weekend took on some dangerous thing some engagement didn't have approval from a partner or someone in authority at the time that would be excluded by this but pro bono services in general are covered and so we would ask you to agree and if our i mean i was it pro bono when you're asking for a two hundred fifty  so if if you were to find that he got thirty two thousand dollars from his then it rebounded to his benefit and then he he would be covered by it but pro bono services as defined under the contract there's no specific definition that says what they are and what they aren't that it has to be for in people and under arizona case law the question is what would an average person a layman who's not trained in the law think when they hear the word pro bono and the national so so if i say to you look i'm an investment advisor i've got some great pro bono advice for you and give you that this advice pro bono ok you want my pro bono advice invest two hundred fifty thousand dollars in my company and i'm giving you that advice pro bono i mean what authority do  that something like that could be considered pro bono the question is can you point to some authority that stands for the proposition that a transit transaction like that could be considered pro bono i don't have any authority interpret in a contract such as this the question is really out of this insurance contract whether pro bono is it is defined in a way that would exclude what he did but i would think you'd be able to point to something that would  that the ordinary meaning of the term pro bono could include a solicitation of the two hundred fifty thousand dollars as well pro bono even the definition the legal definition cited by is it uncompensated yeah well it's uncompensated in terms of harner evans it in nurseries personal benefit perhaps there's language where he says i was doing this in my personal life because i was personally invested and i was trying to negotiate this deal and so he did have some personal benefit from it but the question under coverage for the contract is whether harner evans received any benefit as a result of this transaction and if not we're harner evans received any benefit that's correct so there's two ways that it can be covered under professional you're saying is no matter what evans did no matter what he did if it was not performed for remuneration that benefited harner evans by definition it must have been pro bono work so he went to if you use driving down the street and hit somebody with a car or evans doesn't get a benefit so it must be pro bono work that's that's not our position and respect our position is that when he is performing normal accounting functions such as providing investment advice to his former clients and when he chooses not to build them for those services that he is making a choice to do that without compensation and that's covered and if you think about it that makes sense for someone who's covered as a professional you want to be able to charge your clients you want to be able to have discretion not to charge them that discretion is not given to associates it's only given to partners and to directors under this contract but the idea of providing ongoing services little services here and there to existing clients or former clients or future hopeful clients is a normal way of doing business and they haven't defined it and i'm not asking for a pro for a or a per se rule i'm saying that our the issue here is whether a jury could reasonably find that because he was acting as a  because he was using their letterhead that he must have been performing some accounting services for them and if so could they reasonably conclude that he did so pro bono and they could is the link then the letterhead but the link is all the things we saw in the record includes letterhead includes the fact that he was performing normal accounting services he was providing his advice on how to structure the investment but he was providing but for example i referee my daughter's basketball game sometimes and i might use my judge  email account to tell all the coaches hey we're going to play this saturday so i may send e mail from my judge account and i'm judging in a sense because i'm judging whether the ball isn't around when i be performing judicial functions on referee my daughter sixth grade basketball game  but there's we submitted a deposition of mr evans partner that talks about how all these services that you were providing were normal accounting services that provide investment advice looking over the books of the company these are all normal investing  accounting services so it's not just happening to be the same word judge being used in different content let me ask you about the thing that bothered me the most about your position and i understand the irony of this case because you know evans because what he did the worse he acts the harder it is for you to get coverage i appreciate the predicament you're in this case but the thirty two thousand dollars that he got is your position that that that was not renumeration to him but it was basically he stole that money our position we're not arguing on appeal that that thirty two thousand dollars went to harner evans and provided coverage under section a professional service so if he's pocketing that money how is getting back to my colleagues question from earlier how is it pro bono if he is pocketing thirty two thousand dollars from providing some service well that gets to a factual question of what services he provided what he was due what the different investors in this company were do what distributions were made that are not not before the court and are not the question here the question is whether he performed it in a way that a jury could find pro bono and we submitted that there's disputed facts and we agree it could come out various ways  it could have been yes and so transitioning you mentioned the awkward ness or the strangeness of the situation where the shoe is on the other foot the same is true for the insurance company they who are providing a defense for him now are now attacking him arizona has recognized this conflict in this goes to my second issue and the third issue that they've asked you to raise which is arizona has had an established rule for over thirty years that when there is this dispute and there's a conflict of interest between the insured and ensure that those facts cannot be used in collateral estoppel and that was all they submitted if you look they submitted their entire summary judgment saving the facts it includes the jury's verdict verdict but it's not it's not clear to me that either the district court or the other side the insurance company here is arguing for collateral estoppel so on is a lot of ink on the issue of collateral stoppel but i'm just not me not my understanding of the district court's ruling and of their position is that the verdict  against evans is evidence against evans and that cool radiators in this case didn't come forward with contrary evidence that would create a factual dispute on the issue of coverage so why i mean why are you spending all this time talking about the collateral estoppel because it is being used that way if it's not  no jury verdict you agree that there is evidence in the record to support their position of no coverage so what evidence do you have what evidence do you have that he did not have a basis to believe that his conduct would form the basis of a loss so first we would say there is no evidence they submitted other than the jury verdict but the evidence that we submitted  in in opposition to that is the affidavits from aerojet c e o and from a just yet saying that their negotiations were ongoing if they weren't done that they hadn't given up that they were still working on it and so that it wasn't and corrected it wasn't a lie and there was no reason for him to know at the time that it wasn't gonna work out the other questions i'd like to reserve the balance of my time good afternoon your honour's and may it please the court my name is steven jones and i represent a healthy continental casualty in this matter the district court correctly determined that there was no coverage under harner evans accountants professional liability policy for two reasons and this court can and honestly should affirm the district court's ruling and can do so on one of any three separate and independent grounds the first grounds that the first ground your honor is that the insuring agreement under an accountant's professional liability policy like many other professional liability policies delineates between covered activities and uncovered activities for the professional and how it does so is  specifically defines and to litigate what constitutes a professional service under the policy here the policy requires that a claim arise by reason of an act or omission in the performance of professional services and that's either acts in the practice of public accountancy or pro bono services with respect of the first of acts in the performance of public accountants see it requires that it actually be accounting work and i think  the beginning in the end of the analysis that it should be for the court is that steps into the shoes of mr evans to pursue coverage under the policy so i think the court should look at what did mr evans say about the e basis of that representations were made as to that the money would be returned if an investment deal did not go through the money was not returned and what mr evans testified is that when he was soliciting that investment for k r i which is the very act upon which k r seeks to recover from harner evans or excuse me from mr evans and then from continental is he he testified or provided testimony that he was quote acting as a member of aegis like all members of aegis were raising money he also testified this was quote private business i'm doing on my own in my private life quote this isn't a billable thing this is my private business this is he soliciting a two  hundred fifty thousand dollars as a member of a non non insured third party so there is no coverage and the definition of professional services further delineates but besides the testimony and the fact that there is no error in emission arising from the performance of public accountancy the policy also requires that there be some remuneration that goes to the benefit of the accounting firm itself there's no evidence of that in this case and k r i can see that it can't point to any type of money that changed hands and went from k r i or aegis to harner evans so there cannot be any type of compensated service to trigger that portion of the definition of professional services secondly with respect to pro bono services pro bono services are provided to in addition klein it's not a two hundred fifty thousand dollar investment for a third party entity of which the individual is hoping to seek a return on his or her individual behalf well i don't know i don't know if it has to be establish that pro bono services must be for an indigent client to win on your argument that these aren't pro bono services you win on your argument that these aren't pro bono services i think because of the fact that he was soliciting money from cool radiators rigorous with you your honor is that the fact is that he's doing it as a third party on behalf of a third party to make money and i think that addresses that the professional services what relation is the thirty two thousand dollars they took have to the two hundred fifty thousand dollars you know i don't know that it has it has anything other than the fact that the money didn't go i also your daughter there are multiple other your honors there are multiple other grounds in which the court should affirm the district court's decision also and as part of the ensuring agreement in the policy there was a requirement it makes sense that continental doesn't insure against known risks and so to trigger coverage under this accounting professional liability policy it requires that indicates that there is no coverage if prior to the effective date of this policy you had a choir to come forward with some evidence indicating that mr evans had no basis to believe that his actions in soliciting the proof no your honor at this prior knowledge condition is a requirement of the policies insuring agree is part of the ground the coverage yes your honor so that they are i has the burden of stepping into the shoes of mr evans to make that pro here all that continental was required to do and did this presented evidence that there was a jury verdict finding that mr evidence mr evans in soliciting the investment from k r i committed common law fraud and securities fraud are i made its investment based on those misrepresentations in august of two thousand and seven over a year before continental's policy and set it and so continental as the party who wouldn't ultimately bear the burden at trial its burden that there were no genuine issues of material fact for summary judgment k r i came forward with no specific evidence that before the inception of this policy mr evans had no basis to believe that a claim wouldn't be made so continental has met its burden in that respect and because kara has not come forward with any additional evidence to create a genuine issue of material fact it provides another ground for this court to affirm the district court's ruling this court also has a  third basis to affirm the district court's ruling and it's on a basis that the district court did not actually make a specific finding on but it's based on the fraud exclusion under the policy the policy provides that  continental doesn't provide coverage for quote any claim based on or arising out of a dishonest illegal fraudulent criminal or malicious act by any of you here again continental came forward with evidence that a jury found that mr evans committed common law fraud and securities fraud so the maybe he didn't i mean maybe he was maybe he was just blended maybe he just believed that he was going to get it determination whether it has precludes effect or not because the fact is that continental came forward with admissible evidence of this jury verdict so the court need not make that determination and all of the causes of action in the underlying action are based on representations with respect to solicitation of this two hundred fifty thousand dollar investment they all arise out of what the underlying jury found was fraudulent conduct so this exclusion also applies to the entire cla time that mr evans made the solicitation and representations regarding the investment that those representations were made in july and august of two thousand and seven a year before the inception of continental's policy and  and make a finding specifically about which statements were were fraudulent that it no your honor it did not but the policy doesn't require continental to parse that it's it does create a situation of you have multiple causes of action or representations that may or may not be fraudulent but the way that the policy is defined with respect to the fraud exclusion is that it applies to quote any claim based on arising out of conduct but you have to point to conduct that you believe gave evans a basis to believe would give rise to it to a claim were was fraudulent  and which you haven't said anything about which conduct it is that you believe was fraudulent your honor the jury did not make that finding i'm not asking what the jury did i'm asking what conduct are you pointing to that you say  gave evans a basis to believe that his conduct would give rise to a lawsuit or that was fraudulent what was it that you want us to just sort of say it was fraud without being able to identify what conduct actually was fraudulent and i don't think the court is is required to make that specific determination it's only in that in this underlying lawsuit the jury made a finding of both common law fraud and securities fraud it's not required t that if you say that was fraud the specific misrepresentation would be that if the deal didn't go through aegis was going to use the money that it raised from investors to buy another airplane charter company and that deal he made the representation that if that deal did not go through that the earnest money that was being provided in the deal would be returned that was not in fact true no what he said was that cool radiators investment was going to be refundable and what evidence is there that he did not believe that it was going to be refundable when he made that statement where where in the record is there evidence of that there's  nothing in that the the specific evidence in the record your honor is that the jury for the jury verdict of the finding of common law fraud and securities fraud in the the jury didn't parse the specific representations that were the basis for a securities fraud determination or a common law fraud determination but the way that the policies fraud exclusion as well as the prior knowledge condition are defined doesn't require that continental actually make that parse that the policy provides that  i would think we would have to parse that if we were to rule in your favor on that question on either your second point or your third point what was the conduct that he engaged in that gave him a basis to believe that  there may be a claim and you know i don't see how we could say that he engaged in conduct that gave him the basis to believe that there would be a claim against him at the time without identifying th contacts and you're not identifying the conduct so i think your honor for putting those respective it is the the jury it is the beginning in the end on those questions is the jury verdict itself and the way that the policy defines claim and interrelated actor remissions is that all of mr evans omissions whether representations with respect to the solicitation of the investment and care i involve a single claim a single lawsuit and they arise from interrelated acts  missions which based on that policy language the court doesn't actually have to parse any of the representations they were made or any basis upon which mr evans was found to have committed commonlaw fraud or securities fraud and  action filed of the the first action was filed in two thousand and nine your honor and then a second action was filed there was an issue with the dismissal of that one went out on appeal and then the suit that ultimately led to the verdict in this case was filed in two thousand and eleven  your honor unless there are any other questions we would respectfully request that this court affirm the district court's decision on any one of these three separate and independent grounds thank i'd like to make two points you just heard say that the jury verdict is the beginning in the end of their case on the second two cases if that's it this is collateral estoppel you can dress it up and make any arguments that it's evidence they want but that's what they're doing arizona is clear this court has adopted it and this court needs to follow arizona present which is those issues can be related to their own they're under dispute the other question which seemed to be more foremost on your mind is how can he be doing this on behalf of the aegis and perhaps making money out of that and yet it be pro bono and the answer that is the restatement of agency section two twenty six that we cited which is that he can be doing this under multiple hats he can be doing it on behalf of agents and his membership in there he can also be doing at the same time on behalf of hard evidence and his interest as an accountant his interest in maintain relationship with our client providing investment advice and earning his business in the future and so there's really no problem with him making money on it in his other hat and proport providing it as an accounting person probe so they go back to my hypothetical i say to you look i've got some pro bono advice for you i'm wearing my hat of investment advisor now pro bono investment adviser and i'm going to give you this advice pro bono and my pro bono advice to you invest in my company and when i get your money i'm going to be wearing the hat of a shareholder in that company that makes it pro bono work by because i'm saying that i'm doing it while wearing two different hats at the same time that's correct as to the policy is pro bono if he as a as a partner authorizes performing it without renumeration and this relationship you're talking about this hypothetical relationship is one of an accountant who is providing accounting services and has provided counting services to a client and it's coming to that client and saying here's another investment i'm also the accountant for this company and i reviewed their books all these things he's making representations as an accountant and on in his capacity as an accountant and if you chose to do that on his own it is in the evidence and it is covered and again there is dispute evidence on both sides we submitted our contrary statements of facts with hundreds of pages of deposition about why this wasn't fraud why they felt it wasn't fraud and we respectfully