question of insurance coverage and the circumstances under which a lost pay he may recover for damage to a building and i think what judgement chain got wrong in this case is there are two issues that have to be decided he decided there had to be a cover loss from the named insured in order for the last pay me to recover and a little quick primer on insurance is the name but a as i understand it maybe i need the primer but if i read transportation equipment rentals for says oregon autos it says that under oregon law the last pay cannot recover in their own right but must rest any claim to payment on whether the insured has a sustained loss correct or honor and so in this case the only way that your client could have received payment was if the insured had a sustained loss that's if that's correct you correctly posed the two questions in this case let me jump to the second one rather than the first is heard or a good case that says that the last pay can sue directly sue the insurance company when the claim and when no claim has been made by the insured sure i think the two cases in this appeal the two main cases both arm brust and transportation equipment both are lost suing without the presence or the involvement with the shoes of the insured no your honor not in the sense of an assignment what they do is they stand in the in the shoes of the insured under the law as to its use as you pointed out correctly you get anything unless the insured is named a law yes  covered damage to property and in this case the grocery store was clearly a covered property and there was physical damage to the store next to the question then becomes well if there's damage there's a promise to pay that damage in the in the question is to whom that's where you get i think to the conflation i agree that question is to whom and in this particular case your client my be the one to whom paid my problem comes again too what's the damage yes or let me tell you what here doesn't seem to me and this is where i'm going to push you just a little bit why is there any damage here when c k market says there is no loss because the it's a  kinds of losses your honor what's seen k suffered by damaging it's own building was first of all a loss in the building and enjoyed that as a leasehold interest as the less sore it now has a dam as a building that's worth less and the second part anything more important for this appeal is that seen k when it damaged the building under the lease at the same time incurred liability its own loss to repair those damages that it did on the way out of the store had incurred liability it seems to me was how can i say there's a loss there's still a loss because under that it i guess it goes back to what i'm trying to get out is the conflation of two kinds of lost because the problem that i have is this if if that off goes into  not under the policy language and what we always have to go back to that in the senate where our job russians if you look in points you to are fifty one and the language of what triggers coverage into this policy and what are going to promise to pay for a promise to pay for damage to the building and when you read that too we will pay for direct physical loss or damage to covered property at the premises just described in the declaration so i take it your argument and coverage is that you think the policy covers damage that c in k did to the did to the building yes your honor i do above wear and tear yes sir i mean and i must admit when you go through the language of the policy it's a little obscure but i bet never heard in the past of a property damage policy that covered damage caused by the actions of the insured but i think it's common in you again let me point you back to the language of the  mean i think you have a pick strong policy i think you have an argument on the face of the policy that that gives me some pause i just must say i've i've done a lot of work in this area and i've never seen a property damage policy that covered damage that you did yourself just like if you crash your own car you question car you're going to pay for it see lots of automobile policy that say that i have accidentally burned down your house you would also be entitle to coverage in your policy and that's why you're on i would direct you to the language of the policy itself the only relevant exclusion after the first part that i read you about damage to covered property would apply if the insured had been engaged in criminal or dishonest conduct since neither of those is present here you're right that the policies now triggered in coverage could be missed good different question we all agree that you you are the damage you claim has to be damaged  would have been a message of the state of seeing k had made a claim and made it part of what that money would have been for the estate i hesitate to say yes though because all that money under the last payable clause which explains why these unusual circumstances  have files a claim in the bankruptcy court and says well these guys are claiming that we owe them money so we want that arises out of the same transaction we want to do that and i think that money that claim is an asset of the bankruptcy estate and you settle it and the bankruptcy gets closed and now we have that asset of the bankruptcy estate that you're in effect suing on there's always too many answer disagree on how did how did you get so missed the question in a sort of non legal term how did you get that asset there are always there always two possible actions we got the asset because down off as a last pay you know the policy outside of the bankruptcy can recover on the policy apart from whatever scene kate was doing because it stands as an appointee of the policy can sue just like in transportation so quick and so barney could see in k after everything was done have with the bankruptcy and your settlement could see in k have brought a suit against the insurance company for damages yes your honor it would have because it suffered a loss to answer your quit your credit report and that bankruptcy was a chapter seven and let me tell you why that's important to owners because there's nothing in the in the policy in the terms of the policy which is what down off assuming force not under the bankruptcy not claim out of scene k that they own down off as a loss appointee is pain is insurable interest years in both of those cases to answer a question must stand your honor say that the last be stands in the shoes in a way as the appointee of the named insured and both transportation equipment and arm brusk right both cases brought without the claim filed by the new right but they both say you must claim in the right of the insured and i'm trying to figure out whether the insured still had a right to claim after the bankruptcy ended not something that's brief but that's why i'm asking i think that to get back to the original question about the lost the loss here means that seeing k had a liability under this policy it doesn't mean who paid it it means that they incurred liability and that goes to the insurable interest rule both of those cases didn't require the named insured pay anything first or seek a claim both of those cases just said the named insured has to have an insurer interest has to have something at stake in that case that's true of seeing k that's the end of the i just did that argument i'm i'm what i'm worrying derivative right you're claiming to sue the insurance company outside the bankruptcy there's no released in the suit out in the bankruptcy in the direct claims against seen k for the insurance company so we still reserve our rights and a claims against seeing k ours are also wiped out as an appointee you step into their shoes by virtue of the policy not by an assignment that scene kate could destroy in the bankruptcy we have our own rights and of the policy ok i understand your argument may please the court bill earle for respondent are going on skid so often times on these cases if i want to get to the nub of the case i go right to the reply brief and here if you look at the conclusion in the will understand there's a wear and tear exception but they allege more than wear and tear so they do indeed so where's the exclude the policy says we cover all damages to the covered property and then has a bunch of exclusions which none of which seem to be directly on point why isn't if c m k were here today claiming under the policy why would it fail well it's a very good question first of all it's ok seeing k what's your loss right so that's the let's go if it's says here we will pay for direct physical loss of or damage to covered property now i agree with you that that doesn't say to whom or all the home but what i would say is it is presupposed that it has to be suffered by someone and that someone has to be the named insured and i would say that for a couple of different reasons i want to talk about both of them because that you've gotten to the nu in hoffman versus phrase james which is the that's the way you interpret policies in oregon you have to look at the completing the competing plausible interpretations and look and they have to withstand scrutiny both in examined in the particular context in which they're used and as a whole so first of all what sense does it make to say physical loss or damage to property i mean first of all this is a good example right here the property itself did it suffer or did the building suffer a loss when i take out if i take your order you're saying we damaged they took out stuff out of the building forget the refrigerator and damaged the building just the same way that surely would have been covered had some vandal come inside into and done that right but see that's the that's the key it's the the gets knocked down if as long as it doesn't affect my operations so that's why there's a lot space in there no that's why you get your own if you're the owner you get your own insurance policy the here a lot pay  it's totally you get to be on the settlement check that's what you are i mean i understand i understand right look i think that's a different proposition and the one you're just urging and that's why i want to explore  proposition you are urging is that the last the insured itself must suffer some sort of loss actually right when you're covering when the insured says i'm buying insurance company i'm buying an insurance policy on a property and the property is damaged and the insurer is only leasing the property rather than owning it isn't there a loss it depends on the case right because well it could be ok because it's an it's a it's a loss to the named insure if something came and destroyed the entire building the insured would face a loss but if the insured in this case so i just let me give you an example or say don't keep changing on me for a second that's a certain sum i have an insurance policy on  property that i lease it covers damage to the property our car crashes into the front or property damages the left wall i don't care if i continue on with my business happily until the end you know to do i have a loss covered ever going to fix it do i have a loss i don't know the last well you don't have a loss and you say i'm never going to fix it because for example if i'm in my house right i may take out a wall to enlarge my kitchen well in some sense the building that's what they're arguing that the building is damaged well in some metaphysical sense i don't know but it doesn't make sense when it comes to insurance policy it's not physical it's not i haven't suffered a lo let's go back to my example again and let's see if we can just work it through the car crashes into the side of the building i'm the lessee and i say well it really doesn't affect my operation so i don't care if the landlord of the building who owns it says  i want you to make a claim for that because i'm going to have to fix the building in your can actually obligated to me to do so if they make a claim under that circumstance is it covered by the policy well who would have to go in the no so that's not the direct again so is that the argument that they're making that it's about you that's your position your position is that they're correct a contractual obligation to the landlord is not a covered loss exactly it is not and in fact if you go to the reply brief all right and so they say that see in case potential liability is direct physical loss will first of all that sounds a little odd i don't know why that would beat so let's see authority do they have for that and that authority that argument is listed in peach eat the reply and it says this they talk about the hold harm harmless promise by insurable interest in property that insured so situated would reference that he would be liable to the loss right well that's the problem right there be exactly correct but that's but both things are needed and the case law in the three cases that we talk about farmer oregon which have discussed these last pages they make clear that's true that you need don't finish the different question ye does show you is in this case that c and k did not suffer a loss because typically if they suffer a loss they do make a claim but but again it's a question of whether they suffered the loss of my pathetic a covered it's not a direct physical loss and so what they're trying to do is use they realize they need a direct physical loss and they say well that direct physical loss is the contractual liability well that's a different thing that's not a direct physical loss that's a contractual liability that's what you settled when you settled your liability claim see it seems then what you're arguing is if i boil it down that the only loss to which dan offers up we appropriately can recover is the lost of c and k and that any tortious loss or if you will even contractual loss outside of just the loss to the building is covered by other insurance yes correct that understand yes ok and certainly there was some damage property damage that what we would call lost the wear and tear and but that's that is excluded part of what there was to do was damage beyond  a loss to see and carry that's what you were arguing before surely there was damage to the property well i mean in a sense if i again i take out my refrigerator out of my and i sell it i've got a big a hole with  refrigerator well now we're not talking about an empty space we're talking about a hole in the floor where you may well not have to cover this but the notion that the property wasn't damaged by c and k strikes me  i think really what as i'm listening to this i'm just dying to get up here and explain about the loss the loss in that sense from the from the quote that you gave judge smith about from arm brust about what a loss means always goes back to insurable interest there isn't some kind of loss that has to be paid out it isn't some kind of loss that scene k has to incur in some way because it's not in the policy what all it means that you have the liability in some way under bird in the other cases in uninsur interest it's to prevent wagering both arm breast and transportation equipment are insurable interest cases they didn't have to show that the named insured in either of those cases paid anything or suffered a loss and i think where little off the rails is by saying that you have to have coverage you have to have drek physical loss to seeing k that doesn't make any sense it's an into you have direct physical loss to a building and the building was unquestionably damaged that's how you turn your coverage and that's where you got a pac and you think the policy covers damage caused by the intentional acts and it does your honor because there's no there's no there's no solution for this is no exclusion for the i guess i guess or i thank you for the extra minute thank you thank you case sixteen three five four eight three is submitted and we'll move to sixteen three five nine four three