before this court the first issue is the interpretation according to the terms of the california casualty policy the language used there in and then the second issue is the application of the two government code sections that we have talked about extensively in the briefs a twenty five and a twenty five point four first followed starting with the with the policy text and the policy interpretation because that is really the  if you will of this particular case the california casting policy has two parties to it and i focus on the parties it's obvious but it's not because we talk about parties litigation westport was not a party to the california casually policy the parties intent that we're focusing on for the purposes of the poly interpol's the interpretation is the intent of the administrators and of california casualty the four you get to that and i know that's important but i want to be sure that hopefully we have an understanding between us about the following that as i look at the exclusion that shows up at e r six eighty one it seems to me that has these coverage is is not in excess of all other insurance but rather is an excess of the primary underlying insurance of one million dollars for occurrence you disagree with that i disagree with that your honor for two different reasons number one the california casually policy which is the page you're referring to is page three of the policy policy is only five pages long on page one of the policy it mentions the term yes three different times and on page three of the policy immediately following the the part that i was going to talk about first i would go back to our that is the language insurance under this policy and you have to you don't read the policy language of the policy in isolation you have to read it in the context of the entire policy understood and so i read in the context of the word excess and but the key key for me is what i want to know is this is sandwich or is this just a big piece of cheese where there's only one piece and it looks to me like you've got the first level and in the end you come in you disagree with i explained why shirt and that goes to the other language that i was intending to go to which is on that same page immediately above the exclusionary language that i think your honor referred to which is the insurance art what it says is there must be underlying primary collectable insurance or self insurance available with a minimum per occurrence limit of one million dollars in other words the california casually  obligation to pay until a per her its limit of liability of one million dollars has been paid and as we know from the way this case developed the argument became well per current's means per administrator per student per year so you had three administrators you handed up having three students and you had a combination of three years well one had one year one had years in a three with this in the west foreign policy did not have a one million dollar per occurrence feature it had a one million dollars per current feature but the westport policy does not modify the terms of the california casualty policy in other words no almost and that but but what i'm saying is when we look at these we have to find out what what what  if you will the predicate is here it's seemed to me that the westport policy had a one million dollar per occurrence feature it did say if it did that of course they paid more but it had that and i gather that your position is you don't know anything their position is after you get to this one million dollar feature then your obligation to get i know you going to get to the second part about who's covered but in terms of the sandwich aspect allow any cheese or whatever it is how do you how do you distinguish that it seems to me fairly clear that you've got two different issues here it we do year on there are two different issues but the westport policies it was supposed to westport policy had a just hypothetically a five hundred thousand dollars and they paid all of their limit right that's wonderful but the westport but the california casualty policy to which westport is not a party right only is is only obligated to pay by the language at page six eighty one that i was just reading a once there is a million dollars paid from some other source in other words that there could be a so does that not then serve as the predicate to require assuming that the policy parties are correct that would trigger the allegation of your company to get involved if they had paid one million dollars per currents per student per year which totals out in this particular faxed eighteen million dollars yes it would have because the california casualty policy language it specifically states that until the  with a minimum per currents per currents limit of one million dollars in the westport policy they will say well ahead of her current limit of a million dollars but it also had a a cap that had effect reduced that limit down to about two or three million dollars over that period of time that's the way they argued and that's why we ended up according to judge or coming in next place but the fact is that's the westport policies language but it is not the language of the precondition essential to the coverage under the california casualty policy or policy as you interpret it not only is that one million dollars per current's very year basically but they've got to pay all of that before you come in and that is exactly your honor until the requirement one million dollars limit of liability afforded the insured by such other insurance or self insurance is exhausted that's when the california casually policy pay so it's in other words a california casually policy is written over a million dollar payment that talks about insurance or talks about self insurance talk about primary difference but the point is the california casually policy in these provisions that page six eighty one that you're focusing in on and that is the focus of this case there unless that is paid california casually has no obligation to pay what's your best argument that it's not what the potential is but what's actually paid that triggers your obligation my best argument your honor it is the law that deals with the question of how you interpret an insurance policy which is with the mutual intent of the parties to that policy here the administrators and california casualty as i pointed out and their mutual intent is as is set forth there must be a minimum per current's limit of one million dollars before the california casually policy attaches and that payment must exhaust that limit which the total payment here which was a big number with no question about it that westport paid to settle this case didn't exhaust that one million dollar per occurrence limit and and i think and and the mutual intent is also supported by the concept that the california casualty policy premium is as low as it was one dollar per administrator and i know there's a discussion about that yes it will not it was a look at them right know you can under california law intitled to review in considering what the scope of the coverage is for example the charter ok's which is really i think the the best case it's short it's to the point involved a situation where there was a policy issued to a motel that was owned by a larger company there was a loss sustained by the larger company and they tried to tender it to the insure that it insure the policy that applied to the motel which had a very small premium and the trial court of the court of appeal said the the policy issue to the motel the premium itself the low premium itself is evidence of the intent of the parties that they weren't covering this parent corporation they were only covering this particular piece of property here that was not involved the underlying case would does relate it is not it's not determinative under all circumstances i'm not saying that but it does relate in in this case you have a peculiarly low premium at a dollar per administrator to really get into that though i used to be outside general counsel for the church company then you got to get in underwriting questions in other words of the underwriters really assume that they're going to be seven million dollars of keys paid on cases like this when they set the premium you get into all kinds of things you can get into those questions your honor absolutely right and and if we get well if you get into the underwriter assumption cases or the other issues you know these policies were issued a long time ago and it is this this whole event took place back in the early ninety's as a court knows and the the difficulty with all of that is in california and i'm sure even in  south dakota there has been a substantial increase in the in the jury verdicts on all manner of cases especially cases of this particular type so what i take your point that it's a mutual intend issue but of course like all contracts when there's a dispute the parties don't agree what their mutual intent and he was so i gather you take your point about the amount of the fees beside the premium aside from that what's your best evidence that everybody agreed with your construction of this document actually your honor i think perhaps the best evidence in addition of the policy itself is the page before the first page six seven eight also two one five same thing it's a letter it talks about the fact that this is an excess of policy and it's a letter that sends out telling the people these policies are can access policy and i get all that i think that's very clear from the policy of the question is when does the excess kick in and whether we have the sandwich or the g s yes your honor and that is controlled at page six eighty one by the other insurance that says it has to be a million dollars paid or there is no obligation so from from our perspective as judges we should look at six eighty one and all will be revealed when we do so right all will be revealed when you do so yes your honor and your honor i'd like to save a couple minutes or rebuttal because we didn't get to the twenty five or a twenty five point four point but i think those arguments are laid out in the briefs and unless the court has some specific questions about them that i they would like me to address it you disagree with him only on every point may it please the court my name is adam fleischer and as you may have seen in the dock and my colleague mark shared and was scheduled to affectionately refer to here as the bologna in the sandwich there is an idea that you just heard that was also present in the briefs that westport issued one package policy for six million dollars and it was supposed to be seamless and that we are somehow injecting california casualty into that policy that is flat out wrong there's nothing in the record to support that there's no  testimony no documents that's argument it's made up what westport issued was a series of primary policies and then separately there's a series of access policies the primary policies have on their front page something that says package policy because they cover auto property and general liability the access policies have different policy numbers different premium different policy periods different language so this isn't a question really of trying to inject california casualty into some pre determined you know monolith of a policy this case is about three different coverages there's a primary policy that everyone agrees goes first then there's two access policies and the question is how do you order the access policies and as california law will tell you you look at the policies and you look at the provisions and the california casualty policy says not just in one place but in numerous places that it will pay upon exhaustion of the million dollar primary policy and i want to address that just very briefly there's this idea here that mr biden you know said if westport had paid one million dollars per sturt student per year then california casualty would have been triggered or up next westport deede pay and that primary policy one million dollars per student per year the policy that should have come up next with california casualty westport wrote to them and said our primary policy is about to contribute it's limits we think as we go forward into settlement you're up next before you get to that i want to understand whether we're talking about the first year for all of the years combined it with the sexual abuse allegations your opposing counsel said if i understood it correctly that you aggregate all of these claims and you get to like eighteen million dollars if i recall the fi correctly and yes what you paid bet is fifteen or whatever you paid in settlement and so you never get to them you obviously look at it more in terms of something like the first year or something of that nature  it it's a good question your honor it's not that it's not quite that the question is get up here's here's what's happening there's three distinct legal issues that come into play and california casualty h put all three issues in a blender and mix them together and then tried to say because of this we don't know anything in order to deconstruct it you have to look at each of these three issues the first issue is how many occurrences are there in a policy period elizabeth and the progeny around the country says ok when you have multiple women who were molested in one period it's one occurrence per victim that's based on the case  honor in each policy period if there are two victims molested there are two occurrences in the next policy period if there are two more victims or the same ones molested there are two more occurrences so you're  counsel was correct to this extent that we look at the coverage per victim if you will per policy period which is a year so if you have say six years you would have six years times the number of victims right absolutely on oka right and if you look at the charts in the district court's order at the r thirty one thirty two and the charts in westport response brief it pages eighteen and twenty one you'll see that that's exactly how they were paid one occurrence per victim per policy period the next question which is the separate legal issue becomes ok if that is the number of occurrences how much money does your policy have available to pay for each occurrence and that is determined based on the policy language the westport policies specifically say and for example in the primary policy at pages e r three eighty nine and four eleven westport says we will pay one occurence limit for each occurrence no matter how many insurance so the issue is that you have these three administrators who collectively are the gravel and then each of whom is an insured and they cause this problem the most westport primary will pay is one million dollars per victim for that occurrence no matter how many administrators no matter how many ministers and the reason your honor is not what anybody in this courtroom says the reason is because that's what the policy says the california casualty policy is different it says that it will pay a perk currents limit per insured and that's no longer in dispute here on appeal so if they have three administrators they are paying one hundred fifty thousand dollars for each administrator for each occurrence so the first issue how many occurrences determined by the case law the second issue what does each policy paper occurrence is dictated by the policy the third issue is when does the policy and such now we know how much it will pay when does it come into play and this is where california cattle to skips parts of its policy and goes straight to the exclusions and then tries to say the exclusion as a condition precedent and bring out your calculators and we'll show you why we never pay anything but that's not where the story starts it should start on the cover page of their policy which says coverage a which is what's at issue here is one hundred fifty thousand   currence over one million dollars underlying primary later it doesn't say take out your calculators and here's how we calculate it says they pay over the one million dollar primary under section three of their policy called coverages it says a california casualty agrees to pay damages in excess of the required underlying primary collectable insurance it doesn't say per occurrence multiplied out over all these years it says they will pay once the required million dollar primary is exhausted then you get to the third place and this is on a per annum basis right yes all of this is on each year you kind of look at the the landscape and you then you get to these exclusions which california casualty keeps referring to as a condition precedent to condition they have a condition section of the policy that doesn't mention any of us so context is important they're looking at the exclusion part of their policy and trying to make it into this broad ranging insurance trigger which it's not what the exclusion section simply says is that there must be an underlying primary insurance pursuant to some california co and there will be no assurance afforded by california casualty until the required million dollars is exhausted and what's interesting is if you look at the westport primary policy at six that policy says this is a million dollar policy issued pursuant to the following california code sections and they're the same sections that california casualties policy says we will and sat once another primary policy issue pursuant to these provisions pays its one million dollars so that is exactly what the policy says and that's how it the required primary insurance pays its million dollars and we will not in sept until that they didn't raise any of these other arguments this was never an issue these arguments only came up this whole thing about the code in public policy for the first time five months after all the cases were settled and westport could not get california casualty to talk to the table to answer a letter to do anything and then you finally get a letter in premium to multiply it out by the thousands of individual insurance at the school we could get to eighty four cents per insured that's less than a dollar insured we asked their corporate designee who was charged with their corporate knowledge if that's how it turns out would you recognize that the premium is significant here and she said no no no the premium doesn't matter you have to look at the policy wording and that is what matters not the premium let me just raise one issue about the code section because i believe that you're about to get a look a lot of argument about it and i would simply point you to this and this kind of is a nice tie up to everything we've just discussed you're referring to government code twenty five point four i am your honor and more specifically the pacific indemnity case which forty years ago issued a ruling on this section and has never been mentioned or heard from since until california casualty tries to hide behind it to avoid paying anything on this book of business and the key to that case if i can just kind of cut to the chase is the very last sentence and here's what that case said the employees insurance will not apply where there is neither concession nor contract provision which renders the employee's insurance available for the satisfaction of the public entities obligation in other words the court looked at the private individual coverage of the doctor in that case and said there's nothing in here that indicates this policy had any intent to participate along with the public entities insurance so i'm not going to make it happen so you look at this case and say well in this is there a concession or contract that addresses this and it's there in spades when you look at the california casualty policy it's not silent on this issue it screams out over and over we will pay second once a primary policy that's issued pursuant to these code sections pays its million dollars there's no case that says they're not allowed to do that there's no legislation that says they're not allowed to do that what they're asking you to do is become the legislature and take this case from forty years ago and say that somehow it prevents the entirety of their insurance program from ever paying anything and that's not what the case and that's not what  conclusion your honors in just the last twenty seconds are four rulings that we're asking for and i think it helps delineate this case a little bit more obviously westport is asking for the underlying decision to be affirmed in its entirety but here's how it breaks down a ruling that california casualty pays upon exhaustion of the one million dollar primary policy exactly as its policy says it will once it  it pays without proration or contribution from any other policies because the power of its policy specifically says that that's how it will pay three the california casualty now can't come back and challenge or relive again the reasonable allocation of this settlement to the only three named parties in the case the three administrators they are barred from doing that that's where age twenty five no no this is an issue as to whether or not california casualty can go back and say how much of the fault and dollars should be assigned to which defendant and there were four key defendants in the case three individuals in the school district westport argued that because california casualty was recalcitrant and didn't step up one hundred percent should be allocated to the three individuals and when you do the math you get to two point seven judge oric to his credit listened to california casualty and said i'm not going to sign one hundred percent i'm going to sign twenty five percent to each culpable party so you get seventy five percent of these three out of four and when you do the math works out to two point six million california casualty cannot really litigation reach chalons those liability issues and then last westport would request that the pre judgment interest on the two point six million dollar award should be affirmed as calculated and set forth and the district court's order which is in the record at the are zero zero one when it goes it talks about payment of a primary one million dollar limit or self insurance in other words under the terms of the california casualty policy it is the amount that is paid not the source of the payment that is the condition that preceded the obligation of california casualty to pay and under the california casually policy it is purged ministre it or according to judge or per student per year and that is the definition of per currents which is what the california casually policy on the face of the language at page  eighty one requires and that that is the and that is if you calculate that out because of the the odds policy years vs administrators vs students it comes up to eighteen million dollars in this case and that's why a california catholic doesn't owe anything westport this case wasn't tried and it didn't go to judgment westport decided to settle this case and they decided to settle this case for their own reasons  and that don't they don't have anything to do necessarily with the policy but it probably have to do with the risk of an upside judgment and or other things westport was in charge of the defense of this case the entire way and west courts payment did satisfy once you aggregated it all the entire settlement and that therefore california questions well i won just a procedural question i should have asked the opposing sherpas well we're talking about california law here but my experience has been that insurance companies actually like is to publish an opinion even though or a federal court is that  most of us reviews things and we need to go to sleep at night it's really a very helpful thing thank you all all right