that's funny ok ready to four minutes for you but i see track of your time my clock actually isn't even here but sit by myself time i will watch my time to make sure i have ok enough left the district court mistakenly determined in this case that the beetle infestation and mores log home was cost soley by crimes work based upon that factual conclusion the court concluded that coverage under the your work exclusion in northwinds policy prevented coverage let me ask you one question about the contract the policy defines your were to cover both labor and materials so i'm looking at  and fifty seven dollars where it says it defines it to include number one work or operations performed by you or on your behalf and number two and i'll skip some irrelevant words but honor that relates to the subcontractor exception to the your work is ok so it all rises or falls i'm concluding that the supplier of the logs was some contractor otherwise well the district court was right two points your honor one the district court didn't say that the materials were in fact kinds of materials the materials did come from i said it doesn't say that it says materials furnished in connection it doesn't say your material your honor the this case does rise and fall on the application of the sub contract case let's go there because it seems to me that the minimal processing of these logs isn't really a different kind from point any other supplier of things would do if i ordered a light bulb somebody would have to make sure that they're the right size dust them off count them make sure they're not broken you know maybe look at the sockets make sure it's going to fit that sort of minimal processing and i don't see anything more than that occurring here the difference here your honor is the mr downing the subcontractor who is now  deceased he actually went out into a forest in montana and found logs that would work for this particular project cuts them down and then washes them cuts them to length and delivers them to the project well  thought about that too but then i'm right back a judge graber says appoint what's the difference between that and a sub contractor if this is a large building going so they go out to a material supplier and say this is this is what we need and that material supplier goes out to get somebody to fabricate them are they then subcontractors it depends on the extent of the involvement of the subcontractor and you know i just learned the facts the facts are there are those are those people subcontract if there are specifications as to the windows that need to be muslim and i understand case law they may be but let me change the hypothetical suppose what they did is they went to this person judge ezra's describing and they said this is what we need would you go around to a bunch of junk yards and find and salvage places and find them for us yes that's what he did here it is similar to what he did here is that a subcontractor when he's not making anything is just going around and finding something yes ma'am if the contractor is gives some specification as to i need you to find items x y and z and they are tasking that particular subcontractor i want to buy this from you here is what i want to buy go and if you bring it to me by the cases that deal or subcontractors recognize that there is some push and pull that there's a continuum but basically the idea that you have to go find the right item doesn't seem to me to make someone a sub contractor if i have weird light bulbs in my example they might have to go to three warehouses to find the right light bulbs but it doesn't make the light bulb smell or to me a subcontractor there's a case that i cited i think it's  the court held that a gravel supplier was a subcontractor that the contractor said we need a particular type of gravel for this project in the gravel supplier digs up the gravel was not described in that case what we do know is that the gravel was on the side it was it was prepared they had access material the contractor ordered gravel the gravel was delivered to the project the gravel ended up being process so the issue was whether the fact that they did it on their own property and you know had already done it was you know made it not a subcontractor but that isn't really your issue it isn't location that's the question it's the extent of whether you know the extent of the work and obviously that case is not binding either but our point here is that the extent of the work is immaterial there's no dispute about what happened the question is what does it mean well the one issue that hasn't been the site here and there's no dispute he went out and selected the logs he brought him back to his site he washed them he cut them and then the subcontractor delivered them to the actual home construction site ok so there's no other actual issue that mr downing as the sub contractor was the person who actually went out into the forest and selected the logs and he chose logs that were infested with feels he could have chosen one hundred and fifty logs that were not that doesn't relate to whether he's a subcontractor my light bulb guy who just sells light bulbs could have given me defective light bulbs and that's why the definition of your work matters because if i'm the contractor and i put in defective materials furnished in connection with my work i'm the one who's responsible not the light bulbs so the fact that they may be defective doesn't really advance whether there's a subcontractor that's circular it's like well if if there's a problem i will you know so if i don't understand why that even matters to the sub contractor conversation it your honor that you are correct that the your work exclusion supply applies to the work of materials supplied by the contract that's not what it says materials furnished in connection with the work it doesn't say supplied by you and since furnished in connection with where but regardless it seems to me that regardless of how we get there analytically the question is whether this is a subcontractor or not and i guess all i'm saying is i don't see a factual dispute about what actually occurred as distinct from a dispute over where significance it time seeing what difference there would have been it's not actually what he did is what he didn't do what he didn't do is pressure treat the wood but or make sure that the wood was pressure treated it i don't see that there is a huge difference between mr down going out like some kid and looking for a christmas tree in big trees out of the forest or mr downing going to a lumber yard somewhere and finding a logs or going to another supplier and finding burgess ing them what would he did do is ensure that the logs were pressure treated well as mr kimes testified he's been building log homes in montana for over twenty years and has never in h experience ran into powder post beatles and he had never treated any logs in any of the homes that he had ever constructed prior to that ok he's no longer in the suit there's been a settlement there was a confession of judgment by car and work has to be have been done on behalf of the general contractor i get i don't understand how if you go out and buy something when if i buy something from from a store and they're not selling to and to me on my behalf they're selling it to me because they're in business and they're selling me something and that seems quite different from if i have a project and i contracted to do the electra work and then i go find you and i say you do the electrical work for me and i don't in the on behalf language doesn't seem to fit here either so in montana the general contractor is responsible for constructing the home in a good and working light manner regardless of whether he has a sub contractor do that work or whether he does the work himself here one of the elements that that nothing in the underlying lawsuit concerned whether the seller of the logs down he was negligent i mean we have no idea whether and because the whole claim was that kind should  have put pesticides on these locks and there's no really allegation that's even and then selling somebody with bugs in them is this is negligent or bad or anything else i mean the understanding seemed and in this unnecessarily i mean it could be for all i know that now i understand the kind says you never saw these but this but there was also testimony that that they standard of care is you put pesticides on logs before you put them on in a house and that was what the case was about the case was that one of the bugs should have been there on or should have been there but your honor count one of the underlying complaint the state court level alleged generally against time that he violated the standard of care in montana which includes the obligation to construct the home in a good and workman like manner my kind was responsible for his contact and all d of the conduct of a subcontractors under montana law period and materials and material suppliers if when mr morris sue is kind he doesn't also have to go sue everyone else who messed up on the project in montana that's not his obligation his obligations asuka kind wants to bring logs that had bugs are not putting on pesticide that's exactly the question that hasn't been answered and that's the reason why was the allegation the underlying complaint the allegation underlying complaint simply was that kind failed to meet the standard of care which was to construct a home and a good work in the right manner there was a factual allegation in the complaint that he should have treated timber there's no doubt about that and then on the confession of judgment the court concluded kime you were negligent you did not construct the home in a good and workman like manner now there was a factual fight if he if he had treated the logs presumably not of the rest of  would have treated the logs none of it would have matter it would have stopped it but one of the things that kind was responsible for also was selecting the correct logs in the st place but there is nothing in the law underlying loss or that suggested that some flexion salaams was the problem but the judgment to actually resulted in the and the final judgment against kind the reason why we're here on the insurance policy the court concluded insects war in the timber when harvested when it was delivered and when construction occurred so we have a factual finding in the confession of judgment or as a result of the confession of judgment that the bugs were in the logs of course they were but that doesn't say where the negligence lay whether it was in the failure to treat witches and the law is the greater that when you are examining coverage in montana if we don't know where the negligence lies you can't exclude coverage you have to have a factual right if it's a subcontractor and not merely purchased material is true and mr kind relied upon mr downing to go out into that forest and pick those logs for him he could have done that and south but he didn't he had a subcontractor we understand your position you've exceeded your time but you may have one minute for about oh thank you court martial mickelson on behalf of north and company judge christiansen found that the damages in the state court judgment were not covered by the north on policy because of the your work exclusion and he found that the subcontractor exception to the exclusion never applied because this was the work of mr khan and there's no question that when you look at the record underlying this case is that we have a complaint that although the mr mori wants to try and narrow what that complaint says as this court pointed out there is no allegation of any other sort of negligence in that complaint other than that he anticipated that the defendants could construct the structure percival to an applicable industry standards and that the industry standard was to treat the logs with pesticides before that in the complaint yes your honor so it's he said something like played with he would read the law something like that hard and says something like plaintiffs expected him to treat the locks the the specific allegation is that on e r twenty three you're looking at yes there are some fifteen through nineteen yes your honor plaintiff subsequently learned that the logs used in the construction the homes were infected with beetle reasonable  standards in the construction of log homes include the chemical treatment of logs for beetle offer and larva and insects prior to installations they failed to advise the plaintiff of the standard treatment and failed to apply it they used untreated logs and the say they should have known that untreated logs would result in damage and they knew that those logs were untreated and misrepresentations are also defined under the policy as part of your work and so all of the allegations in the complaint involves the failure to treat the law there is no allegation as to any other liability on the part of kind it was all in favor to treat the logs then what's important is you go to the next step there was a settlement agreement entered into this case and in that settlement agreement the claims that were assigned under the policy where those claims there arose  omissions and failures as alleged in this lawsuit so the only claims that were assigned were those that were part of the lawsuit of the time of the confession of negligence and the confession of negligence was based on this complaint then you go so there's three keys here there's the complaint there's the confession of judgment where the claims are only assigned based upon that complaint and then the findings of fact of the deceased the state district court where the state district court found that the damages would not have occurred but for the fair to treat the logs  there's rect but that the treatment of the logs was part of the process in building the house so is it is it your position that the plaintiff in the suit below should alleged subcontractor donal's that directly or at least some allegation in the complaint because they confessed judgment based on this complaint so they wouldn't necessarily need to include the other individual but if they had said there's hurt potentially two kinds of negligence one is the selection of improper timber and the other is when she got the timber you didn't treat it exact and that would have made the difference and that's the answer to your question your honor is that had they allege that we got defective logs from a log supplier and then they could argue that this was a subcontractor but i'm responsible for it then maybe you have that issue in this case but the issue isn't on this record the issue isn't in this case on this record you have the complaint with those allegations and it's true in montana that's notice pleading in state court but this was a  specific complaint with specific factual allegations and in montana it is the admissions or the findings from if there are factual issues that give rise to a determination of coverage that state farm versus friar here we have certain admissions by the parties with respect to their confession of judgment that it's these allegations that we are confession judgment to and assigning to mr maule roy to enforce against the insurance company they didn't make any exceptions and there's nothing i said which was yes francia just record you know get to the  the court has identified the problem completely is that the courts that have analyzed whether what a subcontractor means in the subcontractor exception to the exclusion is that there must be a manufacturing and let's start with the what a subcontractor is but a subcontractor is i have a contract i'm going to turn some of that contract over to this guy to do so i'm building a house i hire an electrician she comes in and does electrical work to build my but the cases do and this surprised me but they do reach as i understand it  or is hypothetical when i built a new kitchen and i hired a contractor and i have certain windows in the contractors as it goes to the window maker and says i want you to makes what you make to my specifications windows of a certain configuration with certain material even though it is simply buying some customized product the cases seem to regard that as a subcontractor even as a subcontractor never comes near the property in this instance he did come near the property a is that true agreed your honor that i mean this i mean that seems a bit of a stretch to begin with but that is how the cases are looking at those cases that have decided or looked at that issue of a subcontractor have said well first of all they say if there is a specification in the contract between the owner and the  specified type of product and then the general has to go out and hire someone to manufacture that for that specification in the contract then they are in fact a subcontractor there where i wanted to circle back and that is a situation where we know let's say we know that if somebody had gone out and ordered like my earlier hypothetical or judge prisons that make a window they're going to possibly potentially be a subcontractor but the question is now what your opposing counsel is saying is that you can't and he can certainly correct me when he gets back up but my understanding is that he's arguing that by going out into the forest and himself selecting the trees that he has done the legally qui manufacturing and your honor i guess i disagree with that and then he cuts them to sign he cuts them to size he he is not the nature manufactures the logs he goes out and gathers those lay understand that this was what he selects i didn't say he gross them he selects them based on size because that's what you're going to you have to have a certain diameter you're going to have certain likes so he's selecting these logs he washes is is no really different than a supplier of a site or three companies sending trees to your landscape or i don't know that that would be a subcontractor i think they're a supplier because they grow in them i would argue it's actually different because you go to a lumber yard and they're cutting logs into certain sizes two by fours lengths grading that according to what type of lumber with the knot how many knots this is raw logs mr khan peeled and notch he did the manufacturing to take these raw logs to build a home he peeled the bark notch the logs so that it's raw logs and he's manufacturing those laws into a product that will build a house so and i also want to it as the corp appropriately pointed out there isn't an issue of fact here in montana the interpretation of the insurance policy is a legal question here judge christianson didn't raise didn't get to that question but there isn't a dispute a fact here that the log broker mr downey cut the logs down and i will say that there isn't actually any and i haven't gone back and looked at the affidavit but i'm not sure in the record it says that he actually went out into the force and cut the trees it may be in that affidavit i don't remember but i don't remember that particular fact in the record david is kind of calms affidavit i don't remember that that fact is that he actually went out in the force and cut the trees i think the record says that he supplied the logs according to size washed them and delivered them to the to the property so this court of course can affirm judge christians  he so i don't think that's in the record yeah it says i provided him with specifications the type of species of tree that he wanted and he processed the logs by washing measuring and sorting them by songs he selected and delivered the locks i was not involved with that i relied on him to process select and deliver consistent specifications so i do not believe it's in the record that he actually went out into the forest and cut the logs and they cut him in montana or wherever it cut refresh my recollection but i don't believe the specifications talk about a self serving post deposition after the confession of judgment is when they say no but that's true the contract does not say that so if the court goes where to this to ace what do these policies cover well they cover damage to other property so excuse me if mr crime or the sub contractor or anyone if that log fell off of the house because of the bug problem and it hurt somebody or fell on somebody's car that's what it covers because these are what are called the business risk exclusions so insurance companies do not insure the risk that you are a good contractor if you do defective work we don't insure that but if you do defective work that hurts somebody else that is what we ensure there are policies  coverage it is required the proper focus according the montana supreme court is the facts giving rise to coverage not the language of the complaint it is moreover it is the acts giving rise to the complaint which form the basis for coverage not the complaints legal theories or conclusory language paragraph twenty one of the complaint alleges defendant's own i prefer duty to perform construction services to a reasonable standard of care appropriate to construction industry and local standard of care for construction in lincoln montana we have not had that determination made i it's safe to presume that we need to put our expert on in the underlying case that not having beetles in the in the logs would be an industry standard to choose logs that are not infested by beetles but that's unfortunately precisely what mr downing did thank you counsel the case just argued is submitted and we appreciate the helpful arguments from both of you with sam and we will be adjourned for this money session