on whether or not rescission can be retroactively used to defeat the claims of a government entity or the innocence of parties this is a case in which an insurance company that accepted a premium for the purchase of an insurance policy as a means of providing the federally and state required proof of financial responsibility which would be your had to have in order to continue to operate it's state of the art underground storage tank which was first installed in one thousand nine hundred five now claiming that it should be able to avoid making any payments under that policy to anyone because of an alleged misrepresentation regarding pollution from two prior tanks at the site which were removed and misrepresentation even though we are has conceded that those prior to tanks were never covered by the zork policy and their policy specifically provided that it didn't cover those tanks and even though it is now clear and this court has taken judicial notice of the fact that the source of the over one foot deep of gasoline which was floating on the ground water beneath with here and its neighbors property was a back problem we took judicial notice of that  that these are facts which are capable of judicial notice i believe that even if we do consider that what does it mean for suppose we do not throw that in the text what does that mean what this means your honor is the desserts entire premise which is that we're asking them to cover a numerous notices to the owner unresponsive the final notice that we're going to do it as i understand the notice we're going to take care of the cleanup date they came to the point where they said we have now made an investigation it needs clean up in each remedy and we're going to do it because you haven't done it i mean i'm being i'm i'm not saying exactly what it said but that's my understanding of the notice and what a d e p t a d c does two days later they buy zurich coverage now that bothers me because if there's an unknown if the state and that also goes to the innocent third party issue if the state knows about it to the point where they notice too many times the owner and thence we're going to clean it up and we're going to and you're going to have to pay the cost and then you buy coverage how can you ever have coverage for that last would be a nice thing that i can see that what you noticed by the state you're out to get coverage misrepresented and for instance third parties get the coverage well i would have two responses first the coverage was purchased  because federal law required to be purchased by january ninth i have no problem with that but i can with but the applications that there was no prior contamination when in fact you've been noticed by the state of a contamination in a cleanup requirement again you're out of this is where this significant that the problem today is from the new taken one nine hundred ninety five nobody had any idea until february of this year i can only take i can hear how can you say it's a new tank when the when the state before you bought the second cut the satiric coverage and noticed that there's contamination it has to be cleaned up so we just ignore that well because it's different contamination your honor and nineteen ninety five when the tank the two tanks were taken out were removed there was no groundwater free product on the ground water that wasn't the question question was whether there was any contamination previously at the scheduled location not some not some new tank old tank any tank scheduled location the physical position well there had been there was my client understood that they were buying insurance for the new state of the art tank they never expected to have insurance or not asking for money to clean up the old contamination that may be true but zurich never had a chance to one raise your premium declined the coverage or required to clean up before they gave you coverage and i charge you three hundred fifty bucks that's pretty cheap to get insurance where we're never had a chance to make a decision on whether they want to take that risk but your honor if acting up that occurred they would still be paying for that three hundred fifty dollars premium for the cleanup from the leak from the new tank then we're going to write it we're going to write an opinion that says you can misrepresent what is known unknown about the previous site you can pay your three hundred fifty bucks and search going to pay an innocent third party if you don't claim that you get you get paid you know we're not claiming that your honor so minister third parties can be covered by just knowing you've got contamination lie on your application innocent third parties that know about just pay your three hundred fifty bucks you get coverage that's we're going to write in his opinion that maybe the united states position on our position is that you get coverage for the new tank which is what the policy covered write it that way but put the policy said it only covered the new tanks so whatever the application said we're not asking for coverage the policy doesn't provide coverage for anything but these new stay in the arctic system is a foot of gasoline floating on the water table when put a new tank in the new tank what's in another foot but the evidence according to the judge there was no evidence here on how you can sort out look contamination was where are you saying now that the new spill is enough for summary judgment to carry that burden to show that there was evidence that it's a new tank despising the problem your honor i think the evidence is undisputed that there was no free product on the groundwater in one nine hundred ninety five that's in the new horizons report where the judge the district judge did not make any listing of undisputed factual and summary judgment we don't make judgment of facts here where do i go to find the undisputed facts to support your position your honor in the new horizons report it discusses the fact that there was no free product on the ground water and that's in the excerpt of the record versus the new marcel mar morrow report which discusses the crack in the fill pipe to the new tank and the continuous leaking that was coming out of that every time they filled the tank up resulting in approximately fifty thousand gallons of loss and certainly it's not uncommon environmental circumstances courts are asked to do it all the time to allocate the cost of the cleanup among various parties this is distinguished from the cases that were cited by zurich where they are saying you can't simply take it an ongoing loss and split it in time these are two separate unrelated events if we have many times an ongoing loss in other words if if you take five hundred gallons of fuel gallons of fuel oil and put it in the ground and nine of cleaning up the other i think so you can divide the cost of your honor in courts do it all the time they are located between they can base it on the volume of the product they can base it on the time that it was occurring it is certainly possible to allocate that as i think if we had cleaned it up in hundred ninety five zurich would still today be faced with having to pay for this cleanup from the new tank or your shifting of the off loss argument must then also include preemption argument which says then that the mandated insurance requirement that comes down from the federal statutes which is adopted by the states trumps the common right of research got a lot right a recession which we don't see and it's in it right i believe that's correct your honor also on you if we want to go the economic route which means that we've now shifted the  economic loss into the insurance world which increases our insurance premiums rather than putting it in the public sector world these people are going to be bankrupt they will pay states going to stay in our taxes are increasingly shifting it into the insurance world right the even the public through the taxpayer are the parties to actually purchase the fuel to pay for the gas so that the team is going to pay for the underground storage you and i when we go to the pump we're going to pay this for gas prices we're going to pay one way or another and you wanting us to shift in that direction because of the federal mandate relative and the and also we also have to interpret the it the me now i have to also interpret what the what the for the federal regulators have said with regard to the misrepresentation and if that's all right i'd like to turn the other one one just in just to make sure i understand where we were going with matters to which we are going to consider that as i see it is that there can be very little question party involved here the marlin doesn't make any difference then and the legal analysis as to whether the state is likewise in his third party i don't believe it makes any difference and i believe the state is also in essence our party because they never saw the application they relied on the each point the advantage of assigning this risk to the insurance companies is that the insurance companies are best situated to detect and prevent exactly this kind of misrepresentation that's what happens in the auto of cleanup costs would be avoided because insurance companies would be diligent and investigating insurance that's that's how the system is supposed to work if what if your invitation when it i can get you i know where you're going i get hung up on and forty c f r to eighty four ninety two or that the definition of germination is described and where the e p a is interpreted that definition of termination because that goes to the question of whether you can trump a lot of research and what bothers me is when the e p a says that that increase that termination includes this situation it seems as though germination in that regulation seems to say that when you are going to get a terminations you can't ever again and so they're covered the gap until you get  in other words the issue is is that insurance policy valid and that's an issue between the insured and insured and that will be decided here in the united states cannot enforce its regulation independently of this action is that right regulation is going to be given effect we have to do in this case i believe so you're right i mean and and i suspect that the adjoining landowners are stock i believe they're actually spending by joining landowners with contamination and any other  school which is there to fill a new well to deal with this problem any other joining party is a similarly stock i would also assume that there would be a lateral act let's assume the station owner happens to be very very financially you know our d c knew that there was contamination that the d c sec received a notice in october of ninety ninety five hollowing august ten months later they finally sent a series of three letters in a period of three weeks to two to whittier telling them you need to conduct further assessment and if necessary conduct cleaning six weeks after that they sent an additional letter or two and a half years after they received notice a letter in july one thousand nine hundred seven which is in the record telling them that they needed to get insurance and in that record in that letter indicated that you could get insurance even if you had  been entirely on the recession you shoot which is only one of the four reasons we believe the summary judgment ruling should be of help and i would like to focus first on discussing why it's not necessary to even reach the rescission issue which i believe most of the arguments i would be making and that have already been addressed by the court anyway are you sure of which there may or may not be fac it would be our position that this is insurance coverage question is an issue of alaska law and should be resolved under alaska law i believe that bennett that's not that's actually not really responsive to my question because maybe i didn't ask it very well the e p a has interpreted its regulation on terminations to also cover rescission and stuff like situation at hand and to our on that point  are we required to give deference to that view of the federal law as preempting state law that would otherwise i don't believe you do and i believe that what the e regulations do is require certain terms to be included as part of the provisions of the insurance policy and it then becomes a matter of alaska state law to interpret those  that's my very question that is what they're saying now and i said it before that make any difference they are saying and i believe that goes into the difference question i think perhaps the broader question is do you ever even get to this differen issue and i believe that's that's the main thing i want to talk about in my argument is that you never even reach the deference issue and that is because there is no coverage under this policy for this particular release of contamination and if i may speak to that the the very basic provision in the policy here provides that there is only coverage if in this case the release of contamination command after the retroactive date of the policy and in this case the evidence is done contradicted that the release commenced wit highly contaminated with gasoline going into the ground for years before the retroactive dated this policy that the i believe we're here has conceded that and it's varied tanks over quote contaminated soil digging out some contamination its oil the first time not digging out soil the second time that it consisted fact i believe it is now how do we know that it was quote confirming it to the point where before the second think came in true and there was even more after the second take change came that there was an increase based on those new evidence that we're here just had this court takes you to fill notice of it's the report regarding the inventory records of whittier that report states quite clearly that the contamination whether it was from the assessments that are in the record describing the contamination as extremely high levels of both ground water and soil water contamination high enough that the alaska state of alaska the application about a letter from the state of alaska about what ever had been known about the previous contamination what would have happened differently when there have been a higher premium or just the record  very least if there was a potential willingness to write coverage in that type of situation then they would have gone to investigate the property to see if they wanted to take on the risk in our let's say that on january first standard oil delivers twenty thousand gallons of fuel using that fill pipe there's a spill into the as a result into the ground one a month later a already started contaminating the property isn't that different in other words if you have a tank and you have a leaky tank starts to leak you're not i believe that's correct it continued leak exactly and that's what happened here here  if you have a fill pipe it doesn't leak all the time and only you know only leaks when you fill it isn't a release i don't believe it is but there's no evidence to suggest that there is any type of break up into discre time is there an issue of fact of what a release is in that factual setting i believe the way the policy language is worded the only reasonable interpretation of the policy would be that once you have a substantial release take and you know setting aside the de minimus situation that that is enough to that that tells you when the commencement of the releases everything else is just adding to it what i might add is that exclusion any of the policy i believe deals precisely with the issue that you just raised and if i could turn to exclusion a just for a second i think that it's really something that should be brief has ignored it here today but the exclusion airlie i believe covers the exact situations that all of you have raised here and because it because it makes it clear that  the sorts of situations where you have a really start stop you know for example with freezing in the winter you might have a leak stop because of freezing and then start up again in the spring but if you look at exclusion a it just simply requires two things the claim and of course that the claim we're dealing with here is by the state of alaska that arises from a release existing before the policy inception i don't think there's any dispute that that is exactly what happened here contaminated i don't believe that that is a fair reading of exclusionary your honor i believe exclusionary when you look at it carefully so that if there's already a release there and you can understand why from an insurance company's point of view you wouldn't want to have the type of situation you're discussing here where you've already got a piece of contaminated property in this case one that we've been told wasn't contaminated and then write the coverage and then somehow have that leakage stop start during freezing or whatever and then have the argument be made well now we start coverage big because freezing somehow plug up the tank and if it starts again then that somehow triggers coverage explosion a i believe takes care in fact this was and i have to go back and check some of the also indicate that report says even though there was groundwater at nine feet there was no free product pressure ok so let's stop right there product president if we're going to rely on that out i don't believe you need but even if you did get the evidence i have to do something here because you're saying the record supports and exclusion any yest something that happened before the new kank was put in right correct so we have to go back to this what's better in addition to this in one thousand nine hundred five new horizons report that we rely on when we write this well there were additional letters from the state of it looks like the insurance company took future to court and said our policy is void of an issue correct and there are two against two barriers to that potentially one would be state law and one would be federal law because both of them apply in this situation both state and federal law required proof of financial responsibility true so why is it only a question of alaska state law why is that also a question of federal law as to whether or not that policy is still in force well i believe that if there is a conflict between the two and i don't believe there is because i think you can harmonize the alaska state statute that requires or provides for the right of or season to insurers in the event of misrepresentation by simply reading the cancellation regulations not to take away the preemption of any of the federal regulations have to be preemption in other words if you run parallel and that's the situation where for the state has not taken over the program federal program runs parallel with the right i guess i would i would rely on that then if he had joined case which i believe that addresses that the supreme court of the last basically said it coverage question of this type is a matter of alaska law but again i don't believe it matters in this claim was not just for recision but to be clear that there is no coverage under the policy and the the the the arguments have made here about the fact that  the contamination the release has to occur after the retroactive date and about exclusion a those have nothing to do whatsoever with the cancellation regs or the third innocent third party claim and in fact the extent the cancellation regulations specifically provide that they have no impact at all on exclusions or coverage provisions in the policy  would like to answer them for the court what the requisite statute provides and what the federal regulations and the analogous take regulations with respect to underground storage tanks provide as follows number one that insurance may be used as a means of showing financial responsibility plenty of other mechanisms that can be used as well letters of credit guarantee needs etc they specified made specify how risky or other contractual terms to be included in the insurance policy and that's quite different from to they have done that they have specified and now they have taken a position in this litigation explaining exactly what they meant when you specify and it's that last thing which is the problem the first thing they had a right to do which was specified contractual language that would be included in this well known vehicle insurance insurance policies which are regulated and governed by state law and that was the problem with having them interpret their own regulations as something that we do all the time there not interpret ing regulation there  interpret the insurance policy and the question of enforcement of the regulation is a little different than what's presented here was our own thoughts become the same thing if the p r i can specify a term they could have but now they're telling us what they meant what's wrong with that there's several things that are wrong with that first of all i don't believe they did specify and i believe that the definition of terminations that i make clear that it's limited to gaps in coverage not applicable here secondly the commiserated practice and the history of the application of these kinds of regulations is directly counter to the concept that they decide what those words mean under state law in an insurance policy when an insurance policy has been issued containing them and in fact a denim beats the united states breed include the regulations where the amendment regarding the ten day vs sixty day cancellation period is included in there is another provision regarding retroactive date where what did  do when there was a problem with the potential interpretation of its earlier language it didn't say our earlier language with back to retroactive day coverage controls and crimps anything in the state law it's said we will act to change that language to add language into the regulation to provide for a meaning and that's precisely the remedy that's available to anybody and character attachment really interest me because it also the they recognize the fact that they didn't straighten this out that insurance crisis that happen lawyers doctors whatever are we walking into an insurance crisis or is that what you're telling us your honor i think that if you came to the point of discussing a public policy exception which is the only means by which i believe the cancellation remedy could be overridden then all public policy considerations would appropriately think insider by the court and incidentally it's quite clear that the effect of the approach requested it's simply to increase cost and unnecessarily sure worried about that ten day because that the industry came up and said we're not going to carry this for sixty days and that that's an big economic issue this other one is a huge economic issues that we're deciding way inconsistent with the definition of terminations under the regulation which specifies gaps in coverage which means certain things about how one policy interacts with the replacement policy it does not mean the absence of coverage the absence of lied and under alaska common law and alaska statutory law which beyond the common law specifically evidence and alaska public policy interest in rescission the insurer had a right to rely on the truthfulness purpose of the inquiry on which the lie was made well to determine whether a complete fight would be required for underwriting in other words the the insurer has a right to rely on the truthful availability of insurance and can do so or get out we think it's a long shot that there would be a serious problem you're not resources of production are finite and introduced in fact your problem is committed to maintaining the availability of insurance in this area and on the second question i think it's very hard to predict exactly what they're looking pretty indifference would have been and i think it really depends very fact specific but but pollution coverage can be quite costly certainly so there might have been a significant difference and in premium  here we have yet another fact pattern which is we didn't know about and i'm going only but we did know about historical contamination which we believe