and cross apparently cameron international cameron appeals from the judgment of the district court for the eastern district of louisiana which dismissed on summary judgment cameras claim under chapter five forty one of the texas insurance code and denied cameron's motion for attorney's fees under texas civil practice remedies code section thirty eight liberty appeals from the in his decision granting liberty summary judgment on cameron's claim for unfair claims practices judge barbee they agreed with cameron that texas law as set forth by the texas supreme court in vail against texas farm bureau mutual does not require a policyholder to show that it suffered damages in addition to one fully denied policy benefits as the wrongfully policy wrongfully deny policy benefits were the actual damages in the vale case so l the supreme court however judge barbie i said he was compelled to follow this court's decision in great american which included your honor we know we know you know about it ok and chief judge chief judge threw it because of the footnote which indicated that independent injury would be necessary and that was a case where there had been woefully denied  as to the state of texas law or the war on the subject now but he too was compelled by this court's decision in great american to find that independent injury was necessary do you believe that they are compelled do you believe that that's an actual holding of the case or is it possible to read that is not necessary to the outcome of the case and so that it could be seen as dick and therefore not binding o right you're speaking to the great american itself and we believe that the footnote that they both relied on is dicta in that case because the case was remanded for consideration as to whether there was independent injury great american did not itself hold that independent injury would be required in a situation where there was no denial of where there was a denial of policy benefits  court assumed with all due respect it appears that the court assumed that the rule of the case was governed by the parkins decision which was a case where there was no wrongfully denied policy ben that instance it would be necessary to find some independent injury but in the judge coming in in terms of the answer to your question i think the the law of the circuit is that if  court has specifically said that it is dicta but there have been texas appellate courts that have said that they'll still support supplies the rule of law and be binding on them anyway so that's kind of almost irrelevant what they're saying about what we said because they are not they don't have to even read what we say in that way if they can go straight to the source of some of the texas appellate courts do cite some of the federal law i know they do because sometimes they think we have some guidance offer but they don't technically have to look at what we've said on the subject if they believe the texas supreme court has spoken but my question is what is the case that you are siding for the proposition that of what the definition  is in our circuit i don't have to hear your honor but it and i thought just for that because that would seem very important because you know none of the courts that have said it's not dick to have actually gone through the analysis of what dicta is in our circuit to my knowledge  alleged victim purported dicta can be excised out of the case and where the circumstance is where the there was an unexamined assumption that the court may have made and that comes from a case are not holdings of the case but if it was dr that would have been no remand accompany the loss would have been the policy benefits that were not paid so i don't it would not have been as a little weird not to be trying to justify the case but since i was on the panel but i i don't see how it's not to i think judge it's absolutely fair to say with what will respect that the court assumed that parking is controlled  the decision in the case where there was there were policy benefits but the court did not cite vale which was certainly the controlling decision under texas law in circumstances where there to determine whether there was separate damage so didn't change the outcome of the case because it would not have changed the outcome of the case so i assume now that it is not dicta what do we d if it's not victor i think the court has has two options one is that it can certify the case to the texas court of appeals sorry the texas supreme court for clarification and that  the second choice is to have a review of the of the case for the court to decide what what is that what they think the texas law is on the subject if you say the texas  agrees on it so to go around the bush when bank seventeen people say we think texas law years which is a no matter what we say everybody agrees texas could on you know our cases whether it's relevant or not you know but particularly sending signals so there may be some difference of opinion about what the court may say particularly when we're talking about you know t point because certification is the only way we're going to get the texas supreme court to say you know we we think bail was over by subsequent case law or veil remains the law but this court said certification is the most principled solution where this court that is the fifth circuit and the texas state courts disagree as to the effect of disputed language in a texas court a supreme court opinion how many of we sort of thought out of this is now complete i'm sure you have we sent to matters to be certified already in this case you would know you don't know i didn't work out but the answer is yes you have you have sent two cases but this one they're all different judge all right but this one really has nothing to do i mean i'm the i've been on some of the other ones yes this is different this is the insurance interesting texas issue but this is this is the one where we have to have law that apply and i don't think that we can continue on that way r is there an option whereby the parties would agree we could withhold them withdraw the mandate and the great american case and reaction opinion which is consistent with t should have been applicable yes you could and i wish i had so i don't know if there's any authority for that so you'll have to one haven't seen it we've we've looked at it was a circuit we've looked at every which way we could and we've come up with those three we haven't seen authority for that are that throw l and indicated in his opinion that he was not inclined to deal with our attorneys he's issue but there has never been a case that we have been able to find where a party has been deemed to have waived its contract statutory right to attorneys fees under section thirty eight by not moving to get those attorneys fees before it actually won the breach of contract case and if we have a published case it says it's premature to even ask for them then that would seem to cut against that wouldn't yes the i think that this is just a this is just a clear error on his part understandably because of what he was dealing with but if we had moved  honor's point if we had moved for attorney's fees before we actually won the summary judgment motion i think he would be telling us respectfully that he is very busy don't bring me or attorney's fees taste of jerry's fees motion clear as long as i have as long as i have time i'd like to move to liberty's cross appeal and i'm with i'd like to deal with that now and on reply as far as the other insurance provision is concerned which is one of the two defenses that everybody relied on judge bork ph actually went through in detail liberty's position on the interpretation of  that and concluded that it was on reasonable originally on a motion for judgment on the pleadings he said that there were two competing interpretations and under the contra preferential doctrine cameron was entitled to when that was on a motion for judgment on the pleadings at the beginning after he had the entire record in front of him following discovery he had he concluded that it is also and reasonable in turkey and it is and the basic reason why it's why it's not reasonable is because in other citric other insurance situation and assuming even that liberty's sorry trans ocean's indemnity was insurance leaving that aside for a moment it's never up to the policy holder in this case cameron to fight with the two competing other insurers over who ought to be paying its the policyholder is supposed to be put paid and then the other insurers the want in this case liberty and then trans ocean have to decide how they're going to allocate the loss as between the liberties position in this case stands that completely on its head and left cameron camer in a terrible position right at the moment where it needed to settle the b p litigation or run the risk of disastrous results that is not what the law is that is that is basically that's basic unfairness and with respect we don't think that that liberty has answered that answer that point they do or if they do switching back to if this court decides that their position has some reasonable a and the language is somehow ambiguous that we still should not win based upon the contra preferential doctrine because there is a sophisticated insured exception to contra preferential  parag court said judge all right participating on on that one there the texas supreme court has never said that there's a sophisticated insured exception and further the court went on to talk about how if there was a sophisticated insured exception it would never apply in a situation where the policy holder had no involvement in the drafting of the policy in this case liberty has actually conceded at its reply brief on page sixteen that it and this is a quote liberty conceded that cameron did not draft the insurance contract at issue and that had to be conceded because there are several please the court in the brief time that i have i wanted to initially begin by outlining the three key points i'd like to cover in addition to responding to some questions from the court on the other issues that cameron raised first indemnities where the policy attachment point and a condition of coverage under the l i e policy cameron's flip flop on the viability of these indemnities when settling with b p prevented l r u from preserving those and now precludes coverage second independently the word applies is not unique to the other insurance clause in the l i e policy in fact it's ubiquitous in all types of insurance contracts and as a result judge barbie is finding of ambiguity will lead to catastrophic and absurd results given the frequency of the word applies in virtually every insurance policy in the western world third cameron admits it released its own indemnity rights as a result there were no subrogation shoes for l y u to stand in and as a result independently breached the contract ication the record is clear there would be no such coverage the insurance attaches its attachment point is following the existence and the application of these indemnities cameron from those two years argued the  valid told the securities and exchange commission they were valid follow the motion for summary judgment they were valid told the world in its ten k filings they were valid then on the eve of its settlement with b p suddenly withdrew its motion insurance policy needs to be given it's plain ordinary common understood meaning judge bar b a just simply writes it out of the policy but then he takes a second step which i made in my second point and he deals with the term applies and he finds the word applies to be ambiguous it's significant that no court in the country has held the word applies to be ambiguous second it is significant that here the word applies exists twenty seven times in this very insurance policy and any search of google or less floor anything else would show it exist in virtually every insurance policy in the western world ok if if we don't find that if we find that parts could be ambiguous you can't win on this because contra prefer because of the theory that if they the insured gets the benefit of the doubt under texas law and then also because there's no sophisticated insurer right well to point your honor number one i would argue that there is not a second and reasonable interpretation and the words for applies in the cation to be ambiguous you've got to find a second reasonable interpretation i would argue it's not there because if you apply the exact same construction to the self insured retention component it leads to ridiculous absurd results it would mean an insured with a self insured retention could say we don't think it applies ok do you need do you need s win on your three key points it's a secondary argument we think it does apply we think your decision from last week indicates that first of all distinguishing facts that there they waived it here we did not but second when you identify a strict interpretation and modern interpretation your panel was specifically asking for evidence of a sophisticated insured involved in the policy we have that here in this record this record indicates the involvement  goshi ation of this policy for a fortune one hundred company with the biggest broker in the world and the record shows negotiation by march marsh on behalf of cameron recently said if they didn't participate in the negotiations we wouldn't we said what opposing counsel said we said sure sure but how you're stuck with that aren't you will hear the record shows that they didn't go shit and certainly or i realize this panel is bound by the prior determination of the court  but we think that for example judge fitz waters analysis even further in the body aircraft case is also highly persuasive on this issue but we don't think you get there judge or one we think that in this instance there is not a second reason the interpretation under judge barbie is interpretation if another insurance company in this tower just simply says it's not pain under judge barbie's interpretation that's ambiguous it's not presently available and a carrier has to drop down that violates three decades of case law from this court in the texas supreme court under judge barbie is interpretation if an insured with a self insured retention says i just don't want to pay it it's not presently available under his interpretation it's in big us and because it's ambiguous if sophisticated insured doesn't apply then you've got to drop down in excess insurance companies paying what it never negotiated and priced a premium to pay it turns the insurance issues on its head and so the indemnities are critical attachment point applies is not ambiguous but third an independent of anything that we signed in the record and the break indicates that they had to waive its subrogation rights in order to have a settlement agreement with cameron the texas supreme court has made it clear if a carrier has to step in that not only could not cooperate with l y u in the process it was adverse to l y u if anything was going to be pursued l i you lost the ability to pursue it because the underlying case was resolved as far as cameron and b p were concerned with their someone's there was nothing to intervene into there was no separate suit or no claim that ally you could make to pursue it subrogation rights so as a result l r u was denied the ability to pursue what its policy clearly indicated was an attachment point under which it would have the right to have it resolved in the not have it's insurance apply after that what do you do with the present counsel's argument that your interpretation effectively renders the liberty policy illusory for blowout totally false because number one if there are no indemnities the policy attaches immediately second your honor if their policy exists and it's simply not valid and let's say hypothetically it fails to meet the express negligence test then our policy attaches immediately the third scenario is it exists in the indemnities do apply a's concern at oral argument on the twelve the motion but it's not an issue that's foreign to the insurance world i think the benefits generally apply presently the benefits certainly didn't apply we had offered payment we had attempted to settle multiple times and the record is clear that we offered them money but we simply wanted to recognition the value of indemnities if they had simply said ok we won't have the nonfinancial we have the ability to either one if the insurance going to pursue indemnities then we're going to wait if the insurance says no we don't want to preserve the indemnities then at least preserve our right to do so here they rode the first horse totally changed  then precluded our right to get on the first horse to resolve that attachment when the policy when judge bar b a says well this will just take time his only resolution is rewrite the and so the timing issue would provide fifty million of benefits if they would simply preserve our rights to go figure out a diminishes if indemnities aren't valid then we don't have a recovery if the indemnities are valid then we would get a recovery but cameron in paragraphs four point three and four point five of their settlement agreement with  exist let's say cameron and trans ocean just never signed a master service agreement with and this policy doesn't contemplate any of their tens of thousands of business contacts some of whom have indemnity some don't but if they don't have an indemnity we attach immediately so automatically one here they shouldn't be worse off and that's what the part where dealers point is here but here there's no way they're worse off because number one if they pursue those inde recover then we attach on top of it is that fifty five hundred million dollars towers intact your honor if they choose not to pursue those and in these and they tell us then we can l i you can pursue them so under either scenario hardware dealers scenario never happens because they pursue indemnities as they did here for almost two years and we attach at the end of the process if the indemnities don't preclude our right to do so we step into their shoes and pursue that paragraph for three and four five don't give us the ability to do that i gave the court a handout that i hope you receive from the clerk's office because it raises one more critical issue that we've not discussed but it's in the briefing in the bottom right hand corner of the handout it a den of finds the last definition and the last definition is critical because judge barbee is decision on the contract is also an error because it invalidates the last clause you'll notice this is important because the other insurance clause immediately to the left says other insurance applies to a loss covered by this policy and it continues with the self insured language in the indemnity langley but the last definition talks about those psalms legally obligated to pay as damages judge over all the question raised about hardware dealers goes to this exact point because the last clause says whatever you are legally obligated to pay is damages their defense cameron's defense to b p and trans ocean was always we've got in and that goes to the heart of the last issue judge bar b age is completely ignored the briefing on it and the arguments on it and a simply said no you attach because the indemnities aren't presently available it ignores the last clause are you but does that mean that it's not picked up it is not good because this court standard that we briefed on page fifty eight fifty nine us bank versus arising case from this court the international truck versus engine corp says the test predicted versus non dicta is is it essential to the resolution of the case and because we re manned it it's essential that europe and its no ma'am it's one step further it's because you  on that persists issue that's what justice o'connor judge o'connor did in the northern district on remain and he had that one issue that you remain ended on whether there was independent injuries what then are you familiar with the texas practice insurance guy that you are the author of this very familiar why does it say to the extent that the fifth circuit held that an independent injury is required if you thought that we had held  why didn't you just say the fifth circuit is held in opposition you k h did it as well if they did then the next cost to some commentators believe the decision is incorrect in light of fail and my  authors the plaintiff's lawyer the language is a reflection of the plaintiff's lawyer and industry lawyer writing a book but it recognizes that perkins and great american touched on the issue but i think the key point to help the court here is that you would say it's not to the extent that you say that it explicitly did that's my interpretation of south dakota had to have you taken the position in texas cases because your firm is very well known for these this type of litigation that vale is controlling on this point and that there is no independent injurious required not that i'm aware i'm not aware of them what would you have been allowed to have given texas law right already they're going to argue bail but what is significant is the kill garland court that decided bail and the phillips court that decided cast in the ada has consistently moved away from fail but they have and in fact recently one of your colleagues wrote a brief that said male as is the law of log texas and spoke glowingly unveil one of the colleagues at your firm in test texas appeal not aware of them ok but the issue is one of the texas courts done since cast in it in the vast majority the cases that we cite deal with this exact issue on page fifty three fifty four fifty five we cite numerous cases that court that's my case tried it in the government county courts it got transferred by reallocation to think you think this is likely to have solved this inquiry i think that's one of the answers to justice clement a few minutes ago that there are other options here so we could wait for that case to see if it explicitly addresses and then we'll have an intermediate texas supreme court opinion and so then we wouldn't have to certify this one if that case ended up addressing the issue and they did it because in that case i convinced a jury there was no breach of contract but they found one by lation the insurance code so the issue is squarely teed up and for the court of appeals with no breach of contract can you have a statutory bad fa primary issue before the court we filed a application for an affair with supreme court court ask for a brief on the merits a huge sign they're interested in the issues our brief was filed last july o i think just anybody that's another alternative is there any problem for either party with waiting i get the other side is saying yes i'm sure that tell us on the rebuttal we have no problem waiting because we don't think the certification will do anything other than if we start a fight it would probably get done quicker than the ruling on this other case anyway regulatory authorities but it would seem to me that what you're saying because you brought in this intermediate courts in texas that you're saying that certification is the better answer than on bach because before it because you're saying that there is some doubt or cloud on bail and so that on bog to say fail controls and we were wrong if we weren't so inclined we may not be and i'm not prejudging matt that it's not not the right thing that certification because you think there's a cloud on bail itself on board would simply be a guess an eerie guess as well and i think that your guess is relatively easy a host of reasons that we discussed in the break so i think on bond would be quicker i think on mark would reach the ultimate same result but clearly the tech supreme court's going to side with texas law is so on bond is just going to be an eerie guess but we cite a tremendous amount of case law that has consistently followed cast aneta but if people that would want to go on bonk would want to go i mean don't you on bonk would be if we thought that we made the wrong choice before i clearly understand that and i was simply dealing with the area sure but if you wanted to certify the supreme court i think the better decision would be wait for me chocking to be decided it's not going to be settled and the issue is just squarely teed up in front of it and you persuasively organo think to me at least that the issue is articulated in a way you know sometimes with u s supreme court cases you know grant cert on one issue but you know when they rule back passage and talk about something else and fair it's very fair and you know as a prediction i think this court's yes and great american parkins were right you can't look at a case from the kill garland court in the late seventy's and bail and say that get it when you're saying you can't look at this and say this is still good log absolutely in fact we have to unless it's over old so we should have made a different determination at the time we decided great americans shouldn't we have  think you made the exact right decisions because remember great americans was premised on parkins right that there was a misunderstanding of parkins but parkins was based squarely on caste and they that right but it's the great american misunderstood parkins applicability i mean even your that i think is the most recent pronouncement of the texas supreme court on this issue that unless it overrules the other one now we have to look at both of them don't we and you can do so and in doing so you can conclude that due to the unique factors of bail that in the vast majority of other circumstances other than unique facts said in vail that kasten eight is the case law so they don't necessarily contradict each other you could take bail on its facts and recognize it in that limited fact pattern veil still good law but that's not an issue here it hasn't been an issue in these other cases whether coverage is founder coverage of the nine do you conceive that if you don't win on your policy question and you don't win on the five forty one and we've got a sim back the attorneys fees in light of america sure i think there's a clear fact issue on the four point four million of attorneys but i do want to comment here that the attorneys his issue is slightly unique as it wasn't because what they did was they had a five for one claim where they made a present claim for barbie to give them attorney's fees he shot them down in the rule fifty nine motion they said oh yeah we've got this other claim that we haven't presented we have we don't have discovery on it we don't have experts on it we haven't had a determination of reason in the sense that he's of fees but oh yeah give us more than three million dollars and do you get it automatically i mean thirty thirty eight  if plan presented if industry your discovery disclosures if you've got an expert well should they be allowed to do that now not as a rule fifty nine motion there's not a legion of who can i bring one now separate  present they had the ability to brief them on summary judgment they chose not to it was indispensable to their breach of contract claim on we have a need for saw that as they could never brought it sure and i recognise the case law i understand but that case law not i can't we go ahead and certify and then if they address the question in the other case and they'll tell us they addressed in the other case so that we don't wait months and months before getting the ball rolling in our case  recent that the most efficient way to handle the case most efficient i'd certainly say it is a way to have a case i don't think it's necessary because if there's not a breach of contract you don't get back  rebuttal your honor first i'd like to dispose of the attorney's fees issue i think first of all cameron did plead in its complaint attorney's fees and that's all cameron had to do it did not have to say which section of the law it was relying on and we know that because judge clement told us that in the in the in the alpine case which i can find the site  two point one point two there has been extensive discovery of attorneys eternity's fees much of a sense of discovery which is that there's been extensive discovery on attorneys fees our attorneys fees in the case that's in the that's in the can there has been factual discovery documents have been produced experts have testified on it that is that is actually teed up and that's the basis on which we made our motion to judge forty eight for turns so it's not a question of redoing but i want to go back to the chapters five forty one because i think that the questions that the court put to both counsel shed light on the basic miss connect disconnect here i mean chock a case is not a case as mr morton just described it where policy benefits were wrongfully denied he happily won a jury case where the contract was where he defeated the breach of contract case so you're dealing in m that was also a case where there was no wrong fully denied policy benefits at page one ninety six quoting from the cast not made a case ninety eight southwest second one eighty nine at page one ninety six the texas supreme court said yesterday that never brought and did not receive any can never brought and did not receive any contractual relief the only theories of liability at issue in the extra contracts one so casting naida and all of the cases that follow it stand for the proposition which is probably a correct one if you don't have one fully denied policy benefits you have to show that there was some other injury that makes perfect sense fail on the other hand and it's one of cases stands for the proposition that if there are wrongfully denied benefits that constitutes actual damages  and that's enough to go forward with the chapter foot by forty one claim so while the state courts and the federal courts have not always kept the lines straight the texas supreme court has kept the line straight v governs the situation where there are policy benefits that have been long fully denied their actual damages and cast a nato governs the case where policy benefits have not been wrongfully denied you must show an independent injury in that circumstance and it's a question of what is the best way to straighten to straighten that out i did go back and find a face that i couldn't call to mind when i was up here a few minutes ago on what the fifth circuit has said about dicta and its international truck and energy corp against bray three seventy two f third seven seventeen at seven twenty one fifth circuit two thousand and  four and the test that the first fifth circuit has laid down is that statement should be considered non binding dicta if they quote could have been deleted without seriously impairing the analytical foundations of the holding and being peripheral may not have received the following careful consideration of the court that ordered now between that and they put i gave you before from the united states opinion is not necessarily what the panel fully considers in the court so i mean only takes you so far you agree i would agree but in this instance you're in with respect to both you and judge clement that decision argument on the their their offensive claim rather than defending against yes well what mr morton didn't point out when he was quoting the last provision of the policy that on the last page of the policy actually in the same provision at record site thirty five ninety seven is a provision that says when loss is payable and what it says is cover under this policy will not apply a lesson until you or the insurer of the underlying insurance has paid or is obligated to pay full amount of such limits of liability and then i see my time is running out but when the amount of loss has been finally determined we meaning liberty will promptly pay you pay pay on your behalf the amount of the loss covered under this policy when cameron reached the settlement agreement with  actually absolutely right i'm not sure why he thinks it's in his favor to say we offered them less well they offered us less in order to save the policy limits that was not acceptable can't the camera thank you ron thank you for the briefing