move on to american trucking and transportation this is liberty mutual insurance eighteen one one hundred six and eighteen one three five one represented adek in the proceedings below adek i would suggest of the court to have the context of this dispute is very important in in determining of the many issues in it and the context is that this isn't a dispute between two insurance companies not a dispute between an insurance company and its insured this is particularly s makes it very clear that if there is an ambiguity it should not be construed against the insurer in favor of a stranger to the policy an entity that had nothing to do with the formation or negotiation of the policy in this case that's peerless there's no reason that any ambiguity that the district court may have found or not should in new york to their benefit distinguishable because in that case the court found the ambiguity in favor of designated that additional insurance people named in the policy not as not strangers to the policy but it's noteworthy that swank  also stated as a matter of law that the phrase the named insured which applies to this case created an ambiguity one of the inconsistency is this court has to deal with  should deal with rather it with respect to the district court's opinion below is the inconsistency that early in the opinion it concluded that any ambiguity should be construed in favor of ag yet when it came to the issue of late notice said that attic would not prevail on late notice because the policy says leap notice from the name to short it's inconsistent either either the named insured provision is an ambiguity to be construed in favor of attic or not it doesn't apply wouldn't apply to sept separate provisions of the policy more importantly the late notice is true in this case the late notice of claim four years after the accident weeks before trial when a mediation had also already been scheduled should be despondent of all issues in th the court below dismissed the notion that addict was prejudiced by a four year delay here on the and getting notice of getting involved on the eve of trial the reason i proposition that the notice must come from the named insured makes a lot of sense because as it stated because when when when the person giving notice is somebody who who incidentally becomes within the coverage of the of the policy because of factors that come into play but is not a contract in part how is that person supposed to know how is that person posed to know about what the what the policy provides about giving giving notice your own i stream valley stream didn't have this policy valley stream and it's insured didn't work named insurance they weren't contract ing part is to say that they're supposed to know they're supposed to know what the policy i think rendered to its insured provides about notice things to me bizarre you're under both month and a lot and new york cold looking at it from terms of a separate a separate ability of coverage that that a permissive user is treated as if it were his own policy or her own policy included in that is compliance with all conditions proceeding to coverage in the policy and both montana law and the new york law earth i think a clue full of cases that the additional insureds obligations to the insurer to provide notice are the same as a name to george the issue of how would they know who to contact generally the way that happens is counsel in a litigation or the insurance company as in peerless could have easily looked on the department of transportation safer site which lists every trucking company that's registered and who insurers there's no reason for any doubt about who insured aduc erhu insured watkins and shepherd addicts insurance policy explicitly states that note is given by the name insured in this fashion yes but again the named insured relying on the swank case has already been construed as an ambiguity in the policy and given that purely as a stranger to policy that ambiguity should not in your day or benefit the the  the only notice provided of this claim in terms of a tender of the defense and indemnification was to addicks insured watkins and sheppard by a fairly typical insurance company tender letter saying we look to you for coverage please turn this over to your liability carrier that letter proves a number of things one that peerless and it's insured had no idea who that carrier was at the time they hadn't done the research  simply looking on on the web as to what carrier covers this trucking company and in addition to which the letter is addressed to gentleman at watkins and shepherd trucking peerless in its papers below and  the this record seem to accept that argument i have maintained that coverage in notice of the claim to addicks insured was noticed attic that's contrary to how much earlier on are but if it were timely notice had more than likely the attic would have had the opportunity to investigate not only the the underlying case and provide a defense but also didn't investigate its own coverage claims is this person entitle the coverage if the investigation showed that they were properly a permissive user and had given them timely notice then the next analysis would be are there  they were informed there's a mediation going to take place in a couple of weeks and trials i think six or eight weeks out show up with a checkbook you know your position really boils down to as i see it that notice timely notice and prejudice which applies in montana really means only timely notice because any time notice is on time on time the insurance company is always in a position to say well if we had learned earlier we could have done more without specifying anything but my understanding of the montana cases is you actually have to prove prejudice is not true yes that is what precisely was not done by virtue of the notice coming when it did that would have been done had the notice been given earlier what's the support in the record for it and i might say to you that you know in the dim memories of the past long before i was here i went to trial in a section seven and he truscott he's six weeks after i got notice that we've been sued it can be done you could have investigated this claim whether or not it can be done is not the definition of prejudice your honor you may have prevailed and done what you had to do to represent your client that doesn't mean your client wasn't prejudiced by that  him from doing due diligence with respect to not only the coverage but the investigation he testified that you know in a moment's notice he had that's buzzwords due diligence where was he in the eight weeks what was he doing what couldn't he do in the eight weeks you're under and say any of that and what he did say as i read the record is that what you would have done if you had earlier notices you would have refused to in anyway their coverage determination has nothing to do with whether or not they were prejudiced with respect to the underlying case for four years peerless had or at least for two years from the commencement of the action peerless had assigned defense counsel conducted depositions conducted written discovery retained experts prepared for trial and then turned to an addict and said here how many depositions were conduct in the case below i don't know that your honor how many documents were produced i don't know that i didn't have the upper why is it unreasonable to prove that the time available to you was inadequate to review that material and indeed to go beyond yes your honor i think also in the record as mr mentions testimony that once they were informed by actually a liberty mutual representative that the mediation had been scheduled adek scrambled to assign a defense attorney in assuming the defense and reserving its rights to deny it had to assign defense counsel which you did who had literally days to prepare for the mediation to say nothing of the trial and had to get in touch with peerless and its defense counsel to ask for a copy the file mr mintz testified that he didn't even receive a copy of the underlying complaint until defense counsel had been assigned to attend the mediation to see is this mediation going to result in a reasonable settlement he literally did not have the pleading judgment interest or is dependent on the law of this state that determines liability in this case if adequate to prevail based upon construction of the policy under month panda law we believe that montana's ten percent interest rate for prejudgment interest would apply if on the other hand the court accepted that despite the liability risk retention act that these very specific new york insurance regulations on which fearless realize that cause them to prevail then it would be good new york's insurance rate of nine percent let me ask you one more question if i may really ar the federal courts under the doctrine certainly have the capacity in the power to construe that the law of the of the irrelevant states without certifying that request and you certainly could but here on the issue notice you know a whole at least not this whole group of subject use that raise questions of montana law that might best be resolved there for example is mr manches saying i could do more due diligence if i had more time a truism if ever there was one just sufficient to prove prejudice under the law of montana you've got the issue of whether the notice was timely in the first place and you should mind and to me or others your honor i think that the first of all must take issue with quantum of evidence in terms of sworn testimony from mr managed that you see there was more than that statement that we say needs a little more than that about that  but in terms of the panel law having to do with late notice the steadily case that we cited in the brief the court found that a five month delay was sufficient to deny coverage but that's compared to four years your honor years away montana has no such statute which i'm away no your honor i simply suggest that looking at the body of montana case law dealing with late notice i believe that the the record in this case would be sufficient to show that it has met its burden to prove prejudice when confronted with a case that's been going on for four years a few weeks before trial and handed the it please the court my name is marshall tasher attorney for pelleas cross appellants first i want to say that as far as the context is concerned whether or not adequate insurance coverage doesn't depend on whether there's other insurance coverage there's no law to support that going to the timing and a prejudice issue just to address some of the issues raised by matter sorry and actually the timing was it was in august when they admit they received notice the mediation did not occur until and it's in the record at a four hundred the mediation statement february third of the following year so that's five plus months so was in a couple weeks l be done in fact last month's second i would like to point out that prior to that the first statement we got was a letter from from rawls and henderson on behalf of attic denying coverage the letter they deny that they denied coverage but when you read the letter a particular page a one twenty four it says the underlying plaintiff's mohammad was an employee of addicts insured and thus and it short at the time of the accent such to the policy does not provide coverage to house or carpets for to raise a leg injury they denied coverage when you deny coverage you don't get to control the defense and there's no anticipation you're going to pay in fact they refuse to pay i will note that they have conceded that both the settlement was reasonable and the defense costs amounts are reasonable so where is the prejudice there i'll come back some of the what's the significance of the fact that they denied coverage well if they denied coverage they're saying well we would have done this we've done that what's the difference if they were going to paint deny coverage they already denied coverage many states new jersey one of them has case well for example as a matter of law you can't show prejudice when you  coverage on the merits anyway standard for duty to defend trial coverage right but they don't get to control the defense when you deny like that at best they had to pay for the defense they don't get to put their own attorney in they don't get to control the defense and in fact they haven't showed any prejudice that their with their vice president emitted that he would have done anything different he would not have paid anyway  what's your position on the sufficiency of mentions testimony claiming prejudice well again that's conclusory when you get to the facts he was asked would he have paid would he have done anything different he was actually asked was he any in in respect of the mediation in respect of getting up to speed for trial right but what's the purpose of getting up to speed from to trial if you're denying coverage anyway and but away he had plenty of time again it was five months he wouldn't have the right to control the defense at the trial because he was denying coverage so when he says when he talks about he would didn't do his due diligence his explain what do  done that would have had any actual effect on anything now extensive was the record in the underlying issues how many depositions how many documents your honor i all i know is the case was ready for trial i don't know how extensive the record was pretty simple case right yes i'm assuming there was depositions of the plaintiff and the defendants but i sitting here today off my memory i don't know it was all available for example in this case through discovery if they wanted to use that to show prejudice remember they had substantive issues this case is not about addict being regulated by new york it's about watkins being regulated by new york and it's week when new york's requirements when walk ins drives its trucks in new york and it's also about  contractual agreement to provide the coverage is required by walk ins to operated vehicles in new york in fact there's a mission by maginnis to manage the addict agreed to provide the coverage or is required by walk ins when operating vehicles in new york and this is done through their coverage conformance provision and effect is to admissions in their briefs and in this case in an addict's response reply brief they state quote peerless is correct that addicts contractually agreed to provide its insured the types of amounts of insurance coverage required by new york if the insured used a cover trucking unit in new york here the truckers being used in new york new york only allows the now we're  liability exclusion now they say well montana construes that differently but when you considering what new york requires and it's regulations and it's statute you look at new york law there's no doubt in new york law that insured means the insured seeking coverage and here and particularly with there's a separation short provision like there is in this case it doesn't apply in fact it's not even contested that under new york law that that regulation does not allow this type of exclusion why shouldn't we interpret the contract in accordance with its words to say that the the insurance provided by adding to the named insured does not imply that was my next argument and this is the swank case and this is the one place where the court below the court will err to two cases one place where the court aired and i don't think it's ambiguous by the way it's not ambiguous it's very clear it talks about exclusion that provided by addict to the named insured it doesn't say any insurer doesn't say an insured doesn't even say the insured is to the named insured there's no ambiguity here all the bullet point exclusions which they rely on that fall below that do not apply to additional insureds have to say anything just say the trucking liability insurance does not apply to the following but it didn't say that the name insured right and what the court erred it was a district court had the court held where you can't have a policy which provides more coverage to an additional insured then a named insured and that's just a pure error of law they mechanics supreme court and that's why i get a prize this case specifically in refer to no we cited and we discussed it but the court didn't refer to it so swank clearly makes clear two things one you can have more cover for an additional insured and this is the supreme court of montana is talking at t i don't agree with the way it's being distinguish it's not clear whether or not the additional insurance is like normal or are not name but are just identified by what they do or whether they're actually typed into the policy it just says they're and in fact in two thousand and twelve when the letter was sent and the court realized it really relied on this in part when you look at the policy it gives the name of a person to send the notice to jesse ellison there's no dispute that the two thousand and twelve letter was an address to jesse ellis and sometimes as luck he received it he responded a few shortly thereafter in two thousand and twelve so that's on page eighty fifty four  record they list jesse ellison as the person that received notice and i think it's important is the relationship between addict and watkins here watkins is the is the majority owner of  their employees go in and out of attic jesse ellison at one time was a counsel for addict he moved to counsel for watkins in fact his boss at the time was on the was a director of addict so the notice was receive  as set forth in this specific policy by jesse ellison but even if not there even if you forget that there is no prejudice here because of again they denied coverage they had do and we were just on that point one thing to note it also makes sense that watkins provides a notice because this policy only covers cover trucking units a cover trucking it is a walk ins truck so walk ins by it's nature would know of any accidents and that's why it was that's what may be one of the reasons why it was set up this way that watkins provides the notice as far as the interest rate we never argued that this is a new york contract what we argued this this is a montana contract whereby they agreed through the coverage conformance provision to provide the coverages required of new york so when you look at what coverages are required in new york you do look at new york law but you look at whether or not there was a breach of this contract and what logo has the contract it's montana law and it should have been ten percent which is undisputed and it's why case actually addresses that to it's a case that has a lot that's not discretionary it's ten percent and that's what should have been the the interest rate view on the underlying issue we should send it back for  reservation of rights a letter at which point addict chose to assume the defense and have the courts deal with the duties and obligations of the parties they've never denied coverage as in any reservation of writes a letter you have to articulate not only the provision of the policy but what that means to the insurer the person you're putting on notice of the reservation of rights that includes pointing out an exclusion provision on which basis coverage may be denied that is a reservation of rights letter if we had denied coverage we wouldn't have done anything to assume the defense were to reimburse peerless for the defense costs of did already pain we did jump in ready to assume the defense it just  mediation was in a matter of days and the matter was disposed of now with respect to  hannah questions during this case about whether or not an owner's life this policy would provide what new york requires under a quote owner's liability owner's policy of liability insurance which is the term of art under new york insurance regulations counsel did not advise the deponent that that is the term of art under new york insurance regulations to any person coast to coast if you asked about owners policy of  you wouldn't attach special meaning to it any more than if he'd been asked about a picnic table everyone knows what that is owner's policy of liability insurance but he did not advise mr manch was that that had a particular meaning and within new york peerless asserted that addict had waived certain coverage defenses because that asserted one of them that's just not coverage what works it just doesn't in the reservation of rights letter we informed peerless and it's insured