[00:00:14] Speaker 00:
Thank you, Your Honor.

[00:00:15] Speaker 00:
May I please the Court, Phil Talmadge here representing Roger May, try to reserve four minutes of rebuttal time if I could.

[00:00:22] Speaker 00:
As the Court is aware, this case involves insurance coverage for claims arising out of the salvage of treasure aboard the SS Islander, a vessel that sank in 1901 off the coast of Juneau, Alaska.

[00:00:34] Speaker 00:
When the salvers parted ways over their efforts to secure the treasure, and they had recovered some,

[00:00:42] Speaker 00:
they allocated responsibility for the assets of the salvage operation.

[00:00:48] Speaker 00:
Mr. May received the ability to do further salvage on the vessel, and implicit in that was his opportunity to have access to what was called intellectual property, but really was charts, maps, logs, notebooks, all sorts of tangible materials that related to the salvage operation that helped Salvor locate

[00:01:09] Speaker 00:
the wreck of the vessel for future salvage operations.

[00:01:14] Speaker 00:
This material was downloaded into electronic form, however, for purposes of a lien for one of the partners to the salvage operations.

[00:01:22] Speaker 00:
And so you have that electronic issue that came up.

[00:01:28] Speaker 00:
The partner refused to turn over the intellectual property to Mr. May, and he ended up suing for breach of contract for declaratory relief and for conversion.

[00:01:38] Speaker 00:
under Washington law, GAIC, Great American, denied a defense.

[00:01:44] Speaker 00:
It denied a defense under a reservation of rights.

[00:01:47] Speaker 00:
It did not conduct any kind of investigation.

[00:01:50] Speaker 00:
And the district court ultimately agreed that there was no duty to defend in this case erroneously.

[00:01:55] Speaker 00:
We believe that the district court should be reversed because the district court erred in its conclusions about the duty to defend and indemnify, as well as the contractual and extracontractual claims.

[00:02:05] Speaker 01:
Let me ask it this way.

[00:02:08] Speaker 01:
The insurance company owes a duty to defend and a duty to indemnify if there is an occurrence.

[00:02:16] Speaker 01:
And occurrence is defined in the policy as an accident, correct?

[00:02:21] Speaker 00:
It's not defined, but I think an accident has been the basis in Washington law for defining what constitutes an occurrence.

[00:02:29] Speaker 01:
But I'm to take occurrence as synonymous with accident.

[00:02:32] Speaker 00:
That's correct, Judge Fletcher, yes.

[00:02:34] Speaker 01:
And what you claim is an accident is the refusal to hand over the electronic information?

[00:02:41] Speaker 00:
Well, both the electronic information and the tangible source material

[00:02:45] Speaker 00:
the tangible maps and charts and all of the rest.

[00:02:49] Speaker 01:
But you're claiming that it's an accident within the meaning of the policy not to turn over those materials.

[00:02:55] Speaker 00:
It was indeed under Washington law because Washington law requires in terms of dealing with an accident that there be both a deliberate or volitional act and that there be an intent to inflict harm as a consequence of that volitional act.

[00:03:09] Speaker 00:
The latter component of the requirement for an accident under Washington law is not met in this case.

[00:03:16] Speaker 03:
And it's not... So Washington law defined... I thought an accident under Washington law had to have a... I'm looking at the Safeco against Butler.

[00:03:28] Speaker 03:
The result has to be unforeseen, involuntary, unexpected and unusual.

[00:03:32] Speaker 03:
Is that a correct statement of the law?

[00:03:35] Speaker 00:
That's a correct statement of Butler, Your Honor, but it's been refined in cases like Hamm and Rye and Webb.

[00:03:42] Speaker 00:
Judge Max's opinion in Webb is particularly significant, I think, in terms of requiring both that the act be volitional and that the harm or the result be intended by the party that's involved.

[00:03:53] Speaker 03:
But so here the act is not turning over the materials that they say they were entitled to.

[00:03:59] Speaker 03:
That's correct.

[00:04:00] Speaker 03:
And the result is they didn't get the materials that they wanted to have.

[00:04:06] Speaker 03:
And so I'm struggling to see how that is not 100% foreseeable from not handing it over to them.

[00:04:13] Speaker 00:
The harm that was inflicted was the damage to the salvage operations.

[00:04:18] Speaker 00:
Mr. May was deprived of the opportunity to conduct salvage operations because he didn't have the IP.

[00:04:24] Speaker 00:
So the intent to inflict that harm, the intent to inflict the

[00:04:28] Speaker 00:
the damage that he would not be able to conduct salvage operations was the second piece of the conversation.

[00:04:35] Speaker 00:
And if you look at cases like Hammond-Wright, you get the kid that starts a fire.

[00:04:38] Speaker 00:
I mean, pretty deliberate act.

[00:04:40] Speaker 00:
But the court concluded that it was an accident because the intent to harm, the intent to burn down a building was not there.

[00:04:48] Speaker 00:
You have Webb, which was Judge Max's opinion.

[00:04:51] Speaker 00:
where you have the guy shooting across the neighbor's property.

[00:04:54] Speaker 00:
Nuisance, trespass, assault, all very deliberate kinds of acts.

[00:04:59] Speaker 00:
It was considered to be an accident under those circumstances because the harm was not intended to be inflicted in the conduct of that activity.

[00:05:08] Speaker 00:
Same thing is true here.

[00:05:10] Speaker 00:
You have that situation where there is no indication that Bear, the former salvage partner, intended to deprive Mr. May of the opportunity to conduct salvage operations, which was the

[00:05:21] Speaker 00:
in fact, the harm that was felt.

[00:05:26] Speaker 00:
But rather, there was simply the claim as a matter of right that they were entitled to continue to hold the IP.

[00:05:32] Speaker 00:
And that IP was both in tangible form and in intangible form.

[00:05:39] Speaker 03:
He surely intended them not to have the IP that he didn't hand over, right?

[00:05:45] Speaker 00:
but didn't intend to deprive Mr. May of the opportunity to conduct salvage operations, which was the net effect of not having the IP.

[00:05:53] Speaker 00:
And that was the gravamen for the $7.5 million covenant judgment settlement.

[00:05:57] Speaker 00:
It wasn't because they didn't have this material.

[00:05:59] Speaker 00:
It's because they were deprived of the opportunity.

[00:06:02] Speaker 00:
Mr. May was deprived of the opportunity to conduct

[00:06:05] Speaker 00:
salvage operations and potential treasure of up to perhaps $60 million.

[00:06:10] Speaker 00:
That was the harm that was lost.

[00:06:12] Speaker 00:
But in addition, Your Honor, the thing that was a very clear-cut error on the part of the trial court here was Mr. May pleaded against his former salvage partners a claim of conversion.

[00:06:23] Speaker 00:
And in the

[00:06:24] Speaker 00:
In the denial letter by GAIC, conversion isn't mentioned, not even talked about.

[00:06:31] Speaker 00:
And in the district court opinion, Judge Kunar didn't address the issue of conversion whatsoever.

[00:06:37] Speaker 00:
In Washington laws, the court is aware, conversion is not an intentional tort.

[00:06:44] Speaker 00:
And you have a clear-cut split of authority across the country as to whether or not a claim of conversion can be an occurrence under a liability policy.

[00:06:53] Speaker 00:
defense counsel journal article that talks about the majority opinion and the dissenting opinion and a case out of New York, for example, Spodek that we cited there.

[00:07:03] Speaker 01:
But the mere fact that conversion might have been pleaded doesn't mean that the factual allegations giving rise to the alleged claim for conversion

[00:07:14] Speaker 01:
were unintentional.

[00:07:17] Speaker 01:
That is to say, if the facts pleaded are intentional, it doesn't matter that the tort of conversion includes unintentional acts if the facts pleaded are intentional acts.

[00:07:28] Speaker 00:
But Your Honor, under Washington law with respect to the duty to defend, which is of course broader than the duty to indemnify, you liberally construe the allegations in the complaint

[00:07:38] Speaker 01:
But were the allegations in the complaint at all susceptible to he accidentally didn't give me those materials?

[00:07:47] Speaker 00:
He did not intend to deprive Mr. May of the opportunity to conduct salvage operations as a result of the IP being deprived.

[00:07:56] Speaker 01:
But that's not the conversion claim.

[00:07:58] Speaker 01:
Conversion is

[00:08:00] Speaker 01:
he took it from me or withheld something from me that I was entitled to have.

[00:08:04] Speaker 01:
You're talking about consequences, not the elements of conversion.

[00:08:08] Speaker 00:
That's correct.

[00:08:09] Speaker 00:
But in this circumstance, we're talking about a circumstance where there's a claim of right.

[00:08:14] Speaker 00:
The former salvage partner is saying, hey, look, we have this lien that's ours.

[00:08:19] Speaker 00:
The IP is ours.

[00:08:20] Speaker 00:
We have a claim of right under the circumstances.

[00:08:23] Speaker 00:
So you can have a conversion under those circumstances and have it not be

[00:08:27] Speaker 00:
intentional conduct, not something that's barred under the definition of an occurrence and a liability policy.

[00:08:34] Speaker 00:
And in fact, you have case law from around the country that says that that's true.

[00:08:37] Speaker 00:
Under Alea London, a case that I argued actually on behalf of the insurance carrier,

[00:08:43] Speaker 00:
This is a situation where if there's any conceivable basis for recovery, any conceivable basis for recovery, you have to provide a defense or you have to investigate the circumstances.

[00:08:56] Speaker 00:
GAIC did none of that.

[00:08:58] Speaker 00:
They didn't defend.

[00:08:59] Speaker 00:
They didn't defend under a reservation of rights, which the Washington Supreme Court has directed them to do.

[00:09:05] Speaker 00:
And they didn't conduct any kind of investigation to determine what the nature of the claim regarding the IP was.

[00:09:12] Speaker 00:
Under the circumstances, they breached that duty to defend.

[00:09:16] Speaker 03:
Can I ask you to go back to Webb for a minute?

[00:09:19] Speaker 03:
That's the shooting case, right?

[00:09:21] Speaker 00:
Yes.

[00:09:22] Speaker 03:
And I think you were citing that for the proposition that an accident can cover an intentional act that results in unintended harm.

[00:09:35] Speaker 03:
If I remember correctly, in Webb, the definition of occurrence in the policy there covered not just an accident, but there was a second kind of occurrence that it covered that could be broader.

[00:09:47] Speaker 03:
And that was the definition that the court was relying on there.

[00:09:49] Speaker 00:
Is that wrong?

[00:09:50] Speaker 00:
It had a subjective element to it, Your Honor, neither expected nor intended from the standpoint the name ensured.

[00:09:56] Speaker 03:
But of course, in this policy- But that wasn't part of the accident definition.

[00:09:59] Speaker 03:
That was a separate component to the policy there, wasn't it?

[00:10:03] Speaker 00:
I'm trying to recall if that was the case or not, but the point I'm illustrating here is that it still could be an occurrence within the meaning of the definition of an accident by shooting across a neighbor's property.

[00:10:17] Speaker 03:
But here occurrence is defined in the policy, right?

[00:10:20] Speaker 03:
And it's defined just as an accident, right?

[00:10:24] Speaker 03:
Isn't that right?

[00:10:25] Speaker 00:
I seem to recall that occurrence was not defined, but accident has always been the basis for defining what an occurrence is under Washington law.

[00:10:33] Speaker 03:
I'm looking at page 880 of the ER, and I think this is the relevant policy.

[00:10:40] Speaker 03:
Paragraph 18, occurrence means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

[00:10:46] Speaker 00:
Yeah, if it is, Your Honor, it's simply an implementation of what is already Washington law.

[00:10:52] Speaker 00:
Equating accident with occurrence for all practical purposes So I mean I would if it's there I mean I think it doesn't make any difference in terms of the case law that describes what constitutes an accident in connection with an occurrence But the the consequential thing here is if you think about it driving down the road, you've got a lane of traffic

[00:11:12] Speaker 00:
and I'm driving down the road, I volitionally turn the wheel of my vehicle, and I bump into the car next to me in the neighboring lane.

[00:11:21] Speaker 00:
I've acted volitionally.

[00:11:22] Speaker 00:
I volitionally deliberately turned the wheel of the car.

[00:11:25] Speaker 00:
But I didn't intend to cause that accident.

[00:11:28] Speaker 00:
So in those circumstances, a policy covers that for obvious reasons.

[00:11:32] Speaker 00:
You don't have this exclusion.

[00:11:35] Speaker 00:
You don't have the lack of an occurrence that would preclude coverage in a traditional liability policy under those circumstances.

[00:11:44] Speaker 00:
You can have a circumstance where that action might not have been deliberate in a three-lane vehicle situation and a truck pushes me over into the lane of the vehicle to the right.

[00:11:54] Speaker 00:
It's not even a volitional act.

[00:11:56] Speaker 00:
You'd still have coverage because it's an accident in either circumstance.

[00:12:00] Speaker 00:
The same thing is true here.

[00:12:01] Speaker 00:
You have no intent on the part of Bayer, no evidence in the record to demonstrate the existence of any intent to deprive Mr. May of the opportunity to consult— Isn't it sufficient for purposes of what you're calling intent that it be the natural and probable consequence?

[00:12:17] Speaker 01:
Withholding this information or this material had exactly the consequence of which your client is complaining and it was entirely predictable and understandable that that's the consequence.

[00:12:28] Speaker 00:
But was that intended from the standpoint of Bayer?

[00:12:31] Speaker 00:
The answer is no.

[00:12:32] Speaker 01:
And how do you know that it's not intended?

[00:12:34] Speaker 01:
I mean, that it's clear that that's the consequence.

[00:12:37] Speaker 01:
Does he say, you know, I'm very, very sorry that it's going to have this consequence.

[00:12:42] Speaker 01:
I don't want this to have this consequence.

[00:12:44] Speaker 01:
But nonetheless, I'm not going to give it to you.

[00:12:46] Speaker 01:
Is that what you're claiming is happening?

[00:12:47] Speaker 00:
There's no evidence in the record that there's any intent on the part of Bayer to deprive Mr. May of the opportunity to conduct salvage operations.

[00:12:55] Speaker 00:
They insisted as a matter of right that they had a right to the IP.

[00:12:58] Speaker 00:
But they didn't say anything about their intentional desire to deprive him of the opportunity to conduct the salvage operations, nor does it necessarily follow.

[00:13:09] Speaker 00:
They're insisting on their security interest.

[00:13:12] Speaker 00:
They had a security interest, a lean interest under their agreement.

[00:13:17] Speaker 00:
But that doesn't necessarily mean that they intended to deprive him of the opportunity to conduct salvage operations, that they had agreed to allocate to him as part of their divorce, their corporate divorce.

[00:13:29] Speaker 00:
And that's the circumstance here.

[00:13:32] Speaker 00:
Before I stand down, I do want to address a couple of points relating to exclusions that GAIC raises.

[00:13:38] Speaker 00:
GIC did not argue in its denial letter either the electronic data exclusion or the care custody and control exclusion in the policy.

[00:13:49] Speaker 00:
And under Washington law, vision one, they had an obligation to do that.

[00:13:54] Speaker 00:
Insurance commissioner claim regulations require them to articulate the reasons for their denial of a claim.

[00:14:00] Speaker 00:
They have to do that in that denial letter.

[00:14:01] Speaker 00:
The denial letter is silent on this point.

[00:14:04] Speaker 00:
And in fact, their complaint

[00:14:05] Speaker 00:
is silent on both of those exclusions.

[00:14:08] Speaker 00:
The exclusion for care custody and control was raised for the first time before this court.

[00:14:14] Speaker 00:
So it's an issue that's raised for the first time on appeal.

[00:14:16] Speaker 00:
And the issue of the data, the electronic data exclusion was raised for the first time before the district court.

[00:14:25] Speaker 00:
but not in their denial letter.

[00:14:26] Speaker 00:
And again, I think both of those exclusions would be precluded from consideration by the court.

[00:14:31] Speaker 00:
The electronic data exclusion in particular is inapplicable because Mr. May's request was for all of the IP, tangible, intangible, necessary for salvage operations.

[00:14:43] Speaker 00:
I mean, can you imagine the conduct of salvage operations without the necessary maps

[00:14:48] Speaker 00:
and charts and all of the other kinds of things that somebody would need to have to operate a salvage operation with respect to the location of a wreck off the coast of Alaska.

[00:14:58] Speaker 03:
So you're down, or you're almost out of time.

[00:15:01] Speaker 03:
You did want to reserve.

[00:15:02] Speaker 00:
I do.

[00:15:03] Speaker 00:
Let me reserve the additional time.

[00:15:04] Speaker 00:
But for all these reasons, under the liberal definition of a duty to defend in Washington law, GAIC breached it, and therefore the district court committed error.

[00:15:12] Speaker 00:
Thank you.

[00:15:17] Speaker 03:
Mr. Hampton.

[00:15:18] Speaker 02:
Good morning.

[00:15:19] Speaker 02:
May I please the court.

[00:15:20] Speaker 02:
I'm Joe Hampton and Daniel Mackenzie is with me on the brief.

[00:15:23] Speaker 02:
We're representing great American right out of the gate.

[00:15:26] Speaker 02:
I have to correct some errors.

[00:15:28] Speaker 02:
Number one, an accident, which occurrence is defined as has two parts.

[00:15:34] Speaker 02:
First part is subjective.

[00:15:37] Speaker 02:
The second part is objective.

[00:15:40] Speaker 02:
And the second part is what is raising most of the questions before the court today.

[00:15:45] Speaker 02:
The reasonable, foreseeable consequences of a deliberate act is the test.

[00:15:51] Speaker 02:
And here, where you have a corpus of information, and that corpus of information is willfully withheld from another party,

[00:16:01] Speaker 02:
It stands to reason that that other party is not going to be able to use it.

[00:16:05] Speaker 02:
We're not talking about a tool with a whole bunch of different functions, folks.

[00:16:10] Speaker 02:
Your honors, we're talking about supposedly this treasure map that shows exactly where the vessel went down in the Pacific Ocean.

[00:16:18] Speaker 02:
It has no other reason for existence other than to point the direction to where this vessel went down.

[00:16:26] Speaker 02:
It's also electronic.

[00:16:30] Speaker 02:
It is purely electronic, and that's what Mr. May pled.

[00:16:33] Speaker 01:
Well, I don't think some of the material is electronic, but I don't think all of it is.

[00:16:39] Speaker 02:
Actually, Your Honor, let's step back a minute.

[00:16:42] Speaker 02:
Okay, when we're talking about the duty to defend, we're talking about two documents, those eight corners.

[00:16:47] Speaker 02:
The complaint, and we're talking about the policy.

[00:16:49] Speaker 02:
Under the complaint, Mr. May alleged

[00:16:53] Speaker 02:
twice at least, that all of the information was downloaded.

[00:17:00] Speaker 02:
And he was demanding the downloaded information on its storage devices from Bayer and Cattell.

[00:17:08] Speaker 02:
That's what he pled.

[00:17:09] Speaker 02:
He is the master of his complaint.

[00:17:11] Speaker 02:
As Judge Kuhnauer below observed, this is a case about intellectual property.

[00:17:18] Speaker 02:
He pled it 35 times in his complaint.

[00:17:20] Speaker 01:
But intellectual property is not necessarily in an electronic form.

[00:17:22] Speaker 01:
I don't think it's all electronic.

[00:17:24] Speaker 01:
And I don't think that's your strongest argument.

[00:17:26] Speaker 02:
I know.

[00:17:28] Speaker 02:
That's true.

[00:17:29] Speaker 02:
But it is all electronic, Your Honor.

[00:17:30] Speaker 02:
In fact, if you want to flip over for a minute to the duty to indemnify, you look at the actual facts.

[00:17:38] Speaker 02:
And you look at the actual facts, Mr. May did get the intellectual property on page 303.

[00:17:45] Speaker 02:
You can see it's all electronic devices.

[00:17:48] Speaker 02:
So the proposition that this was not downloaded and there's a map someplace is not pled and it's not the truth.

[00:17:58] Speaker 02:
Now, on the occurrence issue, your honors have focused in on the big problem here.

[00:18:05] Speaker 02:
The big problem here for Mr. May is that he pled into an exclusion.

[00:18:10] Speaker 02:
He pled into numerous exclusions.

[00:18:12] Speaker 02:
And he pled himself out of coverage by doing so when he said,

[00:18:17] Speaker 02:
Bear, you have my property, or the property that belongs to me.

[00:18:22] Speaker 02:
You need to give it back to me, because if you don't give it back to me, I cannot continue the salvage operations.

[00:18:30] Speaker 02:
So in that allegation, he is telling the other side, you have intentionally taken it from me, and I know what the result is going to be.

[00:18:41] Speaker 02:
My colleague says that Great American is a stop from asserting other coverage defenses that were not explicitly raised in the denial letter.

[00:18:54] Speaker 02:
Again, his arguments don't go all the way to fully disclosing what Washington law is.

[00:19:00] Speaker 02:
Washington law says if the insurance company raises a coverage defense later,

[00:19:08] Speaker 02:
It can be stopped from arguing it in court if there is prejudice resulting from that failure to disclose it.

[00:19:18] Speaker 02:
Mr. May, having access to his assignors, never put any evidence before the court of any prejudice from Great American not asserting those earlier.

[00:19:32] Speaker 02:
And those exclusions pretty clearly apply.

[00:19:36] Speaker 02:
We've already talked about electronic data.

[00:19:39] Speaker 02:
There is not only an electronic data exclusion,

[00:19:43] Speaker 02:
But there is a carve out from the definition of property damage for electronic data.

[00:19:50] Speaker 02:
And if you look at it closely, you'll see also that electronic data is not only the bits and bytes that exist in cyberspace, but it's also defined as the physical, tangible objects that store it.

[00:20:09] Speaker 02:
multiple terabytes devices you will see on ER 303.

[00:20:18] Speaker 02:
In terms of the care, custody, and control exclusion, he pled right into it again.

[00:20:24] Speaker 02:
He said, you have it.

[00:20:26] Speaker 02:
I want it.

[00:20:26] Speaker 02:
Give it to me.

[00:20:28] Speaker 02:
And he didn't get it until they settled.

[00:20:30] Speaker 02:
So clearly, this property, if loss of use is property damage, which the policy says it is,

[00:20:38] Speaker 02:
The loss of use occurred and the property damage occurred while it was in the care custody and control of the insureds.

[00:20:51] Speaker 02:
Oh, there's a couple of.

[00:20:54] Speaker 02:
estoppel cases I wanted to point the court to.

[00:20:56] Speaker 02:
One of them is Bosco versus Pitts and Still.

[00:21:00] Speaker 02:
And that demonstrates what prejudice looks like.

[00:21:03] Speaker 02:
The other one is James Torena-Fine and Holmes, which demonstrates what prejudice is not about.

[00:21:11] Speaker 02:
I want to switch a moment to the whole discussion and argument on there being a conversion claim.

[00:21:19] Speaker 02:
in the complaint.

[00:21:20] Speaker 02:
That's very true.

[00:21:21] Speaker 02:
There is a conversion claim in the complaint, but as Judge Fletcher has indicated, what we look at are the allegations of the complaint.

[00:21:31] Speaker 02:
The case law I'd point the court to is Grange Insurance versus Roberts, which is right on point because it tells us, don't look at those labels, but look at the facts alleged.

[00:21:42] Speaker 02:
In Grange Insurance versus Roberts, the plaintiff was suing on the basis of a claim for outrage.

[00:21:54] Speaker 02:
And outrage can be based upon a whole range of different types of misconduct, including recklessness.

[00:22:01] Speaker 02:
And so there was an argument that, well,

[00:22:04] Speaker 02:
Because outrage can be based upon recklessness, then there isn't the intent to cause harm, and therefore there could be an occurrence.

[00:22:14] Speaker 02:
The court rejected that.

[00:22:15] Speaker 02:
The court said, don't look at the label, look at the allegations.

[00:22:19] Speaker 02:
When you look at the allegations, you can see that they're claiming intentional actions.

[00:22:34] Speaker 02:
Two things, two last things.

[00:22:39] Speaker 02:
The complaint doesn't need interpretation.

[00:22:43] Speaker 02:
We've heard a lot about and you've seen a lot in the briefing about the complaint has to be liberally construed to give the insured the benefit of the doubt and any ambiguities are resolved in favor of the possibility of a covered claim.

[00:23:01] Speaker 02:
Well, this complaint doesn't need any interpretation on the key issues.

[00:23:06] Speaker 02:
It's really clear.

[00:23:08] Speaker 02:
He says, you took my stuff.

[00:23:11] Speaker 02:
I want it.

[00:23:11] Speaker 02:
I've demanded it twice.

[00:23:13] Speaker 02:
You won't give it back.

[00:23:16] Speaker 02:
There's nothing to be interpreted.

[00:23:24] Speaker 02:
Judge Kuhnauer, practicing in this state for nearly 60 years, on the bench for about 40 years, knows Washington law.

[00:23:35] Speaker 02:
He made the right decision.

[00:23:37] Speaker 02:
This court should affirm him and tell Mr. May that he needs to find a different way to get money for all that gold that's on the bottom of the ocean, unless the court has any questions.

[00:23:53] Speaker 03:
Thank you.

[00:24:04] Speaker 00:
Just a couple of points on rebuttal, Your Honor.

[00:24:06] Speaker 00:
I mean, first of all, in terms of the denial letter,

[00:24:10] Speaker 00:
Council ignores the most recent Washington Supreme Court case on the proposition of the obligation of the insurer to include within the denial letter all bases for denial.

[00:24:21] Speaker 00:
And that is vision one, which we've cited to the court and we asked the court to take a look at that.

[00:24:25] Speaker 00:
There's also WAC 284-30-380 that deals with these kinds of denial letters.

[00:24:31] Speaker 00:
And clearly in this case, all of these exclusionary arguments that the insurance company is raising are raised for the first time.

[00:24:39] Speaker 00:
in the course of litigation long after the denial letter to the prejudice of

[00:24:44] Speaker 00:
of Mr. May.

[00:24:46] Speaker 00:
Secondly, with respect to this question of an occurrence, you didn't hear counsel stand up and say in any way, shape, and form that there was any demonstration in the complaint that there was an intent on the part of Bayer to deny Mr. May the opportunity to conduct salvage operations.

[00:25:03] Speaker 00:
There was an intent to deny him the access to the IP because they were insisting upon their claim of right with respect to that lien.

[00:25:12] Speaker 00:
But there was no indication that they intended to harm him, and the harm was not so much the lack of the IP as it was the denial of the opportunity to conduct salvage operations.

[00:25:22] Speaker 00:
No intent to deprive him of that opportunity.

[00:25:25] Speaker 03:
The third point I- Counsel, you're over your time, but I think we have the argument.

[00:25:30] Speaker 00:
I think, okay, thanks, Your Honor.

[00:25:32] Speaker 00:
Thank you.

[00:25:33] Speaker 00:
Thank you both.

[00:25:33] Speaker 03:
We thank both counsel for their arguments and the cases submitted.