[00:00:00] Speaker 00:
If I may reserve three minutes for rebuttal? Yes.

[00:00:03] Speaker 00:
May it please the court, Nancy Adams for Golden Eagle and Peerless. I thought I would start with the jurisdictional issues that the court asked us to address with respect to PG&E. And there are two separate reasons this court has jurisdiction over the stay order. The first is under the Moses Cohn Doctrine, which stands for the proposition that a stay order is appealable if that order effectively places a plaintiff, such as the insurers, out of court. This court has routinely held and routinely exercised jurisdiction over state orders that are lengthy, indefinite, or both, whether PG&E, Doe v. Fitzgerald, Blue Cross and Blue Shield.

[00:00:44] Speaker 00:
Here the order is both indefinite and it's also lengthy.

[00:00:48] Speaker 04:
I mean, you know, this case is not a lot like Moses H. Cohn, where you had basically identical cases and the federal one was stopped, the other would then... go to judgment, be raised true to Cotta, and block the federal case so it was dead and done. This case is going to go forward. I mean, what happens in the state court in the underlying suit is not going to moot the case in the Moses H. Cohn sense, but our case law seems to have gone further and extended Moses Cohn to even when it's not a dead lawsuit, and it will go forward, but it's just an...

[00:01:28] Speaker 04:
such an indefinite delay that it's tantamount to being put out of court.

[00:01:33] Speaker 04:
And so I take it you're really relying more on our extension of Moses H. Cohn than Moses H. Cohn itself.

[00:01:39] Speaker 00:
Yeah, how it's been interpreted so broadly. And you see that in PG&E. You see that in Doe versus Fitzgerald, Blue Cross and Blue Shield. And I think what's particularly important here is the context. And that is that when an insurer does the right thing and it makes the decision to defend instead of deny, and here the insurers initially denied coverage and then upon reconsideration agreed to provide a defense, it did so with the understanding it would have an expeditious resolution of that coverage issue.

[00:02:09] Speaker 00:
This lawsuit, this declaratory judgment action, has been pending for over two years. That is not an expeditious resolution of a coverage issue.

[00:02:18] Speaker 04:
But the second ground, which is the collateral order doctrine— It doesn't seem like it's really divorced from the merits, given that a very significant portion of your briefing quite logically relies on how easy the merits are as an argument for not deferring them. I mean, you're saying Gordon is very much on point and therefore this should have been resolved. So it's not really divorced from the merits in the way that one would normally think of a collateral order as having to be.

[00:02:51] Speaker 00:
So the way we would look at it is it is a separate issue from the merits because what we have is we have a district court that is presently refusing to adjudicate on the merits, and that is an important issue separate from those merits. What this state order is doing is effectively refusing to adjudicate a declaratory judgment action more broadly, and then more particularly, the court is refusing to entertain a Rule 12C motion on the applicability of the sexual abuse and molestation exclusion or the same exclusion more particularly.

[00:03:26] Speaker 00:
Ms.

[00:03:27] Speaker 03:
Adams, I guess we leave litigants like you in kind of a, I guess, maybe an easier or more difficult position. But most of our cases see a fork in the road and take it with respect to whether this is better viewed under Moses Cohn or under a collateral order doctrine.

[00:03:50] Speaker 03:
There's some tension there. It's not clear under the requirements that anything could actually be both. But do you have a preference for one or the other in terms of how we would resolve it?

[00:04:01] Speaker 00:
I think from our view, from the insurer's view, both are applicable. With respect to Moses Cohn, it is indefinite that it is being triggered by an occurrence that is external. That's PG&E, and that is the resolution of the underlying case. There is no trial date. Discovery is ongoing. Presumably there will be appeals. And although Contra Costa says at some point it will be over, I mean, at PG&E it said this isn't the standard.

[00:04:28] Speaker 04:
What is the current status? Is there a discovery cutoff?

[00:04:32] Speaker 00:
There was an amended complaint that was filed. Motions to dismiss or mirrors were filed. Rulings on those were in April. There's a status conference, I want to say June 11th.

[00:04:44] Speaker 00:
Discovery is ongoing. There are depositions, my understanding, that are also being scheduled.

[00:04:49] Speaker 04:
Is there a discovery cutoff at this point? Has some date been set?

[00:04:54] Speaker 00:
I'm not aware of one. I know that discovery is ongoing.

[00:04:57] Speaker 03:
I guess it seems like this shouldn't be an uncommon approach or at least attempted approach in coverage disputes where you have the underlying action and the defense, and then the insurer wants a declaration of coverage one way or the other. And then there might be a sense that you want to avoid the parallel litigation. But I don't see anything in the briefs on either side that points us to how we've usually dealt with this, notwithstanding the volume of cases that involve either the appellate jurisdiction issue or the land estate question.

[00:05:42] Speaker 03:
what am I missing? It seems I get your point that you'd rather it go ahead, but it seems like a perfectly sensible way to have parallel actions as, in fact, you decided to do by trying to get a federal deck action on top of an underlying state action.

[00:05:59] Speaker 03:
Is this the, I mean, where should we look to try to make sure that we're not doing something that will upset the general practice of insurers and insureds in these cases?

[00:06:09] Speaker 00:
So that's a great question on the general practice of insurers and insureds. So the courts, as I indicated before, generally prefer that an insurer file a declaratory judgment action, defend, file a declaratory judgment action. What is happening is when the carriers are doing this, motions to stay are being filed. They're lasting literally four years. And so when an insurer is making a decision about whether to provide a defense or not, at some point, the fact that these cases are being stayed is going to be a problem.

[00:06:40] Speaker 03:
But they're lasting for years to allow the defense to play out in a way that could inform the coverage action. What's wrong with that?

[00:06:47] Speaker 00:
Because it's not necessary. Here there's a fundamental error of law that was made by the district court. The district court stated that the application of the abuse or molestation exclusion, we call it a SAM exclusion, on which plaintiffs rely depends on factual issues, whether Doe was in Kamek's care, custody, and control, and whether Kamek was negligent, in the employment investigation, supervision, retention, or failure to report the perpetrator.

[00:07:15] Speaker 00:
That is not necessary. The duty to defend is determined by comparing the allegations in the complaint with the policy. That is not a controversial or novel proposition. It is, whether you want to call it the four corners rule, the eight corners rule, you compare the allegations with what is in the policy. The SAM exclusion on its face is applicable to bar coverage for this claim. There is no need to resolve underlying facts. And in Gordon, they didn't need the underlying facts.

[00:07:45] Speaker 04:
The court, the appellate court in California... So what would be, what would follow if in the underlying state court litigation, it was to be determined that, you know, Doe was not in Kamek's care, custody, and control, what would follow?

[00:08:07] Speaker 00:
It would be our position that there's still no coverage. The policy bars coverage for plaintiffs making allegations such as this. The fact that Contra Costa may or may not be liable is irrelevant.

[00:08:22] Speaker 04:
So there's no obligation to defend someone who is wrongly being tagged with molestation of someone else?

[00:08:32] Speaker 00:
That's correct, and I'll give you an example.

[00:08:35] Speaker 00:
Courts across the country routinely hold that there is no coverage for a perpetrator of a sexual abuse claim for numerous reasons. It's not an accident when you sexually assault a minor. It is not unusual for the perpetrator to say, I didn't do it. If that were the standard, then we would be defending all of those cases, and that's not accurate. It's based on the allegations.

[00:08:56] Speaker 04:
And the same thing is true for the derivative party. So if they... deny the connection that would give them secondary liability, you think that that's just irrelevant to the coverage question?

[00:09:11] Speaker 00:
It's a liability question. It is not a coverage question. The coverage is determined by the plaintiff's allegations. And in fact, in Gordon, one of the arguments that the insured, well, actually, it was the plaintiff's assassinate. But what was being argued is that there the insurance company didn't put forward affirmative evidence demonstrating that that what the facts were. And the court said, no, it's based on the allegations in the complaint.

[00:09:35] Speaker 04:
Your position is that in assessing the second Landis factor, that the court essentially committed a legal error because it identified factual issues as being relevant that legally are not relevant.

[00:09:54] Speaker 00:
Not essentially, it did commit a legal error by not doing the traditional, comparing the allegations of the complaint with the terms of the policy and instead finding that these liability issues somehow bore upon coverage.

[00:10:08] Speaker 03:
Well, what do we do with – I mean, these are all questions of state law embedded into this federal standard. What do we do with – what does the California Supreme Court mean when it says in Montrose that facts extrinsic to those eight corners can help determine coverage?

[00:10:25] Speaker 00:
So two things there. One is what is an extrinsic fact? So an extrinsic fact is something that bears upon coverage. An example, I issue an auto policy. It provides coverage if you're driving a Jeep. Plaintiff alleges that they were involved in an accident. The insured was driving a Camaro. Aside from the fact I don't know how you distinct, can't tell what's a Jeep and what's a Camaro, the insurer finds out, in fact, it was a Jeep. That is an extrinsic evidence that bears upon coverage, and thus you would provide coverage. Another example is the Great American case, which is cited in the briefs.

[00:10:59] Speaker 00:
the court held that a catalog, which demonstrated the potential for advertising, is an extrinsic fact. Those are extrinsic facts that bear upon coverage. Whether or not you committed or didn't commit what the plaintiff is alleging is not. And secondly, in Montrose, what the court was concerned about were issues of intent. It was important to make sure that where an insurer is taking the position that an insured did not negligently do something, but instead did they intentionally did something to try to trigger the expected or intended exclusion or to say it's not an occurrence.

[00:11:37] Speaker 00:
Effectively, what the insurer is doing is jumping sides and joining forces with the plaintiff because now they're both arguing it's intentional conduct. That's what Montrose was concerned about.

[00:11:49] Speaker 03:
How isn't that happening in this case where the same coverage that the coverage determination overlaps the question of whether the insured was negligent or, you know, part of culpable in some way.

[00:12:08] Speaker 00:
Because that's not the issue that we're not we're not litigating whether it's true or not. What we're what we're asking the court to determine is that in the complaint, the plaintiff alleges that she was within the care custody and control of Contra Costa. And because she was in because that's the allegation, there is no coverage. We're not intending to do discovery on that. It is just basically looking again at the policy. You look at the allegations and the complaint. When you compare the two, there is no coverage. All right.

[00:12:38] Speaker 04:
You want to save your time?

[00:12:40] Speaker 00:
Yes, please. All right.

[00:12:41] Speaker 04:
Thank you. Thank you, counsel. We will hear now from Mr. Williams.

[00:12:59] Speaker 01:
Good morning. May it please the court. John Williams on behalf of Appley, Mr. Kamek, and Contra Costa Ballet, who I'll refer to as CCB in my argument. I'll first address the jurisdiction question that was raised. I think we briefed this pretty thoroughly to the court, but it's our position that the stay order is not appealable under Moses Cohn. It does not put Golden Eagle out of court. Instead, it merely postpones the the determination on the merits of the issue?

[00:13:28] Speaker 04:
In PG&E, we extended Moses H. Cohn to postponement cases. I mean, Moses H. Cohn is not a postponement case. I agree with that. You're dead. It's never a coming back case. But PG&E is not that case. It is a postponement case, and we've said it applies.

[00:13:47] Speaker 01:
I would argue that in this case, the relevant coverage issues have not been dismissed. They've merely been...

[00:13:55] Speaker 04:
delayed in terms of trying to get... But we said in PG&E that if you're subject to an indefinite delay that stretches out for, in that case, at least 18 months and no prospect of the case coming back, that that fits Moses H. Cohn. Maybe that wasn't right as an original matter, but that's what we said, and it sure seems like it fits this case.

[00:14:17] Speaker 01:
I'm not sure that I would agree with the characterization of indefinite delay here. There has been delay. I think the parties originally took a run at settlement And that caused some delay?

[00:14:25] Speaker 04:
At this point, the stay is open-ended. There's no prospect this case, the case in Contra Costa County Superior Court, is going to go to trial in any foreseeable period within the immediate future.

[00:14:43] Speaker 01:
A few comments on that. I don't know that this was President PG&E, but there is a robust review process of the stay order that the district court built in where the parties have to provide a status report every 90 days to let the district court know what the status is of the underlying case. Those status reports have been filed jointly by all parties. There has never been an issue.

[00:15:05] Speaker 04:
Do you agree with counsel's description of the current status that discovery is ongoing, a discovery cutoff has not been set, no trial date has been set, and there's an upcoming status conference in June? Is that all correct?

[00:15:18] Speaker 01:
I agree with that, and I believe that in that – Doesn't that seem awfully open-ended?

[00:15:22] Speaker 04:
We're already, what, at 16 months already?

[00:15:25] Speaker 01:
Well, again, I think there's reasons for why it took as long as it did. Again, the parties tried to engage in mediation, tried to get the case globally settled. That didn't occur. Then there were subsequent amendments made to the operative pleadings. which were then challenged on demur. We had a demur ruling, so there was motions on those demurs.

[00:15:48] Speaker 03:
But meanwhile, the insurer is unable to proceed. And why the status reports should change anything between having appellate jurisdiction now or three status reports in the future, I guess I'm just not sure where in our doctrine suggests that makes a difference once the delays subside.

[00:16:11] Speaker 01:
I suppose it gives the opportunity for Golden Eagle to come back to the district court and raise these arguments and say to the district court, hey, this is taking way too long. We'd like you to reconsider this day. As far as I know, and Golden Eagle can tell you otherwise, they've never done that. So there is a process for them to raise their hand and say this is taking too long. It's causing us prejudice.

[00:16:34] Speaker 01:
and we need to get this back on calendar, and that has not been done.

[00:16:37] Speaker 03:
Mr. Williams, could you pick up on where I left off with your friend in terms of why anything that happens in the state court should matter to the eight corners question of coverage?

[00:16:51] Speaker 01:
Well, it's interesting. The Rule 12 motion that was brought here was both on the duty to defend and indemnify, and I think that it's an easier question for the court when you look at the issue of indemnification. Indemnification is going to require an adjudication of the underlying state court action to know what the findings are there and whether that is a claim that needs to be – Why is that true?

[00:17:14] Speaker 04:
I mean the claim here is for molestation. The policy has a blanket exclusion for all liability arising out of molestation.

[00:17:27] Speaker 01:
It's negligence as to my client. There's a general negligence claim as to my client. That claim survived demur. There's a negligence supervision and hiring claim as well and a civil rights claim.

[00:17:41] Speaker 04:
But it's only negligent supervision to the extent that it's attached to molestation as the underlying claim.

[00:17:50] Speaker 01:
Right, but with respect to the general negligence claim, that is more broadly pledged. And that is a general negligence claim that has survived and is in this claim. It remains in the state court case as well.

[00:18:02] Speaker 02:
So is it your position that counsel on the other side, that their position basically is wrong, that we looked at the terms of the insurance and it has the SAM exclusion, and we look at the complaint and the complaint is alleging molestation, and so therefore they are not going to be responsible, even if you're found, if the perpetrator is found innocent, they say, hey, we're not on the hook. So is that just a wrong reading?

[00:18:29] Speaker 01:
We would disagree with that. And I think it's important that we look at that question in context, because the way this was framed for the district court was on a stay motion and looking at the Landis factor. So that dealt with the second Landis factor. And it's also important to note that under Landis, this is an issue of discretion. So we're here talking about possibly a bright line formulation, what you do four corners, eight corners, how you do that. And I think that it's important that the district court judge under Landis has the discretion to look at these factors.

[00:19:04] Speaker 03:
But why wouldn't it be an abuse of discretion if there's nothing you can tell us here that would move the needle from state court on these questions, primarily of the duty to defend, but also just coverage generally indemnification?

[00:19:21] Speaker 03:
Don't you have to show in order for the Landis stay to work at all that there's something that will happen in state court where both there's a requirement of coverage and there's a judgment that falls outside of this exception?

[00:19:46] Speaker 01:
Well, again, we talked about extrinsic facts under Montrose. And the fact that an insurer cannot build a fortress of the pleadings of the third party and then hide behind it. It has to recognize these extrinsic facts.

[00:20:01] Speaker 04:
What's an extrinsic fact that takes it out of the coverage bar?

[00:20:05] Speaker 01:
CCB has no record of Jane Doe ever being a student.

[00:20:10] Speaker 01:
That would just mean that there's no liability, not that the exclusion – That means they have been sued for negligence on an unmeritorious claim, and they are seeking a defense for that claim.

[00:20:23] Speaker 03:
But the suit for negligence, as I understand it, is exactly what takes it out of coverage. Why is that not correct?

[00:20:30] Speaker 01:
Well, if it's an unmeritorious claim, at that point – and these facts that are extrinsic that are known to the insured – that would suggest that that exclusion doesn't apply, and maybe I should back up a step. The presumption is that there's coverage under this policy. That is the presumption. It is the insurer's duty to demonstrate that the exclusion applies.

[00:20:57] Speaker 01:
And so we have a presumption of coverage, and then in order for the exclusion to apply, there has to be facts and circumstances which demonstrate that that exclusion applies. And so if there is extrinsic evidence that demonstrates there is coverage, until there is evidence that supports a determination that the exclusion applies, there has to, at very least, be a defense. There has to be, at very least, a defense offered. And so the insurer just can't look at this as a formula.

[00:21:30] Speaker 01:
They have to also look at these facts that are extrinsic here. And in determining whether there was a stay and whether the state court action could inform that determination, the court properly looked at the Landis factors. I'm not here to tell you that another district court judge who would have considered the same factors may have come up with a different conclusion. That's the nature of the abuse of discretion standard.

[00:21:53] Speaker 04:
But you're contending in the state court litigation that she never actually went to the school and what she's Hallucinating the whole thing? Is that just all made up? What's your position in the underlying case?

[00:22:08] Speaker 01:
Well, it's a recovered memory case that was brought 20 years after the alleged acts occurred. There's evidence that the instructor in question was hired by the victim's parents to give instruction at the parents' home and at the parents' yoga studio and at the parents' vacation home. So there is a lot of moving parts as to the basic what.

[00:22:33] Speaker 04:
You're contending that the person had no connection whatsoever to your studio?

[00:22:40] Speaker 01:
Not saying no connection at all. He was a substitute teacher there for a brief period of time. But with respect to where the actual acts of molestation occurred, was that instructor an agent of my client or was he an agent of the parents who had separately hired him to give private lessons to their daughter.

[00:23:00] Speaker 03:
But that goes to liability. I'm trying to figure out where it goes to these coverage questions.

[00:23:07] Speaker 01:
Again, it's an extrinsic fact that the court could consider in the rubric of the Landis factors to determine whether the stay would impose a hardship on my client.

[00:23:20] Speaker 04:
I know, but I'm still having trouble seeing how it would establish coverage to show that she wasn't a student at the school and that the abuse took place at the home away from the school. How does that establish coverage in this case? Because it's still a claim for a barred injury for which there's no coverage.

[00:23:50] Speaker 01:
I guess my response would be just by operation of the policy, there would be a presumption of coverage unless and until there was a demonstration by the insured that the exclusion applied. So there is a presumption that they have to provide coverage and the defense until the facts are established that demonstrate the exclusion applies.

[00:24:10] Speaker 04:
We have to play out hypothetically because this was the whole basis for the district court's ruling. We need to stay this case because the facts that get handed to us by the state court adjudication are likely to affect the coverage issue. I'm having a hard time seeing how that could possibly be true. And I'm trying to understand from you, what are the facts we could be handed by the state court proceeding? What is the outcome that would be handed to us that would establish that coverage exists?

[00:24:39] Speaker 01:
And my position would be that these issues do overlap with the merits. This question of whether this person was even a student or whether... If you establish in the case that she wasn't a student...

[00:24:54] Speaker 04:
and that he wasn't an employee, does that mean you have then coverage?

[00:25:00] Speaker 01:
That would mean that the exclusion does not apply, and if the exclusion does not apply, the presumption is there would be coverage.

[00:25:07] Speaker 02:
Why would the exclusion not apply? Because as your friend on the other side just said, the exclusion has to do with what's stated on the complaint, not what is proven, but what the allegation is.

[00:25:18] Speaker 01:
And we disagree with that. We think under Montrose that's not the correct formulation. Montrose is a case that speaks to the utility of a stay in similar circumstances and why the merits of the underlying case can overlap with the coverage question and why in that circumstance it's within the discretion of the court to grant such a stay.

[00:25:40] Speaker 03:
Mr. Williams, if we, I guess, one concern is if we have jurisdiction over this, I guess I can foresee, and again, I'm unable to find this as a conventional practice in our district courts in these rather common coverage actions that a land of stay would occur, although, of course, because of the appellate jurisdiction question, there may not be as many appeals. But I guess a concern is why would not every coverage action essentially then become going, this become a pattern?

[00:26:16] Speaker 03:
And if we have jurisdiction, it becomes a pattern that not only affects kind of the district courts in terms of imposing a stay on the proceeding, but then comes to us to basically do a shadow determination of the exact coverage question that the district court has decided to stay.

[00:26:38] Speaker 01:
So I have two answers to your question. The first is we cited the court to both the Zurich American decision and the Golden Eagle decision, both district court decisions. where the circumstances were very similar to this.

[00:26:53] Speaker 04:
They're not binding on us.

[00:26:54] Speaker 01:
Not binding, but I think the question was, how common is this practice? And I wanted to address that, that these are district court decisions where this has occurred. There are decisions where the determination is elsewise. And I don't think this court should be framing this question as trying to glean some bright line law because This issue is a question of discretion. Every case is going to be different. It is the district court's obligation in those circumstances to look at all of the facts and circumstances of the case to weigh the prejudice of the respective parties and come up with a determination.

[00:27:32] Speaker 03:
But your theory is adopted by the district court that the merits determination of the state court litigation, even when the claim is framed in the same terms as as the insurance exclusion, if that matters in this case, I don't see why it wouldn't matter in just about every coverage dispute that comes to our district courts.

[00:27:56] Speaker 01:
I'm not sure that's true. I think that, again, it's going to depend on the facts and circumstances, and a district court judge could view it differently. The question for this court is, is that within its discretion? And so I think that what Golden Eagle wants to do is extrapolate this into a conflict where you have to make a determination about a bright line law or bright line rule, when in fact this is the kind of discretion that district court judges exercise all the time and that this court typically defers to.

[00:28:28] Speaker 01:
The facts and circumstances matter, but in the first instance, it's up to the district court judge to evaluate those facts and circumstances. This court wasn't making any bright line rule by this determination. And so it's our position that that discretion should be upheld by this court. Unless there's further questions, I think I'm to the back of my time.

[00:28:48] Speaker 04:
Thank you, counsel. Thank you. All right. We'll hear rebuttal.

[00:29:10] Speaker 00:
Thank you.

[00:29:12] Speaker 00:
First, Golden Eagle did move for reconsideration, and it was summarily denied by the district court, and that's part of the appeal, and that's in the record at 232.

[00:29:22] Speaker 00:
Secondly, with respect to the discretion standard, in the context of a stay order, this court has held Young and PG&E that it's less deferential for a stay action, and of course, if there is an error of law, which the insurers contend there is, you do have an abuse of discretion.

[00:29:40] Speaker 04:
But what's your response to his contention that if the result that we are handed from the state court litigation is that the plaintiff was not a student at the school and the alleged assailant was not an employee of the school when the events happened, that there then would be coverage. What's your response to that?

[00:30:06] Speaker 00:
That's wrong. And I'll give you an example. Imagine if you have a plaintiff who alleges that an insured polluted a piece of property and assume that the policy has a pollution exclusion on it, an absolute pollution exclusion. Under this theory, you would have to defend that lawsuit if the insured denied that it polluted that land. That is effectively what we're hearing. is that if an insured is denying liability, then there is an obligation to provide a defense.

[00:30:38] Speaker 00:
But that's not what the policy provides. The policy bars coverage for claims alleging sexual abuse. That's what we have.

[00:30:47] Speaker 03:
So the Lantus factors is an abuse of discretion, but they're factors. And it's not clear that even if there's a legal error with respect to one of the factors on this coverage question, that the other ones don't do enough work to affirm. So, for example, what prejudice did you show or claim to the district court, to you, that would result from this stay?

[00:31:14] Speaker 00:
We obviously have to defend, and I understand how the courts have held with respect to that defense obligation, but I think it's also important that this is a pattern where a carrier is agreeing to provide a defense and it now has to wait years to get an expeditious review on defense obligation.

[00:31:30] Speaker 03:
Did you make that argument to the district court?

[00:31:33] Speaker 00:
What we argued to the district court was that we were going to have to continue to defend.

[00:31:37] Speaker 03:
Right, which is, as you said, is already legally required. And what about the two-front war question on the – so there's this kind of balancing of the equities.

[00:31:47] Speaker 03:
The California courts have generally seemed to disfavor – these dual actions proceeding at the same time? And why isn't that enough on the prejudice, just on the equities to affirm the stay?

[00:32:04] Speaker 00:
So I would disagree with that. What the California courts have held is that when it's an issue of intent, when an insurer is arguing that the insured's conduct is intentional, that creates an issue. And, in fact, Montrose has guideposts that talks about when the issue is about intent and where an insurer is arguing that it was intentional conduct and effectively jumping in bed with the plaintiff, That is a problem. That is not what we're talking about here. We're not talking about switching sides. We're not talking about overlapping facts.

[00:32:35] Speaker 04:
Under your view, no matter how the facts come out in the state court litigation, there's no coverage anyway.

[00:32:39] Speaker 00:
That's exactly right.

[00:32:40] Speaker 04:
There can't be a situation like Montrose where you're with the insured is put in the tough position of I've got to argue this for coverage, but this for defense.

[00:32:52] Speaker 00:
That's exactly right, because we're not arguing intentional conduct. We're arguing the SAM exclusion bars coverage and that Gordon supports that position.

[00:33:00] Speaker 04:
All right. We've taken you over. So, all right. Thank you, counsel. The case just argued will be submitted.