[00:00:00] Speaker 01:
This is Juarez versus Hudson Specialty Insurance Company.

[00:00:04] Speaker 01:
It is Dock at 23-4101.

[00:00:06] Speaker 01:
And I'll give you a minute to get collected.

[00:00:12] Speaker 01:
And when you're ready, please proceed.

[00:00:27] Speaker 02:
I'm Michael Banks.

[00:00:27] Speaker 02:
I'm appearing on behalf of the appellant, Alejandro Juarez, in this matter.

[00:00:31] Speaker 02:
My intention is to reserve three minutes time rebuttal.

[00:00:39] Speaker 02:
Rule 12 of these six motions should only be granted if a claimant fails to state a claim upon which relief can be granted.

[00:00:52] Speaker 02:
because it treated Hudson's rule 12b6 motion as essentially a rule 56 motion or declaratory relief action and made a determination on the ultimate merits of the case.

[00:01:13] Speaker 00:
Didn't you attach the insurance policy to the petition or to the complaint?

[00:01:20] Speaker 00:
Yes.

[00:01:20] Speaker 00:
So that's appropriately considered at the motion to dismiss stage.

[00:01:27] Speaker 00:
I didn't really understand what your complaint was.

[00:01:31] Speaker 00:
Why would you suggest this is a summary judgment level decision when you attached the insurance?

[00:01:40] Speaker 02:
The question of fact in the underlying case is multiple.

[00:01:48] Speaker 02:
Among one is whether or not there ultimately would have been coverage or whether this exclusion would have applied.

[00:01:54] Speaker 02:
But that's a fair point.

[00:01:57] Speaker 02:
But beyond that, back to the standard with the rule of 12b6 motion, if a plausible cause of action has been played on its face, then the motion should be denied.

[00:02:10] Speaker 02:
Here, in this case, the complaint alleged a cause of action for

[00:02:17] Speaker 02:
the breach of a contractual duty to defend.

[00:02:20] Speaker 02:
And not just a failure in its duty to indemnify.

[00:02:26] Speaker 02:
There's a cause of action for breach of contract for the duty to defend.

[00:02:29] Speaker 02:
And the district court erred because it conflated the two concepts of duty to indemnify, duty to defend.

[00:02:37] Speaker 02:
Utah case law treats those two contractual duties completely separately.

[00:02:47] Speaker 02:
analyze the exclusion and reach a determination that the exclusion would apply to initiate the duty to indemnify without dividing the proper analysis of whether a plausible claim for breach of contract on the duty to defend had been alleged.

[00:03:11] Speaker 02:
And they had.

[00:03:12] Speaker 01:
Well, there's no duty to defend if there's absolutely no coverage, right?

[00:03:16] Speaker 02:
Under Utah law, that's incorrect.

[00:03:19] Speaker 02:
Utah law treats the duty to defend as being much broader than the duty for coverage.

[00:03:28] Speaker 02:
And the contract, the insurance contract in question here, also is broader than the duty.

[00:03:35] Speaker 02:
The duty to defend portion is broader and not subject to the exclusion of the duty to indemnify.

[00:03:43] Speaker 02:
On page four of Hudson's brief,

[00:03:46] Speaker 02:
Hudson summarizes fairly the contractual, the insurance contract, as the duty to defend.

[00:03:56] Speaker 02:
It writes, the company shall have the right to defend any suit against the insurer seeking damages by reason of selling, serving, or giving alcoholic beverages, even if the allegations of the suit are groundless, false,

[00:04:17] Speaker 02:
or fraudulent.

[00:04:18] Speaker 03:
That's the first paragraph of the liability coverage.

[00:04:22] Speaker 02:
It is.

[00:04:22] Speaker 02:
And that's, and it is, that is correct, but also the duty to defend is treated separately and a part of the coverage and indemnity duty as well.

[00:04:39] Speaker 03:
So you're suggesting that the reason, or by reason of the selling, serving, or giving of any alcoholic beverage,

[00:04:47] Speaker 03:
defines the duty to defend.

[00:04:50] Speaker 03:
Correct.

[00:04:51] Speaker 03:
And whether or not there's ultimate liability depends on other circumstances.

[00:04:57] Speaker 02:
Exactly.

[00:04:58] Speaker 02:
And Utah law is very clear.

[00:05:01] Speaker 02:
In the estate of the Thurkesson case, 2001, Utah 48, at paragraph 22, the court held an insurance duty to defend is broader than its duty to indemnify.

[00:05:17] Speaker 02:
And to this point, an insurer may have a duty to defend even if the insurer is ultimately not liable to indemnify.

[00:05:26] Speaker 03:
Did you receive a reservation of rights letter from the insurance company?

[00:05:31] Speaker 02:
No.

[00:05:32] Speaker 03:
Did anybody file a declaratory judgment action?

[00:05:36] Speaker 02:
No.

[00:05:36] Speaker 02:
And that's particularly problematic because the case law that's set forth in the briefs holds that, you know,

[00:05:49] Speaker 02:
with a claim that creates potential liability under this, you've got to file a motion for declaratory relief or defend under reservation of rights and treat that duty to defend.

[00:06:05] Speaker 02:
It's a fiduciary duty.

[00:06:07] Speaker 02:
You've got to do that.

[00:06:08] Speaker 03:
And recently... What is the effect of not doing either of those?

[00:06:17] Speaker 02:
Well, under Utah law, it's very interesting because the courts in Utah take so seriously the public policy of requiring insurers to meet their duty to defend.

[00:06:29] Speaker 02:
The courts say, well, if you don't do that, if you don't seek declaratory relief, if you don't defend under a reservation of rights, then we will hold that there's coverage by a stop

[00:06:44] Speaker 02:
action in the underlying committee.

[00:06:45] Speaker 03:
In other words, they waive any contract defenses.

[00:06:47] Speaker 03:
Correct.

[00:06:48] Speaker 02:
Because Utah law and policy takes seriously this bargain for protection, this bargain for defense.

[00:07:02] Speaker 02:
You're not just bargaining for indemnification.

[00:07:05] Speaker 02:
All business owners would expect, oh, man, if there's a claim brought against me, I'm going to

[00:07:13] Speaker 02:
have to shell out serious money to pay for a defense.

[00:07:18] Speaker 02:
I'm put in a really bad spot.

[00:07:20] Speaker 02:
And so when somebody's buying insurance in Utah, they're buying indemnification, and they're buying a defense.

[00:07:30] Speaker 02:
And so to the point of our case, a plausible cause of action

[00:07:40] Speaker 02:
violating the duty to defend, breaching the duty to defend, was put.

[00:07:44] Speaker 00:
Could you, just for a minute, you mentioned that there was no reservation of rights letter, but you assumed this claim from Quantum.

[00:07:55] Speaker 00:
Correct.

[00:07:56] Speaker 00:
So they first filed, the act was first filed against Quantum, and Quantum sought coverage from its insurer, which is Hudson,

[00:08:07] Speaker 00:
and Hudson denied coverage, quantum then settles, and there's this consent judgment.

[00:08:15] Speaker 00:
But I wonder if, since you only assume whatever rights quantum had, perhaps that had already taken place.

[00:08:21] Speaker 00:
It had not.

[00:08:22] Speaker 02:
It's in the, we also, part of the assignment is getting all of the facts here.

[00:08:28] Speaker 02:
And I would say, first, just to kind of clarify the question a little bit, it wasn't the quantum denied coverage that was the problem.

[00:08:37] Speaker 02:
or that Hudson denied coverage.

[00:08:40] Speaker 00:
They denied a defense.

[00:08:42] Speaker 02:
They denied the defense, which is a separate duty, and that harmed quantum, and that is our cause of action against Hudson, is that denial of a defense.

[00:08:56] Speaker 02:
Not the denial of coverage, that's separate.

[00:08:59] Speaker 02:
But by denying the defense, you can get coverage by a stopper, but they denied the defense, and that harmed quantum because quantum

[00:09:08] Speaker 02:
had to hire counsel, was facing a million dollar recovery, which, by the way, is under the Utah Alcoholic Product Viability Act.

[00:09:20] Speaker 02:
The damages against Ponce were more limited because, specifically, this case was brought under what this policy was to protect.

[00:09:28] Speaker 02:
There was no assault or battery claim pled here to complain.

[00:09:33] Speaker 02:
Everything about

[00:09:35] Speaker 02:
the underlying lawsuit has to do with the over-service of selling alcoholic products.

[00:09:40] Speaker 02:
Why is that an important amount of duty to defend?

[00:09:42] Speaker 02:
It's important because Utah case law says, well, when we look at triggering the duty to defend, we compare policy language with the underlying complaint.

[00:09:55] Speaker 02:
And in this case, the policy was all about this alcoholic, selling alcoholic products, and the complaint was all about

[00:10:05] Speaker 02:
the provision of alcohol products, not about recklessness or assault, battery.

[00:10:12] Speaker 02:
It was specifically brought with a cause of action, which under Utah is very specific.

[00:10:17] Speaker 02:
It's statutory.

[00:10:18] Speaker 02:
It was brought under Utah's Dran Shop Act.

[00:10:22] Speaker 00:
Well, of course, though, the problem with your brief is you never address the full language of the exclusion, which says this insurance does not apply to claims arising out of an assault or battery.

[00:10:35] Speaker 00:
whether caused by or at the instigation of or omission by the insurer.

[00:10:39] Speaker 00:
Why isn't that exactly how this claim arose by an omission of the insurer, which was either maybe the failure or an action by the insurer, which was the over serving?

[00:10:57] Speaker 00:
Why didn't it arise out of the over serving of alcohol or the failure or the omission of cutting this person off?

[00:11:04] Speaker 00:
That exactly fits the language of the policy.

[00:11:10] Speaker 00:
And the arising out of never gets mentioned in your brief, but that's the important part of the exclusion.

[00:11:16] Speaker 03:
It arises out of the serving or giving of alcohol to somebody who shouldn't have gotten it.

[00:11:26] Speaker 03:
Correct.

[00:11:26] Speaker 03:
Now how you calculate damages down the road is a totally different issue.

[00:11:32] Speaker 02:
So to address Judge Moritz's question and then Judge Kelly, I wouldn't say that I would disagree that this is a problem of the Greek, because that question leads to the same kind of conflation that the district court did in determining coverage.

[00:11:51] Speaker 02:
And all that's at issue here today, it's not a determination of coverage.

[00:11:55] Speaker 02:
It's whether or not a cause of action, a plausible cause of action,

[00:12:01] Speaker 02:
had been filed against Hudson for its breach of contractual duty to defend and not just limited to coverage.

[00:12:11] Speaker 02:
And under Utah law, the duty to defend was triggered by fact of bringing a lawsuit that filed.

[00:12:21] Speaker 02:
So as we look through the Utah cases, those two things are treated very separately.

[00:12:27] Speaker 02:
And the district court aired because we pled

[00:12:31] Speaker 02:
a plausible cause of action on that, do you mean to defend Portia?

[00:12:37] Speaker 01:
Meaning that you didn't plead an assault and battery?

[00:12:41] Speaker 02:
Meaning that our actions in the federal courts now is a breach of contract for failure to defend and that defense obligation under the contract is triggered by

[00:12:59] Speaker 02:
The lawsuit, Utah treats duty to defend very differently from duty to identify.

[00:13:04] Speaker 02:
The case law is very clear in Utah on that.

[00:13:06] Speaker 01:
Well, had the complaint said that Rocky struck the victim and caused all of these damages outside the bar after he was served too much alcohol, then would you fault the district court?

[00:13:20] Speaker 01:
Or is that the piece that you're faulting the district court on, is that it picked that fact out of somewhere else?

[00:13:27] Speaker 02:
We would still fall the district court for that because here, again, the duty to defend is triggered, even if ultimately there's no coverage, the duty to defend is triggered by the potential here, the potential claim.

[00:13:43] Speaker 02:
And, you know, there's been a lot of talk in this case about the DeRosier case from the Ninth Circuit.

[00:13:48] Speaker 02:
We understand that that's a limited, it's not a presidential value, but it is strong evidence

[00:13:54] Speaker 00:
strong evidence that there was a potential for coverage in this case and that there was a potential for- How was there a potential for coverage if you interpret that exclusion, which is a legal question, the way that the district court did?

[00:14:10] Speaker 02:
Yeah.

[00:14:11] Speaker 00:
So- How is there a potential for coverage?

[00:14:15] Speaker 02:
If you're looking at the relationship between Hudson and quantum, Hudson, the very same insurer,

[00:14:23] Speaker 02:
had it on the same policy, same exclusion, same set of facts in DeRosier, identical, had a court hold that it had a duty to cover this fact case, that it had a duty to identify it, that it had a duty to defend.

[00:14:41] Speaker 02:
And so potential is the word.

[00:14:43] Speaker 02:
Was there potential?

[00:14:45] Speaker 02:
If you were Hudson and you're looking at this, is there potential that there may be coverage?

[00:14:49] Speaker 00:
We have... So you're saying the potential is that a court would interpret it differently?

[00:14:54] Speaker 02:
The potential is, in the DeRosier case, the court held that they... Yeah.

[00:15:01] Speaker 00:
The DeRosier case, the Ninth Circuit case, the complaint sounded in negligence.

[00:15:06] Speaker 02:
Our complaints sounded in negligence.

[00:15:08] Speaker 02:
Our complaints sounded... In fact, our case is stronger because it sounded if causes of action in our complaint were

[00:15:15] Speaker 00:
The violation of the Utah Product Liability Act, which is what this policy is... No, but the arising out of part of it, there's no question here that the bar patron committed battery, assault and battery, against the plaintiff.

[00:15:29] Speaker 00:
There's no question about that here.

[00:15:31] Speaker 00:
And you pled that.

[00:15:32] Speaker 02:
I see that my time is up.

[00:15:34] Speaker 02:
Please answer.

[00:15:35] Speaker 02:
We did not plead that.

[00:15:37] Speaker 02:
That was not pled in any way.

[00:15:40] Speaker 02:
of product liability and negligence.

[00:15:42] Speaker 02:
The complaint never pled assault and battery.

[00:15:46] Speaker 02:
It pled that, to Judge Kelly's question, because Rocky was over-served and became visibly intoxicated by the over-service, that is what, that is how this case arrived.

[00:15:57] Speaker 00:
That he did what?

[00:15:59] Speaker 02:
That he went out into the parking lot and struck Ms.

[00:16:03] Speaker 02:
Forrest.

[00:16:04] Speaker 00:
And that's the part of it that is the intentional.

[00:16:08] Speaker 02:
We have to answer the questions their intent and the underlying complaint just wasn't about assault and battery.

[00:16:17] Speaker 02:
It's not even fled in the underlying complaint and that's why the duty to defend was

[00:16:37] Speaker 04:
Good morning, and may it please the Court.

[00:16:39] Speaker 04:
Thomas Rollins on behalf of Hudson Specialty Insurance.

[00:16:44] Speaker 04:
Your Honors, we're here to ask you to uphold the District Court of Utah's granting of our motion to dismiss.

[00:16:51] Speaker 03:
I have a question on that.

[00:16:53] Speaker 03:
What does the policy, I'm looking at the insurance coverage, and the language, even if any of the allegations in the suit are groundless, false, or fraudulent,

[00:17:06] Speaker 03:
and may make such investigation and settlement of any claim as they deem expedient, et cetera.

[00:17:13] Speaker 03:
That doesn't have anything to do with the ultimate question of whether there is coverage.

[00:17:23] Speaker 03:
It has to do with, it seems to me to be the duty to defend.

[00:17:28] Speaker 03:
And is it correct that Hudson never sent a reservation letter, never sought a declaratory judgment action?

[00:17:37] Speaker 03:
Uh, and it was cut off at the pass by the, by the 12B6 motion.

[00:17:43] Speaker 03:
Uh, yes, your honor.

[00:17:45] Speaker 03:
And the cause of action again, was not for salt and battery.

[00:17:50] Speaker 03:
Maybe damages were, were, uh, calculated or would have been calculated based on the injuries, but that's, that's far down the road.

[00:18:03] Speaker 04:
Yes, Your Honor, I believe I understand your question.

[00:18:05] Speaker 04:
And it's going to take some unwinding, because there's many legal principles that apply to the proposition that you've set forward.

[00:18:13] Speaker 04:
So first, going back to Alf v. State Farm, it's a seminal Utah Supreme Court case, I believe, from 1986.

[00:18:20] Speaker 04:
It starts with the proposition that insurance is a contract between an insurer and a purchaser of insurance.

[00:18:27] Speaker 04:
And certainly, there are some certain fiduciary duties that arise out of that.

[00:18:34] Speaker 04:
is a question of law.

[00:18:35] Speaker 04:
And if the terms and conditions within that policy are unambiguous, then it can be treated as a question of law.

[00:18:42] Speaker 04:
And so the first proposition is, yes, that first paragraph in the policy insurance establishes the coverage territory.

[00:18:49] Speaker 03:
That means nothing, then, is what you're telling me.

[00:18:53] Speaker 03:
No, Your Honor.

[00:18:54] Speaker 03:
Well, if they still have to defend, even if the allegations are groundless,

[00:19:04] Speaker 03:
It seems to me they have to defend even if they think the allegations are groundless.

[00:19:10] Speaker 03:
If I can answer that question in two parts, you know, the first... Yes, in as many parts as you want.

[00:19:14] Speaker 04:
The first would be that the coverage territory, whether or not the allegations are groundless, goes to kind of the Rule 11 sanctions, that someone files a totally frivolous complaint, that these facts didn't even happen, that the allegations are, you know, figurative or imaginary.

[00:19:30] Speaker 03:
So that if that happened, they could just ignore it

[00:19:34] Speaker 03:
and a default judgment could be entered against the insured regardless.

[00:19:38] Speaker 04:
No.

[00:19:39] Speaker 04:
If a frivolous imaginary plaintiff files a complaint against an insurer that falls within the coverage territory under that provision in the opening statement, then there would be duty to defend unless there is an exception coverage.

[00:19:56] Speaker 03:
So even if it was imaginary and groundless.

[00:19:59] Speaker 03:
I'm sorry, Your Honor.

[00:20:00] Speaker 03:
Even if it was imaginary, they would still have a duty to defend.

[00:20:03] Speaker 03:
Yes.

[00:20:04] Speaker 03:
And why not a duty to defend for having served when they shouldn't have served, and when you calculate the damages to, not to the individual, but to the company, that we then get into the assault and battery issue.

[00:20:23] Speaker 04:
It is because of the second part of that opening statement in the coverage territory that states to which this insurance applies.

[00:20:31] Speaker 04:
And then the policy goes on to identify

[00:20:34] Speaker 04:
Oh, I read it all.

[00:20:35] Speaker 04:
The certain part portions to which the insurance does not apply.

[00:20:39] Speaker 03:
And that's consistent.

[00:20:39] Speaker 03:
Well, indemnity doesn't apply.

[00:20:42] Speaker 03:
But it doesn't address whether the duty to defend doesn't apply.

[00:20:48] Speaker 04:
Your Honor, if you read the entire portion of the coverage territory,

[00:21:16] Speaker 04:
The company shall not be obligated to pay any claim or any judgment or to defend any suit after applicable limit... The company's liability has been exhausted by payment of judgments or settlements.

[00:21:28] Speaker 03:
...shall be legally obligated to pay its damages because of injury to which this insurance applies.

[00:21:33] Speaker 03:
That doesn't affect the duty to defend.

[00:21:36] Speaker 03:
We argue that it does.

[00:21:38] Speaker 04:
Okay, that's the question.

[00:21:39] Speaker 04:
The injury to which this insurance applies is later defined as excluding injuries arising out of assault

[00:21:47] Speaker 01:
But the assault and battery, that's where I'm hung up right now, because I don't have to complain in front of me, but I do know that it alleged, as a direct and proximate result of serving intoxicating alcoholic beverages to Rocky, Manateo, plaintiff was severely injured, suffering economic and non-economic damages, period.

[00:22:08] Speaker 01:
No assault and battery.

[00:22:10] Speaker 01:
Did the district court reach outside of the complaint to fill in that gap and say, aha, what your complaint really is is an assault and battery?

[00:22:21] Speaker 04:
No, Your Honor.

[00:22:22] Speaker 04:
The district court did not do that.

[00:22:23] Speaker 04:
The district court did not do that for several reasons.

[00:22:25] Speaker 04:
First, the question is whether or not coverage in the duty of the fed was denied except the four corners of the original complaint filed against or the original complaint filed against the insurer.

[00:22:39] Speaker 04:
And in that original complaint, file against insurer, to which the denial was made, the factual allegations, no matter how you color them under which legal theory, was an assault and battery.

[00:22:52] Speaker 04:
And that's that differentiation, that distinction between pleading a legal conclusion and pleading a plausible legal claim.

[00:23:00] Speaker 04:
Kindness is the force for the treason, because the purpose of the pleading standard is to put the party on notice of what are the underlying facts.

[00:23:08] Speaker 04:
I'm being accused of so I can understand what factually new defenses I have to those allegations.

[00:23:15] Speaker 04:
And so the District of Utah in the Essex Insurance versus Wake Up 2 case, which I believe was a Judge Kimmel case from, I don't want to guess the year, but it was, I believe in the 10s or the 18s, in the teens sometime, the district court in that case goes

[00:23:39] Speaker 04:
words, assault and battery, that does not preclude a district court from applying the exclusion.

[00:23:46] Speaker 04:
And I want a quote from that case.

[00:23:48] Speaker 03:
Well, you could apply the exclusion, but don't you have to develop the case?

[00:23:54] Speaker 03:
Don't you have to defend your insured and make that argument and see what develops?

[00:24:04] Speaker 03:
You just cut it off at the tip.

[00:24:06] Speaker 03:
Oh, that doesn't apply.

[00:24:07] Speaker 03:
Bang.

[00:24:07] Speaker 03:
Gone.

[00:24:08] Speaker 03:
And now you're on your own, insurer.

[00:24:10] Speaker 04:
So under Utah law in 2018, Utah Supreme Court, and Utah law is being applied in this case, ruled that in paragraph 21 of that complaint, we've never held an insurer who must defend against all third-party liability claims that could conceivably fall within the insurance coverage.

[00:24:31] Speaker 04:
Nor have we considered whether an insurer may, consistent with its fiduciary obligations, stay the underlying proceedings until the indisputable coverage is resolved.

[00:24:40] Speaker 04:
Nor, in our view, have we squarely repudiated any role for the fairly debatable standard."

[00:24:45] Speaker 04:
And then if you look at the concurrence in part of that decision, Justice Durham goes into more detail exploring this third-party duty and what is required and what's not required.

[00:24:58] Speaker 03:
But it doesn't sound like the Supreme Court definitively

[00:25:01] Speaker 03:
laid down any rule is that they haven't done it, and the concurrence may have wished they had.

[00:25:08] Speaker 04:
So the concurrence cites to a 1986 Utah case in paragraph 49, Deseret Federal Savings and Loan Association versus US insurance.

[00:25:22] Speaker 04:
Is that cited in your brief?

[00:25:24] Speaker 04:
The Altman's case is, and I believe we do cite directly to the... The case you're reading from right now.

[00:25:30] Speaker 04:
Yes.

[00:25:30] Speaker 04:
Fire Insurance Exchange versus Altman's.

[00:25:33] Speaker 04:
And in the concurrence of that case, they cite to the Utah 1986 case that says, that the duty arises when the insurer has obligated itself to defend the insurer in the insurance contract when there is sufficient factual basis for potential liability.

[00:25:54] Speaker 04:
But the insurer's obligation is not unlimited.

[00:25:57] Speaker 04:
And so really what we're looking for is, what are the factual allegations alleged?

[00:26:02] Speaker 04:
And first, we find, yes, the factual allegations, when you compare the four corners of the policy of insurance to the four corners of the claim, fall within that original coverage territory.

[00:26:14] Speaker 04:
However, there's exclusions to that coverage territory.

[00:26:18] Speaker 04:
And the exclusion in this case is number six, assault battery exclusion, which excludes

[00:26:24] Speaker 04:
all injuries arising out of an assault and battery.

[00:26:29] Speaker 04:
And that arising out of language in Utah law and other jurisdictions is very broad.

[00:26:34] Speaker 04:
It's leveled from, originated from, derived from.

[00:26:37] Speaker 04:
And so when we have four corners of a complaint saying that the damage arises from this person being over-served, from not being cut off, from not being removed from the premises, and then ultimately striking,

[00:26:52] Speaker 04:
Another patron.

[00:26:53] Speaker 01:
All right, but where does that part come in?

[00:26:54] Speaker 01:
You said the original complaint says that he struck her.

[00:26:59] Speaker 04:
So the complaint filed against Hudson by Ms.

[00:27:02] Speaker 04:
Juarez incorporated by reference the underlying complaint.

[00:27:06] Speaker 04:
And the underlying complaint, which is originally the plaintiff argues, triggered this duty to defend when Ms.

[00:27:11] Speaker 04:
Juarez sued the insurer, the quantum ultra bar.

[00:27:15] Speaker 04:
And so when you look at both, the complaint underlying this appeal

[00:27:19] Speaker 04:
and the original complaint underlying the assignment, both clearly set forth the basis for the claim.

[00:27:26] Speaker 01:
Now, when you use the word complaint, what are you talking about?

[00:27:29] Speaker 01:
Are you talking about within the parties, or are you talking about to the court?

[00:27:33] Speaker 04:
I am referencing a formal pleading filed with the third district of Utah.

[00:27:37] Speaker 01:
All right.

[00:27:37] Speaker 01:
And in the formal pleading complaint, it says assault and battery, or describes that the plaintiff was struck.

[00:27:47] Speaker 04:
It describes that the plaintiff was struck.

[00:27:50] Speaker 01:
Do you have it handy?

[00:27:51] Speaker 01:
Can you read it?

[00:27:52] Speaker 04:
Actually, Your Honor, I do not have it handy.

[00:27:54] Speaker 01:
OK.

[00:27:54] Speaker 01:
Understood.

[00:27:56] Speaker 04:
Understood.

[00:27:57] Speaker 04:
But it's incorporated by reference in our opening brief.

[00:28:00] Speaker 04:
We identified some of the operative allegations from that.

[00:28:04] Speaker 04:
And the operative allegations are in the record, volume one.

[00:28:11] Speaker 03:
Would it be different if the plaintiff had alleged a claim for assault and battery against the

[00:28:20] Speaker 03:
assaulter and batterer and the establishment?

[00:28:27] Speaker 04:
It would be different in the sense that the assaulter, Rocky Manitow, he may have applicable insurance that could cover the claim, he may have assets that could pay for his conduct, but he is a distinct individual separate from the insured quantum motion law.

[00:28:43] Speaker 04:
And he's not even a party to this case.

[00:28:47] Speaker 04:
And what would be distinct though, Your Honor, is if Ms.

[00:28:51] Speaker 03:
Juarez slipped and fell and broke her leg or twisted her ankle because she'd been over-served or... Suppose a guy ran out of the woods with his bat and hit her on the head with a bat and had never even been in the establishment.

[00:29:07] Speaker 03:
That certainly would not be covered.

[00:29:09] Speaker 03:
Correct.

[00:29:10] Speaker 03:
Because that is outside... And so there'd be no claim against the establishment.

[00:29:15] Speaker 03:
Correct.

[00:29:16] Speaker 03:
And it was their parking lot.

[00:29:18] Speaker 03:
That's right, Your Honor.

[00:29:21] Speaker 00:
I do have the original complaint in front of me, and I assume you're talking about there's quite a number of paragraphs describing the patron who was intoxicated, the plaintiff's request that he be removed because he was harassing her and grabbing her.

[00:29:38] Speaker 00:
He grabbed her several times.

[00:29:40] Speaker 00:
She continued to complain, continued to be served.

[00:29:44] Speaker 00:
Eventually it does say, I think this is a paragraph you're talking about,

[00:29:48] Speaker 00:
that when they tried to leave the club, this individual followed her to her car and in the parking lot struck her in the face, causing severe facial and dental injuries.

[00:29:59] Speaker 04:
Yes, Your Honor.

[00:30:02] Speaker 00:
Is that what you're referring to that was incorporated in the second complaint?

[00:30:05] Speaker 01:
That is, Your Honor.

[00:30:06] Speaker 01:
And is that what Judge Shelby relied on?

[00:30:10] Speaker 04:
I would have to go back to the oral ruling made by Judge Shelby, but it was undisputed, and I believe it's undisputed today, that it was pleaded

[00:30:18] Speaker 04:
Real basis for the suit is that an over-served patron who was not removed struck Ms.

[00:30:24] Speaker 04:
Juarez in the face, causing injury.

[00:30:32] Speaker 04:
And just as a final thought, Your Honors, this exact same exclusion has been upheld by the First Circuit and the Eleventh Circuit.

[00:30:40] Speaker 04:
The Doe versus Hudson specialty case from 2018, I believe, is very informative and provides a good legal analysis.

[00:31:01] Speaker 03:
We sure can.

[00:31:05] Speaker 01:
Can I give counsel just one minute though to respond?

[00:31:09] Speaker 01:
You were out of time but I want you to have a minute and if there are questions that carry past

[00:31:27] Speaker 02:
But Utah law treats very differently, and we can specify that, but treats very differently the duty to defend versus the duty to identify or coverage or the exclusion.

[00:31:38] Speaker 02:
And so there's at least at a minimum, at a minimum, what has been pled in this case is a plausible claim for

[00:31:55] Speaker 02:
breach of contracts based on Hudson's breach of its duty to defend.

[00:32:01] Speaker 02:
And because a plausible claim has been pled, the district court should be reversed and the matter should be remanded.

[00:32:09] Speaker 02:
So thank you.

[00:32:12] Speaker 01:
All right.

[00:32:12] Speaker 01:
Thank you, counsel.