[00:00:02] Speaker 03:
Okay, our second case this morning is 23-1262 Crumb versus Chubb Limited.

[00:00:08] Speaker 03:
Now you may begin.

[00:00:09] Speaker 01:
Good morning.

[00:00:09] Speaker 01:
My name is Carl Ciceri.

[00:00:11] Speaker 01:
I represent Mark Crumb, the appellant in this case.

[00:00:13] Speaker 01:
I'm an endeavor to reserve six months for a rebuttal, which will be handled by Mr. Crumb.

[00:00:20] Speaker 01:
This case concerns the dismissal of four different categories of claims relating to Mr. Crumb's flooding of his one-of-a-kind ski home in Beaver Creek

[00:00:30] Speaker 01:
the world's greatest elodge on Christmas of 2019.

[00:00:35] Speaker 01:
I plan on discussing the claims themselves and not the discovery related challenge that we raised.

[00:00:40] Speaker 01:
In this case, although I'm happy to talk about anything, we're just here to hear your argument on it.

[00:00:46] Speaker 01:
I'd like to start with the first category of claims we raised in our brief, the FRV or fair rental value.

[00:00:52] Speaker 01:
Now, the court denied that claim on the basis that Crum hadn't established his usual, that he usually, there's so many usuals in this case, that he usually rented the property in the period immediately preceding his cover's loss.

[00:01:06] Speaker 01:
Now, putting aside the fact that the court actually cited the wrong provision of the policy, when it reached that conclusion, there is a provision of the policy that does involve usually renting, and we think that the court's conclusion cannot be sustained on the evidence in this case.

[00:01:21] Speaker 01:
was a home that Crumb bought and renovated and spent millions of dollars to rent it out to other people.

[00:01:27] Speaker 02:
He had only had a handful of rentals in five years, isn't that right?

[00:01:36] Speaker 01:
He had had 99 days of rentals in the nine years he'd owned it.

[00:01:42] Speaker 01:
There was a period of four years in which he was not able to rent other properties.

[00:01:46] Speaker 02:
So that leaves you five years, 99 days.

[00:01:52] Speaker 02:
And how imminent had been the rentals?

[00:01:55] Speaker 02:
Had he been renting just before the water damage, or what was the last rental?

[00:02:00] Speaker 02:
Well, he had actually gotten an inquiry and a commitment to rent the property right before the... I'm not asking about an inquiry.

[00:02:07] Speaker 02:
When was the last rental, actual rental, compared to when the water damage

[00:02:11] Speaker 01:
It was four years before, but he did have a commitment to rent it in March of 2020.

[00:02:16] Speaker 01:
So the rental period hadn't happened, but he had a commitment to rent it out in that period of time.

[00:02:23] Speaker 01:
So we think that that counts as usually renting as well.

[00:02:27] Speaker 00:
Was that in the record that he actually had a commitment a few months later or just that he'd had an inquiry or he was taking inquiries?

[00:02:35] Speaker 01:
They had not assigned a rental agreement.

[00:02:38] Speaker 01:
But he said, I'm going to rent this property.

[00:02:40] Speaker 01:
I've reserved it.

[00:02:41] Speaker 01:
And that's at volume 14, 2468, 270.

[00:02:47] Speaker 00:
And more to the point, though.

[00:02:50] Speaker 00:
So assuming that's the case and it was to be rented in March, how does that come within the definition of the word usually?

[00:02:58] Speaker 00:
would be rented once in four plus years.

[00:03:03] Speaker 01:
We've got two words, and I think both are important.

[00:03:05] Speaker 01:
The rented means either to have actual rental transactions or to be offered for rent.

[00:03:10] Speaker 01:
That's what hotels do.

[00:03:11] Speaker 01:
Even when their rooms are empty, they're renting rooms.

[00:03:14] Speaker 01:
That's what a motel does.

[00:03:14] Speaker 01:
That's what a B&B does.

[00:03:16] Speaker 01:
That's between renting and rented.

[00:03:19] Speaker 01:
Well, they're both entrenched.

[00:03:22] Speaker 01:
I'm not going to regret it.

[00:03:23] Speaker 02:
Renting a room is a historic fact.

[00:03:26] Speaker 02:
Renting is a process.

[00:03:28] Speaker 02:
But I see a difference in meaning.

[00:03:31] Speaker 02:
Go on.

[00:03:31] Speaker 02:
That's not me.

[00:03:32] Speaker 01:
Well, I think it is looking backwards.

[00:03:34] Speaker 03:
Well, how many days were you claiming?

[00:03:37] Speaker 03:
What were you asking FRV for?

[00:03:40] Speaker 03:
How many days?

[00:03:41] Speaker 01:
Well, the policy limit is 15 days.

[00:03:43] Speaker 01:
We think there's at least evidence of 15 days, although we ultimately think that that's a determination for the jury, because he had offered the property for rent for 15 days.

[00:03:52] Speaker 01:
But at the very least... Times 20,000?

[00:03:55] Speaker 01:
Yeah.

[00:03:56] Speaker 01:
But for the very least, we think that the jury could conclude that an average of nine days a year for nine years should equate to at least nine days of FRB.

[00:04:08] Speaker 01:
And I think that's a determination for the jury to make.

[00:04:10] Speaker 01:
We also think that, like I said, there are two words, renting and usually.

[00:04:15] Speaker 01:
And usually means, and I think we all agree, under normal circumstances.

[00:04:19] Speaker 01:
So we should at least consider what normal circumstances are and include within the scope of our review

[00:04:26] Speaker 01:
of what usually rented means, the entire transaction history, what is his normal circumstances for his rentals, what are the abnormal circumstances.

[00:04:35] Speaker 01:
We submit the four years before the covered loss were abnormal circumstances because there was a once in a decade snow loss that depressed not only the rentals in the 2017 to 2018,

[00:04:50] Speaker 01:
year, but also depressed rentals in the 2018-2019 year, but they didn't know if the snow was going to come back.

[00:04:55] Speaker 01:
You never know what's going to happen.

[00:04:56] Speaker 01:
And that takes us right into 2019, where that's when Mr. Crumb's rental history usually begins.

[00:05:03] Speaker 01:
He usually starts to rent the property in the period after Christmas, and that's exactly what we would have had.

[00:05:11] Speaker 01:
Was 2019-2020 a good snow year?

[00:05:16] Speaker 01:
I don't recall, I mean I'll hand.

[00:05:18] Speaker 01:
But he had someone who was willing to rent it for two separate occasions during that period.

[00:05:24] Speaker 01:
Moving on to the ELB claim.

[00:05:27] Speaker 01:
That is the extra living expenses claim.

[00:05:30] Speaker 01:
Now the district court's rejection of that claim was also unfounded because GNIC denied nine different claims for ELB benefits from Crumb.

[00:05:39] Speaker 01:
And each one of those was a breach of contract and a breach of the duty of good faith.

[00:05:43] Speaker 03:
And those were basically, I was a little confused on that.

[00:05:48] Speaker 03:
He says, I want to rent this house, and then Chef said no, or, you know.

[00:05:55] Speaker 03:
Yeah, where was he staying?

[00:05:57] Speaker 03:
Was he staying at the Ritz?

[00:05:58] Speaker 03:
What was going on?

[00:06:00] Speaker 01:
He was staying in a portion of the property in which they didn't have a functioning kitchen that was kind of part of the owner's quarters.

[00:06:07] Speaker 01:
But it was very damaged, so he obviously needed to move on.

[00:06:11] Speaker 01:
He found a series of four rentals that he proposed before January 27th.

[00:06:17] Speaker 01:
For each of those, they said, we're looking at them, we're reviewing them, we'll get back to you on them.

[00:06:23] Speaker 01:
And they never did.

[00:06:24] Speaker 01:
We get to January the 17th, and after that, he makes a series of accommodations.

[00:06:31] Speaker 01:
And by the way, for each one of these, he's contacted the property owner.

[00:06:36] Speaker 01:
He has inquired and negotiated the special rate and special dates for the property in the period.

[00:06:44] Speaker 01:
And after January 2017, they put him off.

[00:06:46] Speaker 01:
They say, well, now we haven't established your usual vacation occupancy of the home, a requirement that's only in the policy because

[00:06:54] Speaker 01:
The brokers erroneously put him in a vacation policy rather than a true homeowners policy.

[00:07:00] Speaker 02:
Was that accidental?

[00:07:02] Speaker 02:
I thought he said, I want a cheaper premium.

[00:07:06] Speaker 02:
And that was the only way they could get a cheaper premium.

[00:07:08] Speaker 01:
Well, they promised that they could get the same coverage.

[00:07:10] Speaker 01:
And the only thing that he was trying to avoid was a construction surcharge.

[00:07:14] Speaker 01:
So they said, we need to do the same coverage with a lower construction surcharge.

[00:07:18] Speaker 01:
And that's why he went from his chartist policy to his GNIC policy.

[00:07:24] Speaker 01:
And I'd like to just briefly get onto the broker's claim, because I think it's worth getting into as well.

[00:07:34] Speaker 01:
The essence of the court's denial of that claim was its conclusion that he had not established causation.

[00:07:47] Speaker 01:
The conclusion is really circular.

[00:07:49] Speaker 01:
The court says, well, I can't establish that he

[00:07:52] Speaker 01:
exceeded the policy's limits because he didn't establish he was entitled to coverage on the policy.

[00:07:56] Speaker 01:
Of course, we think he did establish he was entitled to coverage on the policy, but it's both the limits of the policy, that is the 15 days limits on FRV and the 60 days supposed limitation on ELE coverage.

[00:08:10] Speaker 01:
Those limits, as well as the preconditions on coverage, like establishing usual vacation occupancy or establishing that he usually rented, we think those were both

[00:08:19] Speaker 01:
in violation of his express instructions to give maximum unlimited ELE and FRV with no exceptions.

[00:08:28] Speaker 00:
I'm a little confused about that, Arvind.

[00:08:29] Speaker 00:
I guess if we disagree with you that the extra living expenses, the ELE or the rental, fair rental value, if we disagree and we think that it was paid, then what's left?

[00:08:43] Speaker 00:
Because why would there be any claim against the brokers that they should have gotten him an even greater maximum

[00:08:49] Speaker 00:
if he didn't have any, he couldn't even have met the maximum that he had.

[00:08:53] Speaker 01:
Well, he would have had these claims.

[00:08:55] Speaker 01:
I mean, in terms of causation, the broker's negligence prevented him from being put in a policy that wouldn't have required him to establish his usual vacation occupancy.

[00:09:04] Speaker 01:
So he would have had coverage.

[00:09:07] Speaker 01:
The broker's negligence putting in a policy that made him require that he had established that he usually rented it in order to get any FRB coverage.

[00:09:14] Speaker 01:
That was something that was not in the Charter's policy.

[00:09:16] Speaker 01:
So our contention is

[00:09:18] Speaker 01:
that the negligence is in not putting him in a policy that would have created the conditions whereby he would have been denied.

[00:09:24] Speaker 00:
Or as to living expenses, put him in a policy where he didn't have to prove expenses to get the maximum recovery, which is your argument, right?

[00:09:32] Speaker 01:
Well, I mean, I think the policy itself doesn't require that the losses be incurred.

[00:09:36] Speaker 01:
And that's not that he doesn't have to experience these expenses.

[00:09:41] Speaker 01:
He has to have a covered loss, and he has to have a need for the expenses.

[00:09:45] Speaker 01:
But incurring is not a requirement in the policy.

[00:09:50] Speaker 00:
A reasonable increase in your normal living expenses is what's required.

[00:09:54] Speaker 00:
An increase in your normal living expenses.

[00:09:57] Speaker 00:
How would you not have to incur those expenses to have a reasonable increase?

[00:10:02] Speaker 01:
Well, he again he would have had those increases if they had not been denied and I think that that ultimately goes to the bad faith of the of the insurance and the policy they Impose the condition you have to get approval from us on whether you're going to get a property.

[00:10:17] Speaker 00:
They deny approval Did they ever deny any living expenses?

[00:10:20] Speaker 01:
They denied nine different requests for living expenses.

[00:10:22] Speaker 00:
They denied them or they just didn't Where's the denials in the record?

[00:10:26] Speaker 01:
Well, I mean they never got back to him on any of the four.

[00:10:29] Speaker 00:
There was no denial

[00:10:30] Speaker 01:
I would consider a delay of indefinite duration when you have a time requirement.

[00:10:36] Speaker 03:
When he submitted the receipts from the RIFs, they reimbursed him for that, didn't they?

[00:10:46] Speaker 01:
Only for that one rental, yes, but for the others they completely denied it.

[00:10:50] Speaker 00:
What other expenses or receipts did he submit that he wasn't paid for?

[00:10:55] Speaker 01:
He decided not to take those huge vacations.

[00:10:59] Speaker 00:
So he wants four million more, but he only submitted the $22,000 receipt for the Ritz-Carlton.

[00:11:06] Speaker 01:
That's correct.

[00:11:07] Speaker 01:
And that's either because of bad faith, which denied him the benefits he was entitled to, the benefit in his bargain, or because of anticipatory repudiation.

[00:11:14] Speaker 01:
They decided they declared to him that they were not going to honor their obligations in the policy, and that excuses him of his obligations.

[00:11:22] Speaker 01:
He should get the benefit of the bargain, the expenses that he would have incurred, but for their interference, but for their repudiation, and that he was entitled to it in the policy.

[00:11:33] Speaker 01:
I'd like to reserve the remainder of my time for a bottle of vodka.

[00:11:35] Speaker 01:
Thank you.

[00:11:35] Speaker 03:
All right, for the appellee.

[00:11:44] Speaker 03:
Mr. Palmeri?

[00:11:47] Speaker 03:
And Mr. Hacker, you're going first.

[00:11:55] Speaker 04:
Good morning, arms may please the court.

[00:11:57] Speaker 04:
John Hacker for Great Northern.

[00:11:58] Speaker 04:
I'm going to try to reserve two or three minutes for my colleague, Mr. Palmeri, who will argue the brokers' issues on behalf of the brokers.

[00:12:07] Speaker 04:
After Mark Crumb's vacation house was damaged by a sprinkler malfunction on Christmas Eve 2019,

[00:12:14] Speaker 04:
Great Northern immediately came on site, investigated, and timely paid more than $4 million to repair or replace damaged areas of the house and its contents.

[00:12:24] Speaker 04:
And immediately, upon the conclusion of a normal contractually contemplated appraisal of damage to the home theater system, Chunk Chubb, Great Northern, promptly paid an additional $1.2 million to repair that damage as well.

[00:12:36] Speaker 04:
The principal issue here, as you heard this morning,

[00:12:39] Speaker 04:
is whether Mr. Kronos also entitled a reimbursement for the fair rental value of a vacation house he had not rented for years, and for the cost of alternative housing he never paid for or lived in.

[00:12:50] Speaker 04:
And he also contends he should have been allowed to try his bad faith claims before a jury.

[00:12:55] Speaker 04:
None of his claims has merit.

[00:12:57] Speaker 04:
I'll start where my colleague started, my friend started, with the additional living expenses claim.

[00:13:03] Speaker 04:
concerning the fair rental value of the home.

[00:13:06] Speaker 04:
That provision provides that if a covered loss makes it part of your house or other permanent structure, which you usually rent to others uninhabitable, we cover its fair rental value during the period of time it is usually rented for a reasonable period of time or up to 15 days.

[00:13:21] Speaker 04:
So he has to prove, to invoke that coverage properly,

[00:13:25] Speaker 04:
that his house is usually rented to others, and he has to show the period of time it is usually rented.

[00:13:29] Speaker 04:
And he didn't show that his house was usually rented to others, as we've already just heard this morning.

[00:13:34] Speaker 04:
It had not been rented to anybody since December, January of 2015 and 16.

[00:13:41] Speaker 04:
So it was for four years without renting at all.

[00:13:43] Speaker 04:
And by no common understanding of the phrase usually rented is never renting it.

[00:13:49] Speaker 02:
Do you agree, though, that if there is a

[00:13:53] Speaker 02:
why you're not renting, you're remodeling the house, that that period wouldn't count against your effort to show the usual rental.

[00:14:03] Speaker 04:
I don't know if I can answer that in a categorical way.

[00:14:06] Speaker 04:
If you choose not to rent for years because it takes you years to remodel the house, then it's not in that period of the house that you're usually renting.

[00:14:14] Speaker 04:
But I'm not taking issue with the one year in 2010 and 11 when he didn't rent.

[00:14:20] Speaker 04:
That's not really part of the calculus.

[00:14:21] Speaker 04:
The point here is that for four years,

[00:14:23] Speaker 04:
for various reasons, he didn't rent.

[00:14:26] Speaker 04:
It just wasn't a house that was usually rented.

[00:14:27] Speaker 04:
He blames bad snowfall in one year as a reason, but in the year immediately prior to the rental period, the year before the supposedly bad year of snowfall, he wasn't renting either.

[00:14:42] Speaker 03:
So it just wasn't usually rented.

[00:14:43] Speaker 03:
There had been just a two-year gap instead of a four-year gap?

[00:14:46] Speaker 03:
Is that

[00:14:47] Speaker 04:
You know, there's going to be edge cases, Your Honor.

[00:14:50] Speaker 04:
I don't know, a two-year gap, and then if we show a really consistent pattern for a long time and for two years and there's some sort of understandable reason it doesn't look like it was a choice by him not to rent, one can imagine a different outcome.

[00:15:04] Speaker 04:
I'm not committing to that, but that's not the facts we have.

[00:15:06] Speaker 03:
Why isn't that a fact question for the jury that would, you know, look at his reasons for that?

[00:15:11] Speaker 04:
Right, and I'm agreeing at some point

[00:15:13] Speaker 04:
you know, the facts can look, I mean, somebody could reasonably conclude that a period of time is usually rented.

[00:15:19] Speaker 04:
I want to emphasize, it's not just a temporal dimension, it's the regularity, right?

[00:15:23] Speaker 04:
And both are missing here.

[00:15:24] Speaker 04:
You don't have four years, and you don't have these regular, you know, over that period of time.

[00:15:28] Speaker 04:
So if it's, you know, one year or two years within a four-year period, that's just a different inquiry.

[00:15:33] Speaker 04:
And so just because it involves facts doesn't mean it gets to a jury, because the question is whether a reasonable jury can conclude that not renting it at all for four consecutive years

[00:15:43] Speaker 02:
I was surprised by his argument that because the snowfall was bad, that gives me an out.

[00:15:52] Speaker 02:
I didn't see anything in the contract that said that.

[00:15:55] Speaker 02:
I think the contract says, usually rented.

[00:15:59] Speaker 02:
You can have a reason for your own house why there might be an exception, but you can't simply say, well, the snowfall was bad because there's no force majeure, or this would be something quite a lot short of force majeure in any event.

[00:16:12] Speaker 02:
I completely agree.

[00:16:13] Speaker 02:
It says usually rented, which has the temporal and regularity dimensions.

[00:16:16] Speaker 02:
But it doesn't have an exception.

[00:16:18] Speaker 02:
for bad snow or bad weather?

[00:16:20] Speaker 04:
No, that's completely right.

[00:16:21] Speaker 04:
The only thing I might conceive in that area is if there is like, you know, it's not usually rented because one year, for example, because of COVID, he just literally couldn't, it was like prohibited renting.

[00:16:31] Speaker 04:
You know, there's a government order.

[00:16:32] Speaker 04:
It just was absolutely zero market whatsoever.

[00:16:35] Speaker 04:
You know, for one year, that might actually kind of fill the gap in a regularity element.

[00:16:42] Speaker 04:
If you've been going year after year, then one year, you just can't do it, but you try to, and you know, your bars are doing it, okay.

[00:16:48] Speaker 04:
Maybe that's still usually renting it.

[00:16:50] Speaker 04:
But here we've got four years with one year of bad snowfall and just other years where there's no explanation other than the fact that just descriptively undisputed that he wasn't renting it at all.

[00:17:01] Speaker 03:
What's the explanation for the Great Northern's denial of the substitute properties to live in?

[00:17:12] Speaker 04:
So the district court said there were two

[00:17:16] Speaker 04:
reasons for granting summary judgment.

[00:17:18] Speaker 04:
One was that they hadn't actually incurred any of the, there was no reasonable increase, it just didn't exist.

[00:17:23] Speaker 04:
But the other one, remember, was that the denials were not improper.

[00:17:26] Speaker 04:
And when you look at the record throughout January, counsel just incorrect in saying that Great Northern didn't explain what was going on, was Cromwell's demanding that Great Northern approve rentals for a year, 300 days,

[00:17:44] Speaker 04:
at $20,000 a night, and then at one point it negotiates one of them down to $5,000 a night for a year-long rental, and they're demanding a year-long commitment.

[00:17:51] Speaker 04:
And what Great Northern's claims adjuster says on January 2nd, as reiterated in the Reservation of Law and Rights letter on January 17th, is we're still trying to figure out your usual vacation occupancy.

[00:18:03] Speaker 04:
And we don't have any evidence so far that would support the idea

[00:18:07] Speaker 04:
that your usual vacation occupancy is every day for an entire year, or every day for 300 days.

[00:18:12] Speaker 04:
So we can't approve these exorbitant, incredibly luxurious rentals, which are dependent upon the long-term lease.

[00:18:19] Speaker 04:
That's what they say in January 17.

[00:18:20] Speaker 04:
They explicitly explain that in January 17 as to why they haven't been able to sign off on the requests before that date.

[00:18:30] Speaker 04:
And then that same thing, that same dynamic is continuing.

[00:18:32] Speaker 04:
where they're trying to establish or investigating to determine what his usual occupancy is.

[00:18:38] Speaker 04:
And it's not until middle March, March 27th.

[00:18:41] Speaker 04:
And they say, okay, look, we agree based on the documentation you submitted that your usual vacation occupancy is at least 60 days.

[00:18:49] Speaker 03:
But all that period in January, February, March.

[00:18:52] Speaker 03:
When was that agreement reached?

[00:18:55] Speaker 03:
What date did you say, March?

[00:18:56] Speaker 04:
March 27th is the day they have a meeting

[00:18:59] Speaker 04:
with all Roman people, and it's reported at the meeting, it's recorded in an email on March 29th that they have told Crumb that they agree that he has established usual vacation occupancy.

[00:19:11] Speaker 04:
And if you just look at the literally hour by hour, day to day communications and email responses, that's what they're trying to determine.

[00:19:19] Speaker 04:
That's always the reason that they're not, and I want to be clear about one thing that council said, which is Great Northern never, didn't,

[00:19:27] Speaker 04:
demand the right to approve in advance and prohibit him from getting these other contracts and other leases if he wanted to.

[00:19:35] Speaker 04:
Great Northern was just saying, you know, we're not in a position to approve it.

[00:19:40] Speaker 04:
because we haven't established your usual vacation occupancy.

[00:19:43] Speaker 04:
I don't want to get in a fight on the semantics of whether that constitutes a denial, because it is true that Great Northern wasn't agreeing that he should go ahead and sign a lease and that Great Northern would cover it, because if Great Northern agrees to cover it, they can't agree to cover it until they've established his usual vacation occupancy.

[00:20:00] Speaker 04:
So they're not agreeing to cover it, but there's not any sense in which they're prohibiting him from entering a lease and incurring these expenses and then submitting them

[00:20:08] Speaker 04:
And establishing that, well, here's the period of time during my usual vacation occupancy, which I incurred a reasonable increase in living expenses, and I want you to cover them.

[00:20:18] Speaker 04:
That's how this should have worked.

[00:20:20] Speaker 02:
Do you agree that he only made one explicit request for living expenses backed up by a bill that he paid?

[00:20:31] Speaker 04:
Well, for alternative housing, yes, he had $22,000 that was paid when he stayed at the Ritz-Carlton.

[00:20:38] Speaker 04:
In the British, they keep referring to it as a temporary hotel, like it's Bob's hotel down the street.

[00:20:43] Speaker 04:
It's the Ritz-Carlton-Bachelor Gulch.

[00:20:46] Speaker 04:
That's where he stayed.

[00:20:47] Speaker 04:
And we kept saying to him throughout January, please go stay at the Ritz-Carlton-Bachelor Gulch.

[00:20:53] Speaker 04:
you know, so the demolition can proceed on the house and all that.

[00:20:56] Speaker 04:
And, you know, he didn't do it.

[00:20:58] Speaker 04:
We approved 13 days, a 13 day stay at the Ritz-Carlton Bachelor Gulch in Weaver Creek, not far from his home.

[00:21:05] Speaker 04:
And unfortunately it's right, you know, as COVID hits and then the hotel closes.

[00:21:10] Speaker 04:
But that's what we're offering.

[00:21:12] Speaker 04:
And we actually paid when he did stay for seven days at the Ritz-Carlton Bachelor Gulch, we paid it.

[00:21:18] Speaker 04:
Now we also paid all kinds of additional living expenses,

[00:21:20] Speaker 04:
in terms of food and housing for his dog because they correctly say the part of the house he was living in didn't have a functioning kitchen, so he paid for it.

[00:21:29] Speaker 04:
Very generous food expenses.

[00:21:30] Speaker 04:
He has no complaint with that.

[00:21:31] Speaker 04:
He has no complaint with the $4 million and then $5 million.

[00:21:35] Speaker 03:
Well, they argue it's bad faith to lowball the feeder system.

[00:21:40] Speaker 03:
And there's a pretty big $1 million delta there.

[00:21:44] Speaker 03:
What's the explanation for that?

[00:21:46] Speaker 04:
Well, the explanation

[00:21:48] Speaker 04:
is based on, unlike in all the cases they cite, it's not just a low-ball estimate where it's the insurer kind of rolling his eyes and throwing out a number.

[00:21:57] Speaker 04:
It's based on its own experts.

[00:21:58] Speaker 04:
And no big questions that JSL and the Dr. Hajjam that were retained, timely retained, did all the work by Great Northern, were experts and gave what they thought was an appropriate estimate.

[00:22:13] Speaker 04:
It turned out that it was all about the scope of work was the ultimate difference

[00:22:17] Speaker 04:
that there were things that JS held that our experts, again, nobody questions that the experts weren't doing their best to give us their, and nobody questions that we relied on these experts, unlike in the bad faith cases like Blakely that they cite.

[00:22:36] Speaker 04:
But what was going on is the experts later realized and sort of developed during the appraisal process

[00:22:43] Speaker 04:
that there was just a misunderstanding about what was included in the contents of the house, what was in the theater, accounted as part of the theater system versus what was part of the house itself.

[00:22:52] Speaker 04:
It had already been paid, and so additional amounts were added.

[00:22:56] Speaker 04:
And then there was a whole question about low voltage electrical system, which was $250,000.

[00:23:02] Speaker 04:
After the appraisal is commenced, we realize, or the evidence comes out,

[00:23:08] Speaker 04:
that we've learned for the first time that that's supposed to be included.

[00:23:12] Speaker 03:
Sounds like jury questions to me.

[00:23:18] Speaker 03:
The evaluation of these communications.

[00:23:20] Speaker 04:
Because most of what I just said is not disputed.

[00:23:21] Speaker 04:
The only point that they rely on to say that there is a bad faith jury question is the delta between the two.

[00:23:28] Speaker 04:
And there's all kinds of cases where it says a mere difference.

[00:23:31] Speaker 04:
between the two isn't enough to establish bad faith.

[00:23:33] Speaker 04:
What I would absolutely concede, and because I think it's right, is that when you have a substantial delta, that might get you to discovery to figure out why does that delta exist?

[00:23:41] Speaker 04:
Is the insurer just folding his hands and refusing to do the kind of work we expect of insurers?

[00:23:46] Speaker 04:
And that happened here.

[00:23:47] Speaker 04:
They had full discovery, except for the one deposition that's completely irrelevant to complain about, but they had full discovery to what was going on.

[00:23:55] Speaker 04:
lift the hood, scratch the surface on why this delta existed, it's perfectly clear.

[00:24:00] Speaker 04:
We had experts.

[00:24:02] Speaker 04:
We relied on the experts.

[00:24:03] Speaker 04:
Again, that's not disputed.

[00:24:05] Speaker 04:
The fact that they are expert is not disputed.

[00:24:07] Speaker 04:
The fact that they did their inspection work, they were trying to communicate with their expert about what the basis for their opinion was, and it all gets worked out.

[00:24:17] Speaker 03:
Did you want to give Mr. Palma some time?

[00:24:19] Speaker 04:
Yes, if there's no other questions on these issues, we would ask the court to affirm.

[00:24:24] Speaker 04:
Thank you very much.

[00:24:35] Speaker 05:
May it please the court, John Paul Marion-Pearing on the behalf of the broker defendants.

[00:24:40] Speaker 05:
Thank you, Judge Timkovich, for two minutes.

[00:24:42] Speaker 05:
Judge Moritz teed this up and presented the issue correctly in terms of broker defendants.

[00:24:49] Speaker 05:
If they have not even exhausted the coverage limits at issue under the Chubb policy, nothing is left to prove causation, which is where Judge Moore went, that they failed to prove causation in this case.

[00:25:03] Speaker 05:
Three points.

[00:25:04] Speaker 05:
First point is the language.

[00:25:07] Speaker 05:
The language of the policies, the only two policies in the record are the Chardis policy that predated the Chubb policy and then the Great Northern and the Chubb policy that followed.

[00:25:18] Speaker 05:
The idea that you can argue when we have unlimited coverage, you have to show beyond speculation what coverage would have been available to them.

[00:25:29] Speaker 05:
And their argument is limited to the Chardis policy.

[00:25:31] Speaker 05:
The language is identical, usually read to others.

[00:25:35] Speaker 05:
The language in terms of the ELE is substantially similar.

[00:25:39] Speaker 05:
Reasonable increase in living expenses to maintain household's usual standard of living.

[00:25:45] Speaker 05:
If they do not, if Mr. Crum in this case, if plaintiff does not exhaust those limits, there's nothing in the Charter's policy

[00:25:54] Speaker 05:
that would have provided the causation, the link here to say, I would have gotten a different result under the Charterist Policy.

[00:26:01] Speaker 05:
The conditions of coverage are identical.

[00:26:04] Speaker 05:
If you have exhaust for the 15 days, then there's nothing there for the broker.

[00:26:09] Speaker 02:
So the only big difference in the policies was the duration of coverage, or is the extent of the coverage basically the same?

[00:26:17] Speaker 02:
But the other difference was that this was a vacation rental home, so there was a condition in the new policy that didn't exist in the old one.

[00:26:24] Speaker 05:
No, Judge Eagle, there really wasn't.

[00:26:26] Speaker 05:
Not on the FRV.

[00:26:27] Speaker 05:
Usually rent to others is identical.

[00:26:29] Speaker 05:
It's 15 days.

[00:26:31] Speaker 05:
But if you haven't exhausted the 15 days, there's no causation.

[00:26:34] Speaker 05:
And that's the only difference.

[00:26:37] Speaker 05:
It's that and which.

[00:26:39] Speaker 05:
One policy says that, and one policy says which.

[00:26:42] Speaker 05:
In terms of the ELE, there is some very slight differences.

[00:26:47] Speaker 05:
And you can compare them.

[00:26:49] Speaker 05:
We cite.

[00:26:50] Speaker 05:
reasonable increase in living expenses to maintain your household's usual standard of living.

[00:26:55] Speaker 05:
Same.

[00:26:56] Speaker 05:
Substantially similar.

[00:26:57] Speaker 05:
If I may just have one minute to wrap.

[00:26:59] Speaker 03:
Go ahead and wrap up.

[00:27:01] Speaker 05:
In terms of the causation, under the Gibbons versus Ludlow case, Judge Moore concluded that the burden is on them to present that evidence to prove a different result.

[00:27:14] Speaker 05:
They fail to meet that burden accordingly.

[00:27:16] Speaker 05:
They fail to present a crucial element, and therefore their claim fails.

[00:27:20] Speaker 05:
be happy to address any other questions the panel may have.

[00:27:23] Speaker 05:
Otherwise, we ask that you affirm summary judgment.

[00:27:26] Speaker 05:
If it's a firm for Great Northern, it follows for the broker defendants.

[00:27:30] Speaker 05:
But in any event, the broker defendants on their own have a causation basis, and we ask that you affirm.

[00:27:36] Speaker 05:
Thank you, counsel.

[00:27:37] Speaker 03:
Thank you.

[00:27:37] Speaker 03:
Some rebuttal time?

[00:27:39] Speaker 06:
Yes, your honor.

[00:27:40] Speaker 06:
Mr. Cohn?

[00:27:41] Speaker 06:
I'm on behalf of myself.

[00:27:43] Speaker 06:
It's a privilege to be before your honor.

[00:27:44] Speaker 06:
Thank you for the opportunity.

[00:27:46] Speaker 06:
Let's, if we may, if I may start off, I'm going to answer each of your questions that I believe were not answered accurately, correctly, or truthfully under the record before you.

[00:27:59] Speaker 06:
Okay, let's first start off, and let's lift up the hood as our counsel on the other side stated.

[00:28:05] Speaker 06:
I'll go backwards a little bit, so maybe it's easier with the brokers first.

[00:28:10] Speaker 06:
The brokers are saying, well, we need to exhaust its coverage.

[00:28:13] Speaker 06:
First of all, the record supports

[00:28:16] Speaker 06:
factually that I asked for the coverage to be the same as Chartus.

[00:28:24] Speaker 06:
I wanted unlimited ELE and unlimited FRV.

[00:28:28] Speaker 06:
Why did Crumb want unlimited ELE and FRV?

[00:28:32] Speaker 06:
Because Crumb just built a $24 million house that he bought for five and spent five years constructing it to be the world's greatest ski house.

[00:28:45] Speaker 06:
Now once the world's building a ski house, that's making sure in Vale Valley no house will come close to make it the house of choice of the upper, upper echelon of wanting to rent houses.

[00:29:00] Speaker 06:
We have decorations and affidavits of people that would testify to support that.

[00:29:08] Speaker 06:
The first year I got the house, I told my brokers a month before I bought the house.

[00:29:15] Speaker 06:
Luckily, they did an internal document that was never provided us till discovery.

[00:29:21] Speaker 06:
I will rent this house, okay, at 30 days minimum a year.

[00:29:27] Speaker 06:
That is what I intend.

[00:29:29] Speaker 06:
I may not be able to do that because I may not find people that are willing to pay the rates that I need to justify the risk

[00:29:39] Speaker 06:
renting a house that's a $20 million house with $2 million of art and millions of dollars of antiques.

[00:29:47] Speaker 06:
I know how blessed and lucky I am, but that's the insurance I got.

[00:29:53] Speaker 06:
If you want insurance for your Ferrari or your 911 that you're so blessed to have, and you want insurance to be able to drive those cars when they're in total, your insurance company that's saying we're going to give you that

[00:30:08] Speaker 06:
The thing gives you the pinto for your honors to go from point A to the courthouse.

[00:30:13] Speaker 06:
You may be able to get there, but that's not what you paid for.

[00:30:17] Speaker 06:
That's not what your insurance company was obligated to pay.

[00:30:22] Speaker 06:
That goes to the ELA.

[00:30:24] Speaker 06:
Of course, the night at the Ritz that I stayed.

[00:30:26] Speaker 06:
I stayed at seven nights at the Ritz in a one-bedroom in a height of ski season.

[00:30:31] Speaker 06:
at my preferred Marriott rate, which is hundreds of dollars less, because on the highest status, then someone else will be able to stay there.

[00:30:40] Speaker 06:
That was a thousand dollars a night.

[00:30:42] Speaker 06:
That was seven nights in the middle of some of my demolition that took 90 days that was dangerous.

[00:30:49] Speaker 06:
Their own scientists, I have sites for all this, I have 29 seconds, I can give you a site for everything I'm saying if I'm permitted to go a minute or two longer.

[00:31:00] Speaker 06:
Their own scientists,

[00:31:02] Speaker 06:
Not my scientist, Chubb's scientist, January 8th, less than two weeks of the insured event, get him crumb out of the house.

[00:31:14] Speaker 06:
Because they are now doing remediation.

[00:31:17] Speaker 06:
The insurance company, my insurance company, is instructing me to start with remediation.

[00:31:23] Speaker 06:
What does that mean?

[00:31:24] Speaker 06:
That means anybody going in and out of that house or wearing those white bags.

[00:31:28] Speaker 03:
Are we talking about the ELE?

[00:31:30] Speaker 03:
Well, we're talking about both, Your Honors.

[00:31:33] Speaker 03:
Because I just wondered, Mr. Hacker said, well, they had to establish the usual days that you spent in Beaver Creek to establish what would be a reasonable substitute housing.

[00:31:53] Speaker 03:
Isn't that what happened?

[00:31:55] Speaker 03:
That's what happened.

[00:31:56] Speaker 06:
Nobody brought up for the first

[00:31:58] Speaker 06:
35 days, usual vacation occupancy.

[00:32:03] Speaker 06:
That's the first thing with regard to ELA, because they want to show, hey, does this guy really use this house before we're going to let him have ELA, extra living expenses.

[00:32:14] Speaker 06:
I showed them within days, not months, within days, that I was at that Colorado residence 152 days for the past two years.

[00:32:27] Speaker 06:
It turned out to be full five days more in one year.

[00:32:30] Speaker 06:
I gave them every airline ticket that I flew, every airline ticket, receipt, my credit card voucher, to and from where I flew, either Philadelphia, New York, LA, my practice.

[00:32:45] Speaker 03:
Are you going back to bad faith now, or are you talking about ELE?

[00:32:49] Speaker 06:
It's ELA, because they're saying I have to establish usual vacation occupancy.

[00:32:54] Speaker 06:
It is also bad faith, Judge.

[00:32:56] Speaker 06:
If I can show them that I was at my house 257 days in two years, and my insurance company, my insurance company protecting me, saying I only get 60 days, well, I disagree with that.

[00:33:11] Speaker 06:
But how could they not say I established my usual vacation occupancy immediately when I was at my house 257 days?

[00:33:21] Speaker 03:
Well, you're over time.

[00:33:22] Speaker 03:
I want you to go ahead and wrap up.

[00:33:25] Speaker 03:
OK.

[00:33:27] Speaker 03:
And that means 10 seconds.

[00:33:30] Speaker 06:
So first, just about how they were so concerned to get me into a hotel.

[00:33:36] Speaker 06:
And that's what they promised me.

[00:33:38] Speaker 06:
Well, I have nine separate requests getting into hotels.

[00:33:43] Speaker 06:
All of them were denied.

[00:33:45] Speaker 06:
Or, as your honor asked, we're looking into it.

[00:33:50] Speaker 06:
But when the hotel request is two weeks ahead of time, because I'm having business colleagues,

[00:33:56] Speaker 06:
family coming out and they never respond by that date is in fact the effect of a denial.

[00:34:03] Speaker 03:
All right.

[00:34:04] Speaker 03:
Thanks for your argument.

[00:34:05] Speaker 03:
Time's expired.

[00:34:05] Speaker 03:
The case is submitted and we'll take a brief recess.