[00:00:02] Speaker 01: All right, the next case for argument this morning, Industrial Park Center versus Great Northern Insurance Company, two appeals that are consolidated, 24-4788 and 25-295. [00:00:19] Speaker 01: Councilman, if you're ready, please proceed. [00:00:24] Speaker 04: Good morning, Your Honors. [00:00:24] Speaker 04: May it please the Court? [00:00:25] Speaker 04: My name is Larry Charlotte, and I represent the appellant plaintiff in this case, Main Spring Capital Group. [00:00:31] Speaker 04: Judge Beatty, I would respectfully request a couple minutes for rebuttal. [00:00:37] Speaker 01: Please keep your eye on the clock. [00:00:40] Speaker 04: I will. [00:00:44] Speaker 04: Your Honor, the focal issue here today on this appeal is the interpretation and applicability of the fortuity doctrine in Arizona. [00:00:54] Speaker 04: We know this. [00:00:56] Speaker 04: Courts all over the country have addressed this issue. [00:01:01] Speaker 04: Unfortunately, the Arizona Supreme Court has not, neither has the Court of Appeals, and so this panel is blessed with a case of first impression. [00:01:10] Speaker 00: It is- That leads to a question in my mind that I appreciate having both counsel respond to. [00:01:18] Speaker 00: Given the centrality of this issue of state law on which the state appellate courts have not issued any opinion, [00:01:29] Speaker 00: Is this an appropriate case for certification to the Arizona Supreme Court? [00:01:37] Speaker 04: I think it may be. [00:01:39] Speaker 04: And it's my understanding that the Court of Appeals, I believe it's Rule 27, has the authority to do that. [00:01:49] Speaker 04: I don't believe that [00:01:53] Speaker 04: the Council can certify it, but yes, to answer your question. [00:01:56] Speaker 00: No, Council can't, nor do we need a request from Council, but I'm asking more for your views as to whether that would be useful or appropriate. [00:02:08] Speaker 04: It would certainly be more definitive in Arizona if the Arizona Supreme Court sets out what the interpretation and appropriate application of the fortuity doctrine is, because [00:02:22] Speaker 04: With all due respect, if there's a federal decision on the interpretation, it's not going to be necessarily binding on the state courts. [00:02:31] Speaker 01: Well, it's certainly not going to be binding on the Arizona Supreme Court. [00:02:34] Speaker 01: So is there enough developed law for us to make what we would call an eerie guess? [00:02:42] Speaker 04: There is, as the court is aware, a boatload of law on fortuity. [00:02:52] Speaker 04: I do think that certainly an educated guess could be made by the federal court. [00:02:58] Speaker 04: It's just a matter of binding authority is really my point. [00:03:02] Speaker 04: You're going to see that with the Arizona Supreme Court. [00:03:05] Speaker 04: With this court, it won't necessarily be binding, obviously, on the Arizona Supreme Court. [00:03:10] Speaker 01: So I guess one of the countervailing considerations is [00:03:14] Speaker 01: Of course, first, they don't have to accept it, but also delay. [00:03:18] Speaker 01: So if we can make a decision that resolves the case, should we not do so? [00:03:26] Speaker 04: Well, in representation of the plaintiff, we want as expeditious a ruling as possible. [00:03:32] Speaker 04: And my preference would be, I gave you my reasons why I think the Arizona Supreme Court might be the better forum for something that is binding throughout Arizona. [00:03:44] Speaker 04: My preference would be to have this court decide this issue. [00:03:48] Speaker 00: I have a factual question as well and that is whether this insurer, whether Great Northern was the insurer at the time of the 2010 what I'll call flooding disaster or flood or whatever because [00:04:09] Speaker 00: Clearly they have insured since from 2018 through 2022, which is five years, but I'm unclear as to whether they were the insurer at the time of the 2010 issue. [00:04:22] Speaker 04: They, GNIC Great Northern, was the insurer initially in 2008 and 2010 and 2011. [00:04:31] Speaker 04: And as Judge Graber, you pointed out, [00:04:34] Speaker 00: twenty eighteen through uh... twenty twenty two and i would also i'm sorry to interrupt but i just wanna the reason i'm asking is to understand whether they knew of the problem in twenty ten by way of being the insurer or in some other way and specifically whether they knew uh... of the extent of the problem and the [00:05:02] Speaker 00: likelihood of its repetition if the use of the property remained the same? [00:05:09] Speaker 04: Your Honor, SER 144 is where the deposition of Barbie McDaniel, who was the property manager at mainspring, for all those years that we talked about, and specifically your testimony at SER 159, 160, specifically states under oath deposition, [00:05:32] Speaker 04: that each and every one of those years, GNIC would come and inspect the property, obviously to determine the insurability of it, each and every year. [00:05:41] Speaker 04: So 2008, obviously, 2010, 2011. [00:05:44] Speaker 02: Had there a claim been made at that time when the 2010 occurred? [00:05:53] Speaker 04: It was not, because it had been paid for by Star Fisheries, the $56,000 in damages. [00:06:00] Speaker 00: And that is really one of the... Well, that's actually the source of my question, because if someone else paid for it, what does the record show about the extent to which the insurer was made aware of all the specifics of the actual physical problems and what might happen or would happen in the future? [00:06:30] Speaker 04: As far as the record goes, what I provided you is where they would have obtained that information. [00:06:39] Speaker 04: If they were there in 2010 and there in 2011, inspecting GNIC, that is. [00:06:45] Speaker 00: And I would also add... So there's nothing showing that they received copies of the reports or of the repairs that were made in 2010? [00:06:55] Speaker 04: Not in the record. [00:06:57] Speaker 04: Not in the record. [00:06:58] Speaker 04: But I would also note that in that SER, those numbers I gave you, SER 159 to 160, Ms. [00:07:07] Speaker 04: McDaniel also testified that specifically they would look at the stark fisheries suite. [00:07:13] Speaker 04: So there's that. [00:07:17] Speaker 01: So turning toward the issue of fortuity, somewhat amorphous standard, there needs to be some [00:07:28] Speaker 01: some chance involved, some risk for something to be insurable. [00:07:33] Speaker 01: I understood the district court's order to apply a standard very close to whether it was reasonably foreseeable, whether the event or the damage was foreseeable. [00:07:48] Speaker 01: That would make it outside of fortuity, non-fortuitous, and then not something that could be covered. [00:07:55] Speaker 01: And the district court relied on the [00:07:58] Speaker 01: change in the lease with star fisheries and I'm forgetting what else it was in the record but the district court relied on a few things to conclude that that mainspring was aware of this issue and knew it basically knew it was going to happen or is it foreseeable it was going to happen. [00:08:18] Speaker 01: Why is that wrong? [00:08:21] Speaker 04: Well where do I start? [00:08:25] Speaker 04: and always i'm sure you're going to say that you know a lot of directions here uh... first with respect to the the courts uh... decision with respect to applying a standard of reasonable foreseeability and importantly it applied a standard of almost certain to occur there is no [00:08:47] Speaker 04: jurisdiction, no case in this country. [00:08:50] Speaker 04: And Fertuity's been around for 60 years that applied a standard of almost certain. [00:08:56] Speaker 04: And that's significant because almost certain implies risk. [00:09:01] Speaker 04: There's some type of risk, whether it's high or low. [00:09:06] Speaker 04: That is why the majority of courts, including, by the way, in JANCO, which is what the trial court relied upon, [00:09:15] Speaker 04: required in their analysis, and they found that it was fortuitous, that particular loss, it has to be certain. [00:09:23] Speaker 04: And not only does it have to be certain, the insured has to subjectively know that it's going to be certain to occur within the policy period. [00:09:32] Speaker 01: I now remember what the other bit of the record was that mainspring had had a report prepared in 2010. [00:09:39] Speaker 01: They took some of the recommended steps, but not others that would have hopefully prevented this from happening. [00:09:46] Speaker 04: OK, I've got five minutes. [00:09:48] Speaker 04: I could talk for 20 about just that question. [00:09:53] Speaker 04: The court relied, I just want to stay with this ENJANCO standard, recently foreseeable. [00:09:58] Speaker 04: If you think about that standard, first of all, ENJANCO is one of four cases in this country that applies reasonable foreseeability. [00:10:08] Speaker 04: All of them are out of one state, Washington. [00:10:13] Speaker 04: All of those four cases, as I indicated, [00:10:15] Speaker 04: a moment ago, require certainty. [00:10:19] Speaker 04: The insured has to know with certainty, not almost certainty, which is what the trial court held and applied, and it was the wrong standard. [00:10:28] Speaker 04: Third, all four of these cases, the Ingenco cases out of Washington, all require a subjective standard, all of them. [00:10:39] Speaker 04: And the court's ruling [00:10:44] Speaker 04: The court found initially in that one paragraph, I believe it's ER7, the court finds that Mainspring didn't know this was going to happen. [00:10:53] Speaker 04: And they certainly did nothing intentionally. [00:10:55] Speaker 04: Nevertheless, the court finds that this was reasonably foreseeable and almost certain. [00:11:01] Speaker 04: That's an objective standard. [00:11:03] Speaker 04: All of those cases under ENGENCO require subjective uncertainty. [00:11:09] Speaker 04: Last thing I would point out about the ENGENCO and the reasonable foreseeability standard, [00:11:14] Speaker 04: Again, there's not one case in this country, at least that I'm aware of, where a court has actually held that a loss was not fortuitous, not fortuitous because the insured merely thought the loss was reasonably foreseeable and almost certain. [00:11:34] Speaker 04: The law of fortuity is a threshold issue to prevent wrongdoing where the insured knows when it enters that contract, it knows with certainty [00:11:44] Speaker 04: that I'm going to have a loss in this policy period, I'm going to get paid off. [00:11:47] Speaker 04: That's not what insurance law is about. [00:11:49] Speaker 04: Insurance law is about risk. [00:11:51] Speaker 04: And that's why the courts throughout the country have applied it's got to be certain. [00:11:56] Speaker 04: There's no evidence in this case that it was certain. [00:11:58] Speaker 04: Getting to the other part of your question, the trial judge referred to that restoration clause. [00:12:07] Speaker 04: That clause was put in place in 2014 with Star Fisheries [00:12:12] Speaker 04: as a direct result of repairs that had to be done in 2011. [00:12:18] Speaker 04: And it was put there because, dare I say, Main Springs made up of some smart business people. [00:12:26] Speaker 04: There was a risk, not a certainty. [00:12:29] Speaker 04: And that's critical fortuity. [00:12:31] Speaker 04: Fortuity, again, is just that threshold issue. [00:12:33] Speaker 04: It's not about coverage. [00:12:37] Speaker 04: If there is risk that's involved, the insurance company, [00:12:41] Speaker 04: They cover it. [00:12:42] Speaker 04: That's what insurance law is based upon. [00:12:44] Speaker 04: Secondly, if you look at the restoration clause to put an exclamation point on risk, what that restoration clause said was, look, at the end of your lease, because they had to make repairs in 2011, we're going to have engineers look at it and make sure that everything's copathetic, if you will, before you leave. [00:13:08] Speaker 04: Third, [00:13:10] Speaker 04: Again, certainty, not almost certainty. [00:13:13] Speaker 04: The mainspring amended the lease with Starfishers, as I say, the first time that restoration clause was 2014. [00:13:24] Speaker 04: They did it again in 2018, and this is in the SER records, all the amendments. [00:13:30] Speaker 04: And they did it two other times, up to the 13th Amendment, which was during the timeframe of the loss. [00:13:37] Speaker 04: And again, the standard for fortuity around the country is the insured has to know that the loss is going to occur for all the reasons I stated before within that policy period for a loss to be not fortuitous. [00:13:52] Speaker 04: They clearly didn't know with any type of certainty that this loss was going to occur between June 7th, 2021 and June 7th, 2022, the relevant timeframe, because they kept renewing it. [00:14:03] Speaker 04: If they knew for certain, if that was the case, and by the way, if they really knew for certain that this was gonna happen, they would have gotten rid of this tenant. [00:14:11] Speaker 04: That's more or less Mr. Charlotte's commentary on it. [00:14:15] Speaker 04: There's no statement about that. [00:14:18] Speaker 04: And the last thing on this point, [00:14:21] Speaker 04: The last thing on this point would be think about setting a standard of reasonable foreseeability for fortuity. [00:14:28] Speaker 04: That would mean virtually all insurance is illusory. [00:14:31] Speaker 04: And the reason for that is we, as individuals, we only insure that which is reasonably foreseeable. [00:14:41] Speaker 04: We're not going to get earthquake insurance in Phoenix, likely not, but we sure as heck [00:14:49] Speaker 04: because it's reasonably foreseeable, are going to get auto insurance. [00:14:52] Speaker 04: Because it's reasonably foreseeable, we're going to get an accident. [00:14:56] Speaker 04: Homeowner's insurance, same thing. [00:14:57] Speaker 04: It's reasonably foreseeable. [00:14:58] Speaker 04: We're going to have a pipe. [00:14:59] Speaker 04: And if we're going to set the standard on fortuity, on reasonable foreseeability, then virtually any type of claim is going to be considered not fortuitous. [00:15:09] Speaker 04: And it would be illusory. [00:15:11] Speaker 04: I could reserve my last 10 seconds. [00:15:17] Speaker 01: If my colleagues have no additional questions, I'll give you a couple of minutes on rebuttal. [00:15:25] Speaker 04: Thank you. [00:15:29] Speaker 01: Or you can talk really fast for 10 seconds. [00:15:35] Speaker 00: Thank you. [00:15:44] Speaker 03: Good morning, and may it please the court, Douglas Codell, a parent on behalf of Great Northern Insurance Company. [00:15:50] Speaker 03: I think we start with the panel's threshold question about potentially certifying this matter over to the Arizona Supreme Court. [00:16:01] Speaker 03: And although that would provide certainty on the issue in Arizona and specifically defining Arizona law, this court [00:16:13] Speaker 03: in NGENCO made the same analysis about fortuity under Washington law. [00:16:19] Speaker 03: And so it's our position that your honors are well equipped to make the determination in this case. [00:16:30] Speaker 03: Circling around to then what is fortuity? [00:16:34] Speaker 03: And we think that the district court was spot on in the assessment of what is necessary for fortuity. [00:16:43] Speaker 03: There has to be some kind of a chance. [00:16:45] Speaker 03: There has to be some kind of an unexpected event that is tethered to the actual loss. [00:16:53] Speaker 03: In this case, we have a manifestation of that loss back in 2010, well before this policy, particular policy, incepted. [00:17:04] Speaker 03: And we have mainspring correcting the damage to it, having its tenant contribute to the payment for that damage. [00:17:17] Speaker 03: And this is an ongoing issue to pay for the water-related damage. [00:17:24] Speaker 03: And the water-related issue is ongoing for many, many years. [00:17:29] Speaker 03: So mainspring knew about the condition and what it could cause. [00:17:34] Speaker 03: and had evidence from its inspectors that there was chipping and issues with the tilt walls that are associated with water damages. [00:17:50] Speaker 03: So we have not a focus on [00:17:57] Speaker 03: the cause of the loss, because we know what the cause of the loss is, but whether the loss itself is fortuitous. [00:18:06] Speaker 03: And so for guidance to this court, as in Ingenco, the restatement of contracts is really the focal point that courts around the country have homed in on. [00:18:18] Speaker 03: And under the restatement of contracts, courts typically define a fortuitous event [00:18:26] Speaker 03: as one that depends on chance, taking into account the knowledge of the parties and the perception of the risk at the time the policy was issued and whether the loss could be reasonably foreseen. [00:18:44] Speaker 03: And so the restatement itself is where the district court [00:18:47] Speaker 03: was able to get its standard for this case. [00:18:53] Speaker 01: So how do we draw some lines here? [00:18:56] Speaker 01: Your friend on the other side argues that if reasonable foreseeability is the standard for fortuity, then nothing is insurable because almost every loss is foreseeable, reasonably foreseeable. [00:19:08] Speaker 01: So is there some line drawing that we can do here? [00:19:13] Speaker 03: Again, reasonable foreseeability, yes, there are on clear days, everything is foreseeable. [00:19:21] Speaker 03: But going to the examples that counsel use about auto insurance, well, getting auto insurance is not illusory simply because it's reasonably foreseeable that you might get into an accident. [00:19:36] Speaker 03: You know, it's insuring against an unexpected event, the risk [00:19:42] Speaker 03: of that unexpected event. [00:19:44] Speaker 03: Now you may purchase auto insurance for 30 years and never have to make a claim. [00:19:49] Speaker 03: And so it's not an illusory contract with the insured. [00:19:56] Speaker 01: But it would be illusory if you took out the insurance and you intended to use your vehicle for bumper cars. [00:20:02] Speaker 01: I mean, then you're certain you're going to damage the vehicle as opposed to you're going to drive it. [00:20:09] Speaker 03: It wouldn't be illusory, but I would say it would not be covered because taking out auto insurance and then using your car as a bumper car, it would be reasonably foreseeable to an almost certainty that using your car as a bumper car would cause damage to the car. [00:20:28] Speaker 01: So is fortuity a doctrine that's intended to prevent essentially insurance fraud? [00:20:35] Speaker 01: So you can't take out a policy when you know [00:20:39] Speaker 01: you not only foresee a risk or damage, you know what's going to happen. [00:20:42] Speaker 01: And so you're taking out insurance when there's really no risk at all. [00:20:45] Speaker 01: And you're just trying to shuffle your ability to the insurance company. [00:20:49] Speaker 03: That's the overarching policy behind the fortuity doctrine that's embedded in every insurance contract is you don't want to be insuring or providing insurance for something that is going to happen or is reasonably likely to happen. [00:21:08] Speaker 03: Because then you're encouraging fraud in terms of people making claims when they know something is going to happen or is reasonably foreseeable to happen. [00:21:19] Speaker 03: So yes, that's the undergirding for the policy behind the fortuity doctrine. [00:21:25] Speaker 01: So if I understand your argument, mainspring knew this was going to happen so there was no fortuity because there had been past damage to the building [00:21:38] Speaker 01: in 2010 from the water, they made repairs, they retained the same tenant and the tenant had the same practices with respect to washing down the floors. [00:21:46] Speaker 01: So because it had occurred in the past, they knew it was going to happen again? [00:21:51] Speaker 03: Because it had occurred in the past, they had these reports that indicated that you needed to take action against, to protect against further water damage, otherwise you would have structural issues. [00:22:06] Speaker 03: And that's exactly what happened. [00:22:08] Speaker 03: So in a way, yes, it was reasonably foreseeable based on the knowledge that mainspring had and the knowledge that it needed to do things to prevent the inevitability from occurring and did not do those things that it was reasonably foreseeable that this event would occur. [00:22:31] Speaker 00: That seems to track what Ingenco holds, which I gather is what you want us to apply here. [00:22:39] Speaker 00: They quote saying, while in hindsight structural defects might appear inevitable, the court had to credit the insurance statement that it had no knowledge of the design defects and therefore the loss was fortuitous. [00:22:56] Speaker 00: So I guess by negative implication, if [00:23:01] Speaker 00: the insured had knowledge of the design defects or other problems, it would not have been fortuitous. [00:23:08] Speaker 00: At least that's how I read in JANCO. [00:23:11] Speaker 00: And it's very fact dependent. [00:23:16] Speaker 00: So I guess my next question really is even if we apply that standard, are there genuine issues of fact here that require a trial? [00:23:31] Speaker 03: No, Your Honor, there aren't. [00:23:32] Speaker 03: As the District Court found, the parties agreed on the basic facts which provide the basis to make the fortuity determination. [00:23:40] Speaker 03: And those are the long history, the reports, the failure to make the repairs, and the ongoing water damage over 30 years. [00:23:53] Speaker 01: What about the [00:23:54] Speaker 01: The inspections. [00:23:55] Speaker 01: What about Great Northern's inspections of the building in 2010, 2011, and their ability to determine these issues? [00:24:03] Speaker 03: I'm sorry, Your Honor. [00:24:03] Speaker 03: I didn't quite hear you. [00:24:04] Speaker 01: Oh, I'm sorry. [00:24:07] Speaker 01: Did Great Northern have any ability to determine that there were potential issues with respect to the use of water at the building because they had done inspections around the time of the previous damage in 2010 and 2011? [00:24:20] Speaker 03: There's no evidence in the record that [00:24:23] Speaker 03: Great Northern had any information relating to, you know, the specific underlying nature of the water issues. [00:24:32] Speaker 03: There was, as Judge Holman noted, or asked about, there was no claim made. [00:24:37] Speaker 03: So the type of inspection that might be done [00:24:40] Speaker 03: going out to a property and looking around saying, okay, you know, the Star Fisheries is here. [00:24:46] Speaker 03: They're still doing the same thing. [00:24:48] Speaker 03: You know, has anything changed? [00:24:50] Speaker 03: And the insured doesn't inform the underwriters about any change in circumstances. [00:25:00] Speaker 03: So there's nothing in the record that Great Northern was aware of the issues that were going on for a good 12 years. [00:25:08] Speaker 02: Can you identify the changes that mainspring did not make that the engineers suggested be made in 2010? [00:25:17] Speaker 03: Give me a second. [00:25:40] Speaker 03: The speedy recommended that it may be possible to install new waterproof floor coating or remove or replace large sections of the slab with a vapor barrier or drain system to collect water and prevent infiltration into the deeper soils. [00:26:03] Speaker 03: Those are the ones, specific ones, Your Honor. [00:26:10] Speaker 03: And mainspring admitted that they did not make those changes. [00:26:14] Speaker 01: So they received a report that recommended a number of steps. [00:26:18] Speaker 01: They took some of them, but not others. [00:26:20] Speaker 01: So as I read the report, the steps they didn't take were recommendations, but not requirements. [00:26:28] Speaker 01: And they took the required steps. [00:26:30] Speaker 03: Well, I don't think there was any specific requirement. [00:26:34] Speaker 01: Well, not in the sense that it was required by some regulation or law, but that what the engineers told them, these are the things you need to do, here are some things you could consider doing. [00:26:45] Speaker 03: Well, I think that even for the future ones, in order to prevent inevitability, [00:26:51] Speaker 03: of structural damage, you need to take these particular steps that were not undertaken. [00:26:58] Speaker 03: The easier ones like a stairwell collapsing or having visibly structural issues and those being corrected, sure, those were done. [00:27:11] Speaker 03: But like I said, the ones that had to do with the kind of, pardon me, the behind the scenes type issues [00:27:21] Speaker 03: were not done, and those are the ones that caused all the ultimate problems. [00:27:27] Speaker 03: So, unless the court has any other questions on fortuity, I just wanted to also point out that there are two exclusions, assuming that the court disagrees with the district court on the fortuity analysis, that the wear and tear and the [00:27:50] Speaker 03: Settling, I always forget the name of that one. [00:27:52] Speaker 03: Settling exclusions, both apply given the facts and circumstances submitted to you. [00:27:56] Speaker 01: The district court didn't do that analysis, right? [00:27:59] Speaker 01: I mean, so we would be deciding for the first time whether, assuming that there's coverage, sortuity, that whether or not exclusions apply. [00:28:09] Speaker 01: So you are asking us to make that analysis on appeal. [00:28:13] Speaker 03: As an alternative ground to affirm the judgment below, this court can do that. [00:28:17] Speaker 03: It's a legal issue. [00:28:19] Speaker 03: And we would submit that both exclusions apply in this case, even though the district court didn't have to reach them. [00:28:25] Speaker 03: And we don't believe that this court necessarily has to reach these issues as well. [00:28:30] Speaker 03: But they are alternative grounds for the court. [00:28:33] Speaker 03: And unless the panel has any other questions, I'll submit. [00:28:36] Speaker 03: Thank you. [00:28:37] Speaker 01: All right. [00:28:37] Speaker 01: Thank you. [00:28:41] Speaker 04: You said two minutes? [00:28:43] Speaker 01: It's two minutes on the clock. [00:28:46] Speaker 04: All right. [00:28:49] Speaker 04: First of all, in JANCO, quickly, only state in the country to apply reasonable foreseeability. [00:28:56] Speaker 04: We talked about why that standard would render insurance essentially illusory. [00:29:01] Speaker 04: But getting to the certainty, the purpose of fortuity, it is fraud, that is the purpose. [00:29:09] Speaker 04: That's why the standard has to be certainty, not almost certainty, because that's risk, as I said earlier, and that's what insurance is all about. [00:29:17] Speaker 04: As far as repairs go, [00:29:19] Speaker 04: Specifically, the repairs were, a final report was rendered on October 28th, 2010 by the structural engineer that was originally hired. [00:29:29] Speaker 04: They hired a geologist to take a look at it called Speedy, and then they rendered a final report. [00:29:36] Speaker 04: And in the report, at ER 144, there's, in the conclusions and recommendations, and in the conclusions and the recommendations, there was nothing, nothing in there that [00:29:49] Speaker 04: And that's more important than what is in there. [00:29:51] Speaker 04: There was nothing in there that if star fisheries remained in there, it would affect the structural integrity of the building. [00:29:58] Speaker 04: Because remember, we're talking about fortuity. [00:30:00] Speaker 04: What they knew was absolutely going to happen. [00:30:02] Speaker 04: There was nothing like that. [00:30:04] Speaker 04: They did not suggest that star fisheries alter their conduct at all, that that would affect the structural integrity. [00:30:14] Speaker 04: They did not say that the structural integrity of that building had been compromised in any way. [00:30:20] Speaker 04: And the repairs, very quickly, the repairs you can see at ER 216, which is Mills-Brown declaration, wherein he says, first of all, it's, again, a subjective standard. [00:30:33] Speaker 04: We had no idea the extent that this loss would have happened. [00:30:36] Speaker 04: And that's the focus, is the loss. [00:30:38] Speaker 04: It's not speculation. [00:30:39] Speaker 04: They have to know with certainty. [00:30:41] Speaker 04: Secondly, Mills-Brown sets out the repairs that were done. [00:30:44] Speaker 04: The options for prevention of future moisture infiltration were seal the cracks, put in a water coating or, these are three options, or put in a water vapor system. [00:30:56] Speaker 04: Judge, or Judge, the engineer at ER 202, Judge, or Judge, Engineer Heusman stated these were options, any one of them would have been fine. [00:31:07] Speaker 04: In fact, at ER 9, the court sets out that these were options. [00:31:12] Speaker 04: It's undisputed that the cracks, the first option was done. [00:31:16] Speaker 04: Undisputed, Mills-Brown's deposition. [00:31:19] Speaker 04: You can look at Louis Bozanich, who was the vice president of Star Fisheries, who testified at ER 215 that all those repairs were done. [00:31:32] Speaker 04: The court states at ER 4 and ER 8, [00:31:37] Speaker 04: that the cracks were sealed. [00:31:40] Speaker 04: They did one of the options. [00:31:41] Speaker 04: But the bottom line on this is there's no other repairs, nothing else going on until 2022. [00:31:47] Speaker 04: And so for this court to find that this loss is not fortuitous, it has to find that based upon some repairs that were done in 2011, not told that the structural integrity of this building was gonna collapse. [00:32:03] Speaker 04: Remember, it's a building, it's not just star fisheries, that somehow they're not told [00:32:07] Speaker 04: about anything that's improper with star fisheries, they're bestowed, endowed with knowledge to a certainty that their building is going to collapse between June 7th, 2021 and June 7th, 2022. [00:32:24] Speaker 04: With all due respect, it's not right. [00:32:33] Speaker 01: You're over time now. [00:32:35] Speaker 04: Wait a minute, that should only talk for 15 seconds. [00:32:40] Speaker 04: Thank you all very much and thank you for coming into Phoenix. [00:32:44] Speaker 01: Thank you. [00:32:44] Speaker 01: Thank you both for your arguments this morning. [00:32:47] Speaker 01: They were very helpful. [00:32:48] Speaker 01: This case is submitted and we are adjourned until tomorrow morning.