[00:00:00] Speaker 02:
141389 Southern Snow Manufacturing vs. Snow Wizard Mr. Waters whenever you're ready.

[00:00:27] Speaker 01:
A bit of a warning.

[00:00:28] Speaker 01:
I tend to speak really softly and fast.

[00:00:31] Speaker 01:
So if you can't hear me, you don't need to stand up.

[00:00:33] Speaker 01:
I appreciate you telling me.

[00:00:34] Speaker 04:
Don't speak too softly.

[00:00:36] Speaker 01:
I won't.

[00:00:36] Speaker 04:
I'm already hearing you like that.

[00:00:38] Speaker 01:
Okay.

[00:00:39] Speaker 01:
I have a partner like that.

[00:00:40] Speaker 01:
Your Honor, John Waters, I represent Hanover Insurance Company.

[00:00:46] Speaker 01:
We're here today not on a patent issue or a trademark issue specifically, but on insurance coverage for that.

[00:00:52] Speaker 01:
specifically under Louisiana law.

[00:00:54] Speaker 01:
Everyone now agrees that Hanover has no duty to indemnify Snow Wizard for any of the claims of southern snow because there is no coverage for that claim.

[00:01:09] Speaker 01:
They use the word coverage advisedly because coverage has two points, two problems of this form.

[00:01:15] Speaker 01:
There's a duty to indemnify, that is, what the insurance applies to, and a duty to defend if the insurance applies.

[00:01:25] Speaker 01:
So the only issue, really, overall, is whether there was a duty to defend

[00:01:33] Speaker 00:
with triggers and whether Hanover can terminate or cease that defense once the undisputed facts show that there's no possibility that the interest will... It seems like the only real question for us is did you in the settlement agreement agree in exchange for $20,000 plus you agreed to defend them through these three suits?

[00:02:00] Speaker 00:
in exchange for them dropping the claims about wrongful whatever, whatever, whatever.

[00:02:05] Speaker 00:
So it doesn't seem that the question before us is does your insurance agreement or the word coverage in general require you to defend?

[00:02:14] Speaker 00:
You may be exactly right on all of that, but that doesn't seem like that's the point in front of the court.

[00:02:19] Speaker 00:
It seems to me

[00:02:20] Speaker 00:
that the basis for the lower court's decision was that you certainly didn't have to bind yourself in the settlement agreement to continue to defend their suit, but you did.

[00:02:30] Speaker 00:
That was her view.

[00:02:32] Speaker 00:
And so you tell me why, and please

[00:02:34] Speaker 00:
look at the language of the settlement agreement because I'm a bit of a plain language gal when it comes to contracting.

[00:02:42] Speaker 00:
I feel like, quite frankly, as between the two parties, you all were the more sophisticated party.

[00:02:48] Speaker 00:
You all were the contract drafter to a large extent.

[00:02:51] Speaker 00:
So tell me why the plain language of the contract, why does she have it wrong in terms of what it means?

[00:02:57] Speaker 00:
with a reference to the language of the contract.

[00:03:00] Speaker 01:
First, let me clear something up.

[00:03:03] Speaker 01:
And I think we said it in briefs.

[00:03:04] Speaker 01:
We do not claim that that settlement agreement was ambiguous.

[00:03:08] Speaker 01:
We do not.

[00:03:09] Speaker 01:
That's not our argument.

[00:03:10] Speaker 01:
We say simply that Judge Brown misinterpreted it.

[00:03:13] Speaker 01:
At the last minute, three days before trial, she issued this opinion.

[00:03:17] Speaker 01:
And the settlement language says, we will provide a defense, but we reserve our right

[00:03:27] Speaker 00:
Show me where the language is in particular.

[00:03:38] Speaker 00:
You might want to get it because we're going to be focusing on the language.

[00:03:43] Speaker 00:
You probably want to have a copy of it.

[00:03:48] Speaker 04:
Well, it's at A-1511, I believe, if you've brought your weapon.

[00:03:55] Speaker 04:
It's the paragraph that says Hanover Insurance Company's position on coverage in this matter and its undertaking to defend

[00:04:18] Speaker 04:
The Hanoi Insurance Company's position on coverage is met in its undertaking to defend in a way that does not waive any other policy of defense or legal rights.

[00:04:26] Speaker 04:
The Hanoi Insurance Company reserves the right to amend or alter its position on coverage.

[00:04:32] Speaker 04:
Yes.

[00:04:33] Speaker 04:
At any time.

[00:04:34] Speaker 04:
So the district court judge is saying, although you're correct, it is a matter of insurance law, coverage includes indemnity and duty to defend, you chose to separate the two out in this contract.

[00:04:50] Speaker 04:
And having separated the two out in this contract, you live with the consequences of the separation.

[00:04:55] Speaker 04:
Clear as simple as that.

[00:04:57] Speaker 04:
And you said the contract is not ambiguous.

[00:05:00] Speaker 04:
I think Judge Moore was saying she agreed it was not ambiguous.

[00:05:04] Speaker 04:
And the contract separated the concepts of indemnity and the concept of the duty to defend.

[00:05:10] Speaker 04:
And you reserved the right to back away on the indemnity but not on the right to defend.

[00:05:18] Speaker ?:
Okay.

[00:05:18] Speaker ?:
Good.

[00:05:19] Speaker 04:
And that sir is so painfully clear from the decision below and the briefs that he should be on top of that.

[00:05:28] Speaker 01:
I'm on time.

[00:05:29] Speaker 04:
I do not need to go get the appendix to read it.

[00:05:31] Speaker 01:
Well, I... But now you have it.

[00:05:33] Speaker 01:
I have it, and I thought I had it memorized.

[00:05:37] Speaker 04:
It's not ambiguous, right?

[00:05:39] Speaker 01:
No, I don't agree.

[00:05:41] Speaker 01:
I agree that it's not ambiguous, but I disagree on your interpretation.

[00:05:44] Speaker 01:
And I disagree for this reason.

[00:05:46] Speaker 01:
Coverage has to be understood as a technical term.

[00:05:49] Speaker 01:
This is insurance, sui generis.

[00:05:51] Speaker 01:
Coverage has to be understood in the terms it's met.

[00:05:54] Speaker 01:
Coverage agreement says that

[00:05:58] Speaker 01:
The insurance applies to certain claims and we have a duty to defend those claims to which the insurance applies.

[00:06:04] Speaker 01:
Coverage has to be understood in the context of the fit.

[00:06:08] Speaker 01:
if you will.

[00:06:09] Speaker 04:
If you hadn't written in the words in the undertaking to defend, if those three words didn't exist in the language I just read from your settlement agreement, you'd have a real nice strong position.

[00:06:23] Speaker 04:
But because at arm's length for 20,000 bucks of consideration of whatever you chose to insert those three words, whoever put those three words in creates a little hiccup for you.

[00:06:38] Speaker 04:
well it or small opposition is but your argument is that when the contract would say you reserve the right to amend or alter its position on coverage that includes undertaking to defend sure because we incorporated that language incorporated the reservation of rights what's the purpose of the three words undertaking to defend in the contract

[00:07:08] Speaker 04:
What was the reason for having introduced those three surplus-age words from your perspective?

[00:07:17] Speaker 04:
Totally unnecessary because they are subsumed in the position on coverage, yet they were written into the contract.

[00:07:24] Speaker ?:
Why?

[00:07:25] Speaker 01:
because we were undertaking to provide a defense from the point that you recognize.

[00:07:30] Speaker 04:
As you were legally obligated to do under the notion of coverage.

[00:07:33] Speaker 01:
Right.

[00:07:34] Speaker 01:
But the question is when does that duty cease?

[00:07:37] Speaker 01:
Does that undertaking cease at some point?

[00:07:40] Speaker 04:
And... You reserve the right to say when coverage would cease.

[00:07:45] Speaker 01:
Right.

[00:07:46] Speaker 01:
Coverage

[00:07:47] Speaker 01:
being understood as the insuring language, the coverage language, which includes indemnity.

[00:07:54] Speaker 04:
Let me ask you this question.

[00:07:56] Speaker 04:
Let's assume that this particular ground used by Judge Brown, I think it was, to really guess she didn't exist, and her only other ground was the independent ground, which if I understand correctly was she thought as a matter of equity or fairness it would be unfair

[00:08:15] Speaker 04:
to leave Snow Wizard without lawyers right at the eve of trial, right?

[00:08:23] Speaker 04:
Now, assume that was her only ground of decision.

[00:08:27] Speaker 04:
I think, maybe you can convince me I'm wrong, I think I would be reviewing those findings for abuse of discretion.

[00:08:36] Speaker 04:
Is that right?

[00:08:38] Speaker 04:
That's hard to climb, isn't it?

[00:08:42] Speaker 01:
I'll start with the premise of this.

[00:08:45] Speaker 04:
How do I mean to be rough on you?

[00:08:47] Speaker 04:
I'm just trying to identify what I thought were the two points that you lost on this issue.

[00:08:54] Speaker 01:
That's perfectly okay, Judge.

[00:08:56] Speaker 01:
I kind of figured I was going to get a lot of questions and I'm happy to have them.

[00:09:04] Speaker 01:
Hanover had been trying to get out from under this duty to defend since 2011, March of 2011, when it went through discovery.

[00:09:13] Speaker 01:
He found out that the plaintiff couldn't support the disparagement claim and filed a motion to rescind the judgment.

[00:09:19] Speaker 01:
And Judge Zaney granted, but held that we had a duty to defend, not under the settlement agreement, but under his interpretation of ensuring language of the policy.

[00:09:32] Speaker 01:
The settlement agreement didn't come up until 2012.

[00:09:36] Speaker 00:
Well, and he was wrong.

[00:09:38] Speaker 00:
And that kind of stuff happens, right?

[00:09:40] Speaker 00:
It happens all the time.

[00:09:42] Speaker 00:
You get a denial of summary judgment, and then you get a settlement.

[00:09:46] Speaker 00:
And it may well be that had someone pursued through appeal, the original decision, rather than settle, they would have been vindicated.

[00:09:53] Speaker 00:
But you didn't do that.

[00:09:55] Speaker 00:
You didn't appeal his decision.

[00:09:57] Speaker 00:
Instead, you decided to settle and accept responsibility for a portion of the defense.

[00:10:04] Speaker 01:
We tried in 2011 when Judge Zanin, May of 2011 when Judge Zanin ruled that way, we immediately asked for reconsideration, denied sui sponte, we asked for the right to an intermediately appeal, denied sui sponte, and then the case got shut down for a little while.

[00:10:22] Speaker 01:
And when it reactivated, it was transferred to Judge Brown.

[00:10:28] Speaker 01:
We tried to get out from under it.

[00:10:31] Speaker 01:
In other words, we've been trying to get out from under it for all these years.

[00:10:35] Speaker 01:
And then we filed a motion for summary judgment, again, really a motion for reconsideration, as Judge Brown says, in November 2012.

[00:10:45] Speaker 01:
And Judge Brown, God bless her, was saddled with

[00:10:50] Speaker 01:
with this case at the last minute with the new judge.

[00:10:53] Speaker 01:
And you can tell she's very conscientious.

[00:10:55] Speaker 01:
She takes her time.

[00:10:57] Speaker 01:
She took her time.

[00:10:58] Speaker 01:
She didn't rule until January 31, 2013.

[00:11:01] Speaker 01:
Now we're two weeks before trial.

[00:11:06] Speaker 01:
To your question, Judge, I think it's inequitable to make her pay for defense.

[00:11:11] Speaker 01:
It didn't owe because the court doesn't want to handle it another way, like continuing the trial.

[00:11:19] Speaker 01:
They would not have been left.

[00:11:20] Speaker 01:
lawyer on this.

[00:11:21] Speaker 01:
They had two other lawyers.

[00:11:23] Speaker 01:
They could have retained the lawyer that had them.

[00:11:25] Speaker 04:
How did you know that?

[00:11:26] Speaker 04:
I saw that part.

[00:11:28] Speaker 04:
You know, they got two-thirds of the team left.

[00:11:30] Speaker 04:
But as you well know, sir, sometimes members of the team were not equal in line.

[00:11:35] Speaker 01:
I do.

[00:11:35] Speaker 01:
And that's why, that's why God invented continuances.

[00:11:39] Speaker 01:
It wouldn't have mattered in the scheme of things greatly to continue this for a month or two or three.

[00:11:44] Speaker 01:
But to put this off on Hanover... But the case has been hanging around the system for a long time.

[00:11:51] Speaker 04:
Complaints fall out of the sky like snow cones in a circus.

[00:11:55] Speaker 01:
So when you talk about abuse of discretion, I hate to use that term because Judge Brown really did a fantastic job on this thing.

[00:12:03] Speaker 01:
I don't think she got that wrong.

[00:12:05] Speaker 01:
And to your point, Judge Moore, and to you as Judge Clevenger,

[00:12:13] Speaker 01:
The insertion of these three words, as you say, is an attempt to clarify that we're going to undertake the defense, but we've got these issues open.

[00:12:28] Speaker 01:
And take a look at what the parties did afterwards.

[00:12:31] Speaker 01:
Hanover jumped in.

[00:12:33] Speaker 01:
Not me, I wasn't in the case.

[00:12:34] Speaker 01:
Then jumped in, took depositions, filed a motion for summary judgment that there was no disparagement claim.

[00:12:39] Speaker 01:
It was to the benefit of its insurer too, by the way.

[00:12:41] Speaker 01:
And then filed a motion for summary judgment saying, we don't have a duty to indemnify, and we don't have a duty to do defend thesis.

[00:12:51] Speaker 01:
And yet, defense to that wasn't that we have a settlement agreement.

[00:12:56] Speaker 01:
That didn't come up until 2013-12.

[00:13:01] Speaker 01:
So the part, Hanover would not have had to do the discovery that

[00:13:08] Speaker 01:
that ultimately led to the motion for summary judgment, had, as Judge Moore posits, they agreed to defend to the end.

[00:13:17] Speaker 04:
OK, why don't we?

[00:13:18] Speaker 04:
Go ahead.

[00:13:19] Speaker 04:
I'm sorry.

[00:13:19] Speaker 04:
I was going to leave you.

[00:13:21] Speaker 04:
I was going to ask one practical question.

[00:13:23] Speaker 04:
I'd like to know, if I can, where the money is or where the money is going in these cases.

[00:13:27] Speaker 04:
If you prevail on your appeal, then you didn't have any duty to defend the three

[00:13:37] Speaker 04:
the suit's up till the 2011 suit, right?

[00:13:40] Speaker 04:
So that means that Snow Wizard owes you some money.

[00:13:44] Speaker 04:
Is that right?

[00:13:45] Speaker 04:
I mean, and if you defeat them on their cross appeal, saying you had no duty to defend, then they owe you some money.

[00:13:56] Speaker 01:
Yeah.

[00:13:57] Speaker 04:
The cross-appeal is on the 2011 case, the main cross-appeal.

[00:14:03] Speaker 01:
Right.

[00:14:03] Speaker 01:
We never did spend any money on that case.

[00:14:05] Speaker 01:
We did not accept the duty to defend because there was no disparagement claim.

[00:14:11] Speaker 04:
So what they're hoping for is that you owe them the money from their attorney's fees.

[00:14:15] Speaker 01:
In that case.

[00:14:16] Speaker 01:
And what they're trying to do in the consolidated cases is... Don't let me eat up any more of your time.

[00:14:21] Speaker 01:
Just close with this.

[00:14:23] Speaker 01:
The one thing I don't think I adequately briefed was this consolidation argument.

[00:14:29] Speaker 01:
Consolidation is a tool for judicial efficiency.

[00:14:34] Speaker 01:
They're arguing your spray X case, which I think you were on the panel with Judge Clevener.

[00:14:39] Speaker 01:
Yes, consolidation is a tool for judicial efficiency and convenience, but it doesn't change the character of the cases.

[00:14:46] Speaker 01:
And that's a Supreme Court case, Johnson versus Manhattan Railroad.

[00:14:50] Speaker 01:
And just to give you a quick sight and a follow up, 289 U.S.

[00:14:54] Speaker 01:
four seventy nine uh... nineteen thirty three springboard decision yes there's been a lot of water bridge but you look at the case that cited they're still signing it up until today as recently as April two thousand fifteen is still a good law thank you we still have a couple of minutes of rebuttal let's hear from Mr. Morris

[00:15:17] Speaker 03:
Your Honor, first of all, in order for Hanover to get some relief on the duty to defend in the first three consolidated cases, first of all, the court would have to reverse the district court's order enforcing the settlement agreement.

[00:15:34] Speaker 04:
But if we rule against your adversary on the appeal, this issue is moved, right?

[00:15:40] Speaker 03:
If you, yes, if you affirm the order... Exactly.

[00:15:43] Speaker 04:
So if your colleague can't prevail here, then this particular issue is moot.

[00:15:48] Speaker 04:
I think so.

[00:15:49] Speaker 04:
And it's certain your main cross-appeal has to do with the 2011 lawsuit held no coverage, including identity, including duty to defend, right?

[00:16:01] Speaker 03:
Correct.

[00:16:01] Speaker 04:
And that's the one that you continue to litigate, and you'd like to have them pay your legal fees.

[00:16:06] Speaker 03:
Yes.

[00:16:07] Speaker 04:
Maybe, from my perspective, probably I'll put your eggs in the second basket.

[00:16:15] Speaker 03:
Yes, Your Honor.

[00:16:15] Speaker 03:
And the issue of the duty to defend in that case, the 11-14-99 case, goes back to the language of the policy.

[00:16:31] Speaker 03:
And the policy says that Hanover shall defend Snow Wizard against any suit seeking damages.

[00:16:43] Speaker 03:
Any suit seeking damages?

[00:16:45] Speaker 03:
Any suit seeking those damages.

[00:16:48] Speaker 04:
Any damages?

[00:16:48] Speaker 04:
So like if one of your delivery guys were in his truck into somebody, that policy would cover tort damages?

[00:16:55] Speaker 03:
Well, the insuring agreement provides that the policy covers claims for damages to which this insurance applies, and that a handover shall defend the insurer against any suit seeking those damages.

[00:17:12] Speaker 04:
I thought it was for malicious prosecution.

[00:17:15] Speaker 03:
Well, the HOP policy applies.

[00:17:19] Speaker 04:
That's why I asked you about the tort accident.

[00:17:20] Speaker 04:
It's not just any, it's not an umbrella policy, any in all forms of liability.

[00:17:25] Speaker 03:
No, we contend that one of the claims in the 11-14-99 suit was for malicious prosecution, which is explicitly covered.

[00:17:34] Speaker 03:
in the personal and advertising injury portion of the Hanover policy.

[00:17:39] Speaker 04:
But you were ruled against you on that grant, right?

[00:17:43] Speaker 04:
Yes, Judge Brown ruled against because... You can't get into that policy unless you can get into it through malicious prosecution, right?

[00:17:51] Speaker 03:
Yes.

[00:17:52] Speaker 03:
We don't contend that any of the other claims were covered under this policy.

[00:17:57] Speaker 03:
But, as for the malicious prosecution, it was covered.

[00:18:00] Speaker 03:
The only reason Judge Brown found it wasn't

[00:18:04] Speaker 03:
was because the complaint was unclear, didn't specify that the alleged malicious prosecution suit had terminated in favor of the plaintiffs.

[00:18:17] Speaker 03:
It didn't say one way or the other.

[00:18:19] Speaker 03:
And our position is that in that situation, under Louisiana law, you construe the complaint liberally in favor of the insured, and that it then discloses that there's no dispute that every other element of malicious prosecution claim is alleged in that complaint.

[00:18:38] Speaker 03:
So what Judge Brown did was that what Hanover argued is that the court should determine whether or not the complaint

[00:18:52] Speaker 03:
stated a claim for relief, which could be granted on a malicious prosecution claim, which she found it didn't because of the missing element of the termination of the suit.

[00:19:04] Speaker 03:
I think so.

[00:19:04] Speaker 04:
De Novo's standard of review on this particular question as to whether or not the complaint did allege a malicious prosecution claim?

[00:19:11] Speaker 03:
Yes, it is De Novo.

[00:19:14] Speaker 03:
Because it was a summary judgment and also because it... But it's a legal question.

[00:19:17] Speaker 03:
It's a legal question.

[00:19:18] Speaker 03:
It's an interpretation of the policy.

[00:19:20] Speaker 03:
and the four corners of the complaint.

[00:19:26] Speaker 03:
So that's our position on that, that the complaint surely stated a claim for malicious prosecution, at least rudimentarily.

[00:19:38] Speaker 03:
If there was defects in that, then Hanover should have jumped in and defended on that basis.

[00:19:43] Speaker 03:
And there's ample case law stating that we cited it all in there.

[00:19:49] Speaker 03:
In addition, or in the alternative, this suit 1114-99 was consolidated with the other suits in which there is no dispute.

[00:20:02] Speaker 03:
In fact, there's a final judgment that Hanover owed a duty to defend.

[00:20:07] Speaker 03:
And once this suit, 1114-99, was consolidated with those suits, then they fall within the policy's definition of a civil proceeding in which

[00:20:23] Speaker 03:
Claims were made to which this insurance applies.

[00:20:27] Speaker 00:
I have a dumb question.

[00:20:28] Speaker 00:
Under Louisiana law, suppose that there were multiple discrete claims in a complaint and everyone agreed that coverage would apply to one but coverage would absolutely not apply to the other.

[00:20:40] Speaker 00:
Do they have some duty to defend the entire suit or is it limited to the claim for which state?

[00:20:47] Speaker 00:
could be liable.

[00:20:48] Speaker 03:
They absolutely have a duty to defend the entire suit, even claims which are not covered, and regardless of the outcome of the suit, once that duty to defend is triggered.

[00:20:58] Speaker 03:
And that's the holding of the seminal Louisiana Supreme Court case, Zarniecki, I believe it's called, which says exactly that.

[00:21:08] Speaker 03:
That once the duty to defend is triggered, as to any claim, the insurer has a duty to defend the insured

[00:21:15] Speaker 03:
against all the claims asserted in that proceeding, even claims that are not covered.

[00:21:21] Speaker 04:
I asked a question about the Louisiana law, and you all from Louisiana know better about that than we do, but the law seems to say that the duty to defend is broader than the duty to indemnify?

[00:21:32] Speaker 03:
Correct.

[00:21:33] Speaker 04:
So I'm just sort of puzzled.

[00:21:34] Speaker 04:
I mean, what incentive does an insurance company have to defend a lawsuit vigorously and to the bitter end when it has no possible liability?

[00:21:44] Speaker 04:
no matter public policy.

[00:21:45] Speaker 04:
I mean, you're saying to the insurance company, guess what?

[00:21:49] Speaker 04:
There's no way, Jose, you're going to pay a penny under this policy.

[00:21:53] Speaker 04:
But just send your best lawyers over from your best law firm to defend this claim anyhow.

[00:22:00] Speaker 04:
That doesn't make any sense, does it?

[00:22:02] Speaker 03:
I think it makes a lot of sense, Your Honor.

[00:22:04] Speaker 04:
Do you really think you're going to get the finest representation out of somebody that can't possibly owe you a nickel?

[00:22:12] Speaker 03:
Well, we're getting the representation out of the lawyers who were hired by the company.

[00:22:17] Speaker 03:
The insurance company also has a duty to hire counsel who does not have a conflict in that regard.

[00:22:24] Speaker 04:
Don't be talking about your emotion.

[00:22:26] Speaker 04:
I mean, firing yourself up and defending your client.

[00:22:29] Speaker 04:
Are there any cases in Louisiana law where somebody, the insurer, has filed a lawsuit against the insurance company saying, you guys were laggards.

[00:22:40] Speaker 04:
Once you learned that you had no possible liability on the policy, you sent a bunch of junior varsity youngsters over here to litigate this case and they made a bunch of mistakes and I was poorly represented.

[00:22:52] Speaker 04:
Are there any cases like that in Louisiana law?

[00:22:56] Speaker 03:
Not a single one that I can think of where someone complained about the performance of the lawyers.

[00:23:01] Speaker 03:
other than cases in which the lawyers had a conflict of interest, because they also represented the insurance company.

[00:23:09] Speaker 04:
I'm just thinking about the basic notion of somebody, even though you can't possibly be liable, we're expecting you to pull your arm really hard.

[00:23:18] Speaker 03:
Well, and also the liability would be to the opposing party.

[00:23:22] Speaker 03:
That's right.

[00:23:23] Speaker 03:
So the plaintiff's interest is in that defense.

[00:23:26] Speaker 03:
I mean, the defendant's, the insurer's interest is in that defense.

[00:23:30] Speaker 03:
So, and the jurisdictional question that the court asked parties to respond to was interesting because it really turned upon the fact that that 11-14-99 case, which did include a patent issue, had been

[00:23:50] Speaker 03:
consolidated with the three prior cases which had no patent issues and it really turned upon the fact that this court treats consolidating cases as one case, as one unit for purposes of jurisdiction.

[00:24:06] Speaker 03:
And our position is that the same analysis should apply for purposes of insurance coverage.

[00:24:13] Speaker 03:
And in fact, again, if you go back to the policy language, as you should do under the Louisiana law of insurance contracts, the definition of suit, as in shall defend any suit seeking those damages, is broad.

[00:24:33] Speaker 03:
is very broad and certainly broad enough to encompass this consolidated civil action in which 1114-99 is a part.

[00:24:42] Speaker 04:
Well, we used to have a rule that if there was a patent issue lying around in there somewhere, like in a counterclaim, that that would sustain jurisdiction for us.

[00:24:53] Speaker 04:
And we got whacked down by the Supreme Court saying we couldn't do that anymore.

[00:24:57] Speaker 04:
We have a pre-holmes case called Inotron, in which you're right, you said you take all these cases together, but there's an open question as to whether or not Inotron survives holmes, I think.

[00:25:11] Speaker 03:
Well, I think Homes, and I understand Homes, but Homes has really no bearing on this.

[00:25:20] Speaker 04:
Well, because your patent case didn't come up in a counterclaim.

[00:25:24] Speaker 03:
Exactly, it came up in the complaint itself.

[00:25:27] Speaker 04:
But it came up in a separate case that was whacked on, the way a counterclaim is a separate freestanding case that gets whacked on to the main case.

[00:25:37] Speaker 03:
And so in that situation, then the issue I think is determined by this court's jurisprudence treating consolidated cases as one unit for purposes of jurisdiction.

[00:25:53] Speaker 04:
But we also have jurisdiction going through the law of the case doctrine.

[00:25:57] Speaker 04:
Both of you or at least one of you in your letter brief pointed out the law of the case to us that this case has already been decided, if you will, in the jurisdictional issue by the transfer or circuit.

[00:26:11] Speaker 03:
By the transfer or circuit and also by this court in its previous decision on this case.

[00:26:15] Speaker 04:
Well, when we had the case up here before, we had a patent case front and center.

[00:26:20] Speaker 03:
Yes.

[00:26:21] Speaker 03:
And that patent case was the exact same.

[00:26:24] Speaker 04:
Well, it was carrying with it some non-patent law claims.

[00:26:28] Speaker 04:
Right.

[00:26:28] Speaker 04:
We go, as I recall, for rags and those other people.

[00:26:32] Speaker 03:
Yes.

[00:26:33] Speaker 03:
Yes, we will.

[00:26:35] Speaker 03:
That patent case is the exact same case that is before the board, you know, when there's an issue of the duty to defend.

[00:26:44] Speaker 02:
So do you want to save some rebuttal for your trust?

[00:26:47] Speaker 03:
Yes.

[00:26:47] Speaker 03:
Okay.

[00:26:47] Speaker 03:
Thank you.

[00:26:54] Speaker 01:
To Judge Moore's question, yes, if in a lawsuit, if in a lawsuit there are multiple allegations, 79 allegations, and one of them is covered, would be covered, would be something that the Pals will respond to, there is a duty to defend all those allegations.

[00:27:15] Speaker 01:
There is.

[00:27:17] Speaker 01:
But that's not the situation we have in 11-14-99.

[00:27:21] Speaker 01:
We have a separate lawsuit.

[00:27:24] Speaker 01:
Now, that took place in the consolidated cases.

[00:27:28] Speaker 01:
There is only one claim in the consolidated cases, and they pretty much mirror each other, that is covered.

[00:27:34] Speaker 01:
That was a possible claim for disparagement.

[00:27:40] Speaker 01:
That was not excluded.

[00:27:42] Speaker 01:
So, Hanover picked up the defense.

[00:27:45] Speaker 00:
I don't understand what the legal point you're trying to make is.

[00:27:49] Speaker 00:
Are you trying to say that while it's true in a single suit, even if there's three different bases, the pad over could be liable for coverage under one.

[00:27:59] Speaker 00:
They have to defend all three.

[00:28:01] Speaker 00:
However, in a consolidated case, they don't.

[00:28:03] Speaker 00:
What is the legal point you're trying to make by pointing these facts out?

[00:28:07] Speaker 01:
1499 has no allegations that are covered.

[00:28:12] Speaker 00:
They didn't allege... But the cases have been consolidated.

[00:28:15] Speaker 00:
Yes.

[00:28:15] Speaker 00:
Now just one case.

[00:28:17] Speaker 01:
No, they're not.

[00:28:18] Speaker 01:
I disagree.

[00:28:20] Speaker 01:
They are consolidated for the purposes of convenience and judicial economy.

[00:28:24] Speaker 01:
That's the purpose of consolidation.

[00:28:26] Speaker 01:
That's what the Supreme Court says.

[00:28:27] Speaker 01:
But it doesn't change the character of the case.

[00:28:31] Speaker 01:
They still remain separate cases and they are not merged in that sense.

[00:28:36] Speaker 01:
Now, when you get to the spray act situation,

[00:28:39] Speaker 01:
for purposes of whether you're going to take a piecemeal appeal.

[00:28:43] Speaker 01:
for purposes of convenience.

[00:28:46] Speaker 00:
So back up, are you saying that when these cases are consolidated, you only have a duty to defend the one that has the one claim that might be disparagement, but you don't have a duty to defend the other two?

[00:29:00] Speaker 01:
You don't have a duty to defend the other suit.

[00:29:02] Speaker 01:
And that's in judgment.

[00:29:03] Speaker 01:
And they were handled separately.

[00:29:05] Speaker 00:
Are you talking about the cross appeal now?

[00:29:07] Speaker 00:
I'm just not following where you are.

[00:29:09] Speaker 01:
The cross appeal.

[00:29:10] Speaker 01:
The Crossfield.

[00:29:11] Speaker 00:
You already won on this.

[00:29:13] Speaker 00:
That's one we won on.

[00:29:15] Speaker 01:
And we have a new argument now that they were consolidated and I'm addressing that.

[00:29:19] Speaker 02:
One final thought because time has expired.

[00:29:25] Speaker 01:
No, unless you have a question.

[00:29:36] Speaker 02:
I'm not sure how much more you really have to say.

[00:29:40] Speaker 03:
Well, I understand that Mr. Waters is going back to the Supreme Court case in which it stated or held that consolidation did not transform a civil action into

[00:29:58] Speaker 03:
a different action, you know, by consolidating with other actions.

[00:30:03] Speaker 03:
But that's not really how you analyze the issue here.

[00:30:06] Speaker 03:
Here you look at the language of the policy first.

[00:30:10] Speaker 03:
And again, the duty to defend is determined by the policy language in which Hanover must defend against any suit seeking those damages.

[00:30:18] Speaker 00:
None of these three suits fall into that policy.

[00:30:22] Speaker 00:
That's what was decided by the decision on appeal to us.

[00:30:25] Speaker 00:
The only reason you have their defense at all is because of the settlement agreement.

[00:30:31] Speaker 03:
Well, Judge Zanin originally found that all three of those suits did trigger the duty to defend.

[00:30:41] Speaker 03:
And that decision is final in res judicata.

[00:30:44] Speaker 04:
Not in those three suits, not the 11th suit.

[00:30:48] Speaker 04:
Correct.

[00:30:49] Speaker 04:
The 11th suit came after.

[00:30:50] Speaker 03:
Exactly, came after.

[00:30:52] Speaker 03:
But we actually, and that's what distinguishes this case from all those cases they cited.

[00:30:56] Speaker 03:
We filed a motion for summary judgment on the issue of duty to defend.

[00:31:01] Speaker 03:
Judge Zaney granted it.

[00:31:03] Speaker 03:
It has not been appealed.

[00:31:05] Speaker 03:
It was not reconsidered and reversed by Judge Brown.

[00:31:08] Speaker 03:
It's final.

[00:31:09] Speaker 03:
And so they have a duty to defend.

[00:31:13] Speaker 03:
And that's why, you know, even without the settlement agreement,

[00:31:19] Speaker 04:
You didn't fall under... Well, there was a motion to reconsider, wasn't there?

[00:31:23] Speaker 03:
That motion to reconsider was a different ruling by Judge Zanye.

[00:31:28] Speaker 04:
I thought Judge Brown agreed to a motion to reconsider Judge Zanye's ruling.

[00:31:33] Speaker 03:
A different ruling.

[00:31:35] Speaker 04:
What do you mean a different ruling?

[00:31:37] Speaker 03:
Judge Zaney first ruled granted our motion for summary judgment that they owe a duty to defend.

[00:31:42] Speaker 03:
They filed a motion to terminate the duty to defend.

[00:31:46] Speaker 04:
Well, put it this way.

[00:31:47] Speaker 04:
Judge Brown understood Hanover's motion for reconsideration to be a motion to reconsideration everything that Judge Zaney had done.

[00:31:58] Speaker 04:
you can't read her decision any other way.

[00:32:01] Speaker 04:
Otherwise, it's all a surplus and a waste of effort.

[00:32:07] Speaker 04:
That's my view of that issue.

[00:32:10] Speaker 03:
No, I think it was very specifically reconsideration of very specific orders that Judge Zaney had entered.

[00:32:16] Speaker 03:
And those were orders denying Hanover's motion for summary judgment to terminate the defense.

[00:32:23] Speaker 04:
Right, but that Brown released

[00:32:24] Speaker 04:
released them from the duty to defend.

[00:32:29] Speaker 03:
Yes.

[00:32:32] Speaker 03:
Okay.

[00:32:33] Speaker 04:
And then from your friend and your colleague and your adversaries, with a sleight of hand, when she gave back, she took away.

[00:32:44] Speaker 03:
Well, it was... And you're happy with that decision.

[00:32:52] Speaker 04:
You don't have any reason, if we affirm, if we say we're very sorry, Hannah, or you're stuck with the duty to defend the first three cases, you sit down.

[00:33:01] Speaker 04:
You're happy with that.

[00:33:02] Speaker 00:
Right.

[00:33:03] Speaker 04:
And all you're probably beef is that she said that the contract doesn't cover the 11th suit and certainly the settlement agreement.

[00:33:14] Speaker 02:
Yes.

[00:33:16] Speaker 02:
Okay.

[00:33:17] Speaker 02:
We thank both consular cases submitted.