Vector Products, Inc. V. Hartford Fire Insurance Co.

The following is a real-time transcript taken as closed captioning during the oral argument proceedings, and as such, may contain errors. This service is provided solely for the purpose of assisting those with disabilities and should be used for no other purpose. These are not legal documents, and may not be used as legal authority. This transcript is not an official document of the Florida Supreme Court.

Vector Products, Inc. V. Hartford Fire Insurance Co.

THE MARSHAL: PLEASE RISE. LADIES AND GENTLEMEN, THE FLORIDA SUPREME COURT.

PLEASE BE SEATED.

CHIEF JUSTICE: GOOD MORNING. NEXT CASE ON THE COURT'S CALENDAR IT LOOKS LIKE EVERYONE IS READY IS VECTOR PRODUCTS VERSUS HARTFORD FIRE INSURANCE COMPANY.

GOOD MORNING, YOUR HONOR. MAY IT PLEASE THE COURT MY NAME IS STEPHEN MARSHALL AND I'M HERE ON BEHALF OF THE APPELLANT, VECTOR PRODUCTS. ALSO HERE WITH ME TODAY IS MAJOR HARDING, WHO IS GETTING WARMED UP FOR AN ARGUMENT HE HAS TOMORROW. WE ARE NOT GOING TO HOLD THAT AGAINST YOU.

WE ARE HERE TODAY ON A CERTIFIED QUESTION FROM THE 11TH CIRCUIT, AND GENERALLY THIS CONCERNS AN INSURANCE COVERAGE DISPUTE. THE ISSUE IS WHETHER OR NOT HARTFORD INSURANCE COMPANY IS OBLIGATED TO DEFEND MY CLIENT, VECTOR PRODUCTS, AGAINST A LAWSUIT THAT WAS FILED AGAINST IT IN FEDERAL COURT. THE SPECIFIC ISSUE THAT'S BEFORE THE COURT BY THE CERTIFIED QUESTION IS WHETHER OR NOT THE KNOWLEDGE OF FALSITY EXCLUSION IN THE HARTFORD POLICY RELIEVES HARTFORD OF ITS OBLIGATION TO DEFEND MY CLIENT AGAINST THE FEDERAL LAWSUIT. IF I COULD --

YOU ADMIT THAT THE FACTUAL ALLEGATIONS ARE THAT IT WAS INTENTIONAL CONDUCT?

THE ALLEGATIONS DO CERTAINLY STATE THAT, YOUR HONOR, I CANNOT DISPUTE THAT.

THE ONLY ISSUE HERE IS WHETHER, BECAUSE A LANHAM ACT CLAIM CAN BE PROVED WITHOUT THE INTENTIONAL CONDUCT, WHETHER THAT WOULD BE COVERED UNDER THE POLICY?

THAT'S EXACTLY THE QUESTION, YOUR HONOR.

YOU WOULD ALSO AGREE, WOULD YOU NOT, THAT WE HAVE A VERY CLEAR, CONCISE RULE IN FLORIDA WHICH WAS ANNOUNCED IN LINIX LIQUORS THAT SAYS A LIABILITY INSURANCE COMPANY HAS NO DUTY TO DEFEND ITS SUIT WHEN A COMPLAINT UPON ITS FACE ALLEGES A STATE OF FACTS THAT FAILS TO BRING INTO QUESTION THE COVERAGE. SO WE HAVE NARROWED THIS DOWN, UNLIKE SOME STATES TO WHERE WE ARE DEALING STRICTLY WITHIN THE FOUR CORNERS OF WHAT'S ON THE FACE OF THE COMPLAINT.

ABSOLUTELY, YOUR HONOR, AND I AM NOT ASKING THE COURT TO DEVIATE FROM THAT RULE IN ANY WAY. I'M NOT ASKING THE COURT TO LOOK BEYOND THE LEADINGS. I'M NOT -- PLEADINGS. I'M NOT ASKING THE COURT TO CONSIDER HYPOTHETICAL DAMAGES THAT MAY BE ALLEGED OR REQUESTED. I'M NOT ASKING THE COURT TO CONSIDER HYPOTHETICAL CLAIMS. A CLAIM THAT IS ASSERTED, SECTION 43 LANHAM ACT CLAIM DOES NOT REQUIRE KNOWLEDGE OF FALSITY. IT DOES NOT REQUIRE INTENT TO INJURE. SO THAT CLAIM AS ALLEGED CAN GO TO THE JURY AND WE CAN BE FOUND LIABLE.

BUT WHAT'S ALLEGED HERE IS NOT ALLEGED IN THE ALTERNATIVE. WHAT'S ALLEGED HERE IS THAT UNDER THE -- THAT THE ALLEGATION IS THAT THIS WAS DONE WITH KNOWLEDGE OF FALSITY, AND THAT BRINGS IT SQUARELY WITHIN THE EXCLUSION OF THE POLICY, DOES IT NOT?

YOUR HONOR, IF I COULD ADDRESS THAT. THE PLEADING IS A PLEADING UNDER FEDERAL RULES. IT WAS BROUGHT IN FEDERAL COURT IN ILLINOIS. UNDER THE CONSEQUENCES IT IS CONTROLLED BY THE FEDERAL RULES OF CIVIL PROCEDURE. THE FEDERAL RULES OF CIVIL PROCEDURE, 8E SAYS IN ONE CLAIM, IN ONE COUNT, YOU CAN PLEAD ALTERNATIVE THEORIES OF RECOVERY AND THAT IS WHAT IS DONE HERE. IN THAT COUNT AND WE CAN GO THROUGH THE ALLEGATIONS IN THE COUNT. WHAT THE PLAINTIFF DID IS THEY PLED A SECTION 43 LANHAM ACT CLAIM.

THAT'S UNDER COUNT 1?

THAT'S UNDER COUNT 1, YOUR HONOR, AND IT IS FOUND IN THE APPENDIX AT PAGES 17 THROUGH 19, AND WHAT THEY HAVE DONE, YOUR HONOR, IS THEY HAVE PLED ALL OF THE ELEMENTS OF THE SECTION 43 LANHAM ACT CLAIM. NONE OF WHICH REQUIRE AS A NECESSITY A DEMONSTRATION OF --

MAYBE THEY DON'T. IN PARAGRAPH1 6 YOU SAY VECTOR HAS MADE SUCH FALSE STATEMENTS WILLFULLY AND INTENTIONALLY. I MEAN I GUESS WHAT I AM HAVING TROUBLE WITH, WHY WASN'T THIS COMPLAINT JUST AMENDED SO, YOU KNOW, IT WOULD BE LIKE SAYING IF YOU HAD STRICT LIABILITY, NEGLIGENCE AND SOMETHING ELSE THAT YOU, YOU KNOW, WITHIN THE COUNT IF YOU ARE WITHIN THE COUNT OR PLEADING MORE THAN YOU NEED TO PROVE.

IT IS NOT YOUR COMPLAINT, RIGHT?

IT IS NOT MY COMPLAINT BUT WHAT'S IMPORTANT, YOUR HONOR, IS YOU DON'T NEED TO PLEAD A SECOND COUNT. UNDER THE FEDERAL RULES YOU CAN PLEAD BOTH AN UNINTENTIONAL LANHAM ACT CLAIM AND AN INTENTIONAL LANHAM ACT CLAIM AND THERE IS A SIGNIFICANT POINT FOR THAT, YOUR HONOR. BY PLEADING INTENTIONAL CONDUCT WHAT THAT DOES IS IT GIVES YOU THE RIGHT TO BE ABLE TO GET DAMAGES.

AND A PRESUMPTION?

AND A PRESUMPTION. IF YOU DON'T PLEAD IT YOU CAN'T GET THE PRESUMPTION AND YOU CAN'T GET THE TREBLE DAMAGES AND IF YOU PLEAD IT AND IF YOU FAIL TO DEMONSTRATE THAT EVIDENCE AT THE TIME OF TRIAL YOU CAN STILL SUCCEED.

HOW IS THAT DIFFERENT IN THE LENNOX CASE IF THEY PLED GROSS NEGLIGENCE AND THEY WENT TO THE TRIAL AND A LESSER INCLUDED NEGLIGENCE OF SIMPLE NEGLIGENCE. HOW DO WE DISTINGUISH THAT?

QUITE EASILY, YOUR HONOR. BECAUSE IN THE LENNOX CASE THE COUNT THAT WAS PLED WAS A ASSAULT AND BATTERY. THAT'S THE SITUATION WHERE THE PERSON SHOT THE PERSON WHO HAD COME INTO THE LIQUOR STORE WITH THE B. B. GUN.

THAT WAS REALLY A GROSS NEGLIGENCE CLAIM. IT WAS A CIVIL CLAIM?

IT WAS AN ASSAULT AND BATTERY COUNT. BROUGHT AS A CIVIL CLAIM. SO WHAT YOU DO IS YOU LOOK AT THE ELEMENTS UNDER FLORIDA LAW THAT ARE NECESSARY TO SUSTAIN THAT COUNT. AND IF, IN FACT, ONE OF THOSE ELEMENTS IS INTENT, WHICH IT IS, UNDER ASSAULT AND BATTERY, THEN YOU SAY, WELL, IF THIS GOES TO TRIAL THEY ARE GOING TO HAVE TO PROVE INTENTIONAL CONDUCT, THEREFORE, WE ARE CLEARLY WITHIN THE SCOPE --

LET'S ASSUME IT WAS THAT SAME ACTION IN LENNOX WAS PLED AS A GROSS NEGLIGENCE COUNT AND IN AN ATTEMPT TO GET PUNITIVE DAMAGES. IF YOU DON'T PROVE PUNITIVE YOU WOULD BE ABLE TO GET SIMPLE NEGLIGENCE.

THAT'S CORRECT.

IF YOU DON'T PROVE GROSS NEGLIGENCE BUT SIMPLE NEGLIGENCE, RIGHT?

YES, AND I EQUATE THIS, I TRY TO -- THE ANALOGY TO ME IS YOU HAVE A ONE COUNT COMPLAINT. IT IS A NEGLIGENCE COUNT. SAY IT IS AN AUTOMOBILE ACCIDENT. SOMETHING THAT WE CAN ALL AGREE CLEARLY FALLS WITHIN THE SCOPE OF A LIABILITY POLICY. BUT IN ORDER TO GET PUNITIVE DAMAGES, WHAT YOU DO IS YOU INCLUDE AN ALLEGATION THAT SAID THE ACCIDENT WAS CAUSED INTENTIONALLY WITH MALICE. WELL, CERTAINLY THAT COUNT CAN GO TO TRIAL. THE PLAINTIFF CAN PROVE NEGLIGENCE. NOT PROVE INTENTIONAL CONDUCT AND STILL SUCCEED. EVEN THOUGH THAT FACTUAL ALLEGATION OF INTENT WAS IN THERE. IT WAS IN THERE BUT IT WAS NOT A NECESSARY ALLEGATION AND THAT, YOUR HONOR, IS WHAT I BELIEVE IS THE POINT. CAN THIS UNNECESSARY ALLEGATION TAKE YOU OUT OF COVERAGE? AND I DO NOT BELIEVE IT CAN. BECAUSE, YOUR HONOR, JUDGE WELLS, THERE IS ANOTHER VERY IMPORTANT POINT IN ALL OF THE CASES THAT YOU WOULD BE REFERENCING FOR THE STATE OF FLORIDA LAW. AND THAT IS THAT THE DUTY TO DEFEND IS CLEARLY BROADER THAN THE DUTY TO INDEMNIFY. UNDER THIS COUNT AS PLED, WE COULD BE FOUND LIABLE FOR A LANHAM ACT CASE WITHOUT A SHOWING OF KNOWING FALSITY, WITHOUT A SHOWING OF INTENT TO INJURE AND WITHOUT EVER AMENDING THIS COUNT. IN THAT SITUATION --

BUT SINCE AS I UNDERSTOOD OUR LAW, IS THAT OUR LAW IS QUITE SIMPLE. IN THAT ALL YOU WOULD HAVE TO DO IS LOOK AT THE WAY THAT THE PLAINTIFF HAS PLED THE CASE IN ORDER TO DETERMINE WHETHER THE INSURER HAS AN OBLIGATION TO COME IN AND DEFEND THE CLAIM. IT IS TOTALLY REALLY WITHIN THE CONTROL OF THE PLAINTIFF TO DO THAT, AND IN OUR INSTANCE IF YOU -- IN OUR -- UNDER OUR LAW YOU NORMALLY WOULD BE PLEADING THESE IN SEPARATE COUNTS IF YOU WERE PLEADING ADDITIONAL DEGREES OF NEGLIGENCE, BUT THE FACT IS THAT REGARDLESS OF WHETHER IT IS SOMETHING THAT'S OUTLANDISH OR YOU CANNOT PROVE IT OR REGARDLESS OF WHAT IT IS, WE -- BECAUSE WE DON'T WANT TO GET INTO A DISPUTE AS TO WHETHER THERE IS A RIGHT TO DEFEND OR NOT A RIGHT TO DEFEND, WE WANT TO LOOK SOLELY AT THE COMPLAINT.

AND YOU CAN DO THAT IN THIS SITUATION, YOUR HONOR. WHAT YOU DO IS YOU SAY THERE IS A LANHAM ACT CLAIM THAT IS PLED. I KNOW WHAT THE ELEMENTS ARE. THEY ARE CRYSTAL CLEAR. THE 11TH CIRCUIT HAS TOLD US WHAT THEY ARE. THE CERTIFYING COURT HAS TOLD US WHAT THEY ARE, AND THEY DO NOT REQUIRE A SHOWING OF KNOWING FALSITY OR INTENT TO INJURE. THEREFORE, BASED ON THESE ALLEGATIONS THIS CLAIM, THERE IS A POTENTIAL THAT VECTOR CAN BE FOUND LIABLE FOR THE LANHAM ACT.

LET ME ASK A QUESTION -- THE 11TH CIRCUIT TELLS YOU WHAT THE ELEMENTS ARE OF A LANHAM ACT CLAIM SO YOU SEEM TO BE IMPLYING WE HAVE TO DO RESEARCH IN ORDER TO DETERMINE WHETHER THE CAUSE OF ACTION CAN BE PROVED WITHOUT APPROVING INTENTIONAL CONDUCT SO DON'T YOU HAVE TO GO OUTSIDE THE COMPLAINT THEN TO DETERMINE WHETHER THAT'S THE CASE?

WELL, THAT IS TRUE, YOUR HONOR, BUT ONLY TO FIND OUT WHAT THE LAW IS. YOU DON'T HAVE TO GO OUTSIDE OF THE COMPLAINT TO FIND OUT WHAT THE ALLEGATIONS ARE TO FIND OUT WHAT THE RELEVANT FACTS ARE. AND THAT WOULD BE THE CASE, YOUR HONOR, FOR JUST ABOUT ANY SITUATION IF YOU HAD A COUNT FOR ASSAULT AND BATTERY OR MALICIOUS PROSECUTION AND INTENTIONAL TORT YOU WOULD HAVE TO FIND OUT WHAT THE ELEMENTS OF THAT COUNT WERE IN ORDER TO MAKE SURE THAT YOU WERE, IN FACT, PLEADING AN INTENTIONAL TORT. BUT, JUDGE WELLS, IF YOU CONSIDER THE AXIUM OF FLORIDA LAW THAT THE DUTY TO DEFEND IS BROADER THAN THE DUTY TO INDEMNIFY AND THAT ALSO IS A CHRIS CAL CLEAR STATEMENT OF FLORIDA LAW AS IS THE LAW IN JUST ABOUT EVERY JURISDICTION, THERE IS NO DOUBT THAT UNDER THIS COUNT WE COULD BE FOUND LIABLE FOR DAMAGES THAT WOULD BE COVERED UNDER THE POLICY.

BUT THAT'S A GIVEN, BUT DON'T YOU -- IF WE ACCEPT YOUR POSITION ABSENT A NONWAIVER AGREEMENT OFFERED BY THE INSURANCE COMPANY, DON'T YOU REALLY RUN INTO THE CIRCUMSTANCE WHERE THERE IS ALMOST A CONFLICT OF INTEREST BECAUSE THE INSURANCE COMPANY HAS NO LIABILITY IF THEY CAN PROVE THAT YOUR ACTIONS, IF YOUR ACTIONS WERE KNOWING OR INTENTIONAL? RIGHT, ISN'T THAT TRUE?

IF AS PLED THOSE FACTS ARE PROVEN YOU HAVE NO COVERAGE UNDER YOUR POLICY?

THAT IS CORRECT.

AND THEN BUT YOU ARE ASKING THE INSURANCE COMPANY TO PROVIDE THE DEFENSE SO DOESN'T THAT CREATE SOME INHERENT CONFLICT OF INTEREST?

JUST AS IT WOULD, YOUR HONOR, IN MY HYPOTHETICAL SITUATION WITH A NEGLIGENCE COUNT IN WHICH PUNITIVE DAMAGES ARE BEING REQUESTED, AND I THINK THERE ARE TWO RESPONSES TO THAT FROM A PRACTICAL STANDPOINT. THE FIRST IS THAT WHICH IS FOUND IN THIS COURT'S RECENT DECISION IN THE HIGGINS VERSUS STATE FARM CASUALTY CASE WHERE THE COURT HAS SAID UNDER SOME CIRCUMSTANCES AN INSURER CAN FILE DECLARATORY ACTION WHILE THE UNDERLYING CASE IS PENDING AND WE CAN RESOLVE THIS ISSUE. THE SECOND THING IS, AND THIS IS COMMON IN MOST JURISDICTIONS, IF YOU HAVE A CONFLICT SITUATION SUCH THAT TWO OUTCOMES COULD OCCUR. ONE WHICH WOULD BE FAVORABLE TO THE INSURER, ONE WHICH WOULD BE FAVORABLE TO THE INSURED, UNDER THOSE CIRCUMSTANCES THE INSURED SHOULD BE ENTITLED TO SELECT THEIR OWN INDEPENDENT COUNSEL AS OPPOSED TO HARTFORD SAYING THIS IS YOUR COUNSEL, THIS IS YOUR LAWYER, THIS IS WHO IS GOING TO DEFEND YOU, BUT THAT IS A SEPARATE ISSUE AND THAT IS SOMETHING THAT DOES, IN FACT, OCCUR. LET'S ASSUME WE DID HAVE TWO SEPARATE COUNTS. INSTEAD OF RELYING UPON 8E TO BE FEDERAL RULE 8E TO BE ABLE TO INCORPORATE TWO CLAIMS WITHIN ONE COUNT THEY DID, IN FACT, ALLEGE TWO COUNTS. IT WOULD BE THE SAME SITUATION THERE AS FAR AS THE CONFLICT, AND I THINK UNDER ONE COUNT FOR INTENTIONAL LANHAM ACT, ONE FOR UNINTENTIONAL, AND I THINK UNDER THOSE CIRCUMSTANCES, YOUR HONOR, THE INSURANCE COMPANY COULD FILE DECLARATORY JUDGMENT ACTION UNDER THIS COURT'S DECISION IN HIGGINS OR THEY COULD AFFORD US THE RIGHT TO SELECT INDEPENDENT COUNSEL SO THAT THE LAWYER WHO IS REPRESENTING VECTOR IS, IN FACT, INDEPENDENT AND IS NOT BEHOLNDEN TO THE INSURANCE COMPANY AND WE COULD GET A FAIR REPRESENTATION.

I THINK WHEN YOU GO BACK AND YOU LOOK AT THE CASES WHERE THEY TALK ABOUT YOU LOOK AT THE ALLEGATIONS IN THE COMPLAINT, YOU REALLY NEED TO GO BACK AND LOOK AT THE CONTEXT IN WHICH THOSE CASES CAME OUT.

WELL, I'M LOOKING AT JUDGE KING'S CASE, WHACKENHUT.

IS WRONGLY DECIDED?

NO, WE THINK THAT IS RIGHT ON POINT BECAUSE WHAT THAT IS, YOUR HONOR, THERE WERE SIX COUNTS IN THAT COMPLAINT. THREE OF THEM WERE CLEARLY INTENTIONAL COUNTS. YOU HAD TO PROVE INTENT TO BE ABLE TO SUSTAIN THEM. THREE OF THEM YOU DID NOT HAVE TO PROVE INTENT, AND IN THAT COMPLAINT AND THE FEDERAL COURT TELLS US THIS, THERE WERE GENERAL ALLEGATIONS THAT WERE INCORPORATED INTO EACH OF THE COUNTS AND THOSE GENERAL ALLEGATIONS INCLUDED ALLEGATIONS OF INTENTIONAL CONDUCT. SO THE INTENTIONAL CONDUCT WAS, IN FACT, INCORPORATED INTO EACH OF THE COUNTS SUCH THAT IS SIMILAR TO THE SITUATION HERE. EVEN THOUGH THAT INTENTIONAL CONDUCT WAS NOT NECESSARY TO SUSTAIN THE COUNT. AND WHAT HAPPENED THERE, THE INSURANCE COMPANY ACTUALLY DEFENDED THE INSURED IN THAT SITUATION. THEY DEFENDED THEM AS LONG AS THOSE COUNTS, WHICH DID NOT REQUIRE INTENT, WERE IN THE CASE. THEN THOSE COUNTS WERE DISMISSED BY WAY OF A MOTION TO DISMISS OR SUMMARY JUDGMENT. THOSE COUNTS ARE NOW OUT OF THE COMPLAINT AND YOU ARE LEFT WITH THREE COUNTS THAT NOW REQUIRE INTENT TO SUSTAIN THEM AND THE COURT SAID IT WAS ONLY AFTER THAT DISMISSAL SOUGHT AND OBTAINED BY WACKENHUT THAT NATIONAL UNION WITHDREW ITS DEFENSE OF ESSEX, BECAUSE THE POTENTIALLY COVERED CLAIMS WERE NO LONGER PART OF THE CASE, NATIONAL UNION'S WITHDRAWAL WAS PROPER. SO THE JUDGE IN THAT CASE WAS -- RECOGNIZED THAT THOSE COUNTS WERE, IN FACT, POTENTIALLY COVERED. GAVE RISE TO A DUTY TO DEFEND, NOTWITHSTANDING THE FACT THAT GENERAL ALLEGATIONS OF INTENT AND KNOWING WRONGDOING HAD BEEN INCORPORATED INTO THOSE COUNTS, THE COURT LOOKED AT THE ELEMENTS THAT WERE NECESSARY TO SUSTAIN THOSE CLAIMS AND SAID THEY COULD HAVE BEEN PROVEN WITHOUT PROVING INTENT. AND AS A CONSEQUENCE, THE INSURER IS POTENTIALLY OBLIGATED TO INDEMNIFY.

SO YOUR BOTTOM LINE POSITION IS EVERY TIME THE NECESSARY ELEMENTS OF THE CAUSE OF ACTION DO NOT REQUIRE PROOF OF AN ELEMENT THAT WOULD GIVE RISE TO AN EXCLUSION THE INSURER HAS A DUTY TO DEFEND?

YES, YOUR HONOR, BECAUSE UNDER THOSE CIRCUMSTANCES AND AS THIS COURT HAS REPEATEDLY SAID, WE POTENTIALLY COULD BE FOUND LIABLE FOR DAMAGES THAT WOULD NOT BE EXCLUDED.

YOU ARE IN YOUR REBUTTAL.

WELL, THEN I WILL SIT DOWN, YOUR HONOR. THANK YOU.

CHIEF JUSTICE: THANK YOU. MR.^KAMMER?

GOOD MORNING. MY NAME IS RONALD KAMMER, AND I REPRESENT HARTFORD FIRE INSURANCE COMPANY IN THIS CASE.

I SEE YOU ARE ALSO FROM MIAMI. DO YOU HAVE POWER IN YOUR OFFICE?

I APPRECIATE CHIEF JUSTICE ASKING THAT QUESTION. WE HAVE POWER IN OUR OFFICE WHICH IS WHY I'M HERE. I MUST SAY THAT MY WIFE AND I ON A PERSONAL NOTE HAD A DEBATE WHETHER I SHOULD ASK FOR A CONTINUANCE OF THIS HEARING BECAUSE I DID LEAVE MY WIFE AND SON BEHIND WITHOUT POWER, AND WE DON'T HAVE A GENERATOR, SO RIGHT AFTER THIS ARGUMENT I WILL BE RETURNING HOME TO SEE WHAT WE CAN DO.

CHIEF JUSTICE: THAT'S VERY NICE OF YOU. YOU COULD HAVE BROUGHT YOUR WIFE UP HERE, YOU KNOW?

WELL, SHE HAS BEEN UP HERE BEFORE ARGUING BEFORE THIS COURT BUT SHE IS AT HOME WITH MY NINE-YEAR-OLD SON OR SOON TO BE NINE-YEAR-OLD SON.

CHIEF JUSTICE: WE KNOW THERE HAS BEEN MUCH DISRUPTION IN SOUTH FLORIDA, AND WE DID GRANT CONTINUANCES TO ANYONE THAT REQUESTED IT.

I APPRECIATE THAT. WE THOUGHT ABOUT ASKING FOR ONE BUT CHOSE AS A FAMILY DECISION MORE THAN A CLIENT DECISION TO BE HONEST TO GO FORWARD AND ALLOW ME TO COME UP HERE TODAY. I WILL NOTE THAT WHEN I HAD MY HOT SHOWER TODAY I ALMOST WANTED TO TAKE A COLD ONE SO I COULD BE IN KINDRED SPIRITS WITH THE REST OF MY FAMILY BUT I CHOSE TO TAKE THE HOT SHOWER. IT MIGHT BE SOME TIME BEFORE I GET ANOTHER ONE.

I THINK SINCE YOU ARE HERE YOU NEED TO ANSWER YOUR OPPONENT'S ARGUMENT THAT THAT BECAUSE THERE COULD BE A -- IN A FAIR READING OF THIS COMPLAINT A RECOVERY UNDER THE LANHAM ACT WITHOUT PROOF OF KNOWLEDGE THAT THAT BRINGS INTO PLAY THE OBLIGATION OF THE INSURED TO DEFEND?

AND I THINK THAT QUESTION HAS BEEN ANSWERED BY SEVERAL DECISIONS BEFORE. MOST SPECIFICALLY IN A FEDERAL COURT DECISION ON THE ABC CASE WHICH CITES WITH APPROVAL THIS COURT'S DECISION IN LENNOX LIQUORS, THAT WAS DEALING WITH A SITUATION WHERE THERE WAS A TRADEMARK CLAIM, BUT THEY ONLY ALLEGED, EVEN THOUGH THEY COULD HAVE ALLEGED IN THE ABC CASE AN UNINTENTIONAL VIOLATION OF THE TRADEMARK THEY ONLY ALLEGED AN INTENTIONAL VIOLATION OF THE TRADEMARK MUCH AS THE CHIEF JUSTICE HAS POINTED OUT HERE THAT THE ALLEGATIONS OF THIS COMPLAINT ONLY ALLEGE WILLFUL AND INTENTIONAL CONDUCT.

BUT AS I UNDERSTAND YOUR OPPONENT'S ARGUMENT THAT UNDER THE FEDERAL RULES, IT IS QUITE PERMISSIBLE TO PLEAD MORE THAN ONE THEORY IN A SINGLE COUNT, AND HE IS SUGGESTING THAT HE IS PLEADING, THAT THE PLEADING THAT THE PLAINTIFF DID HERE, WAS OF BOTH A THEORY OF STRICT LIABILITY UNDER THE LANHAM ACT AND A THEORY OF -- THAT WOULD SUPPORT A CLAIM FOR PUNITIVE DAMAGES.

WITH ALL DUE RESPECT TO MR.^MARSHALL AND AS YOU POINTED OUT PREVIOUSLY, JUSTICE WELLS, THIS COMPLAINT WAS NOT ALLEGED IN THE ALTERNATIVE. THE ONLY WAY THAT MR.^MARSHALL CAN TAKE THAT POSITION IS TO IGNORE ALL OF THE FACTS THAT WERE ALLEGED IN THIS COMPLAINT. STARTING WITH THIS JUDGE PARIENTE, CHIEF JUSTICE PARIENTE POINTED OUT IN PARAGRAPH1 6 AND CONTINUING IN EACH AND EVERY COUNT THAT THESE ACTIONS WERE DONE MALICIOUSLY, INTENTIONALLY AND THAT THE FACTUAL STATEMENTS MADE BY VECTOR PRODUCTS WERE KNOWINGLY FALSE WHEN MADE.

CHIEF JUSTICE: SO IF THIS GOES DOWN THE ROAD AND THE -- AND VECTOR IS ABLE TO GET A SUMMARY JUDGMENT THAT THERE MAY HAVE BEEN FALSE STATEMENTS MADE BUT THERE IS NO EVIDENCE OF INTENTIONAL, WILLFULNESS, DOES THE ENTIRE COMPLAINT THEN FAIL? IS IT ALL OR NOTHING FOR THE PLAINTIFF THE WAY IT HAS BEEN PLED?

I WOULD AGREE WITH THAT.

I DON'T KNOW.

MY POSITION IS THAT IF IN THIS CASE SCHUMACHER, WHICH IS THE COMPANY THAT SUED VECTOR, DECIDED TO TAKE ON THE HIGHER BURDEN FOR WHATEVER REASON, AND AS THIS COURT POINTED OUT IN HIGGINS WE DON'T HAVE TO SPECULATE WHY THEY DID THAT, BUT IF THEY CHOSE TO TAKE THE HIGHER BURDEN IT COULD HAVE BEEN TO GET TREBLE DAMAGES, TO SHIFT THE BURDEN OF PROOF, IT COULD HAVE BEEN TO TAKE THIS CASE OUT OF INSURANCE COVERAGE. WE NEED NOT SPECULATE AS TO THAT. ALL WE DO KNOW IS THAT BASED UPON THE FACTS OF THIS COMPLAINT, THAT THEY PLED THEMSELVES INTO NOT ONE BUT TWO EXCLUSIONS AND THERE ARE TWO EXCLUSIONS THAT WERE CERTIFIED, NOT ONE AS MR.^MARSHALL POINTED OUT THAT HAVE BEEN CERTIFIED TO THIS COURT. ONE IS THE INTENT TO INJURE EXCLUSION AND THE OTHER IS THE KNOWLEDGE WITH FALSITY EXCLUSION, AND IN RETURNING IF I CAN --

ARE YOU ARGUING THAT IF THE PLAINTIFF IN THIS CASE PROVES A VIOLATION OF THE LANHAM ACT WITHOUT THE INTENTIONAL CONDUCT, NO TREBLE DAMAGES, THAT THEY COULD NOT GET DAMAGES FOR VIOLATION OF THE LANHAM ACT, UNINTENTIONAL VIOLATION?

IF I UNDERSTAND YOUR QUESTION, JUSTICE CANTERO, YOU CAN GET DAMAGES EVEN COMPENSATORY OR PUNITIVE BASED UPON AN INTENTIONAL OR NONINTENTIONAL VIOLATION OF THE LANHAM ACT.

RIGHT. AND EVEN THOUGH THIS PLAINTIFF ALLEGED INTENTIONAL CONDUCT, IF THE PLAINTIFF ONLY PROVES UNINTENTIONAL CONDUCT YOU AGREE THAT THEY CAN STILL GET DAMAGES?

NO.

OR YOU DON'T AGREE?

I DON'T AGREE WITH THAT.

DON'T THE CASES CONTRADICT THAT AND SAY THAT EVEN IF YOU PROVE LESS THAN INTENTIONAL CONDUCT YOU CAN GET DAMAGES?

IF I AM UNDERSTANDING YOUR QUESTION CORRECTLY AND I THINK I AM AND LET ME EXPLAIN THE CONTEXT IN WHICH I ANSWERED IT, IN THIS PARTICULAR CASE IF ALL THAT WAS PROVEN WAS A NONINTENTIONAL VIOLATION, I THINK THE RESULT THAT CHIEF JUSTICE PARIENTE SUGGESTED WILL HAPPEN AND THAT IS BARRING AN AMENDMENT OF THE COMPLAINT TO ASSERT --

IS THERE NO SUCH THING IN FEDERAL COURT OF AMENDING THE COMPLAINT TO CONFORM WITH THE EVIDENCE?

I THINK YOU CAN AMEND THE COMPLAINT TO CONFORM WITH THE EVIDENCE, BUT A QUESTION IS: ARE YOU AMENDING THE COMPLAINT TO CONFORM TO THE EVIDENCE WHERE YOU HAVE ALLEGED THERE IS AN INTENTIONAL VIOLATION OF THE LANHAM ACT FOR AB AND C BUT YOU PROVED A, B, C OR D OR IS IT PROPER TO AMEND THE COMPLAINT TO CONFORM TO THE EVIDENCE TO ALL OF THE SUDDEN ASSERT A COMPLETELY DIFFERENT CAUSE OF ACTION BY A NONINTENTIONAL VIOLATION?

YOU ARE STILL PROVING A VIOLATION, YOU ARE JUST PROVING A NEGLIGENT VIOLATION INSTEAD OF INTENTIONAL.

WHICH THEN RETURNING TO THE FACTS OF THIS COMPLAINT WERE NEVER PLED.

CHIEF JUSTICE: BUT I THAT THAT'S WHERE, YOU KNOW, SPEAKING OF THE SIMPLER EXAMPLE OF MANY CASES WHERE THERE IS AN ALLEGATION THAT SOMEONE HAS ACTED WITH GROSS NEGLIGENCE IN ORDER TO TRY TO GET PUNITIVE DAMAGES, THE NORMAL SITUATION THERE IS THAT THE INSURANCE COMPANY DEFENDS BUT THEY CAN DEFEND BUT THEY ARE NOT GOING TO PAY THE PUNITIVE DAMAGES. HERE, BECAUSE OF THE WAY THIS IS, I MEAN IT IS A FEDERAL PLEADING, BUT THE REQUEST FOR DAMAGES DOESN'T OCCUR UNTIL THE VERY LAST PART, YOU KNOW, ON PAGE 9 IN THE THEREFORE CLAUSE, AND THERE ARE 46 WHERE THEY ASK FOR COMPENSATORY DAMAGES. THAT WOULD BE THE LANHAM CLAIM AND THEN THERE ARE TREBLE DAMAGES, BUT THEY ARE PLED IN SEPARATE PARAGRAPHS.

AGREED.

CHIEF JUSTICE: SO WHAT I GUESS I SEE THAT I WOULDN'T KNOW, YOU KNOW, IT SEEMS TO ME THE INSURANCE COMPANY WOULD WANT TO DEFEND THIS BECAUSE IF WHAT YOU ARE SAYING DOESN'T OCCUR AND THERE IS A FINDING OF LIABILITY AS TO THE LANHAM ACT CLAIM, YOU ARE GOING TO HAVE TO INDEMNIFY?

THAT'S NOT TRUE AT ALL. AGAIN GOING BACK, WHAT I THINK WOULD HAPPEN AGAIN WE ARE ENGAGING IN SPECULATION WHEN THE DUTY TO --

WHY IS THAT NOT TRUE AT ALL?

IF YOU ALLEGE A CAUSE OF ACTION THAT SAYS, JUSTICE LEWIS, THAT I HAVE AN INTENTIONAL VIOLATION OF THE LANHAM ACT AND YOU DO NOT PROVE THAT INTENTIONAL VIOLATION OF THE LANHAM ACT, I THINK THE LOGICAL CONSEQUENCE OF THAT IS A DIRECTED VERDICT IN FAVOR OF VECTOR PRODUCTS IN THIS CASE.

THAT'S NOT WHAT I UNDERSTOOD HER QUESTION TO BE.

IF I MISUNDERSTOOD THE QUESTION I APOLOGIZE.

IF YOU HAVE AN INTERROGATORY VERDICT AT THE TRIAL AND ONE OF THE QUESTIONS IS SIMPLY A VIOLATION OF THE LANHAM CONTACT -- ACT WITHOUT EXPRESS INTENT AND THE WILLFUL AND INTENTIONAL AND THEN YOU HAVE ANOTHER QUESTION THAT GOES TO THE ISSUE OF THE WILLFULNESS AND INTENT, COULDN'T A JURY ANSWER THE SECOND QUESTION, WE DON'T FIND WILLFULNESS BUT STILL FIND A VIOLATION OF THE LANHAM NEXT AND -- ACT AND LET ME ASK IT A DIFFERENT WAY. IF PARAGRAPH1 6 IN COUNT ONE WAS ELIMINATED FROM THIS -- WHICH IS THE ALLEGATION THAT THEY MADE THE STATEMENTS WILLFULLY AND INTENTIONALLY AND WITH FULL KNOWLEDGE. IF THAT PARAGRAPH WAS TAKEN OUT, WOULDN'T THERE STILL BE A LANHAM ACT COUNT HERE THAT HAS BEEN FULLY AND PROPERLY ALLEGED?

I BELIEVE THE ANSWER TO THAT QUESTION, JUSTICE A STEAD, IS CORRECT.

WELL, IF THAT'S CORRECT, AND NOW YOU HAVE REMOVED, OKAY, THE ALLEGATIONS OF WILLFUL AND INTENTIONAL AND FULL KNOWLEDGE WITH WHICH ARE IN THERE, I ASSUME, IN AN ATTEMPT TO GET TREBLE DAMAGES BUT HAVEN'T YOU ANSWERED THE CASE THEN THAT THERE IS A DUTY TO DEFEND BECAUSE NOW YOU HAVE -- YOU DON'T HAVE THOSE ALLEGATIONS, YOU STILL HAVE A CLAIM UNDER THE LANHAM ACT WHICH DOESN'T REQUIRE WILLFUL AND INTENTIONALLY AND THIS IS, YOU KNOW, FROM THE VERY BEGINNING THEY SAY THAT THIS IS A CLAIM FOR VIOLATION OF SECTION 43A OF THE LANHAM ACT, OKAY, AND THEN THEY MAKE ALLEGATIONS, THE BOX CONTAINS FALSE REPRESENTATIONS OF FACT REGARDING VECTOR'S PRODUCTS AND THEY SAY IN WHAT WAYS THEY DO IT AND THEY GO FURTHER THEN AND THEN IN PARAGRAPH 15 SAY THAT THE ADVERTISING CLAIMS ARE FALSE STATEMENTS OF FACT. SO WHAT HAVE THEY LEFT OUT THAT -- AND I THINK YOU CONCEDED THIS THAT THEY HAVEN'T LEFT ANYTHING OUT IN ORDER TO ENTITLE THEM TO A CLAIM UNDER THE LANHAM ACT, SO I'M HAVING DIFFICULTY THEN WITH YOUR ANSWER THAT, YES, THEY CAN TAKE PARAGRAPH1 6 OUT AND THEY WILL STILL HAVE A VALID COMPLAINT BUT WE DON'T HAVE TO DEFEND IT?

YOU KNOW, THE OLD ADDAGE IN LAW SCHOOL GOES IF YOU CHANGE THE FACTS YOU CHANGE THE RESULT. THE FACT REMAINS, JUSTICE ANSTEAD IS THAT WILLFUL CONDUCT WAS PLED.

HOW DO THEY GET TREBLE DAMAGES?

THEY CAN GET TREBLE DAMAGES BY PLEADING AN INTENTIONAL VIOLATION OF THE LANHAM ACT.

WHAT DAMAGES DO THEY GET IF THEY DON'T PROVE THAT?

IF THEY DON'T PROVE IT?

BUT THEY DO PROVE FALSE STATEMENT?

IF THEY DO PROVE A FALSE STATEMENT THAT WAS NOT INTENTIONAL THEY WOULD GET COMPENSATORY DAMAGES BUT THEY CAN STILL GET COMPENSATORY DAMAGES --

HOW IN THE WORLD THEN IS A PLAINTIFF, YOU KNOW, THAT'S EVALUATING EVIDENCE AND THEY ARE SAYING, WELL, WE THINK WE'VE GOT A PRETTY GOOD CASE FOR PROVING THAT THEY ARE FALSE STATEMENTS, ALL RIGHT, BUT OBVIOUSLY WE'VE GOT A MUCH HARDER ROAD TO HOE IN TERMS OF PROVING THAT IT WAS DONE WILLFULLY, YOU KNOW, AND WITH KNOWLEDGE OF THAT, THEN HOW DO THEY PLEAD THESE TWO THINGS EVEN THOUGH THEY RECOGNIZE THAT AT TRIAL ALTHOUGH THEY WANT TO TRY TO PROVE THE SECOND, THAT IT IS GOING TO BE MUCH MORE DIFFICULT BECAUSE TO REPRESENT THEIR CLIENT THEY WANT TO ATTEMPT TO GET THOSE DAMAGES?

IT WOULD BE AN EASY ANSWER. THEY WOULD HAVE TO PLEAD IN THE ALTERNATIVE BUT I THINK FLORIDA COURTS --.

CHIEF JUSTICE: I JUST WANT TO MAKE SURE -- LET'S JUST ASSUME THAT THIS GOES TO THE JURY AND THERE IS A VERDICT ON THE LANHAM ACT CLAIM WITHOUT ISSUE OF WHETHER THERE WAS AN INTENT. WOULDN'T THAT BE THEN WOULDN'T YOU HAVE A DUTY TO INDEMNIFY UNDER YOUR POLICY?

AGAIN, THIS IS A -- THE ANSWER TO THE QUESTION IS THERE STILL WOULD BE NO DUTY TO DEFEND.

CHIEF JUSTICE: I JUST ASKED ABOUT THE DUTY TO INDEMNIFY.

AGAIN, I'M NOT SURE EXACTLY HOW THAT COULD HAPPEN, CHIEF JUSTICE PARIENTE, BECAUSE WHAT WAS PLED HERE WAS AN INTENTIONAL VIOLATION OF THE ACT.

CHIEF JUSTICE: YOU KNOW, AGAIN I THINK AS WE ALL, MOST OF US WERE LAWYERS BEFORE WE WERE JUDGES. WE WERE ALL LAWYERS BEFORE WE WERE JUDGES BUT ACTUALLY COURTROOM LAWYERS AND UNDERSTAND THAT PLEADINGS SET FORTH THE STRUCTURE, BUT THAT AGAIN JUST IN THE CASE OF AN AUTOMOBILE ACCIDENT, YOU SHOW THE NEGLIGENCE BUT THEN YOU SAY AND THEY ALSO WERE GROSSLY, BECAUSE YOU WANT TO TRY TO GET PUNITIVE DAMAGES. JUST BECAUSE YOU PLEAD THAT DOESN'T TAKE IT OUT OF THE COVERAGE FOR THE BASIC THING. SO NOW JUST ASSUME THAT THIS HAS GONE TO THE JURY AND THE JURY ENDS UP FINDING LANHAM ACT AND THERE IS A JUDGMENT AGAINST VECTOR, HOW IS THAT NOT SOMETHING THAT YOU WOULD HAVE TO INDEMNIFY?

AT THAT MOMENT IN TIME, ASSUMING THAT THERE HAD BEEN AN AMENDMENT TO THE COMPLAINT, THAT WOULD ALLOW A NONINTENTIONAL THEORY TO GO FORWARD AND KEEP IN MIND IT IS HARTFORD'S VIEW AND MY VIEW THAT THAT COULD NOT HAPPEN, THEN AT THAT MOMENT IN TIME THERE WOULD BE NOT ONLY A DUTY TO DEFEND BUT A DUTY TO INDEMNIFY, BUT IF YOU GO BACK TO LENNOX LIQUORS AND YOU GO BACK TO THE ABC CASE WHICH I TALKED ABOUT A FEW MINUTES EARLIER, THAT COURT SAID THAT EVEN IF LIGHTING SYSTEMS COULD HAVE GONE TO TRIAL ON A THEORY OF UNINTENTIONAL TRADEMARK VIOLATIONS JUST AS THE MINOR IN LENNOX LIQUORS COULD HAVE GONE TO TRIAL ON THE THEORY OF A NEGLIGENT SHOOTING UNDER FLORIDA LAW THE INSURANCE COMPANY HAS A RIGHT TO RELY ON THE AVERNENCE OF THE COMPLAINT THAT ABC'S ACTION HAD BEEN INTENTIONAL.

SO YOU DISTINGUISH THAT CASE ON THE BASIS THAT THEY ALLEGE A COMMON LAW CLAIM FOR ASSAULT AND BATTERY. THEY DID NOT ALLEGE A NEGLIGENCE CLAIM AND IN AN ASSAULT AND BATTERY CLAIM YOU HAVE TO PROVE INTENT WHEREAS IN A LANHAM ACT CLAIM YOU DON'T HAVE TO PROVE INTENT.

BUT IN ABC WHICH AGAIN IN THE TRADEMARK CASE YOU DON'T HAVE TO PROVE INTENT IN THE TRADEMARK CASE SO IN TERMS OF THE ABC CASE UPON WHICH WE RELY, THAT WOULD SUPPORT HARTFORD'S POSITION BUT THERE ARE OTHER CASES IN FLORIDA THAT ALSO SUPPORT HARTFORD'S POSITION. IF YOU TAKE A LOOK AT FEDERAL INSURANCE VERSUS APPLESTEIN AND THE S. M. BRICKELL CASE, BOTH OF THOSE ARE DEFAMATION CASES, IN BOTH OF THOSE CASES, MALICE OR INTENTIONAL CONDUCT WAS NOT AN ELEMENT OF THE CAUSE OF ACTION.

MY THRESHOLD QUESTION HERE IS: CAN WE COMPARE FLORIDA CASES THAT ARE BASED ON THE FLORIDA RULES OF CIVIL PROCEDURE AND FLORIDA'S PLEADING REQUIREMENTS TO A CASE OUT OF FEDERAL COURT GOVERNED BY FEDERAL RULES OF PROCEDURE 8E AND FEDERAL PLEADING REQUIREMENTS?

AND MY ANSWER TO THAT QUESTION IS I THINK YOU CAN DO THAT, JUSTICE CAN -- CANTERO, BECAUSE BASED UPON THE ALLEGATIONS OF THIS COMPLAINT I THINK IF YOU ADOPT VECTOR'S POSITION YOU HAVE TO IGNORE ALL OF THE FACTUAL ALLEGATIONS AND THE FACTUAL ALLEGATIONS THAT DO NOT IN AND OF THEMSELVES GO TO WHETHER YOU CAN PROVE TREBLE DAMAGES OR NOT.

CHIEF JUSTICE: SO IF TOMORROW MR.^MARSHALL GOES BACK IN FEDERAL COURT AND WE'VE GOT THE PLAINTIFF IN THERE AND THERE IS A CLARIFICATION IN THE COMPLAINT THAT PARAGRAPH 16 WAS JUST THERE SO THEY COULD ALSO ASK FOR TREBLE BUT THEY WERE ALSO INTENDING TO PROVE THE LANHAM ACT VIOLATION THEN EVERYTHING WE SAY, THIS IS DONE. I MEAN, YOU ARE IN THERE FOR BOTH THE DUTY TO DEFEND AND THE DUTY TO INDEMNIFY.

IF I UNDERSTAND YOUR QUESTION CORRECTLY.

CHIEF JUSTICE: YOU GO BACK AND THIS PARAGRAPH1 6 IS CLARIFIED THAT, NO, THAT IS JUST IN THERE BECAUSE THEY WERE ALSO PROVING -- THEY ARE TRYING TO ALSO GET TREBLE DAMAGES BUT THEY WEREN'T INTENDING TO EVER ABANDON THEIR RIGHT AT THE BEGINNING TO GET A STRAIGHT LANHAM ACT VIOLATION IF THAT'S CLARIFIED THEN YOU HAVE TO -- YOU ARE BACK IN THERE DEFENDING, CORRECT?

I WOULD SAY -- I WOULD ANSWER THAT QUESTION TWO WAYS. ONE IS AGAIN THE COURT I THINK KEEP IN MIND THAT THE INTENT -- THE ALLEGATIONS OF INTENT GO TO MORE THAN PROVING TREBLE DAMAGES. THEY ALSO GO INTO THE LANHAM ACT CLAIM OF SHIFTING THE BURDEN OF PROOF ON ACTUAL CONFUSION AND NOT ONLY TREBLE DAMAGES BUT OTHER TYPES OF DAMAGES AS WELL FOR EXAMPLE GOODWILL DAMAGES AND I THINK THAT'S AN IMPORTANT DISTINCTION BUT NUMBER TWO IS IF THE COMPLAINT IS AMENDED HARTFORD WOULD NOT HAVE A DUTY TO DEFEND FROM DAY ONE GOING FORWARD. IF THE COMPLAINT WAS AMENDED TO ALLEGE A THEORY OR CAUSE OF ACTION THAT WAS, IN FACT, COVERED. AND WE DON'T THINK THIS COMPLAINT DOES, THEN FROM THAT MOMENT OF TIME FORWARD THERE WOULD BE A DUTY TO DEFEND AND POTENTIALLY A DUTY TO INDEMNIFY.

I THOUGHT YOU SAID A MINUTE AGO IF WE TOOK PARAGRAPH1 6 OUT THAT THERE WOULD STILL BE A VALID CLAIM ALLEGED FOR COMPENSATORY DAMAGES UNDER THE LANHAM ACT.

BUT EVEN WITH PARAGRAPH1 6 IN THE COMPLAINT, JUSTICE ANSTEAD.

LET ME BE SURE I UNDERSTAND BECAUSE I THOUGHT THAT'S WHAT YOU ANSWERED MY QUESTION. I SAID IF YOU TAKE PARAGRAPH1 6 OUT -- PARAGRAPH^16 OUT, WOULD THERE STILL BE A VALID COMPLAINT UNDER THE LANHAM ACT FOR COMPENSATORY DAMAGES. I UNDERSTOOD YOUR ANSWER TO THAT QUESTION TO BE YES, THAT BASED UPON THE OTHER ALLEGATIONS THEY HAD A CLAIM UNDER THE LANHAM ACT THERE. I UNDERSTAND NOW THAT YOU ARE SAYING SOMETHING DIFFERENT.

I DON'T THINK I DID SAY SOMETHING DIFFERENT.

LET'S GO BACK TO THAT THEN. IF WE TAKE PARAGRAPH1 6 OUT.

IF YOU AMEND THE COMPLAINT TO TAKE IT OUT.

LET'S TAKE IT OUT. IS THERE A VALID LANHAM CLAIM FOR COMPENSATORY DAMAGES ALLEGED THERE?

IN THAT CASE, I THINK I ANSWERED THE QUESTION BEFORE AND I WOULD ANSWER IT AGAIN IF YOU AMEND THE COMPLAINT TO TAKE PARAGRAPH^16 OUT, THEN YOU WOULD HAVE A CAUSE OF ACTION FOR THE LANHAM ACT THAT WOULD TRIGGER A -- A DUTY TO DEFEND.

WHAT YOU ARE SAYING IS THAT IF INSTEAD OF THE WAY THAT THEY DID IT HERE, IF THEY HAD SAID COUNT TWO, TREBLE DAMAGES UNDER THE LANHAM ACT AND THEN THEY HAD PUT, WE ALLEGED THE THINGS THAT WE HAVE ALLEGED BEFORE AND IN ADDITION WE ALLEGE PARAGRAPH1 6, THAT IF THEY DID IT THAT WAY WE WOULD HAVE GONE BACK TO COUNT ONE, YOU WOULD HAVE HAD A DUTY TO DEFEND COUNT ONE WHICH YOU CONCEDED?

THAT'S NOT WHAT I AM SAYING AT ALL, JUSTICE.

WELL, YOU NEED TO EXPLAIN IT TO ME AGAIN THEN BECAUSE I THOUGHT YOU SAID IF 16 IS OUT, THEN COUNT ONE STATES A CAUSE OF ACTION THAT WE HAVE A DUTY TO DEFEND. DID YOU SAY THAT?

I DID SAY THAT. I'M NOT DISPUTING THAT.

LET'S MOVE FROM HERE, WE'VE GOT A COUNT THEN WITHOUT PARAGRAPH^16 THAT YOU HAVE A DUTY TO DEFEND BUT NOW THEY'VE PUT INTO COUNT 2, THEY'VE SAID WE REALLEGE EVERYTHING WE'VE ALLEGED BEFORE AND IN ADDITION, WE ALLEGED THAT ALL OF THESE THINGS WERE DONE WILLFULLY AND INTENTIONALLY AND WITH FULL KNOWLEDGE OF THEIR FALSITY. AND WE CLAIM TREBLE DAMAGES.

IF YOU TAKE OUT OF COUNT ONE THE ALLEGATIONS OF INTENTIONAL CONDUCT YOU WOULD JUST HAVE A LANHAM ACT CASE, IF YOU PUT IN COUNT TWO I SEE MY TIME IS UP. CAN I FINISH MY ANSWER? IF YOU PUT IN COUNT TWO AGAIN THIS IS NOT WHAT WAS ALLEGED IN THIS CASE AT ALL IN A SEPARATE PARAGRAPH THE FACT THAT THIS WAS INTENTIONALLY DONE TO SEEK TREBLE DAMAGES IS FAR DIFFERENT. WHAT YOU HAVE IN THIS CASE, JUSTICE ASTEAD IS IN EACH AND EVERY COUNT OF THE COMPLAINT WHICH HARTFORD WAS ENTITLED TO RELY UPON IN REACHING ITS DECISION WHETHER THERE WAS A DUTY TO DEFEND OR NOT, ALLEGATIONS THAT THE STATEMENTS THAT WERE MADE WERE KNOWINGLY FALSE WHEN MADE, AND UPON RELYING ON THOSE STATEMENTS AND LOOKING AT THE FACTS WHICH FRAME THE CAUSE OF ACTION FOR THE LANHAM ACT IN THIS SPECIFIC CASE, THERE IS NO DUTY TO DEFEND AND WE WOULD RESPECTFULLY REQUEST THAT THIS COURT ANSWER THE CERTIFIED QUESTION IN THE AFFIRMATIVE.

CHIEF JUSTICE: THANK YOU, MR.^KAMMER. REBUTTAL, MR.^MARSHALL?

COUNSEL, HOW ABOUT THAT? THAT IS THAT ORDINARILY WE WOULD SEE IN FLORIDA PLEADINGS THAT IF YOU WERE GOING TO GET PUNITIVE DAMAGES THERE WOULD BE A SEPARATE COUNT AND SAY IN ADDITION TO THE ABOVE THAT WE HAVE ALLEGED, WE ALLEGE THAT THIS WAS ALL DONE WITH MALICE AND WHATEVER AND WE SEEK PUNITIVE DAMAGES UNDER FLORIDA LAW, YOU KNOW, FOR THE DAMAGES THAT WE HAVE INCURRED, AND THAT DIDN'T HAPPEN HERE. YOU DON'T HAVE IT THE WAY THAT I DESCRIBED. YOU DON'T HAVE COUNT TWO, TREBLE DAMAGES, ET CETERA. YOU HAVE IT ALL ALLEGED IN THIS ONE COUNT WHICH SEEMS ORDINARILY TO THE ORDINARY READER WOULD SAY, WELL, IF YOU WERE GOING TO RECOVER UNDER THAT COUNT YOU'VE GOT TO PROVE ALL OF THESE THINGS YOU ALLEGE.

YES, YOUR HONOR. THIS IS A FEDERAL COMPLAINT, AND UNDER THE FEDERAL RULES YOU HAVE NOTICE PLEADING AND IF I COULD JUST FRAME THIS, READ TO YOU SECTION 8E OF THE FEDERAL RULES OF CIVIL PROCEDURE. A PARTY MAY SET FORTH TWO OR MORE STATEMENTS OF A CLAIM OR DEFENSE ALTERNATIVELY OR HYPOTHETICALLY EITHER IN ONE COUNT OR DEFENSE OR IN SEPARATE COUNTS OR DEFENSES.

BUT THE DISTRICT COURT HERE DIDN'T MAKE A DECISION ON THE BASIS OF THAT RULE. THE DISTRICT COURT HERE MADE THE DECISION ON THE BASIS OF OUR CASE LAW WHICH IS -- AND FOLLOWING JUDGE KING IN WACKENHUT WHICH IS VERY TECHNICAL AND THE THING THAT I'M HAVING TROUBLE WITH IS THAT OUR TECHNICAL LAW ALLOWS THE PLAINTIFF TO BE IN CONTROL OF WHO -- WHETHER THE INSURANCE COMPANY HAS AN OBLIGATION TO COME IN AND DEFEND OR NOT, AND IF THIS PLAINTIFF WHO CHOSE TO PLEAD THIS CASE IN THIS WAY BECAUSE THIS PLAINTIFF DIDN'T WANT THE INSURANCE COMPANY TO COME IN AND DEFEND YOUR CLIENT, UNDER OUR CASE LAW THE PLAINTIFF HAS A RIGHT TO DO THAT.

JUSTICE WELLS, THE PLAINTIFF IN THIS CASE DID PLEAD AN UNINTENTIONAL LANHAM ACT CLAIM. THE INCLUSION OF PARAGRAPH^16 DOES NOT MEAN THAT IT CAN ONLY SUCCEED IF INTENTIONAL CONDUCT IS PROVEN. THIS COUNT, AS PLED, AS DETERMINED BY THE 11TH CIRCUIT, CAN SUCCEED EVEN IF INTENT IS NOT DEMONSTRATED. SO AS A CONSEQUENCE THERE IS A POTENTIAL THEY WOULD HAVE TO INDEMNIFY US. THE UNINTENTIONAL LANHAM ACT CLAIM IS, IN FACT, PLED. UNDER THE FEDERAL RULES YOU CAN PLEAD TWO DIFFERENT CLAIMS IN ONE COUNT IN THE ALTERNATIVE BY ADDING THIS ONE PARAGRAPH.

DID YOU MAKE THAT ARGUMENT IN THE DISTRICT COURT?

WE DIDN'T GET A CHANCE TO MAKE THE ARGUMENT IN THE DISTRICT COURT. IT WAS DONE ON THE BRIEFS.

YOU DIDN'T ARGUE IT IN THE BRIEFS?

WELL, WE DID ARGUE IN THE BRIEFS, YES, BUT THAT SPECIFIC POINT WAS NOT RAISED. WHAT WE DID ARGUE WAS WE DID DEMONSTRATE TO THE COURT THAT THE 11TH CIRCUIT HAS STATED THAT KNOWLEDGE OF FALSITY AND INTENT IS NOT --

SHOULD WE HAVE ONE RULE FOR FRAUD CASES THAT ARE EERY CASES, FITTING TO HALLOWEEN, I GUESS, AND THE CASES WHICH ARE IN STATE COURT?

JUSTICE WELLS, YOU ONLY NEED ONE RULE AND THAT RULE IS IF YOU LOOK AT THIS COMPLAINT AND YOU DETERMINE AT THE END OF THE DAY WITHOUT ANY AMENDMENT TO THAT COMPLAINT THAT THE INSURED COULD BE FOUND LIABLE FOR UNINTENTIONAL DAMAGES THEN THERE IS A DUTY TO DEFEND AND THAT IS PRECISELY WHAT WE HAVE HERE. THIS COUNT AS PLED CAN RESULT IN US BEING FOUND LIABLE FOR UNINTENTIONAL DAMAGES WITHOUT ANY AMENDMENT. THERE IS NO NEED TO AMEND THIS COMPLAINT.

AND ARE THERE CASES SUPPORTING YOUR ARGUMENT?

YES, YOUR HONOR, AND THEY ARE CITED IN OUR BRIEF AND IF I COULD STATE ONE CASE AND IT COMES FROM THE 5TH CIRCUIT AND I BELIEVE THAT'S IMPORTANT BECAUSE COUNSEL FOR HARTFORD HAS REFERRED TO THE ABC DECISION AND FRANKLY THAT'S WHY WE ARE HERE. WHEN WE WERE AT THE 11TH CIRCUIT THERE WAS THE ABC DECISION FROM THE 5TH CIRCUIT WHICH WAS APPLICABLE TO THE 11TH CIRCUIT AND A 11TH CIRCUIT DECISION CALLED LIMETREE WHICH SUPPORTS OUR POSITION WHICH SAYS YOU LOOK AT THE CLAIMS FOR RELIEF THAT ARE SOUGHT. THE 5TH CIRCUIT MOST RECENTLY IN 2005 IN A CASE CALLED AMERICAN HOME ASSURANCE VERSUS UNITED STATES ALLIANCE AND THIS IS A QUOTE, EVEN WHERE ALLEGATIONS INVOLVE FALSE STATEMENTS, IF LIABILITY CAN BE IMPOSED WITHOUT PROVING THAT THE FALSE STATEMENTS WERE MADE WITH THE KNOWLEDGE THAT THEY WERE FALSE, THE KNOWLEDGE OF FALSITY EXCLUSION WILL NOT APPLY TO PRECLUDE COVERAGE. NOW, I RECOGNIZE THAT'S NOT A STATEMENT OF FLORIDA LAW, BUT THAT'S COMMON SENSE.

I GUESS MY QUESTION WAS THE INTERPRETATION OF THE LANHAM ACT ITSELF, WHETHER THERE ARE FEDERAL COURTS THAT SAY IF YOU PLEAD AN INTENTIONAL VIOLATION BUT ONLY PROVE AN UNINTENTIONAL ONE WHETHER YOU CAN GET DAMAGES UNDER THE LANHAM ACT.

YES, YOUR HONOR, AND I WOULD REFER YOU TO THE CASE FROM THE 11TH CIRCUIT IN THIS CASE WHERE AND I SEE MY TIME IS UP BUT IF I COULD JUST FINISH THIS IT SAYS IT IS WELL SETTLED THAT NO PROOF OF INTENT OR WILLFULNESS IS REQUIRED TO ESTABLISH A VIOLATION OF LANHAM ACT SECTION 43A FOR FALSE ADVERTISING. INTENT ALLEGATION WAS SUPERFLUOUS ON THE ISSUE OF LIABILITY SO IF IT IS NOT PROVEN AT THE TIME OF TRIAL, THE CLAIM COULD STILL SUCCEED, WE COULD STILL BE FOUND LIABLE FOR COMPENSATORY DAMAGES AND NO DOUBT ABOUT IT, HARTFORD WOULD HAVE TO INDEMNIFY US FOR THAT SO IF THE DUTY TO DEFEND IS BROADER THEN CERTAINLY THEY HAVE A DUTY TO DEFEND IN THAT SITUATION. THANK YOU, YOUR HONOR.

CHIEF JUSTICE: THANK YOU, MR.^MARSHALL AND MR.^KAMMER. THE COURT WILL TAKE THE MATTER UNDER ADVISEMENT AND WILL BE IN RECESS UNTIL 9:00 TOMORROW MORNING.

THE MARSHAL: PLEASE RISE.