Free Notice of Filing Proposed Pretrial Order - District Court of Arizona - Arizona

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Wayne Gill, Esq. (Fla Bar. No. 114953) WALTON LANTAFF SCHROEDER & CARSON LLP 1700 Palm Beach Lakes Boulevard, 7th Floor West Palm Beach, Florida 33401 Telephone: (561) 689-6700 Facsimile: (561) 689-2647 Steven Plitt, Esq. (State Bar No. 007481) Daniel Maldonado, Esq. (State Bar No. 018483) BESS KUNZ, A Professional Corporation 3838 North Central Avenue, Suite 1500 Phoenix, Arizona 85012-1092 Telephone: (602) 331-4600 Facsimile: (602) 331-8600 Attorneys for Defendant/Counter-Plaintiff IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA U-Haul International, Inc.; U-Haul Company Of Pennsylvania; U-Haul CASE NO.: CIV-04-0662-PHX-DGC Company Of Florida; and Republic Western Insurance Company Maricopa County Superior Court Cause No. CV 2004-002438) Plaintiffs, PROPOSED FINAL PRETRIAL vs. ORDER Lumbermens Mutual Casualty Company, Defendants. (Assigned to the Hon. David G. Campbell)

The following is the joint Proposed Final Pretrial Order to be considered at the Final Pretrial Conference set for January 24, 2007 at 4:00 P.M.

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A.

TRIAL COUNSEL FOR THE PARTIES

Plaintiffs/Counter-Defendants: Gerald Gaffaney, Esq. E-mail: [email protected] David J. Ouimette, Esq. E-mail: [email protected] MARISCAL, WEEKS, MCINTYRE & FRIEDLANDER, P.A. 2901 North Central, Suite 200 Phoenix, AZ 85012 Tel: 602/285-5000 Fax: 602/285-5100 Bruce Friedman, Esq. E-mail: [email protected] Mark S. Fragner, Esq. E-mail: [email protected] RUBIN, FIORELLA & FRIEDMAN, LLP 292 Madison Avenue, 11th Floor New York, NY 10017 Tel: 212/953-2381 Fax: 212/953-2462 Defendant/Counter-Plaintiff: Wayne Gill, Esq., (FL Bar 114953) (Pro Hac Vice Admission) E-mail: [email protected] Walton Lantaff Schroeder & Carson LLP 1700 Palm Beach Lakes Blvd., 7th Floor West Palm Beach, FL 33401 Tel: 561/689-6700 Fax: 561/689-2647 Steven Plitt, Esq. (State Bar No. 007481) E-mail: [email protected] Daniel Maldonado, Esq. (State Bar No. 018483) E-mail: [email protected] Kunz Plitt Hyland Demlong Kleifield 3838 North Central Ave., #1500 Phoenix, AZ 85012-1092 Tel: 602/331-4600; Fax: 602/331-8600

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B.

STATEMENT OF JURISDICTION

1. Jurisdiction in this case is based on diversity of citizenship under Title 28 U.S.C. § 1332. This Court also has jurisdiction pursuant to 28 U.S.C. §2201 et. seq., the Federal Declaratory Judgments Act. 2. C. proof: See those stipulations in Section D.1 where the parties have responded that they are uncontested. This includes issues 5, 6, 7, 8, 9, 10, 11, 16, 19, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 56, 58, 59, 60, 64, 66, 67, 68, 76, 84, 85, 88. 89, 98, 99, 100, 101, 111, 112, and 113 within subsection D.1. 2. The following material facts, although not admitted, will not be contested at trial by evidence to the contrary: NONE 3. parties: The following issues of law are uncontested and stipulated to by the Jurisdiction is not disputed. STIPULATIONS AND UNCONTESTED FACTS AND LAW 1. The following material facts are admitted by the parties and require no

See those stipulations in Section D.2 where the parties have responded that they are uncontested. This includes issues 5, 16, 17, 19, 20, 21, 22, 23, 24, 26, 27, 28, 29, 30, 32, and 33 within subsection D.2. D. CONTESTED ISSUES OF FACT AND LAW 1. The following are the material issues of fact to be tried and decided:

Issue #1: Whether Plaintiffs, U-Haul International, Inc., U-Haul Company of Pennsylvania, and U-Haul Company of Florida (collectively, "U-Haul") intended to be covered by a comprehensive insurance scheme consisting of separate, individual insurance policies, or layers. Plaintiffs Contend: Yes, Plaintiffs did intend to be covered by a comprehensive

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insurance scheme consisting of separate, individual insurance policies, or layers. Defendant Contends: The evidence does not support the allegation of "comprehensive insurance scheme," but defendant admits that plaintiffs purchased, for each policy period, insurance policies from different insurers providing coverage to attach at different levels. Issue #2: Whether as is relevant here, during the relevant coverage periods - April 1, 1999 to March 31, 2000 and April 1, 2000 to March 31, 2001 - UHaul was protected by four lawyers. Plaintiffs Contend: Yes. This statement is correct and accurately describes the U-Haul insurance program. Defendant Contends: The statement is incorrect because during said coverage periods U-Haul was insured under more than four insurance policies. Issue #3: Whether the first three policies, issued by plaintiff, Republic Western Insurance Company ("Republic Western"), provided primary and excess coverage up to a total limit of $7 million per occurrence in excess of a $25,000 selfinsured retention. Plaintiffs Contend: Yes. This statement is correct and accurately describes the three Republic Western Policies. Defendant Contends: The statement is incomplete and therefore is an inaccurate description of the three Republic Western policies. However, defendant admits that said policies' combined occurrence limits total $7,000,000 in excess of a $25,000 selfinsured retention. Issue #4: Whether the fourth policy, purchased from defendant, Lumbermens Mutual Casualty Company ("LMC"), provided excess coverage up to a limit of $13 million per occurrence and attached after the $25,000 self-insured retention and the $7 million total coverage provided by the underlying Republic Western policies were exhausted. Plaintiffs Contend: Yes. This statement is correct, as the Court found in granting Plaintiffs' motion for summary judgment on this issue. Defendant Contends: The statement is incomplete and therefore inaccurate because it does not address whether the Republic Western RU policies can only be exhausted by

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payment of indemnity. (Although the court has ruled otherwise, defendant maintains its denial that the liability limits of the Republic Western RU policies can be exhausted or reduced by the payment of LAE.) However, LMC admits its policy contains a $13,000,000 occurrence limit in excess of $7,000,000 underlying limits, and a $25,000 self-insured retention. Issue #5: Whether Republic Western issued policy RG99 to U-Haul for the policy period April 1, 1999 to March 31, 2000, providing primary coverage in excess of a self-insured retention of $25,000 up to a limit of $250,000 per occurrence. Plaintiffs Contend: This issue is not contested. Defendant Contends: Defendant does not contest this issue. Issue #6: Whether Republic Western issued policy number RX99 to UHaul for policy period April 1, 1999 to March 31, 2000, providing excess coverage up to a limit of $750,000 per occurrence. Plaintiffs Contend: This issue is not contested. Defendant Contends: Defendant does not contest this issue. Issue #7: Whether Republic Western issued policy number RU99 to UHaul for the policy period April 1, 1999 to March 31, 2000, providing excess coverage up to a limit of $6 million per occurrence. LMC issued policy number 9SR 120037-01 to U-Haul for the policy period April 1, 1999 to March 31, 2000, providing excess coverage up to a limit of $13 million per occurrence. Plaintiffs Contend: This issue is not contested. Defendant Contends: Defendant does not contest this issue. Issue #8: Whether Republic Western issued policy number RGMM to UHaul for policy period April 1, 2000 to March 31, 2001, providing the primary coverage in excess of a self-insured retention of $25,000, up to a limit of $250,000 per occurrence. Plaintiffs Contend: This issue is not contested. Defendant Contends: Defendant does not contest this issue.

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Issue #9: Whether Republic Western issued policy number RXMM to UHaul for the policy period April 1, 2000 to March 31, 2001, providing excess coverage up to a limit of $1,750,000 per occurrence. Plaintiffs Contend: This issue is not contested. Defendant Contends: Defendant does not contest this issue. Issue #10: Whether Republic Western issued policy number RUMM to U-Haul, providing excess coverage up to a limit of $5 million each occurrence. Plaintiffs Contend: This issue is not contested. Defendant Contends: Defendant does not contest this issue. Issue #11: Whether LMC issued policy number 9SR 120037-02 to UHaul for the policy period April 1, 2000 to March 31, 2001, providing excess coverage up to a limit of $13 million per occurrence. Plaintiffs Contend: This issue is not contested. Defendant Contends: Defendant does not contest this. Issue #12: Whether AON Risk Services of Arizona ("AON") served as the intermediary between U-Haul and LMC in connection with the placement of the LMC excess insurance policies, whether someone only recognized by LMC is authorized to sell Kemper insurance, and whether as an entity authorized to sell LMC policies, AON acted as LMC's agent. Plaintiffs Contend: Yes. AON was authorized by LMC to sell Kemper insurance, and acted as Kemper's and/or LMC's agent. Defendant Contends: AON Risk Services of Arizona ("AON") was at all times exclusively the agent of plaintiffs, was not authorized by LMC to sell Kemper insurance or to sell LMC policies, and at no time acted as Kemper's or LMC's agent. AON, in obtaining and procuring LMC's policies for U-Haul acted exclusively as plaintiffs' agent. Defendant LMC therefore denies the vague allegation of "intermediary between U-Haul and LMC," and the vague allegation of "someone recognized by LMC."

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Issue #13: Whether AON knew or should have known that the RG99, RX99, RU99, RGMM, RXMM and RUMM policies by Republic Western to U-Haul were defense within limits policies. Plaintiffs Contend: AON knew or should have known that the referenced Republic Western policies were defense within limits policies. Defendant's contention that the RU99 and RUMM policies are defense in addition to limits policies is contrary to the prior ruling of this Court. Defendant Contends: Defendant contends that the RU99 and RUMM policies are defense in addition to limits policies, contends that AON believed the RU99 and RUMM policies are defense in addition to limits policies, and denies there was any reason for AON to believe otherwise. But, defendant admits that the RG99, RX99, RGMM, and RXMM policies are defense within limits policies, and admits that AON knew that RG99, RX99, RGMM, and RXMM are defense within limits policies. (Defendant LMC acknowledges the court has held that the RU99 and RUMM policies are defense inside limits policies.) Issue #14: Whether the only excess insurance application prepared by UHaul provided that the underlying RU policy was a defense within limits policy. Plaintiffs Contend: Yes. The excess insurance application prepared by Republic Western on behalf of U-Haul provided that the underlying RU policy was a defense within limits policy, and was a document that would have been provided to AON. Defendant Contends: The evidence shows that U-Haul did not prepare any excess insurance application, but that Republic Western's risk manager Ron McCarty has admitted being the author of a handwritten draft of a document marked "Application." This document is not contained in the files of AON or LMC and the evidence shows that AON and U-Haul never received it. Further, Mr. McCarty has no specific recollection of sending this document to AON or LMC. Defendant further denies that this document states or provides: "That the underlying RU policy was a defense within limits policy." Although the document checks off that defense costs are within the aggregate limit, contains no response to the printed question as to whether defense costs are unlimited. Therefore, this document does not provide or state that the underlying RU policy was a defense within limits policy. Issue #15: Whether the commercial excess umbrella quotations and commercial excess umbrella binders prepared by LMC with respect to its issuance of its excess policies to U-Haul supersede any and all specifications provided by AON to

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LMC. Plaintiffs Contend: Yes. The commercial excess umbrella quotations and commercial excess umbrella binders prepared by LMC supersede any and all specifications provided by AON to LMC. Defendant Contends: Defendant contends that the term "supersede any and all specifications" is vague. Defendant denies Issue #15 because the specifications provided by AON to LMC contain information and documentation relied on by LMC in deciding whether to issue excess umbrella quotations and binders, and the LMC policies, to U-Haul. Issue #16: Whether the commercial excess umbrella quotations and commercial excess umbrella binders submitted by LMC to AON require a copy of the lead umbrella (RU) policies to be provided to LMC within 90 days of binding. Plaintiffs Contend: This issue is not contested. Defendant Contends: Defendant does not contest this issue. Issue #17: Whether LMC received copies of the RU99 lead umbrella and RUMM lead umbrella policies. Plaintiffs Contend: Yes. LMC received copies of the RU99 and RUMM lead umbrella policies. Defendant Contends: Defendant admits that it eventually received copies of policies RU99 and RUMM. Issue #18: Whether neither Mae Sandoval nor Michael Mizrachi of AON recall any specific conversation with anyone at LMC as to whether any of the Republic Western Insurance policies were or were not defense within limits policies. Plaintiffs Contend: No. Neither former AON employee recalls any specific conversation with anyone at LMC on this issue. Defendant Contends: Defendant admits that Ms. Sandoval does not recall any such specific conversations with anyone at LMC. As to Mr. Mizrachi, defendant says that when Mr. Mizrachi said he cannot recall any specific conversations with LMC as to whether the Republic Western policies were or were not defense within limits policies, he was referring to the RG and RX policies.

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Issue #19: Whether the LMC binders and quotes for the 1999 and 2000 policy years did not contain language that the LMC policies will respond until such time as the indemnity portion of the loss exceed the underlying or sub-insured limit. Plaintiffs Contend: This issue is not contested. Defendant Contends: Defendant does not contest this allegation. Issue #20: Whether as part of its functions, the LMC underwriter would review the underlying policy and confirm that it conformed with his or her understanding of the coverage communicated by the broker. Plaintiffs Contend: Yes, as part of its functions, the LMC underwriters would review the underlying policy and confirm that it conformed with his or her understanding of the coverage communicated by the broker. LMC's underwriting manager, Stephen Tibbs, so testified. Defendant Contends: It denies the stated issue as being an incorrect statement of Mr. Tibbs' testimony. What Tibbs says was that he would review the underlying policy when he could, but that he did not always receive a policy or often did not receive it for a long time. Issue #21: Whether LMC's underwriting manager has any knowledge or recollection of whether anyone at LMC reviewed Republic Western's RU policies to ascertain how that policy treated the issue of whether defense costs were inside or outside the policy limits. Plaintiffs Contend: LMC's underwriting manager has no such knowledge or recollection. Defendant Contends: Defendant denies that LMC's underwriting manager says he has no knowledge or recollection of whether anyone at LMC who reviewed Republic Western's RU policies to ascertain how that policy treated the issue of whether defense costs were inside or outside policy limits. The question he was asked was that "And to your knowledge or recollection, did anyone in your department or at Lumbermens at all review the RU policy issued by Republic Western, which was part of the submission, to ascertain how that policy treated the issue?" His answer was "I don't know." The question did not define the term "issue" and did not state whether the issue being referred to was whether defense costs were inside or outside the policy limits.

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Issue #22: Whether U-Haul or Republic Western ever authorized anyone at AON to tell anyone in the excess insurance market, including LMC, that the Republic Western policies are anything other than defense within limits policies. Plaintiffs Contend: Plaintiffs never so authorized anyone at AON. Defendant Contends: AON's representatives testified that they had no discussions with plaintiffs regarding whether Republic Western's policies were defense within limits and that they received no instructions from plaintiffs regarding what to tell anyone in the market regarding the subject of whether Republic Western's policies are defense in addition to limits policies. Also, the deposition testimony of plaintiffs' representatives does not allege that plaintiffs never authorized anyone at AON to tell anyone in the market that Republic Western's policies are defense in addition to limits policies. Issue #23: Whether representatives of Republic Western and/or U-Haul had continuing dialog with AON wherein it was understood that U-Haul's policies were defense within limits policies, and that all statistical information based on previous losses included defense inside the limits. Plaintiffs Contend: Yes. Representatives of Republic Western and U-Haul had such continuing dialog with AON. (See deposition testimony of Republic Western representatives. Defendant Contends: Republic Western's representatives had no discussions with AON's representatives regarding whether U-Haul's policies were defense in addition to limits instead of defense within limits. (See deposition testimony of AON representatives.) Issue #24: Whether U-Haul would have bound the LMC excess policies if it was known that they would respond only at such time as the indemnity portion of the loss exceeded the underlying limit irrespective of the erosion of the underlying limits by the payment of defense costs. Plaintiffs Contend: No U-Haul would not have bound the LMC excess policies under such circumstances. Defendant Contends: There is a factual dispute as to this allegation because a letter from Republic Western's risk manager Holly Reed to LMC acknowledges that Republic Western's RU policies are defense in addition to limits.

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Issue #25: Whether the U-Haul insurance program was placed on an occurrence basis whereby defense costs were included within the limits of the insurance policies. Plaintiffs Contend: Yes, the U-Haul insurance program was placed on an occurrence basis wherein defense costs were included within the limits of the insurance policies. Defendant Contends: There is no dispute that all of the Republic Western and LMC policies are occurrence type policies. However, defendant maintains its position that the Republic Western RU policies are defense in addition to limits policies (even though defendant acknowledges the court has ruled that the RU policies are defense within limits.) Issue #26: The amount of the Nelson settlement due from LMC once its attachment point is reached is $500,000. Plaintiffs Contend: Yes. The U-Haul insurance program was placed on an occurrence basis. Defendant Contends: LMC's share of the Nelson settlement is limited to $540,000. Defendant also says that its attachment point cannot be reached until $7,000,000 has been paid by Republic Western for indemnity only. Defendant acknowledges that the court has held that Republic Western's combined $7,000,000 underlying limits can be reduced by the payment of indemnity and LAE. Issue #27: $386,481.60. Plaintiffs Contend: Yes, this is an accurate statement. Defendant Contends: It denies this statement because plaintiffs have not provided it with copies of bills for the alleged payments of LAE. Issue #28: The amount paid by LMC pursuant to an interim funding agreement between the parties was $666,221. Plaintiffs Contend Yes, this is an accurate statement. Defendant Contends: The amount contributed by LMC to the settlement of the Nelson lawsuit was $666,221. $126,221 of this amount was paid pursuant to an interim funding LAE paid by Republic Western on the Nelson claim is

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agreement regarding the settlement of the Nelson lawsuit. Issue #29: The amount due to plaintiffs from LMC with respect to the Nelson claim is $221,260.60. Plaintiffs Contend: Yes, this is an accurate statement. Defendant Contends: In view of the court's previous rulings, LMC will owe this amount to plaintiffs with respect to the Nelson settlement if the court denies LMC's estoppel defense. Issue #30: The remaining Republic Western policy limit available after the settlement of the Martinez claim was $5 million. Plaintiffs Contend: Yes, this is an accurate statement. Defendant Contends: LMC acknowledges that the court has ruled that LAE reduces or exhausts the RGMM and RXMM policy aggregate limits. If the court finds in LMC's favor regarding LMC's defense of estoppel, then LMC can owe nothing to plaintiffs and instead LMC will be entitled to recover damages pursuant to its counterclaim against plaintiffs. Further, since plaintiffs have not provided defendant with copies of the bills for LAE paid by Republic Western on the Martinez claim, defendant denies the allegation contained in Issue 30. Also, if the court finds in LMC's favor regarding LMC's affirmative defense, then the Republic Western policy limit available for the Fernandez settlement, after settlement of the Martinez claim was Republic Western's combined $7,000,000 occurrence limit. Issue #31: The total Fernandez settlement amount was $8,174,976.00. Plaintiffs Contend: Yes, this is an accurate statement. Defendant Contends: The total amount of the Fernandez settlement was $8,000,000. Issue #32: LAE paid by Republic Western on the Fernandez claim is $2,178,161.54. Plaintiffs Contend: Yes, this is an accurate statement. Defendant Contends: Defendant denies this statement because it has not been provided with copies of the bills for "LAE paid by Republic Western on the Fernandez claim."

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Issue #33: The amount of the Fernandez settlement paid by LMC was $4,110,769.50. Plaintiffs Contend: Yes, this is an accurate statement. Defendant Contends: It paid said amount pursuant to an interim funding agreement between LMC and plaintiffs regarding the Fernandez settlement. Issue #34: The amount due to plaintiffs from LMC with respect to the Fernandez claim is $1,242,376.72. Plaintiffs Contend: Yes, this is an accurate statement. Defendant Contends: In view of the court's previous ruling that all of Republic Western's policies are defense within limits policies, (defendant respectfully continues to maintain its position to the contrary) LMC admits that it will owe money to plaintiffs with respect to the Fernandez settlement if LMC's estoppel defense is denied. Since plaintiffs have not provided defendant with copies of the LAE paid by Republic Western with respect to the Fernandez claim, defendant denies that $1,242,376.72 is the amount that defendant would owe plaintiffs in the event defendant's estoppel defense is denied. Issue #35: Whether the Nelson claim and suit arose out of an accident that occurred during the 4/1/99-00 policy period. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #35 is "yes."

Issue #36: Whether the Fernandez claim arose out of an accident that occurred during the 4/1/00-01 policy period. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #36 is "yes." Issue #37: $7,500,000. Plaintiffs Contend: Not contested. Whether the total settlement for the Nelson lawsuit was

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Defendant Contends: The correct answer to issue #37 is "yes." Issue #38: Whether the total settlement for the Fernandez lawsuit was $8,000,000. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #38 is "yes." Issue #39: Whether U-Haul/Republic Western and LMC were unable to reach agreement as to their ultimate shares of the Nelson and Fernandez settlements due to a disagreement as to whether LMC had no obligation to make a settlement payment until Republic Western had paid $7,000,000 in indemnity for all claims arising out of a single accident. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #39 is "yes." Issue #40: Whether LMC and Republic Western's contributions to the Nelson and Fernandez settlements were, by agreement, made without prejudice to their right to sue each other to recover reimbursement for what each of them claims was its overpayment of its lawful share of the Nelson and Fernandez lawsuit settlements. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #40 is "yes." Issue #41: Whether LMC has paid a total of $666,221 to the settlement of the Nelson lawsuit. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #41 is "yes." Issue #42: Whether prior to the settlement of the Fernandez lawsuit, Republic Western paid $274,975.68 in July 2002 to settle the Veloz claim which arose out of the Fernandez accident. Plaintiffs Contend: Not contested.

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Defendant Contends: The correct answer to issue #42 is "yes." Issue #43: Whether prior to the settlement of the Fernandez lawsuit, Republic Western recovered $100,000 from Vela Mante as a result of the settlement of the cross-claim U-Haul filed against Mante arising out of the Fernandez accident. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #43 is "yes." Issue #44: Whether the total settlement for the Fernandez lawsuit (combination of payments by Republic Western and LMC) was $8,000,000. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #44 is "yes." Issue #45: Whether Republic Western paid a total of $3,889,230.50 to the settlement of the Fernandez lawsuit. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #45 is "yes." Issue #46: Whether LMC has paid a total of $4,110,769.50 to the settlement of the Fernandez lawsuit. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #46 is "yes." Issue #47: The representations upon which defendant bases its estoppel defense are representations by plaintiffs' agent AON to LMC that LMC would have no obligation to contribute to any judgment or settlement before the combined underlying liability occurrence coverage limits totaling $7,000,000 had been paid in indemnity (i.e., paid only for settlements or judgments in addition to U-Haul's $25,000 self-insured retention), and that defense costs would not reduce any of the stated $7,000,000 underlying liability coverage limits. Plaintiffs Contend: It is not contested that this is a summary of the putative

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representations upon which Defendant bases it's defense of estoppel. Plaintiffs deny that any such representations were made or that Defendant possesses a viable "estoppel" defense. Defendant Contends: The correct answer to issue #47 is "yes." Issue #48: Whether Republic Western was the arm of the AMERCO and U-Haul group of related corporations that was responsible for purchasing all of the liability insurance for the AMERCO organization, including insurance for all of the UHaul plaintiffs. Plaintiffs Contend: Plaintiff acknowledges that at all relevant times, Republic Western and U-Haul were affiliated companies, and that Republic Western, inter alia, undertook to arrange for U-Haul's liability insurance program. Defendant Contends: The correct answer to issue #48 is "yes." Issue #49: Whether the Republic Western employees who communicated with AON regarding AON's procurement of insurance coverage for AMERCO/U-Haul were Republic Western Risk Manager Ron McCarty and his successor Holly Reed. Plaintiffs Contend: Ron McCarty and Holly Reed communicated with AON with respect to the procurement of excess insurance coverage for U-Haul. Defendant Contends: The correct answer to issue #49 is "yes." Issue #50: Whether Ronald McCarty was Republic Western's Risk Manager and U-Haul underwriting manager from June or July 1997 to August 1999. Plaintiffs Contend: Ronald McCarty was Republic Western's U-Haul Risk Manager and U-Haul Underwriting Manager during the stated time period. Defendant Contends: The correct answer to issue #50 is "yes." Issue #51: Whether Holly Reed replaced Mr. McCarty as Republic Western's Risk Manager/U-Haul Underwriting Manager for the period of time from 1999 until 2002. Plaintiffs Contend: Holly Reed became the Republic Western U-Haul Risk Manager and U-Haul Underwriting Manager for the stated time period. Defendant Contends: The correct answer to issue #51 is "yes."

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Issue #52: Whether the AON employees who handled the AMERCO/UHaul account and who selected, negotiated, and procured such insurance coverage were for numerous years, including the April 1, 1998-1999, April 1, 1999-2000, and April 1, 2000-2001 policy periods, AON account executive Michael Mizrachi and his assistant, AON account manager Mae Sandoval. Plaintiffs Contend: It is not disputed that Michael Mizrachi and Mae Sandoval of AON acted in an intermediary capacity in the procurement and placement of certain excess insurance policies which comprised a part of the U-Haul insurance program during the relevant time period. Defendant Contends: The correct answer to issue #52 is "yes." Issue #53: Whether it was AON's yearly practice, prior to U-Haul's annual April 1 policy renewal date, to prepare a set of renewal specifications to be sent to underwriters at those excess insurers from whom AON was interested in obtaining a quote (i.e., a bid). Plaintiffs Contend: This statement is incomplete in that it does not state that as part of the renewal specifications, a copy of the prior year's lead umbrella policy was attached. Defendant Contends: The correct answer to issue #53 is "yes." Issue #54: Whether AON, in assembling the set of specifications to be sent in any given year to prospective insurers to obtain coverage for AMERCO/U-Haul, included within the specifications the types of information and documentation that AON believed such prospective insurers' underwriters would want to review in order to evaluate and to determine whether they would offer coverage to AMERCO/U-Haul, and for what price (i.e., premium). Plaintiffs Contend: This statement is incomplete in that it does not state that as part of the specifications, a copy of the prior year's lead umbrella policy was attached. Defendant Contends: The correct answer to issue #54 is "yes." Issue #55: Whether included in the set of liability specifications that AON sent to LMC's underwriter in 1999 prior to the April 1, 1999 renewal, and in 2000 prior to the April 1, 2000 renewal, was, among other things, a completed Acord umbrella section application which disclosed certain information about Republic Western's underlying coverage, and exposure information including the history of past claims and losses.

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Plaintiffs Contend: Plaintiffs dispute that a completed Acord umbrella section application was included in the liability specifications. Defendant Contends The correct answer to issue #55 is "yes." Issue #56: Whether each year Republic Western's Risk Manager provided AON with whatever information and documentation AON advised it needed from AMERCO/U-Haul to complete AON's compilation of the liability specifications that AON was preparing to send out to underwriters of various insurance companies in advance of the annual April 1 policy expiration date. Plaintiffs Contend: Not disputed. Defendant Contends: The correct answer to issue #56 is "yes." Issue #57: Whether Mr. Mizrachi, as AON's account executive, exercised authority on the U-Haul account regarding how U-Haul's coverages with outside carriers such as LMC, were written and placed. Plaintiffs Contend: Plaintiffs dispute that Mr. Mizrachi exercised such authority, and state that the term "outside carriers" is vague and ambiguous. Defendant Contends: The correct answer to issue #57 is "yes." Issue #58: Whether neither Mr. McCarty, Ms. Reed, nor anyone else at Republic Western had any direct communication with LMC leading up to or regarding the issuance of LMC's policies. Plaintiffs Contend: Not contested. Defendant Contends: communications. The correct answer to issue #58 is "yes," no direct

Issue #59: Whether neither Mr. McCarty, Ms. Reed, nor anyone else at Republic Western had any direct communication with LMC regarding the issue of whether any of U-Haul's Republic Western's policies were defense inside limits or defense outside limits. Plaintiffs Contend: Not disputed, except that Plaintiffs contend that the Republic

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Western policies speak for themselves and are defense within limits policies, which a plain reading of the policies would show and as the Court ruled in granting partial summary judgment. Defendant Contends: communications. The correct answer to issue #59 is "yes," no direct

Issue #60: Whether neither Mr. McCarty, Ms. Reed, had any direct communications with LMC regarding the issue of whether LMC's policies were to be defense inside limits or defense outside limits. Plaintiffs Contend: Not contested, and not material. Defendant Contends: The correct answer to issue #60 is "yes," no direct communications. Issue #61: Whether Mr. McCarty and Ms. Reed have no recollection of ever notifying anyone at AON as to whether the Republic Western RU policies and the LMC policies were to be defense within limits or defense in addition to limits. Plaintiffs Contend: Mr. McCarty filled out an application which indicated that the Republic Western policies were defense within limits policies, and believes it was provided to AON. Ms. Reed had dialog with AON wherein it was understood that the Republic Western policies were defense within limits policies. Defendant Contends: The correct answer to issue #61 is "yes." Issue #62: Whether no one from U-Haul ever told Ms. Sandoval whether they wanted LMC to be required to attach at a lower level of Republic Western paid defense costs. Plaintiffs Contend: This issue is unintelligible and therefore the correct answer is that Plaintiffs had dialog with AON as described in Issue # 61. Further, Plaintiffs never authorized anyone at AON to tell anyone in the excess insurance market that the Republic Western policies were anything other than defense within limits policies. Defendant Contends: The correct answer to issue #62 is "yes." Issue #63: Whether during the years that Ms. Sandoval was handling the U-Haul account, no one from U-Haul or Republic Western had any discussion with her as to whether any of U-Haul's policies were to be inside or outside policy limits.

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Plaintiffs Contend: See Plaintiffs' responses to Issue #s 61 and 62. Defendant Contends: The correct answer to issue #63 is "yes." Issue #64: Whether Mr. Mizrachi does not recall anyone from Republic Western or U-Haul ever telling him that they wanted Republic Western's payment of defense costs to require LMC to pay before $7,000,000 in indemnity had been paid. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #64 is "yes." Issue #65: Whether no one from U-Haul ever told Ms. Sandoval whether they wanted Republic Western's payment of defense costs to result in LMC's policy being required to pay before $7,000,000 in indemnity has been paid by Republic Western. Plaintiffs Contend: See Plaintiffs' responses to Issue #s 61, 62 and 63, Defendant Contends: The correct answer to issue #65 is "yes." Issue #66: Whether Mr. Mizrachi does not recall anyone at AMERCO/UHaul or Republic Western ever telling him that they wanted Republic Western's payment of defense costs to result in LMC's policy being required to pay before $7,000,000 in indemnity has been paid by Republic Western. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #66 is "yes." Issue #67: Whether Mr. Mizrachi does not recall anyone from AMERCO, U-Haul, or Republic Western ever telling him that Republic Western's limits were to be reduced by the amount of defense costs paid by Republic Western. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #67 is "yes." Issue #68: Whether Mr. Mizrachi does not recall anyone from AMERCO,

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Republic Western, or U-Haul ever telling him that they wanted LMC's attachment point for a particular loss to be calculated by subtracting Republic Western's payments of LAE from Republic Western's combined $7,000,000 occurrence limit. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #68 is "yes." Issue #69: Whether the quotation and binder letters that LMC sent to AON for the upcoming April 1, 1998-1999 policy period include the statement that: "Our form will not respond until such time as the indemnity portion of the loss exceeds the underlying or self-insured limit." Plaintiffs Contend: This is neither material nor relevant, as the referenced quotation and binder letters refer to a policy year not at issue in this litigation. Defendant Contends: The correct answer to issue #69 is "yes." Issue #70: Whether LMC's underwriter's handwritten Account Summary for the renewal effective April 1, 1998 states that defense is outside of the limit of the underlying coverage. Plaintiffs Contend: Plaintiffs are not aware of the identity of the document referred to, and states that this is neither material nor relevant as it refers to a policy year not at issue in this litigation. Defendant Contends: The correct answer to issue #70 is "yes." Issue #71: Whether the Acord umbrella section contained in the April 1, 1999-2000 liability specifications submitted by AON to LMC asks if defense costs are within aggregate limits, a separate limit, or unlimited and whether this question is answered on the Acord umbrella section by the placement of an "X" immediately to the left of the word "unlimited." Plaintiffs Contend: It is not contested that the Acord form contains such a question; however, more than one version of the form was provided. In some instances an "X" appears, and in some instances it does not. Defendant Contends: The correct answer to issue #71 is "yes." Issue #72: Whether the set of liability specifications that AON submitted

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to LMC for the renewal period effective April 1, 2000 contains an Acord umbrella section application that states that the coverage beneath LMC's layer provides unlimited defense costs, and whether this statement is made by the placement of an "X" immediately to the left of the word "unlimited" in response to the question: "Are defense costs within aggregate limits, separate limits, or unlimited?" Plaintiffs Contend: It is not contested that the Acord umbrella section contains such a section; however, more than one version of the form was provided. In some instances an "X" appears to the left of the word "unlimited", and in some instances it does not. Defendant Contends: The correct answer to issue #72 is "yes." Issue #73: Whether the LMC policy was renewed for the April 1, 19992000 policy year on the same terms as the expiring April 1, 1998-1999 LMC policy. Plaintiffs Contend: It is not contested that the LMC policy was renewed for the 19992000 policy year on the terms and conditions contained in that policy. Defendant Contends: The correct answer to issue #73 is "yes." Issue #74: Whether LMC's underwriter's Account Summary and Pricing Worksheet for the April 1, 1999-2000 policy renewal states that defense is outside of the underlying limit. Plaintiffs Contend: It is not contested that the document so states with respect to the LMC excess policy. However, the LMC policy speaks for itself and supersedes any prior documents. Defendant Contends: The correct answer to issue #74 is "yes." Issue #75: Whether LMC's underwriter's Account Summary and Pricing Worksheet for the April 1, 2000-2001 policy renewal states that defense is outside of the underlying limit. Plaintiffs Contend: See Plaintiffs' response to Issue #74. Defendant Contends: The correct answer to issue #75 is "yes." Issue #76: Whether when AON's account executive Mr. Mizrachi on behalf of U-Haul, negotiated with LMC for the issuance of LMC's April 1, 1999-2000 and April 1, 2000-2001 policies, and whether it was his understanding that, for each of

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these two policy years, the RU policies were defense within limits. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #76 is "yes." Issue #77: Whether Mr. Mizrachi's understanding that Republic Western's RU policies were defense within limits is confirmed by the chart he drew which states that the Republic Western RU policy is defense outside the limits. Plaintiffs Contend: It is not contested that Mr. Mizrachi drew a chart incorrectly noting that the RU policy is a defense outside limits policy. This chart was never provided to LMC. Defendant Contends: The correct answer to issue #77 is "yes." Issue #78: Whether AON, when procuring coverage for AMERCO/UHaul to apply in excess of U-Haul's Republic Western policies, wanted policies that were defense outside the policy limit. Plaintiffs Contend: Since AON only placed excess policies at limits above the Republic Western RU policies, this is not relevant as it does not speak to whether the Republic Western RU polices underlying LMC's policies were or were not defense within limits policies, and does not address the attachment point of LMC's policies. Defendant Contends: The correct answer to issue #78 is "yes." Issue #79: Whether AON, at all relevant times, told LMC that the policies beneath LMC's coverage were defense in addition to limits type policies, and that therefore the limits of those underlying policies would not be reduced by Republic Western's payment of defense expenses. Plaintiffs Contend: AON did not make such statements to LMC. Defendant Contends: The correct answer to issue #79 is "yes." Issue #80: Whether AON, in regard to each policy period, explained to LMC that LMC's policy is triggered only after the Republic Western RU policy limit has been exhausted by indemnity payments only. Plaintiffs Contend: AON did not make such statements or explanations to LMC.

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Defendant Contends: The correct answer to issue #80 is "yes." Issue #81: Whether AON consistently told LMC that expenses were outside the RU policy limit. Plaintiffs Contend: AON did not make such statements to LMC. Defendant Contends: The correct answer to issue #81 is "yes." Issue #82: Whether the reason LMC priced its policy for the amount it did, and the reason LMC issued its policy to AMERCO/U-Haul, was that the LMC policy, and the Republic Western policies beneath the LMC policy, were to be defense outside limits policies according to discussions between AON's U-Haul account executive Mr. Mizrachi and LMC's underwriter. Plaintiffs Contend: Plaintiffs deny that LMC's pricing of its policies was based on discussions between Mr. Mizrachi and LMC's underwriter, or that LMC relied on statements by AON in pricing the LMC policies. Defendant Contends: The correct answer to issue #82 is "yes." Issue #83: Whether LMC's receipt of AON's set of liability specifications for AMERCO/U-Haul always occurred before LMC issued its quote and binder to AON. Plaintiffs Contend: It is not disputed that AON issued specifications to potential excess insurers, including LMC, which included copies of the prior year's underlying lead umbrella policy, and that subsequently LMC would issue one or more quotes and binders. Defendant Contends: The correct answer to issue #83 is "yes." Issue #84: Whether the underlying Republic Western policies for the upcoming policy period were often not received by LMC from AON until after LMC had already bound coverage to AMERCO/U-Haul by issuing a binder to AON for the effective date of the new policy period. Plaintiffs Contend: This is not contested. However, pursuant to LMC's binders and quotes, LMC reserved the right to void the binder or quotation or cancel its policy if a copy of the lead umbrella was not provided within 90 days of binding. LMC never voided a binder or quotation or canceled a policy on that basis.

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Defendant Contends: The correct answer to issue #84 is "yes." Issue #85: Whether LMC's underwriting summary for an upcoming policy period was based on the set of liability specifications that LMC received from AON for that particular new policy period. Plaintiffs Contend: Not contested. However, the underwriting summary and specifications were superseded by the quotations and binders. Defendant Contends: The correct answer to issue #85 is "yes." Issue #86: Whether LMC relied on AON's word about the provisions of the underlying Republic Western policies because applications LMC received from AON were typically not signed. Plaintiffs Contend: LMC has demonstrated no such reliance upon any statements made by AON. Defendant Contends: The correct answer to issue #86 is "yes." Issue #87: Whether LMC relied on what AON told LMC, and on what AON furnished to LMC, in deciding whether to issue a policy to AMERCO/U-Haul and for what premium. Plaintiffs Contend: LMC has demonstrated no such reliance on any statements made by AON. Defendant Contends: The correct answer to issue #87 is "yes." Issue #88: Whether LMC, in deciding whether to issue or renew its policy to AMERCO/U-Haul, and in deciding how much premium to charge, relied on the information it received each year from AON prior to the effective date of the new policy period. Plaintiffs Contend: Not contested. However, LMC has not demonstrated reliance on any statements or information received from AON as to whether the Republic Western RU policies were or were not defense within limits policies. Defendant Contends: The correct answer to issue #88 is "yes."

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Issue #89: Whether there is no evidence that anyone from AON ever discussed the Republic Western RU policies' definition of "Ultimate Net Loss" with LMC. Plaintiffs Contend: Not contested. Defendant Contends: The correct answer to issue #89 is "yes." Issue #90: Whether if LMC's excess underwriting manager Mr. Tibbs were to have read the Republic Western RU policies' definition of "Ultimate Net Loss," he would have interpreted it as not making the RU policy a defense within limits type policy. Plaintiffs Contend: This is speculation, since Mr. Tibbs has no recollection of ever having read the RU policies, which this Court has ruled as a matter of law are defense within limits policies. Defendant Contends: The correct answer to issue #90 is "yes." Issue #91: Whether LMC's excess underwriting manager Mr. Tibbs, based on his conversations with AON, and based on the applications LMC received from AON, was of the understanding that the policy underneath LMC's policy (i.e., the Republic Western RU policy) was defense outside the policy limit. Plaintiffs Contend: It is not contested that Mr. Tibbs so testified. However, there is no evidence of any such conversations with AON or that Mr. Tibbs ever saw the applications referred to prior to his deposition. Defendant Contends: The correct answer to issue #91 is "yes." Issue #92: Whether the liability specifications for the April 1, 1999-2000 renewal that LMC received from AON contained an Acord umbrella section that stated that the underlying coverage provided "unlimited defense costs," and whether this meant to LMC's excess underwriting manager Mr. Tibbs that the underlying Republic Western policies provided defense costs outside policy limits. Plaintiffs Contend: It is not contested that certain Acord forms stated that defense costs were unlimited; however, there is no evidence that Mr. Tibbs ever saw the forms referred to prior to his deposition.

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Defendant Contends: The correct answer to issue #92 is "yes." Issue #93: Whether the whole reason LMC decided to issue its policy to AMERCO/U-Haul was because expenses were to be outside policy limits. Plaintiffs Contend: This issue, as stated, is unintelligible, as it is not specified which policy or policies is or are being referred to with respect to the phrase "expenses were to be outside policy limits." To the extent this phrase refers to the Republic Western RU policies, the correct answer ton Issue # 93 is "no." Defendant Contends: The correct answer to issue #93 is "yes." Issue #94: Whether LMC did not want defense inside limits because that would serve to erode Republic Western's coverage more quickly and cause LMC's policy to trigger and apply at a lower attachment level. Plaintiffs' Contend: This is neither relevant nor material, since the issue of what LMC "wanted" is irrelevant to the issue of estoppel, i.e., whether anyone told LMC that the Republic RU policies were defense outside of limits policies, and whether LMC justifiably relied on such statements to its detriment.. Defendant's Contend: The correct answer to issue #94 is "yes." Issue #95: Whether if an LMC underwriter knew that the policy underneath LMC's policy (i.e., the Republic Western RU policy) was defense inside limits, LMC would not have issued its policy to AMERCO/U-Haul because LMC does not issue defense inside limits type policies except at an attachment level of $100,000,000 or higher. Plaintiffs Contend: See Plaintiffs' response to Issue # 94. Defendant Contends: The correct answer to issue #95 is "yes." Issue #96: Whether if anyone from U-Haul, or anyone representing or acting on behalf of U-Haul, were to have told LMC that U-Haul would ever contend that Republic Western's RU policy was defense within the policy limits, then LMC would not have issued a quote to AON. Plaintiffs Contend: See Plaintiffs' responses to Issue #s 94 and 95. Defendant Contends: The correct answer to issue #96 is "yes."

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Issue #97: Whether the reason LMC's March 28, 2000 binder letter to AON did not mention that LMC owes no payment until $7,000,000 in indemnity has been paid, is that AON told LMC to delete any such statement because in AON's opinion any such statement did not need to be mentioned in LMC's binder letter since Republic Western's underlying coverage was defense outside the limits. Plaintiffs Contend: The correct answer to Issue # 97 is "no." Defendant Contends: The correct answer to issue #97 is "yes." Issue #98: Whether Plaintiffs, at all times material, referred to AON as being U-Haul's "broker." Plaintiffs Contend: This is not contested. Defendant Contends: The correct answer to issue #98 is "yes." Issue #99: Whether AON was retained by AON to annually shop for in the market and obtain or procure liability insurance for AMERCO/U-Haul to apply in excess of the combined liability limits provided to AMERCO/U-Haul by Republic Western's policies, including the policy periods April 1, 1998-1999, April 1, 1999-2000, and April 1, 2000-2001. Plaintiffs Contend: This is not contested. Defendant Contends: The correct answer to issue #99 is "yes." Issue #100: Whether AON obtained or procured the liability insurance policies that LMC issued to AMERCO/U-Haul for the April 1, 1999-2000 and the April 1, 2000-2001 policy periods. Plaintiffs Contend: This is not contested. Defendant Contends: The correct answer to issue #100 is "yes." Issue #101: Whether AON represented, and acted on behalf of, U-Haul pursuant to an engagement with U-Haul that resulted from AON's acceptance of a request for proposal for broker qualification that AON received from Republic Western. Plaintiffs' Contend: It is not contested that AON entered into an engagement with U-

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Haul pursuant to an RFP. Defendant Contends: The correct answer to issue #101 is "yes." Issue #102: Whether AON acted as plaintiffs' actual agent when AON obtained or procured insurance coverage for plaintiffs from LMC (i.e., when AON obtained or procured the LMC policies that insured AMERCO/U-Haul for the 4/1/99-00 and 4/1/00-01 policy periods), and whether AON had plaintiffs' express or implied permission to do so. Plaintiffs Contend: AON acted both as U-Haul's agent and as LMC's agent. Defendant Contends: The correct answer to issue #102 is "yes." Issue #103: Whether if AON did not have plaintiffs' express or implied permission to obtain or procure AMERCO/U-Haul's LMC policies, then did AON act as plaintiffs' apparent (i.e., ostensible) agent for said purpose. Plaintiffs Contend: AON acted both as U-Haul's and LMC's agent. Defendant Contends: The correct answer to issue #103 is "yes." Issue #104: Whether AON had U-Haul's express, implied, or apparent (i.e., ostensible) authority to make the representations to LMC that are alleged in LMC's estoppel affirmative defense (i.e., the representation that LMC would have no obligation to contribute to any judgment or settlement before Republic Western has paid $7,000,000 in indemnity, and the representation that Republic Western's payment of defense costs would not reduce any of Republic Western's combined $7,000,000 underlying coverage limits). Plaintiffs Contend: The correct answer to Issue #104 is "no." Further, Plaintiffs contend that AON did not make the stated "representations" to LMC. Defendant Contends: The correct answer to issue #104 is "yes." Issue #105: Whether Plaintiffs, by their direct act or negligent omission, caused or permitted or inadvertently caused or permitted LMC to reasonably believe that plaintiffs had conferred authority on AON to make the representations alleged in LMC's affirmative defense of estoppel (i.e., the representations that LMC would have no obligation to contribute to any judgment or settlement before Republic Western has

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paid $7,000,000 in indemnity, and the representation that Republic Western's payment of defense costs would not reduce any of Republic Western's combined $7,000,000 underlying coverage limits). Plaintiffs Contend: The correct answer to Issue #105 is "no." Defendant Contends: The correct answer to issue #105 is "yes." Issue #106: Whether it is the custom and practice in the insurance industry for underwriters for excess liability insurers, when deciding whether to issue a policy and for what premium, to rely on what it is told to them by the insured's broker or agent regarding the nature and extent of the underlying insurance coverage unless the excess insurer has reason to believe that the broker or agent may not be telling it the truth. Plaintiffs Contend: The correct answer to Issue #106 is "no." Defendant Contends: The correct answer to issue #106 is "yes." Issue #107: Whether Plaintiffs, by their conduct, intentionally or through culpable negligence, represented to LMC and induced LMC to believe that: (1) LMC would have no obligation to contribute to any judgment or settlement before Republic Western has paid $7,000,000 in indemnity; and (2) that Republic Western's payment of defense costs would not reduce any of Republic Western's combined $7,000,000 underlying coverage limits. Plaintiffs Contend: The correct answer to Issue #107 is "no." Defendant Contends: The correct answer to issue #107 is "yes." Issue #108: representations. Whether LMC justifiably relied on AON's aforesaid

Plaintiff's Contend: The correct answer to Issue #108 is "no." Defendant Contends: The correct answer to issue #108 is "yes." Issue #109: detrimental to LMC. Whether LMC's reliance on said representations was

Plaintiffs Contend: The correct answer to Issue # 109 is "no.".

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Defendant Contends: The correct answer to issue #109 is "yes." Issue #110: Whether LMC's affirmative defense of estoppel has been proven by clear and satisfactory proof. Plaintiffs Contend: The correct answer to Issue #110 is "no." Defendant Contends: The correct answer to issue #110 is "yes." Issue #111: Whether on December 19, 2002, by a check dated said date, LMC made a $540,000 contribution to the settlement of the Nelson lawsuit. Plaintiffs Contend: This issue is not contested. Defendant Contends: The correct answer to issue #111 is "yes." Issue #112: Whether on April 8, 2004, by check dated said date, LMC made a further contribution to the settlement of the Nelson claim in the amount of $126,221. Plaintiffs Contend: This issue is not contested. Defendant Contends: The correct answer to issue #112 is "yes." Issue #113: Whether on March 9, 2004, by a check dated said date, LMC made a $4,110,769.50 contribution to the settlement of the Fernandez lawsuit. Plaintiffs Contend: This issue is not contested. Defendant Contends: The correct answer to issue #113 is "yes." Issue #114: Whether if the court finds in favor of LMC regarding LMC's affirmative defense of estoppel, then LMC is entitled to recover $126,221 from Republic Western as partial reimbursement of LMC's total contribution to the settlement of the Nelson lawsuit, plus attorney's fees and interest on said amount. Plaintiffs Contend: The correct answer to Issue #114 is "no." Defendant Contends: The correct answer to issue #114 is "yes."

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Issue #115: Whether if the court finds in favor of LMC regarding LMC's affirmative defense of estoppel, then LMC is entitled to recover $2,935,793.80 from Republic Western as partial reimbursement of LMC's total contribution to the settlement of the Fernandez lawsuit, plus interest on said amount. Plaintiffs Contend: The correct answer to Issue #115 is "no." Defendant Contends: The correct answer to issue #115 is "yes." 2. The following are the issues of law to be determined:

Issue #1: Whether loss adjustment expense ("LAE") are covered in the RU policies' definition of "ultimate net loss". Accordingly, the RU policies may be exhausted by payments of indemnity and LAE, and the LMC policies attach after said exhaustion. Plaintiffs Contend: The correct answer to Issue #1 is "yes." Defendant Contends: It maintains its position that the RU policies are defense in addition to limits and that therefore the RU policy limits can be exhausted or reduced only by the payment of indemnity and therefore the LMC policies do not attach until $7,000,000 has been paid for indemnity only in regard to claims and losses arising out of a single accident. However, defendant acknowledges that the court has held that the RU policies may be exhausted by payments of indemnity and LAE, and that the LMC policies attach after said exhaustion. Defendant further states that if the court finds in favor of defendant on its estoppel defense, then plaintiffs will be estopped to deny that the RU policies are defense in addition to limits policies. Issue #2: Whether the aggregate limits of liability contained in the Republic Western RG and RX policies are reduced by Republic Western's payment of defense costs. Plaintiffs Contend: The correct answer to Issue #2 is "yes." Defendant Contends: It maintains its position that the aggregate limits of liability contained in the Republic Western RG and RX policies are not reduced by Republic Western's payment of defense costs. (However, defendant acknowledges that the court has held that the aggregate limits of liability contained in the Republic Western RG and RX policies are reduced by Republic Western's payment of defense costs.) Defendant further states that if the court finds in defendant's favor regarding defendant's estoppel

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defense, then plaintiffs will be estopped to deny that the aggregate limits of liability contained in the Republic Western RG and RX policies are not reduced by Republic Western's payment of defense costs. Issue #3: Whether LMC has not met its burden of proof of establishing that AON was the agent of U-Haul. Plaintiffs Contend: LMC has not met its burden of proof of establishing that AON was the agent of U-Haul. Defendant Contends: LMC has met its burden of proof of establishing that AON was the agent of U-Haul. Issue #4: Whether LMC has not established that AON represented to LMC that LMC would have no obligation under its policies to contribute to any judgment or settlement before $7 million had been paid by Republic Western for indemnity only, but that Republic Western's payment of defense costs would not reduce any of Republic Western's combined $7 million underlying coverage limits. Plaintiffs Contend: LMC has not established that AON represented to LMC that LMC would have no obligation under its policies to contribute to any judgment or settlement before $7 million had been paid by Republic Western for indemnity only, but that Republic Western's payment of defense costs would not reduce any of Republic Western's combined $7 million underlying coverage limits. Defendant Contends: LMC has established that AON represented to LMC that LMC would have no obligation under its policies to contribute to any judgment or settlement before $7,000,000 had been paid by Republic Western for indemnity only and that Republic Western's payment of LAE would not reduce any of Republic Western's combined $7,000,000 underlying coverage limits. Issue #5: Whether the party pleading the de