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This paper describes the formalization and use of Latent Nesting Method (LNM) using Coloured Petri Nets (CPNs) for fault diagnosis and recovery in hybrid and complex systems. The method presented here will expand the initial proposed using Hybrid Petri Nets (HPNs) for adding the continuous dynamic. This method is illustrated with a comprehensive example of a lubrication and cooling system in the wind turbine's gearbox. It is analyzed step by step and results are shown and interpreted.