sixteen this one to six a homeowners insurance company versus ally property and casualty insurance company at all arguments not to exceed fifteen minutes for side mr smith number three they were premature and number four even if they were probably before the court and there was jurisdiction of they were premature there is no way i can ever meet the corporate capacity standard by driving an automobile i'm sorry corporate capacity what do you mean there the standard in the michigan business corporation statute has to be by reason of the fact that he was a director officer and as defined by the court as the corporate capacity corporate function because that's where you're this agreement be offered or submitted in any manner is evidence in the declarator action or any alternative dispute resolution with respect to determination of courage or prior to issues so that's very important because to be a  was no payment that has been officially made by homeowners or by allen and cope there was just an interim funding agreement and the claim that was before the court was you have on stott and you have to be to see an issue was who insured them and you look at the cases the first case settled is the client has a cool case that was subtle within the five hundred thousand dollar policy and primary policy of homeowners homeowners insured both therefore they were the insurer we get to the have a right under a policy of segregation no that's the point i'm getting at there was no payment they have to make a payment in the shoes of their insured clerk you're saying they actually have to make agreement but that it says right in it is not to be argued asserted in any subsequent action including this action if everything went procedurally the way that you now seem to say that it should other than being down the road is there anything that would be any different that is as i understand it settlements have actually been made with the injured parties so if everybody went back to square one and went through the minuet the way you want it to be wouldn't we be here somewhere down the road or before a judge or a nap and then us on you know the merits the sort of corporate capacity who really you know what's what's really in the policies so would there anything be any different is anybody's rights affected in any way because of these first three points that says it is assignment and the policy they have an absolute right to subrogate but he has a right yes but he also the fact that it doesn't have an assignment is irrelevant right what he has to do want to do things have an assignment or be subjugated by a payment but he can't do look as in every single policy a lot of lot of deca actions i can tell you directly or file before payments are made to adjudicate liability before payments are made and here when you actually have a settlement and you've got the liability  seems to me that doesn't make it so but i will look at the policy or do you have a citation for the section you're quoting right in the condition section of the policy of the can you or can you help us with where it is what page what  record entry something of that sort might help us a little bit leave because ok under the n b c a there's two ways to get indemnity the corporation can do it which in this case the core business said we're not going to do it they submitted a letter say we're not going to make a voluntary payment or number two the corporation here being deputies or b c c or number two the employee can soup the corporation and ask them to make a voluntary payment and this case that didn't happen well and the reason it didn't that it did though that's really judge boxes question would you not be here i get to why he can't do it ok he hasn't done it and won't do it the statute says that that's the two ways you have to do it and extension says the only person that can do that is the director of a certain chloe home home and cannot do that they're not the director officer employee they have to do it now why why isn't he doing it the reason he's not doing it is the corporation are doing this because if they voluntarily pay and there's no point of there's no coverage has been a payment but the point ok your argument there's no payment there are paid no but the point is the payment was an interim funny agreement to get rid of those cases of a homeowner that actually has paid money now but it says in the agreement a judge the payment was pursuant to the funding agreement which says in no advantage shelly interim payment provisions of this agreement be offered or submitted in any manner as evidence in the current tory action or in any sure they're paid under reservation of rights which is what you expect and i think that's all that there was two cases pending the insurance companies thought we're have a real problem with carbon but let's see if we can just put a package of money together voluntarily with no strings attached as saying we're make who's making the payment here just to get rid of these two underlying cases and then we'll find out who was the coverage and that's what the hope that's what the greenman says so there was no official payment be what happened except now you're saying that it shouldn't have happened no there should have been some other dance before we could get to it now what i'm saying is that after that happened then there should have been a determination as to who additional point the point is the corporation would have to voluntarily pay if they voluntarily pay the insurance policy every insurance policy says in it you may assume  payment or incur any expense without our consent except at the insurance on cost so therefore if the b b c voluntarily paid they would have no insurance coverage under the home policy or the auto or the allied or ample policies similarly if sued which he never did that we voluntarily payment there would be no insurance coverage that's why in this only if it meets the standard of by reason of the fact and it never has been applied to accident case ever in any single case and never been applied what yes no no it's somehow that was an intentional malicious conduct of the vice president of a corporation and therefore was not within corporate business and therefore he was not driving a good faith and therefore i know that that's rather ridiculous you know the case is say that it has to be an act in the course of exercising the corporate powers i cited on an interview was it not for me driving to yes or do an interview that was corporate business with no that's not what i mean it says it has a was he going to an interview he said he was going to interview a prospective case anywhere in the country that has applied this corporate capacity test to any kind of an accident auto accident boat accident promises accident any kind it has to be some act where the corporate powers were used or necessary maryland florida massachusetts new york this language is in the michigan because corporations statute is in is in the model corporation statute is mentored by these cases and these cases all apply to situations where it's a corporate type decision it's not driving a car or a boat and that the cases in the brief are for example improper fees from a third party financial institution and the agent ensuring to a lease a an agreement with the parent corporation during a merger breach of a due shiri duties personal guarantees to a bank reaching duties with respect to respect to busy relationship breach of warranties a time of a merger there isn't a single case anywhere in the country which ever found that driving a car a boat or any kind of an accident has ever been found to be within this corporate function test  provision was very broad in fact i think it stated in there that they wanted it to be as broad as allowable by law right exactly and the law says it has to be by reason of the fact of exercising the corporate powers that you raise any of this before judge now  he used all of his extra five minutes yet all right thank you counsel your time fine job but the arguments that have advanced are terrible first the contention by mr schmidt that the by reason of the fact that argument was raised by no court has ever addressed a question involving tortious conduct certainly most of the cases looking to whether there is a sufficient nexus to satisfy that by reason of the fact that requirement of section fifteen sixty six involve corporate actions borrowing money making agreements and so forth but the would go case in our brief is west against belfour p d construction of page forty four the cases broadly interpret interpret by reason of the fact to require no more than a nexus between the corporate officers and directors official activity official activity and the this was official activity he was going to interview and ultimately did hire the person he interviewed for a job the whip cocaine in that case was an accident case or you know  forty five and i misstated the page number forty five of my brief and also page forty six is one in which the corporate officer was sued for and and personal liability was sought to be attached to him for his conduct  accident it wasn't an automobile accident it's a conduct damaging the environment i think it's close enough to demonstrate that when there is conduct of that sort and there is a sufficient between the official capacity in which the person acts indemnification is proper now does that also make a difference in this case because this is sort of a two person operation and well certainly there a the record from the record there are fourteen eighty eight through fifteen hundred were where there was payment the interim funding agreement interestingly enough from which council was reading is one that we all agreed i don't care i have it here and you're welcome to have it if you will stipulate to provide to you i'd love to have you see it quite frankly but but allied insisted it be a secret and he's been reading from it but he's been misinterpreting what it means certainly nothing in that agreement establishes a liability that's what we agreed or priority of coverage but that agree that agreement merely said it would be cut cutting cutting to the chase is the case there has been payment by the reason i'll ask you because i didn't think i got much of an answer from him where i said that sort of that's my question i said ok suppose we went through all the procedural dance where would we be would we be any different and the only thing i heard i mean a you can give me your own answer but he seemed to be saying that in some way w t c would either be worse off or would be put to a choice about making the payment or not so can you give me your view and b what do you think he's well it's complete wishful thinking your honor and the short answer is  it goes after w t c so what i mean you could anything be any different no it would not and that's the short and then sort of tell me about how w t c would be exactly the same because that's where he seemed to be saying that w t c would be in either a more peril were put to a choice well mr column r us their trial counsel engaged in some bullying tactics he said if you make a payment if you agree if he didn't demanded indemnification in writing it's in the exhibit and w t c in turn called upon allied and and co that one company there nationwide to pay and that was their response there if you have a cite for and while i'm looking for it if i may continue while i'm looking for it so the point is that since w t c is called upon allied to perform allied now has a duty to perform under its policy and primary and it's precisely because that's because of the clause about it being an insured contract that's correct or b c i have that here yes and i'm getting to   if this were a real if if it had gone through a real series of lawsuits would the allied then have been in a position to defend the t c against that demand in other words it's a i mean they're sort of saying now either because the the michigan corporation law oh isn't right or because of that may not they also sort of say it isn't really an insured contract would they not have been in a position by the officer in court the court has no jurisdiction no i was i'm trying to get to the merits and i thought they saw in effect what i would call a merits argument which says it isn't really an insured contract under our terms or the michigan corporation act only extends so far as if you did it as a director i mean literally doing it his is last argument about that i mean if we accept that he can even raise that double as as a it's only been raised on appeal so it's not preserved argument but even if the court is willing to exercise its discretion to consider it it's not a meritorious argument not even and certainly has no merit because  agreement is the maximum permitted under michigan law and i think that the argument that you you want me to circle around to is whether this is a conduct that is permitted to be indemnified under michigan law and yes of course it is because this is simply negligent conduct it's the very essence of the kind of conduct for which if on the way to interview this guy he stops and robs a liquor store or kills his mistress and that that the coverage then that's intentional matter in this clarity to action judge action didn't they get the opportunity to raise those self same objections that certainly allied would have been entitled to and it is attempted to do so on appeal it did not in the trial court it could have raised any argument that was available to the w t c in opposition to the claim for indemnification that homeowners asserted by allied fulfill its doing under its policies the policies define an insured contract to include a promise to answer for the tort liability of another and and that tort liability of another is for non insured and that's what is he was not insured because under allies policy because driving his own vehicle that's critical if you'd been insured we would be on the hook he was not insured allied policies them the settlements extinguish the liability of all parties and allied was a party to those settlements and that's again exhibits w x y and z allied is released