good morning and may have please the court my name is scott colgan and i'm here on the have both palance structural shop and blue the nature of this appeal of course is the equitable stop we are contending in this case that the lower court a committee to mr ogun you might be able to tell what the likely first question in this case is the insurer sort of declaratory judgment and the district judge said it is entitle to one and i can't find it is there declaratory judgment in this case the insurer the lower court granted summary judgment on behalf of e insurance company on all claims before the court meaning what the judgment checksum boxen says the judgement is in favor of the players and then he doesn't provide any terms right as i said in the last case we have said until blue in the face that he judgement must provide the relief to which the prevailing part case was not done in the district court why are we here i believe that the lower court did enter a judgment in favor of it is under judgment that doesn't have any terms it's like every new document on judge when he granted summary judgment we went in on another status and he entered you can go you can rant summary judgment to a defendant but take nothing judgement doesn't need any terms beyond the fact that the defendant wins a judgment in favor of the planet mosty contain the relief to which the plaintiff using title is not something you can argue about it's as straightforward as can be and this judgement doesn't do that i listen to the prior argument and i understand what you're saying your honor soul my show or do we need to do now while i will make my argument on appeal and we will seek the nature  judgment from the lower court why didn't you go to the district judge and say please enter a proper judgement i'll be asking this question of mr walton to this should not wait for oral argument in the court of appeals i think what people are doing i mean i'll offer you a guess as to why it's happening i think what people are doing is that in this particular case you're reading judge lisa pena when you read it and he think well we know who won and we know who lost and we know that he just expressly says that essex you know he declares that essex insurance company has no to do number five and then without thinking about well is there a separate rule fifty eight judgment what's the actual judgment is mandatory that the district judge personally review the terms of every judgment except for defendant wins outright because no sign of the district judge has reviewed the judgment argument then it is your only chance for argument and i will proceed the heart of this issue is that the district court erred in granting summary judgment by failing to consider equitable stoffel it ruled on the prejudice prong that there was no material issue of fact but it is our contention here in this case there was an issue of fair and as to prejudice because we did show some prejudice up this summary judgment level and in fact we showed that there was some control that control begins it may of two thousand and fourteen when the first settlement offer was for twenty five thousand dollars mitt was made by blue move to essex at that time  as fixes insurance adjuster melanie brown instructed mr palin dec to reject the settlement she wrote in an e mail that she it that they should go ahead and litigate the case that is  because it would be cheaper or less expensive than the twenty five thousand dollars issue both the twenty five thousand dollars offer and presumably the twenty five thousand dollars policy at that time she was asserting control essex was asserting control of the case is important to note that she responds first to mr palin deck's request on whether the case should be settled and she says not to settle she does not say we need to hear from the insurer she does not say we should wait she does not wait to hear from the insured she responds first and then the insurer does mr mr veatch does respond and say i am a firm no as to the settlement and where as well but that agreement is incidental because at that time mr veatch is completely under the understanding that he has full and defense an indemnity from essex insurance company that he has coverage at that time because there's been no reservation of rights letter that the cases continued for two years without a reservation rights letter and the lack of preservation of rights i submit to you is control as well because the insured in this case does not know and does not have an understanding that the structural shop just up and settled with bloom right in that what was that like april march april two thousand and fifteen correct not clear to me that essex had any role in that whatsoever we're we're good out of us we're going out of this we're going to sign our rights to blue moon and good luck but we're done that's it that's what happened i know did you is that that documented anywhere in the record there's a nest there was an assignment the assignment is part of the record it's right it's agreed upon but i think that here's my here's the upshot for me of my observation i had is that i thought the first time that essex really seemed to take control or have control is when they told mr palin deck a look we got a new council to deal with this on appeal in the illinois state court we're going to be in the front seat you're now going to be in the back that's the first fact that i see that you could objectively point to to say that there are some you know there are some active control being asserted here well before that the parties seem to be going back and forth and they're aware of what's happening but it just seems hard to read the record that essex is calling the shots it's clear and there's no dispute that is i submit to you that at that time she is giving direction to palin deck and he is doing what she says and there's no others and when she gives they had order there's nothing from the insured insured responds an hour later and agrees but at that time he has no knowledge of he believes he's being covered so he has nothing to lose this is all to the insurance company's advantage i submit to you because they have nothing to lose at this time if they're served if there's proper service then they have no duty to cover that's their reasoning if there is no proper service but they win the motion to dismiss then they get a free the you get free litigation at that time they don't have to pay for the difference because it's still deductible but even more that in itself in and of itself is evidence of control and on summary judgment that is a material issue because she is making direction and he is following direction but after that time then there are two more attempts by bloom to try to settle the case in july there is the it in july evidence is sent to two i'm sorry to that he informed essex of the proper service so at that time essex has knowledge of the proper service palin deck and essex appellant testified that he spoke with brown on several occasions that he had other cases with brown that they were paneled attorneys and so they're speaking with each other about this and there's a reasonable presumption at that time that essex knew that there was proper service and and there was still the opportunity to settle the case before the motion to reinstate which the state court judge would would reinstate and yet that was not done that was not done nothing was done now that is an ultimate issue of control i submit to you because mr  testifies that he doesn't have knowledge of of blue moons continued willingness to settle the case so those are two two examples of control before the attorney is fired before the appeal occurs i'd like to morning runners may please the court and jonathan moulton counsel for evanston insurance company successor in interest to essex insurance company and may as well begin with on the issue today regarding your judgment yes indeed your your brief says tell us jurisdictional statement is complete and correct you're representing that there was a final decision in the district court and there plainly was about what's gone wrong here your honor we were under the impression that the court statement in a memorandum opinion that essex insurance company has no duty to identify the structural shop for the fall judge to show you think an opinion in a judgment are the same what gave you that impression so leave the subsequent entry of the judgment did you do any legal research on that we expect the lawyers on both sides to ask the district judge to fix problems and to do legal research before saying off the top of their head that something is or is not within our jurisdiction essex as to the defense strategy the record does not support this contention it is undisputed that these emails from the claims of examiner came in response to correspondence from mr pound back who was the attorney for the structural shop who was the attorney selected by the structural shop and who when the matter was first tender to the insurance company was already representing the structural shop is their chosen counsel mr p make recommendations that he would send to both the structural shop and the insurance company to check with both of them for the go ahead so the evidence shows that the claims examiner was responding to those recommendations voicing the company's approval what is undisputed is the only directive which was issued by any party came from the structural shop who said i am firmly a no to settlement no similar communication came from the insurance company moreover under the policy the structural shop had control over settlement and had to approve any settlement council for bloom deposed mr pound i can ask him that very question did you take any direction from s s and he denied doing so he said i was defending the structural shop i was providing contemporaneous reports to the carrier and to the structural shop whatever direction i took in the case was the product of that consensual interface now another issue is that blue moon states over and over that there is some evidence of control or that he's created a question of fact as to who controlled the litigation well that is not sufficient here it is undisputed the prejudice must be proven by clear concise and unequivocal evidence that standard cannot be ignored on summary judgment this court in the state two case found that evidence was not sufficient to establish prejudice by clear concise and unequivocal evidence and on that basis the firm the decision of the granting summary judgment by the district court judge shater concluded emmett's an insurance company for security assurance company that the standard requiring proof of prejudice by clear concise and unequivocal call evidence must guide the determination of whether a material or factual dispute exists so mr walton is it your view then that the moment that we first see control as a factual matter in the case is in that march april two thousand and fifteen time period when your client tells mr palin decade look we're going to take over on this appeal and hire new counsel you want involved but we're going to we're going to guide it going forward i agree that that is the first time we have some clear concise evidence of control so did any was there let's i mean i read that as if there's an assertion of control or an act of control being asserted did they ever then exercised it was or ever  exercise of control no your honor at that point the insurance company decided to take over the appeal and try and have that reinstated default judgment vacated again so the matter would go back to  litigation the appeal was not after the notice of appeal was filed the structure shot that settlement with blue moon and so the matter was resolved and there was no appeal pursuit at that point as the district court concluded essex's later retention of appellate counsel does not establish that there was control throughout the litigation of this case this was only done after the vacated default judgment was then reinstated and only after essex had issued a reservation of rights letter explaining that there would be no coverage for that default judgment yet it would continue to pursue the appeal to have that default judgment faded once again and i think that goes to another issue which looms counsel is raised which is that you know his position and theory that essex the whole time was just looking for a way out of coverage well by taking over the appeal by handling the the appeal what essex was trying to do was have the court's decision reversed the court's decision that blue moon blue moon in fact service structure shot back in two thousand and two so cohen have a decent point when he says you all waited an awfully long time to send the reservation rights you know your honor first of all a mere delay in issuing reservation of rights letters not sufficient to estab prejudice by clear concise and unequivocal evidence that was the court's holding in other states to case what is necessary to prove prejudice is control of the litigation not solely a delay in issuing a reservation rights  letter blue moon and structural shop simply have not produced that evidence of control and it is undisputed that the attorney who represented the structural shop in the litigation was engaged by the structural shot before the matter was tendered to e appellants argue in their brief that at some point in the litigation mr pound they changed his status from the structure shop's council of choice to the insurer retained counsel and there's simply no evidence of this and there's no evidence that the structural shot terminated alan decker ever had any disagreement with his defense strategy in fact on the structural shops principle testified that he never had any objection and if you disagreed with any steps taken he could have said so and he believed in  prejudice there's no requirement that a reliance by the insured on any act or conduct of the insurer must be reasonable the appellant's cannot meet that meet that essential element as well party cleaning the benefit of a stop and must prove that they reasonably relied upon the axle representations of the insurer and that the party did not have knowledge of a convenient means of learning the true facts themselves in the stoffel context and insured cannot shut his eyes to obvious fa neglect to seek information is easily accepted accessible and then charges ignorance to others illinois law charges an insured with the duty to read the insurance policy and the insured is charged with knowledge of the contents of the policy in the younger insurance contract as well as the insurer and there staring it in the face was a closet clearly barred coverage the claims made nature of this policy was clearly stated both in the declarations pages a statement at the top this policy provides claims made coverage both by its counsel mr pound and its insurance broker they did not believe there would be coverage under a two thousand and twelve claims made policy for a default judgment entered in two thousand and nine  additionally the accounts must establish actual or constructive notice in order to prove equitable stoppel and we believe that is not met as well the key here he is that there is evidence of control strong evidence of control early as early as may of two thousand and fourteen and particularly after july twenty nine when blue moon sends the important information to mr palen deck mr veatch denies that he was ever informed about that information basically his testimony is that the attorney and the communications go dark on him after that time so he does not know about the crucial opportunity to be able to settle the case after july of two thousand and fourteen and after the motion to reinstate the default judgment was fired and during that time until judge brown or judge brennan entered the decision to reinstate the default judgment previously she had notified counsel that she may reinstate the fault default judgment if good service had been shown good service was shown in july but blue moon was nevertheless willing to still settle the case they reached out three times within three months to settle in may the twenty five thousand dollar offer in june after that offer had been rejected and the judges palin neck yes to palin dick essex cannot say that palin that was not their attorney they fired us as they could not fire essex if he was not their attorney you will also see in the record that palin directed a great deal of business with essex and he had cases pending with essex that he spoke with melanie bromley cause he called to refer to her as mel they were friends about other cases and about this case during both the summer and fall there's only two things iran and i'm not sure so are you saying that palin beck was representing both t s s and essex was the attorney for yes yes he was represented t s s and essex and there was a conflict of interest a clear conflict of interest since march of two thousand and thirteen because at that time there was good evident as of an invoice from a special process server that good service had been made from march of two thousand and thirteen so essex knew or should have known at that time that there was a good probability that the default judgment could be re enter that there was evidence of good service now even if you go again to may melanie brown is giving orders to is giving direction and orders to paladin and he's following it he's doing what she sets and then after that time she tells him to continue litigation by filing a petition to reconsider and at the end they they fire him so there is some evidence of control here we do not have to prove on summary judgment we do have to ultimately prove that it's clear and concise and i've given you some interest is where it could be shown as clear in concise but on summary judgment if we can show there's an issue affect of control and i believe that those many instances that i've covered in that we cover in the brief are factors that show that there is some control and that after july of two thousand and fourteen there is absolute control by by classics the other key factor that you have to consider in this one's told him other no one from essex has told him anything other than he will be indemnified so he can't make a rational decision on this issue if he had known that if if the default judgment could be entered and there was proof of good service then he would have settled the case for twenty five thousand dollars it's a nuisance value he would have been able to settle the case and he wouldn't be risking getting hit for over a million dollars yes and that's what happened here  i submit to you was gambling without any risk because they they win either way there's a conflict of interest under maryland versus peppers they have to basically either waive the coverage to counsel thank you we will issue an order governing what has to happen next in this case to produce