though mississippi law is actually quite standard you know when it comes to this you have to look at the four corners of the complaint you have to look at all of congress or the insurance policy and you have to ask whether there's anything in the complaint that might give rise to a duty to defend it certainly doesn't have to be the whole thing understand that and if there is are to duty to defend and then at the back end if you're going to indemnify it's typically narrow or so my problem is when you when you look even at the very introduction of all of the versions of the complaint i'm looking right now the second amended complaint that i don't think it's different is that it says this is a lawsuit arising from it unfair and unconscionable assessment collection of excessive overdraft fees so the question is why haven't the plaintiffs in the underlying litigation defined their own lawsuit as a lawsuit about the fees and then i guess i have this other thought and you can respond to it it doesn't shock me that an insurance company might want to exclude from coverage something that's so much in the power of the insured party here bancorp because bancorp if the charge is excessive fees it might say oh well you know we're covered anyway by insurance and if it doesn't charge excessive fees  they don't need to have anything to worry about but this kind of a moral hazard built into this that it seems the insurance company may be trying to avoid well with respect to your first fortune your honor and you're absolutely correct the law in mississippi was not unlike the standard yeah it is very standard and you hit the nail on the head that it's a very broad with respect the duty to defend right and the district court as your honor just noted focused only on the introductory paragraph in assessing what the in the totality of the swift complaint alleged and that's here if there is much more somebody has to have incurred an overdraft fee to be a member of a class and then there are these other practices such as the sequencing credit you're all very troublesome practices actually sequencing practice and inaccurate information about how much the trumpet is accounted but it always winds up with and thus this is designed to maximize generation of overdraft fees that paragraph forty two  forty six is the authorization hold and the extent to which they're used by bancorp south to charge overdraft fees i don't see any allegations that there are injuries independent of the fees like you know i thought i had one hundred dollars in my account so i went and bought a product on salen and my purchase was denied or something right but what the what the lawsuit does allege your honor excuse me is that in addition to the alleged practices that gave rise to improperly charge fees there were also practices and policies employed by bancorp south allegedly that violated the arkansas consumer protection statutes that were allegedly deceptive and unfair which gives rise to damages well where those claims unrelated to overdraft fees well they were they related to your honor to the practices and procedures employed by the bank generally specifically in some of the allegations the problems statutory claim the first two steps trial ation violations based on unfair business practices relating to the imposition of overdraft fees on consumers and also be another paragraph your honor relates to  he contract of adhesion and imposing upon the bank or county south customers a deposit agreement that was drafted with a slant toward benefiting the bank and injuring the customers in a number of ways by not informing them of the sequence of their transactions by not informing them of the act or a balance in their bank account by not informing them of the manner in which transactions were being posted to their account on the statement by statement basis and all of these allegations gave rise to causes of action and more importantly under the insurance policy categories of damage categories of loss under that policy that are not related to the fees they are independent  if the if this with the action had gone to trial the jury could have concluded that the plaintiffs were not entitle to restitution of any improperly chores fees and that they were only entitle to say punitive damages because of the nature of the to defend and which the district court ignored reading the allegations as the horror in the a complaint and the second amended complaint which your honor pointed out or essentially the same there was more than  potentiality well the cleanest argument for you i think is what what you're trying to regulate the fifth claim to relieve the violations of the arkansas statute because i'm just looking at that right now and i don't even just a reference back to paragraphs one through seventy one i don't see fees you're talking about the resequencing practices you're talking about concealment of  failing to disclose these practices damages into clara toward relief so that's correct you're right i don't call the overdraft in that count that's correct and as you're wrong noted and as is the case in mississippi as it is in virtually every other jurisdiction it's even want to claim in the complaint gives rise to potential for coverage then the entire complaint must be defended by the jurors coming from the district court did not follow that rule and so i'm just so in your view does it justice turn on the question whether a recovery is possible that is not somehow measured by the amount of overdraft fees that's correct your honor that's correct and before a jump to duty to indemnify i do want to address your other question with respect to the moral hazard certainly an insurance company has the right to exclude categories of loss from an insurance policy but the insurance company has a duty as the drafter of that policy which was the case here to draft the exclusion in clear and unambiguous terms and there are at least three ways in which the exclusion in this case was not drafted in a clear and unambiguous way and the first one we do address these issues in our brief but it federal the insurance company argues we believe in correctly but they do or you can take the position that as long as the fees have an incidental relationship to the two this is this incidental versus you're writing out of yes right and taking from the moment federals argument if what they say is true well then the fee exclusion swallows up the entire insuring agreement in this case because the ensuring agreement provides coverage for a loss because of a claim for a wrongful act by the insured arising out of professional services to your argument there as i understand it is you know that since the bank is not in the business of being a charity  actually charges something for everything well that's true but if it's more tied to the insurance policy itself because the definition of professional services is defined as a service performed for a fee or because of the fee or connection with it so if barbara was saying is correct that there need only be an incidental relationship between the theory and the claim then the exclusion in this instance necessarily swallows the entire injury agreement there can be no coverage of the policy  there are two other reasons why ambiguity should have been found in this policy one varies no punctuation in the in the exclusionary language so we have no idea whether the exclusion or fees was intended to apply to the loss which is a defined term for claim now we've argued in our brief of bancorp so south argues that the exclusion modifies the phrase loss and if that's the case then the exclusion again is  conflict with the definition of laws which includes among other things a chinese species have that seems like a stretch though i mean obviously you've got the underlying claim and then you've got litigation expenses basically i thought that is your honor but i think the first point is enough and you really don't have to get beyond that to take it the way they construed it and frankly that we're going to go into something too about which fees are we talking about like merchant fees they may pay for a visa herb you know or charge i guess they charge fact that's the language of the exclusion well and that's the conclusion that the district court reached and the reason that that's wrong is that under the rules of construction in mississippi and elsewhere exclusions must be construed narrowly and in favor of coverage so if there is a question punctuation there is no way to tell so the benefit of the doubt had to go in favor bancorp so the district court might the other way and said well this is just broad and that's in direct violation and this is the law regarding the construction of insurance policies i see to mr romney i'd like you to start with this fifth claim for relief because even though much of the complaint seems to be focused on the overdraft fees and that the practices in question are adopted for the purpose of generating sees it's not hard at all for me to imagine that for example resequencing debit purchases would independently harm the consumer and failing to give the consumer accurate information about how much money is in her account at any given time can be harmful and i don't see fees anywhere in this fits claim for relief your honor of first with respect to that i'm looking at the at the version well in the district court it all the arguments were based on this original complaint and that was the complaint that no argument was made in the district court based on this paragraph in this as the original complaint and well it includes in one fifteen the language that was in the old one zero seven but i'm just saying goes on to say that the resequencing is an independent violation maybe it's just more clear as opposed to different perhaps your other ball i'm pointing out is that in the district court this argument was never was ever presented to the district where we were arguing based on the initial complaint which was conceded by bank or s of to be materially the same for purposes of the duty to defend as any subsequent iterations so that's the operative complaint that everybody agreed it is in to the extent that there is now an argument being injected that there was some amendment later that changed that i would argue that that argument does waived beyond that though you're right that in the original complaint the fact that they're asking not just for restitution of the overdraft fees that's a paragraph or two i'm now looking at the amount according to proof that me because they've made a lot of allegations even in this original complaint about delayed posting of transactions using debit card so that people are being deprived of their money for a period of time  d failure to provide people with accurate balance information so that they can plan their financial transactions with full information there's a lot of information even in its original complain well beyond overdraft fees as a source of injury well i don't agree with that your honor i think i want to about what about not giving you credit for your deposits properly that's not an overdraft fee well but stay private you have to to and you need to look at the paragraphs that pertain to what are the damages i think at least in the in the first complaint they started paragraph fifty eight where they talk about bank corp sales to overdraft practices harm plaintiff and then so wrongfully assessed and deducted from its customers accounts then in paragraph sixty nine he states the us as a consequence of bankruptcy house overdraft policies and practices plaintiff in the classes have been wrongfully forced to pay overdraft fees as you pointed out in the in the in bankruptcy also opening argument there's no allegation here that the plaintiffs because of what because of one of these practices incurred some harm independent of the overdraft now did they have to do that in a situation where notice pleading is the rule this is not a state court complaints in the northern district of florida well i think there has to be some allegation and there that triggers coverage under the policy and in this congress and i think a lack of information about the amount of money in my bank account is not such an allegation not when it's tied directly to the imposition of a fee when there's no harm that's alleged from that practice separate in a apart from the fact that that caused me to encourage feet so the bottom line here is and we talked about whether the test is incidental or caused by when we talk about a rising from i don't think it makes much of a difference in this case because i didn't your policy cover anything of course it covers it does it cover everything has to do with i mean you don't give services away for free of charge a fee for everything well of course you do but just because you charge so there coverage if it's a fee the claim has to arise from the feet it's the fee itself so if for example the banks service as trustees and if they commit an error or omission in the conduct of acting as a as a we were overcharged for your fee for your trustee services that would be a claim that would arise out of a fee because we're claiming that ok you you overcharged us you engage in certain practices in order to generate fees for yourself not that oh you made an error or omission in the in the manner in which you violated your fiduciary exactly exactly and so those are the types of things that are covered under these policies it's not you know ok you engage in these practices that created unnecessary or improper or unlawful  which is what was alleged in this complaint and getting back to what i was about say before is whether we say caused by instant all and incidental to the point is is that if mr swift had been charged overdraft fees he would have filed this lawsuit i mean the lawsuit is filed because he was charged overdraft because that's the only harm that's a legend in the complaint that's resulted from these quote unquote overdraft practices and policies and so this is a lawsuit that arises have paid fees right and as you pointed out in the opening paragraph i mean it almost tracks the language of our exclusion when you look at the opening paragraph it says that this is a civil action seeking monetary damages restitution and declaratory relief from defendant bancorp so arising from its unfair and unconscionable assessment and collection of excessive overdraft fees and then the complaint goes on for i mean you know i think the issue of resequencing transactions and what not and holding them that sounds very troubling but the point is this is not the types of things that insurance companies cover this is a moral to insurance companies don't say you go out and try to generate as many fees as you can and and and charge fees and then when you get caught you can just turn to your insurance coverage you hear insurance policy to cover at that that's not the types of coverage would be very much in the hands of the insured indeed indeed right we're not we're not we're not this isn't a fortuitous that in other words this is this is something that the bank is in complete control of and something that they've done and then  or you can't shift now if for example your honor the underlying case was still pending in the facts were changing then there certainly wouldn't be an argument that fact would you can't we not if he opened it away even from you affirmatively agreed with your opponent to proceed on initial complaint and that's what you were seeking coverage on so you're stuck with that moving on your honor the the issue on moral hazard this is not a moral hazard exclusion and if it were before narrowly drafted the fact that this exclusion applies to any fetuses you're going to go out a moment ago indicates that this is not a moral hazard exclusion if ban forbes out at file the lawsuit seeking recovery of fees that it paid as opposed to short this exclusion presumably would still apply and that can't be a moral hazard that would be something far different so getting to the courts question to mr wadley about what does this policy cover with an exclusion like the fee exclusion that's in this policy it doesn't cover anything and that's simply because everything the bank does including acting as a trustee is that which were used in its example is for three so if the task but not every issue would relate to th but it would be incidental to or even in consequence because of the conduct remember this is a lawful conduct policy it provides coverage when a wrongful conduct were wrongful conduct is alleged to have occurred if that conduct occurred either in performing the service in not performing the service as the policy says that service has to be a service for thirty and it necessarily would invoke the exclusion ok thank you very much thanks to both counsel take the case