i and other insurance that it was going to assume when the primary coverage exhausted and in fact that supports the finding of the united states necessary judge who said it was implicit that they would assume the defense once the st three layers of insurance were exhausted i think that correct finding shows why the court was wrong to grant arch summary judgment this is a material fact issue on a court issue and then nd we believe that the court dismissed evidence predating january th the date that arch purported to reject the defense that it already assured t d s it would get on the ground that even if elected to defend arched could not be held to that promise but we have shown that a promise even one condition on a future event can be important indeed the elections and arches policy included not only the right to defend but also the right to investigate and to set up and we know that arch extras sized that right to settle before january th which was also conditioned on exhaustion of the underlying primary policies so just as arches election to settle pre existing exhaustion so did arches agreement to defend and  then rd i think this is important judge of the policy if we look at the policy itself because it does contain this idea of a right the arch policy and that it's assertion that it could always change its mind determined whether it's could withdraw the defense policy conditions withdraw and arches exhaustion of its policy limits not on a change of heart as they say in their briefs the policy you'll see in have made sense for them to do that because they might have preferred to hire their own counsel and deal with that to avoid costing a lot but they say that doesn't make them have to again it's a right i have the right to do x that that i mean different that benefited arch so how is that a modification to the contract mean that's essentially with your art or as a model it's the contract that requires an agreement and consideration and i don't see that the original premium suit which in our opinion make it rise to payment so there is the the right ok so they have that right but they may not withdraw that right if they exercise it unless we may with the rest of the d contemporaneously with the ongoing litigation here and i'm julie tucker julie tucker said until the underlying limits have been paid arts does not have an obligation to pay for defense we remain very much involved and onboard with the defense of this claim and then she says i've had several communications with underlying defense counsel and that can be can it communicated with them that is my understanding i'm quoting here from disposal systems and ask them to provide a defense budget through trial to enable her to prepare to take over defense costs when that obligation kicks in for arch so what i'm saying is if we're counsel corporate representative here she is representing arched and she is telling t d s that not only do we have the right but we're exercising that right to defend once the underlying limits are still her best case for the proposition that saying we were playing let's say they said we plan to take over the defense which i don't really think they said that well let's say they put it but prior to the other insurers ending their defense which was january th as i understand it they say now not going to do it any case it says tough you have to still come in and pay for the defense you know on it we've cited a series of cases not in  context but where you can have you can have future obligations and that if you exercise them then you can be bound by them and so we have that we also have been trying to have an insurance case not on this point your honor we we have not we should certified of the texas supreme who are we'd be happy with the certification to the court on this question of state law certainly but i think the what the state the supreme court would say it could be like a tort case exercise of that right that you've already taken on is if your own policy limits have been exhausted and we know that that is not true here but we have more facts i think judge the support what i'm saying and that is that the  lawyer altogether yes the point i'm making there is to the question did arch agree to defend there were two lawyers that were sitting at the table to defend t v s one was  chair david merkley if you accept the pre read a statement and the evidence about his participation will moya's then it wasn't just the biasing arch about coverage or anything i could make good recommendations i could you know right no it's like a hole on the jacket but that i wasn't able to tell me him or what to do so i mean that's just a different person and that is what moyet was the whole time right i think he was there to defend t d s and i think that goes to our argument that arch exercise its right early on to defend t d s and wh not have the right to burst chair until the other three were bomb because they're the ones who get to control and that's actually fairly important controlling the you know progress of the case and the decisions that you make there's all is the client when the insurance companies in charge they are directing i think you're exactly right and what we're saying though and this is an evidence as well that david merkley knew that that decision who would be st chair arch anticipated i think everyone knew that the primary limits would be exhausted so when they're making these statements about we will take over when the limits are exhausted they are invoking that part of the policy the give  s i think that would be a matter that we would determine it to the extent that the defense costs were covered by the other insurers during that time period then f c c i would not you know when those defense because i've been on the board control the language of the settlement agreement itself incorporates the settlements which require court approval i think it all has to be packaged together and  here the check the f c c i sent it was sent to the ask me a law firm to leave bowick individually and as representatives of the state and of the minor children so you had a global settlement three layers of insurance well miss bollock signed that agreement in her three capacities individually as next friend for two surviving children and has represented to them these data her deceased child and early oh well yes it could but out of here i guess i'm wondering what would have happened if either of the or what would happen if a probate court had not approved the settlement opinion in the american guarantee versus ace case they talked about that in star situation as to an ad litum and they said it was a lump sum settlement and the fact that there was in that law to require did not make it a conditional settlement because really was just  yes it was you know and that's not our case your obviously our our case is what the graco but they did talk about does it make it conditional her some an agreement that she signed on january th on behalf of the estate doesn't say anything about court approval or any condition she just says she will get poor approval realistically what i think would have happened if the probate court had said no thirty thousand is not enough is that she would have had to reallocate some of the money have stayed in place that just would have been a question of you know and there were books monied spotted and of course the money should be a state was or survivor benefits to the brief time that there is and a very tragic to be able to exhaust your policy that's well established i remember when that line of cases came out that's true that would be arnold that was in excess of our limits because the cash portion alone was almost two million dollars and then there was also an annuity and that's when the after we contributed our check that's when the next lawyers began depending rubidium paying the carriers because on about day one we knew that our limits would be exhausted somewhere along the way though there was a lot of communication with the access because it was always in the anticipation that there would be exhaustion and they would be implicated we just didn't know at what point in time that would so we have that settlement and i referred to a graph and i think that's an important case again it's not exactly our case but in the a graphic ok so the court looked at the settlement by the primary which did not settle all the claims it was a partial settlement and then a covenant not to execute except against insurance proceeds but the court talking great detail about what is in solomon under texas law and as of the conclusion of the disputed claim and as our mutual concession in order to avoid resolving controversy but we have that we offered our limits we paid our limits of the portion of the settlement it did was all the disputed claim it was all the claims of the miners they also talked about the king's park case which was related to the judge when case  and in the pink the king's park case they talk about the benefits from covenant not to execute and again we paid actual cash for release but the covenant not to execute it had benefits because one it triggered the excess after our payment to it was an  essential step towards pulleys and three dollars it was an integral piece of the overall settlement plan and we would submit that our payment was exactly the same there was no way we could satisfy a fourteen million dollars settlement we can only pay for use of it we pay that  it went towards the st settlement because we're the st insurer on deck so as of the st of december when there was a settlement and release a judgement on the minor claims our policy was exhausted and therefore request mr duff may please the court i'm chris dove speaking on behalf of our specialty insurance company and because this court has already discussed the fact that this is not eight duty to defend case i would like to begin by focusing on two key concepts that arise from the fact that this is a right to defend case st the fact that arch had no right to assume this defense until the underlying layers were exhausted the policy could have been written differently i guess theoretically but texas law keeps layer separate for a reason as it's explained we don't want different insurance companies throwing elbows to try to control the defense it's very clear who has the defense at a given time in this case arch could not exercise its right to defend until all of the underling lawyers have been  exhausted and nd to assume that defense is an action it's not an idea and justice jefferson this morning has been using the rhetoric of action which i think is appropriate as opposed do you explain let's assume argue endo we decide that they deposition couldn't have been changed and so that them lawyer was representing t v s how do you then explain that because of the undisputed facts about what will actually did and this is an area where i would like to to take what you said in your call if we with justice jefferson earlier and clarify the little bit i agree with you that it would not matter one bit if he was  d chair but that is not in the record what the record shows that he did is that he helped to behind the scenes with talked with the other lawyers was of use and then evidence that t v s the likes to take out of context and imply that it means something different what it was was that their attorney said that at the mediation i assumed that in the future more it would be the nd chair at trial but that never happened that's not what actually unfolded what he did his actions never assumed that difficulty was a nd share you your argument as why so long as we maintain all of the same facts if he's sitting at counsel table because i don't as you would said what does nd chair really mean if he's sitting at counsel table but all the facts remain the same he never speaks on behalf of t v s he never files a document about half  s he never gives any instruction to anyone about how they should conduct the case all of which is under spirit if we keep all of that the same it does not matter if he's sitting at counsel table it does not matter if he says i'm nd chair so long as he continues to reiterate i am not in charge i'm not assuming the defense i'm not telling anybody what to do so long as that stays the same nobody has assumed the defense and there's no evidence here that he did another piece that t d s likes to talk about as being in evidence that we actually did take this action of assuming the defense was the action where we were in control of the nd mediation in the case we've talked about how this isn't inconsistent with the language in the policy at all because we did this under ours obligation and this is an area where t v s as misspoken in its reply brief and i want to make sure you have the right record citation they claim the souers duty could not have arisen because there was not a settlement offer that was within the tower of insurance coverage the details are part of the sealed record and so i'm hesitant to get specific about numbers here in open this point arch given the way that the common law works has no choice but to take very seriously this settlement offer because all of the other layers of insurance have tendered their full limits they naturally have to be in charge of that settlement discussion but as your honor also knows texas draws a very strict distinction between the duty to defend and this tower is a duty which is part of the duty to settle in good faith out of an indemnity obligation these are separate concepts once you understand what the record says that we had a stellar stuti we didn't behave inconsistently we're not talking out of both sides of our mouth which is middle of cancer treatment i would say this it is a difficult position for everybody involved t d s wanted to take her deposition what could our to do but what it did it said she's not our employee we cannot compel her we have no power over her we voluntarily contacted her we didn't have to do that even we could have just said she's not our employee we're done we voluntarily contacted her and came back and said she had told us she's not willing to testify voluntarily because she's undergoing cancer treatment at this point this is a difficult situation but art didn't make it  fate made it that way by unfortunately having this arc as to how can we improve the magistrate judges determination but nonetheless should go subpoena that's not really consistent with or the district of texas diaby case or with the  general rules that you should be respectful of the fact that people can't at a witness might be sick and unable to appear and then you're forcing you're dragging someone out of the chemotherapy chamber and putting them in a chair to  them how is that something we should have because of two features that i think make this a very different case st as soon as art recognize that it had this problem it immediately offered her supervisor for deposition she gave her deposition addressed all of the issues that mr parker would have addressed so that's one of the mitigating factors that i think changed it and the nd is the fact that t d s waited so long and made such a vague an open ended request if they had immediately don't to the court once they received this and said we have months to come before the deadline however we've got an awkward situation she doesn't want to talk what should we do that might be a different situation but what we have here is this court giving deferential abuse of discretion review to the statement if you wait until the very know we four months that you have this problem and then say very faithfully please lift this and i'm not going to tell you when i'm going to tip depose or i'm going to tell you how i'm going to depose or i'm going to tell you how much time i need for trial to start i just please lift this deadline and let this continue on vaguely on the docket it's not irrational or unreasonable or arbitrary or capricious for the magistrate judge at that point to say given what you knew the fact that you're bringing this up now is entirely  inappropriate i feel bad for the fact that t d s wanted this deposition but certainly everybody handled it as well as they could given the circumstances and i really would hate for this d court to faith that what we're doing is in any way being rude to ms tucker or trying to exploit her very unfortunate condition another point that i would like to address and i think it's necessary just as jefferson says well part of the problem they've got once they exercise this right they can't withdraw until they big soft and the problem with this is that he would be right if we clearly exercised the right which is an action not a hope not a wish my dream an action after that right came in to exists if on the th or after there were any evidence that we said we assume the defense at that point is exactly right we cannot relinquish that defense until we exhausted our policy but what the evidence shows instead is that that right did not exist there are statements that are made in which as we've pointed out in our brief every time our says this right does not currently exist we are not driving the bus we cannot drive the bus in till a future date and then says something about what may or may not happen on a future date justice jefferson has talked about how this is somehow implying but i think we're talking about two different reasonable uses of the word implying i don't read the magistrate is saying when you said this the sum will be paid within thirty days of drafting instructions tax i d s court approval and an executed releases and that that goes for argument for  harm to t d s if we're correct and i understand this is the issue but if we are correct that arch exercised its right and assume the defense then t the the the consequence of that would be that t d s would not have to pay for the defense for the rest of the case and we knew because of the tragic circumstance and also because of the lawyer involved in the case against gardner that the defense obligations were going to be very significant tony busby was a lawyer for the plaintiff in that case and i think the experience was published about and i agree with that and i would say that this is what happened here that there was communication among t v s among the primary insurers with the excess insurers leading up to the trial in which depends i think it's for this reason because they control at that point they control the defense and that is why they did merkley tendered the case over to mr boy and said arch if you want him to be lead counsel i will step back and arch said no mr merkley we want you to continue lead counsel also they said we want mr strength who represented the driver to continue as counsel for the driver that is controlling the defense as you say a tragic a very tragic event with huge liability concerns and that's why early in the case in these communications t d s is saying will you undertake the defense and julie tucker is saying yes we will once the obligation once the defense obligation obligation she says this is the record eight hundred and seventy dollars our defense obligation once all underlined limits have been paid out that is as clear as it can be and that's something that we are intitled to rely on she says david merkley in a plea provided fence budget to me she's asking the league