good morning ladies and gentlemen our first case for argument this morning is philadelphia indemnity insurance company against the chicago trust company all mr corrupt kyon over the course of two policy periods i was physical abuse that ultimately ended in her wrongful death during the second policy period this abuse spanned course of several months triggering coverage for policies of seeking a determination of coverage in the district courts determination of the lack of the limits of coverage available and how was the how did the court determine those limits the court applied and i'm  asking you i don't think you're touching on the court issued an opinion that seemed quite favorable to the insurer then it issued judgement which says the case dismissed there was the court said the insurers entitled to a declaratory judgment and it didn't matter what in fact it seems to have entered are going to taper your client that's why i'm asking what you're appealing from and of course i will be asking how we can be considering the propriety of a declaratory judgment when none was ever entered i appreciate your that you're on the jury the district court did award coverage a finding of coverage no it did not it wrote an opinion but the judgment doesn't match the opinion right the appeal is from the judgment the opinion explains the judgement unfortunately in this case the opinion and the judgment are mutually contradictory that's a problem i agree your honor and part of anybody asked the district court to enter a proper judgement in this case no perhaps you need to do that and certainly could we have we have said i think pretty much until blue in the face that if the district judge says that somebody is entitled to an injunction or a declaratory judgment one must be i apologize for that your honor i took the court's dismissal of the case in its entirety with prejudice in conjunction with that finding of the opinion in order of a finding of you can't take anything in conjunction with an opinion the judgment is what  we can rectify they are well the district judge can rectify that it would have been a lot better had somebody pointed out to the district judge that there was a serious problem in this case i now  single coverage form a single spam otherwise known as a sexual or physical abuse or miles station liability coverage form supplement what the court term in was that this sub women which provides these kind of coverage for two hundred fifty thousand dollars change the access policy as a whole from five million dollar policy to a two hundred fifty thought she just said it it it limited it and it that that seems to be exactly what it does just by its plain contested it that it's really in you know it's part of the access policy in other words it's not these provisions do not appear in the primary policy they appear in the access policy the provisions are included within the access policy and the access policy is meant to include a specific coverage form that comes from the underlying insurance and that coverage form is dr one day off for three ninety eight through four zero two and forty five b s three page numbers nine ninety nine through one thousand and three that form from the underlying insurance has its own declarations page which is forty five b s three number seven seven seven zero one dash for one sixty five that provides a one million dollars coverage limit for the underlying layer of insurance that's a separate coverage form within the underlying layer of of coverage for primary policies that provide one million dollars in coverage the spam supplement or endorsement limits that one million dollar right now in the primary two hundred fifty thousand dollars right but here we're talking about the excess policy right and so that spam one provides that access policy is meant to include that coverage form but not for the million dollar policy limits otherwise available only for two hundred fifty thousand dollars no not for the million for the five million reduces the five million to two fifty because the excess policy by its terms provides a maximum of up to five million correct correct and so all this is doing is it says this indorsement changes the policy the policy is the access policy and then  this think it's just a term of art this supplement that limits the five million down to to fifty that's what best interpretation we think is erroneous sharana though right i think the difficulty that i have is very terms of bikes very title it reduces the coverage available under the form which is a million dollars under the decorations of the spam coverage form that's not the same as explicitly clearly for unemployed use the saying that the decorations the ensuring agreement the limits available under the access policies are limited by the second how do you how do you get there from the language and i just looking at the language i mean i hear which i understand what you're saying but i when i look at the words i think how in the world you get there it's the absence of the language i think is is is the issue you're ignorant is that you can't take a five million dollar policy under illinois law and rules of construction and reduce it to two hundred fifty thousand dollars absent clear explicit unambiguous language this doesn't say that the limits available under the decorations or that the excess policy limits are subject to reduced by a limited by the supplement indorsement that merely says the limits are included within and not acts of not excess of nor an addition to that's not the same as saying it completely changes the five million dollar limits and reduces it to two hundred fifty thousand dollars and if they wanted to do that they could have labeled this an access policy supplement they could have said that the decorations and the access policy are hereby limited subject to or reduced by which is a lot of the language in the formosa case in the baylor case that they discussed on how the supplements are plot but the supplement is restricted to the spam form coverage that is otherwise available not the access policies ensuring gruman to cover bodily injury occurring during the policy period up to him it's a five million that changes those clear terms of the access policies clearly are ambiguous lee i understand the operation of what a subcommittee would do and i understand what the how it's supposed to be read but that's not how this specific coverage form the argument is that the spam form subform if it can't do both it can't be both a supplement for the million dollars of coverage available under the spam form and also two hundred fifty dollars thousand dollars of them for the access policies he says the limits included in the limits of insurance stay in the trying to capitalize on certain ambiguities which they can't do under illinois l case below and we were responding to the appeal of the dismissal from the case below and in that sense the posture of the case is just appeal from an entry of dismiss and then why is there an appealable judgment on your view the case remains pending in the district court because it is never finally resolved your claim well this and unfortunately you can't appeal from the resolution of for the defense and actually doesn't even mention that there are two defense doesn't mean it doesn't mention chicago trucks right that's an independent crime it has to resolve all claims of all parties the judgment doesn't recognize that there was a counter claim the district judge said that your client was entitled to a declaratory judgment and then didn't never want to correct  wife would be easier if district judges did the right thing spontaneously but it would also be easier if the parties when they notice a mistake ask the district court to finish the job you're right shouldn't wait till oral i continue with argument and the limits your honor we're moving we're going to refer to resolve this this will be your only chance but i'll continue if the district court fixes this it will be submitted on this argument  think it's fair to say it is philadelphia and trust don't disagree on illinois insurance law there is complete agreement about parties about how illinois insurance law should be understood and interpreted the disagreement has to do with what policy limits are set by the policies that issue here and in this is a case where the factual background makes some difference start to policy periods two thousand and ten two thousand and eleven for each policy period there are two policies of insurance there's a commercial lines policy which is the underlying policy of insurance and there's an excess of policy and the access policy is access to the commercial lines policy the commercial lines policy contains a number of what a policy forms and that's described on the declarations and there are several at issue that could have provided coverage for abusive conduct there's a seatbelt policy or commercial john why the lady policy there's a professional liability policy and there's something called the spam for the sexual physical abuse and melissa stations for each of those are policy forms in the underlying policy in the c g l policy in the underlying policy and in the professional liability policy in the underlying policy both express the contain and exclusion saying they don't cover physical abuse in the underlying policy of insurance just the spam form covers physical abuse and there is a million dollar limit of liability in the underlying policy what's important to note here is there's no disagreement about the parties and how the underlying policy works we noted in football three of our group there's an exclusion form in the underlying commercial liability policy we thought that was important enough to fill that form in its entirety because that endorsement to the c p l policy says it creates an exclusion or it creates a sublevel it has either option and then we show in the foot seatbelt policy they've all agreed that in the underlying commercial lines policy there's a million dollars of insurance for abusive conduct and that's with the language of the endorsements included now the access policy is structured in the same way as every other philadelphia policy it has a doctor ations page it then has a page where lists the other forms the comprise the policy concerns policies look complex but they're very simple to read because they tell you how to read them because they give you a doctor ations page telling you what's covered they then give you a list of forms the root fluted least what we described in our brief about the access policy then they include in ensuring agreement and include the endorsements in this case the access policy worked and provided coverage under coverage or coverage b and what the access policy said is that there's an underlying limit of insurance this policy will act as an access to whatever that insurance is and then have a list of a forms saying these are the forms below for which we provide insurance and physically i can show with that list looks like looks like this and it's including the electronic exhibits in the supporting record we cite to it in the brief and just list the underlying insurance and because in this case there's a million dollars of underlying insurance the access policy provides access insurance that's what the essence of this dispute about what is the amount of access insurance provided by the policy that's contained in the spam endorsement to the access policy the spam endorsement and the access policy is the whole point that's at issue now an endorsement modifies an insurance policy there's no dispute under illinois law that that's what happens if you have an endorsement and it tells you the modification and in this case as we go through explained in the brief the first line of the endorsement says this indorsement modifies the insurance provided under the following there is no ambiguity there it says this is modifying the policy and then it says it modifies the commercial access liability policy it doesn't say it modifies spam for it doesn't say it modifies the c g i policy it doesn't say that it modifies anything else it says it modifies the commercial access liability for so it tells you how to read the policy and how to read the modification then it goes on and says this policy meaning the commercial access policy is intended to include the spam form but it's only intended to include the spam form with the limit that's described below and it describes this doesn't mean we're adding insurance it doesn't mean we're taking insurance away means we're setting a supplement and it uses the word supplement to say we're going to get spam coverage for the amount of the subject now in the briefing talk about the philadelphia didn't use the word exclusion it didn't use the word follows form it didn't do any of those things and of course it is going to those things just clips that's not what the spam formed the spam for and the spam indorsement is a car van that makes it express that there will be coverage for abusive conduct in the access policy but only in the amount of two hundred fifty thousand dollars and that couldn't be clearer from the language of the policy yes the what's the purpose of the first part of the sentence you just wrote you just read what and why is that in there that the policies intended to include you know spam coverage for it because it's not a policy hourman course that your honor it doesn't exactly follow the form of the supplements or of the spam form it includes the spam form and it wants to make clear that it's creating a supplement and that it's to clue to spam form for purposes of dealing with things like multiple allegations of one injuries during the time period the other condition about one policy applies not to policies yes yes that's exactly right because we didn't really talk about it much here but there we have a fight about the napping provision and the anti stacking provision is included in the spam form there's also the famous condition a condition it is something that's been very important to courts that have looked at the anti static provision because condition eight describes in the first part of condition a that the intention by philadelphia is only to provide one policy of insurance and so if there's multiple forms that can provide insurance only the insurance policy that provides the highest insurance will ply except in the last paragraph of condition it is very important because the last paragraph says that if a policy of insurance is acting as an access policy a pure access policy it can also provide insurance which means structurally in this case baby fold purchased commercial lines policy with a million dollars for insurance and then it purchased excess coverage and the condition  indicates the excess coverage can actually act as excess coverage and it can provide additional coverage beyond the commercial lines policy and so in terms of the structure of the policy the structural pieces are very very clear they operate together to give the baby fold a clear limit on her standing of the use of conduct covers this or that opening language of that sentence is really just to incorporate by reference in a form of kind of shorthand all of those other terms and conditions rather than reprinting them in full that's correct grammar it's exactly that way and it's designed so that it repeats the exact language you can conceive of circumstances where the parties wouldn't want to incorporate that line which in the hypothetical i would use is if in the underlined c t l form they had purchased a supplement of abusive conduct insurance and they didn't in purchased the spam form for the underlying insurance that would mean you wouldn't include this endorsement in the access policy because you wouldn't purchase excess insurance for abusive conduct instead you would include indorsement in the access policy that excluded coverage for abusive conduct because you would have chosen to purchase in the first instance less than a million dollars of abusive conduct insurance younger life or so the beauty of endorsements for attorneys policies this on face they seem confusing but in fact they allow the parties to negotiate a very specific set of coverage terms that become changeable by including or removing indorsements based upon what the insured chooses to purchase and in this case a sophisticated consumer the baby fold purchased very sophisticated form of insurance abuse of panda coverage is expensive there are human services agency they need that coverage it's essential and the policy forms a lot of the baby fold to negotiate a very specific level of coverage that they can afford and that's the key they can afford that coverage yeah to sort of wrap up the position that we've taken that the policy limit through the indorsement in the access policy doesn't provide any ambiguity and read in the whole and read in conjunction with the underlying policy of insurance it becomes very clear that the parties were allocating risk and the parties agreed upon a level of coverage for abusive conduct that was affordable for the baby falls the second piece that's also clear i the anti stacking provision in the spam form is in forcible because the anti stacking provision provides a limit of in surance based upon when abusive conduct occurs regardless of the number of occurrences of abusive conduct and regardless of the policy periods which occurred judge lefkow as opinion on this point was spot on it doesn't matter if you have coverage under the two thousand and ten policy or if you have coverage under the two thousand and eleven policy the one abusive conduct language means the limit of insurance will be the limit of one policy and in this case for the underlying commercial lines policy that limit will be a million dollars for the excess policy that limit will be two hundred fifty thousand dollars you know in one sense here chicago trust has been trolling for ambiguity because they can't explain what the endorsement in the excess policy does if it doesn't set a supplement i mean language plainly doesn't create additional coverage the language language clearly doesn't create a separate insurer agreement the language clearly doesn't do anything different with abusive conduct other than care about a specific guarantee of two hundred fifty thousand dollars that's us read in terms of condition a day where the intention is to provide a single policy of coverage at last it's acting as access it's clear that the two hundred fifty thousand dollar supplement in the access policy is designed purely to provide additional excess coverage in a quite limited amount based upon the negotiated result sought by the parties thank you ir i think your honor just briefly i'll try to be as quick as possible the inclusion of the coverage form is not the same as limiting or making that access policy subject to or limited by that coverage form it is the inclusion of us of an additional coverage for there's sixty ninety pages of briefing on a term that's supposed to be clear and unambiguous it's not clear and unambiguous and subject to differing interpretations because of the word inclusion of a coverage form in the absence of limiting or extinguishing language those ambiguities are construed against philadelphia this is not a clear and ambiguous restriction of five million dollars of coverage for an excess of policy that provides a clearly clear and explicit ensure agreement that shrink on the access policies that provide coverage for bodily injury during the two consecutive policy appears is the inclusion of a separate form meant to include an additional coverage form not a limitation not a subject to not a limit on the otherwise available also i think you honor thank you very much we will issue an appropriate order prescribing what needs to happen next in this case