kind of in a nutshell this involves a situation where surrey oaks l l c was the beneficiary of a deed of trust you know we we do have all that down so why don't you move to your first point in the key thing on that judgment bride response that first off washington law which controls the capacity of the sea to sue had passed a statute in january of two thousand  sixteen that would allow a dissolved l l c as part of one in up its affairs to sue or either be sued which well that that would require us to get into the  retroactivity question about a question of washington state law does all that really matter though is zoom in chan or either of them has capacity it doesn't that's why i think that's kind of vague a red herring issue it doesn't matter recognized that because what he did is say ok even if they would have rights there was no rights for them to assume because when the insurance company paid the claim discharge their liability and part of what we did is to point out to the judge how they would be charged with of notice of the publicly recorded deed of trust that required surgery of to be named as an additional insured on the evanston policy and that again is kind of an issue that is not one of real significance because even if they were charged with notice of it at the time the issue payment they certainly are on notice of it once  stanley chu made the claim to the insurance company and i think judge mcbride recognized that might be a problem so basically he reasoned that ok even if they did have noticed by then they had discharged their liability because they had already paid the client and that's where the judgment bride committed the reversible error your honour's is that under the macallan hospital's case that was cited and discussed to a judgment brian and discussed at length in our brief where the insurance company discharges or attempts to discharge subrogation by issue a check like what we have here if the check endorsed by all of the pays it does not discharge the liability on the check or liability for the underlying obligation here the evidence is undisputed that the check issued by macallan hospitals didn't come out until after you know the facts of this claim arose but as i point out in the brief the view point by case which was dealt with that very issue says the macallan decision would apply retroactively and they cited the texas supreme court case law which is the bowen case cited in the viewpoint bank case eight thirty seven southwestern second ninety nine where it's take spring court holds their decisions apply retroactively unless they indicate in the opinion that it's only to be applied prospect of lee and this court is likewise follow that rule i cite city of san antonio and the rich cases in our brief that shows the fifth circuit follows that same rule to where if it's a text supreme court pinion it's going to be applied retroactively unless they indicate otherwise in the opinion which wasn't the case with mccallum and so at that point at the time the judge vader's summary judgment ruling the issues would  chen be the parties entitle to receive the insurance proceeds and they clearly were by then because as i pointed out in our brief the  was void at that point under section sixteen point zero thirty five d of the civil practice and remedies code and that deals with the lien holder as a four year period to file suit on their gave notice of the intent to accelerate but also the acceleration of the note and this is back on march thirteenth of two thousand and thirteen and that part of the record is pages twenty two extinguished my clients with the only parties entitle to receive the insurance proceedings assuming evanston is liability and not the discharge at that point which under macallan hospitals it clearly had not clarify for me want to point and time we should use to determine whether three know how to claim to the insurance proceeds of their their rights of the policy vested at the time of the last row and i've got case law cited in our brief on that that includes the form of case and that ties in with one of the other defenses of evanston is racing is that when the property was sold a foreclosure my clients lost any  rights to insurance proceeds and part that's just simply not the law since the writers festival at the time of the loss and i cited several cases including the edgewood manor case  the texas case that i found in a brief dealing that with that was the northern district savant case and as part of getting prepared another texas case on that issue is the smith first texas farmers that's eighty two southwestern third five eighty nine and that's one were a situation similar to this the mortgage g s debt became extinguished so that when that occurred the proceeds of the right to revert back to the mortgage or slash insured and other cases holdings and same effect with the what case is there that citizen i'm sure is obligated to survey the at the time they issued the check they did they have any duty to search the public records once mr choose made his claim that would have put him on notice at that point and the only issue at that point would be was there a liability texas law treats the policy as having been issued in that respect he has that party also a lien on any insurance proceeds and allows him to see to the insurer directly so at that point to answer your question your hon r they would have had to issue a new check payable to the named insured fannie ma at that point was the insurance company stock or could they have easily had their bank re credit their account so that the loss going to fall in on the bank that took an on of the check without having all the necessary indorsements federal the illinois court of appeals case that that dealt with this same type of factual situation where they both noted the insurer has an adequate remedy they can require their bank to recreate their fund so that they're not paying it twice at leave it up to the bank to go after the party that either secured the funds without the necessary dorson or i think in one of the cases he had forged the other parties dorsey that and especially  so they clearly could have taken appropriate steps to honor the policy and they didn't do that if the facts on that and the law are undisputed and show my clients are clearly entitled to the insurance proceeds especially now that there's nobody else that would have a claim to and as part of that since i'm getting close to the end of my time one of the other defenses that i wanted to take up that evanson has raised  as i point out in our brief there's under texas law it can't destroy any vested rights under contract or you don't determine any rights in the contract and again that's another issue that kind is a red herring your honour's in that the receiver didn't do anything as far as this particular insurance claim and is the evidence shows what's the property was  mcbride about the deed of trust that was executed by in favor serie of speed on authorized and they said in brief that was a finding made by the court all that was a was just a label that was a stranger to the claim payment it was not listed as a co pay eat when evanston issued a payment on a claim in bank of two thousand and twelve to its named insured over the last pay who is identified on the insurance policy and the third factor i'd like to keep at the top of your mind is that there has been no case in texas that has applied has required an insurance company to make a duplicate payment to a third party claiming rights under the equitable insured equitable ie doctrine when the insurance company did not have notice at the time and made a claim payment so there's three legal topics i'd like to talk about that many of which were addressed by mr coleman first  that the rights of a third party when there's an agreement by an insured to ensure that their party's interests will be protected it's limited to the interest that that third party has in the property and the courts are clear that the insurance company has to have actual notice before it can be held liable to the third party that didn't happen here second the texas supreme court's decision in macao and doesn't apply here it doesn't revive the claim and it certainly doesn't restart of instance liability under the policy to stereotypes at most it creates a right of action by fannie mae to evanston finally i'm going to discuss the third independent ground that you doctrine there's two cases that really apply here it's the federally guaranteed insurance company supercold case and the nelson case both cases recognize that an insurance policy is a personal contract between the insurance company and the insured and the third parties can't make a claim under that contract now there's a narrow exception that we're calling the equitable insured doctrine under the narrow set of circumstances under principles of equity courts have found that certain parties interest such as mortgagees may be protected by agreement that's outside the insurance contract but the court is both supercold and nelson found that if the insurer is non form to such an agreement it is not bound thereby and frankly that makes sense how can insurance company b be held liable to some party it doesn't know about so therefore any actions of the insurance company may take before it has notice should be held against that insurance company they are going to insure doctrine only provides coverage for the third party's interest in the property it's nothing more nothing less it doesn't create any kind of new status for that third party when mr bo buyer i guess management here who is here as evidence and shirt it's asking asking management please make sure that this property is insured and that my interests are protected and that's what management failed to do but that's what the equitable and share doctrine is in place to do so the cases that mr bowman cites to claim this additional insured protection they don't support his argument for example one of the cases he cites is nuts and which is what i rely on and in that case the court just extended the equitable and sure doctrine to landlords who are less or as opposed to just limiting it to the mortgage context another case relies on is called transport international in that case the insurance policy had an actual endorsement and where the court actually rejects a third party's clients a complete stranger so the contract can't make a claim here under so as again you know if you call it you can call it science whatever you want but it's mortgagee interest it's trying to claim here they're also trying to expand the equivalence or doctrine to circumstances where there is no notice of the agreement as i said at the beginning there's no he says in texas that require an insurance company  a duplicate payment when the payment has already been made before the insurance company has notice of that so let's talk about notice he talked briefly about constructive though that incident had constructive  well as the fifth circuit recognizes it cancer reinsurance constructive notice only applies to put people on notice for those who have an obligation to search for it there's never been a case in texas that says an insurance company should go out and search for the land of the land deeds of property that it insures notion nor should there be that would basically be requiring an army of check detectors to go out there for every time an insurance company issues an insurance policy and that's just an unreasonable burden that no state court in texas has done next in fact in fact the h c e c i which the texas supreme court case noted when the rationale for imposing constructive notices lacking public records have not been held to create in your rebuttal presumption of notice so there is no constructive notice that should be applied here there's also no actual about us i think mr bowman admitted in his argument that i was in didn't have any notice until until august of two thousand and twelve which was three months after after the pick a payment was made so i'd like to address the macallan case that's a texas supreme court's case that came down in two thousand and fourteen now now mr bowman said it applies retroactively and admittedly we agree it does provide it does apply retroactively but i want to say for as a practical standpoint how is an insurance company in two thousand and twelve who's following the law in place the time under the case benchmark supposed to know in two years the court is going to make a change in the decision but regardless macallan doesn't apply at is a stranger to that check so so surreal to is not a company and it doesn't have a right to enforce that chad and mr bowman discuss the viewpoint case which i think is actually very instructive here for you to consider under the viewpoint case the court that was  case where a mortgagee was named on a check and insured and deposited that check without the mortgagees indorsement the mortgage you tried to enforce it directly against the insurance company notably that was a mortgage it was named on the posy which discuss and the court said under section three point three ten there are two avenues a co pay can can proceed to try to recover the funds on a check and go against the bank who issued who paid on the check or can go against driver here the insurance company the courts said if you go against the insurance company you have to bring your claims under section three point three zero nine of the u c c well the comments are the sections and the and the court and you point specifically said you can't sue on the underlying contract for example here the insurance policy you have to sue on the instrument and we made up a point in our response brave that it's the instrument on which you sail that is the point now three point three ten that was specifically discussed in a different case called park weird parkway and in that case the court said the plain it may not sue the defendant on the underlying contract so here again the party estate and are property of the estate itself so that when the estate is sold so are those proceeds some of the right to the proceeds and the reason for that is if you think about the difference between property insurance for a c e o and chimes things like that property insurance is there to protect the property so if there's damage to the property you want to have insurance that could come in and fix that damage so it makes sense that if you are selling the property to a buyer that that buyer has rights to the about here is evanston issuing a second payment so it's already spent two hundred eleven thousand dollars to not have to spend two hundred eleven thousand dollars to a party that it didn't have any notice of at the time it made the payment so requiring evidence and to now have to expend its own body and interest in it except or out to go after its bank is not also required by texas law there's nothing out there that shows a that is a harm because it's money in its time and who knows can't go to a deed of trust to avoid making payment to an insured but that's not what's going on here you have to look at the terms of the d n a trust in the original deed of trust to determine what the interest that party is because again stranger to the insurance policy so the only reason that they can make a claim is under the equitable insurer doctrine and the equitable interest is to find out by the second original deed of trust so if you don't have an talked about the four about four bow case and the edge the issue there is that the site and mr balance reply is to the dissent it was actually that wasn't the ruling in the case that he is signing it to and in fact it just related to the cancellation of a group policy and whether or not a party can continue to have rights under an insurance policy for medical benefits so ending with edgewood manor related to the right to recover replacement costs after  voluntary sale of the property again that was an end shirred who had a right and had a vested right into the insurance proceeds so the property and wanted to get replacement cost in the courts said well we'll consider that and that's that was that context it has nothing to do with the issues here certainly nothing to do with the issue as to whether or not an equitable insured has a right so i think that i've addressed the issues that were raised by mr bowman i just want to conclude by saying that syria is essentially asking this court to expand and disregard established texas law concerning equitable unsure doctrine it shouldn't the district court appropriately applied texas law notice at the time a serious of serious interest at the time of the claim was paid it's not only inconsistent with the status texas law what it's doing is a seeking to destroy contract certainty insurers will not be able to rely on payments to the parties named in its insurance policy to discharge the i village if this case is it this case is saying if this cases is reversed this is an unreasonable burden that's not imposed by the law  mortgage e and that's clearly not the case i quote the provision in our brief but one part of it in particular they required that the insurance to be obtained by management surry of actual name grant to or which was celibacy as an additional insured tune indorsement such policies and the reason that was in there is because even though sorry osa gotten the e but as an additional insured which would give it the same rights as the danish or so when the as far as councils are going about the deed of trust to being  the savant case and also the smith case that if the mortgagees interest becomes extinguish which in this case is fannie mae than any insurance proceeds that would remain to be owed would revert back to the viewpoint case that case held exactly has been calibrated went back and read it there briefly just to make sure that basically if you're the party who's been named on the check but you endorsement was forged or it was negotiate without your doorstep and the party has two options it can sue the bank on the negotiable instruments itself or sue the draw or on the underlying obligation this case the remedy of serial cell c would be to sue evanston under the under under line obligations as they were named on the check itself and now  the burden this would impose on insurance companies all these cases dealing with is that if if they're on notice like they finally were when choose made his claim and their liabilities not discharged they need to reshoot the discharged so my client's remedy at that point would be to go after the management of syria but that's not the factual scenario we're dealing with here at this thing clearly could've easily made this right and chose not to do so and so it's the only burden that's been put on is because of their own actions especially as i mentioned earlier they were actually represented by counsel they clearly had a conversion claim against their back  to make sense to put the burden on the part of your purchases the insurance policy to name all the injured parties and if they did we wouldn't have this case law that evolved that if they failed to name somebody in the policy like they're  why texas law treats that policy is have you been issued that way and especially if you're younger again if the facts are are different it's not place pardon on the insurance company to do something they ordinarily