the next case of the morning number sixteen six zero seven two eight imperium insurance country company versus shelton waiting for it  arguments made in this case and obviously as as that opinion addressed a prior knowledge exclusion but did not address material misrepresentations prior knowledge exclusion of do believe is certainly relevant for multiple reasons and they are somewhat in a related so it's hard to dissect them into two completely separate items the first being that the court in one b can made a distinction between the question of foreseeability and the question of an actual breach and in arguments before this court imperium has taken the position that the mere existence of a breach in and of itself is sufficient to trigger the exclusion because any reasonable attorney would have known breach an expected any breach to potentially lead to a claim that's not what and the core of one beacon is the notion that claims made really has no meaning if you're going to say did you have knowledge that you had done the act whatever act it is that's now being charged is malpractise during the claims period the claim made period if that's enough to trigger the prior knowledge exclusion then unless you were sleepwalking when you committed the malpractise you're going to have coverage on anything and that seems to be the position and the problem with one beacon was it was way overstated what they were trying to make the policy m and when you match up to two policies although they don't have a thing about going back to ninety ninety five when you match up the language is very similar so it's a little surprise you ought incited because even though it's texas law versus mississippi law no one has pointed out to me and indeed the district court relied upon other states law no one has pointed out to me some uniqueness of mississippi law that would make this different so i mean to me it seems very relevant it is very relevant your honor and and specifically back to this in relation of these issues by restricting the interpretation the way imperium argues that to simply an act just like your honor said any reasonable attorney you know based on that standard would have expected the claim to be made well in that instance essentially what you're doing is you're eliminating any valid malpractise climb right because it ended the day the only thing you can have coverage for is a frivolous claim because a reasonable tourney wouldn't expect that to turn into law so you get your defense costs for the frivolous claim which is worth something better probably and worth what you're paying premiums on and for that reason you know one beacon goes beyond whether or not the the wrongful act occurred or the person should have known of the wrongful act into whether they should have reasonably expected or in the language  of one can whether it was reasonably likely that there would actually be a claim filed not whether it was possible for a claim to exist and whether the claim was possible or the claimant could have occurred or in the language of the district court in this case on three different occasions whether the facts might later turn into a claim is not the same standard espoused by one beacon it's not the same standard imposed in the us actually came in i would point out one was texas law right i don't believe there's any material difference in the determination of whether coverage would be a loser e based on the same facts under mississippi long particularly in light of the same reasoning from actually that of your centrally offering and telling uninsured that you have retroactive coverage but that you don't have retroactive coverage over anything that might possibly be partly difference does it make that the application for before the insurance is applied i think for purposes of providing the analysis it makes no difference because the question is whether you're limited simply to knowledge of the wrongful act which in both cases is allege have occurred prior to the application well the first is just make a difference in terms of the seriousness another one a reasonable person could expect a malpractise claim on three facts on one fact perhaps not but on three facts yes an one to become you had one fact that occurred that was that was relatively  to clarify my point your honor it would not make a difference as to the standard that is applied whether or not you consider foreseeability separate from the knowledge of the breach agree with your honor that it would be relevant to the consideration of whether a reasonable attorney should have expected that it would in fact turn into a point the problem to me with the district court opinion in this case ignores the fact that pretty much any time you lose a case as a lawyer your client can point to something you could have done better and that's not the standard for malpractise at least not in my knowledge particularly in texas but i think that's true in mississippi as well in other words you're on the course of litigation you make decisions you make strategy calls you do things you don't do things and somebody could always say well you could have to pose this extra guy you could have sent this extra in iraq or tory you could've made a bigger deal out of this document it's not that you know you lose a case or you lose a case right and it seems to me that this argument here that the opposing counsel is making is that you're never going to have coverage for those cases because you could always expect someone to point to something you could have done differently maybe even they did point it out and so that all of that is excluded and we're back to again the frivolous lawsuit maybe the guy one you know well didn't the district court grant rescission because shelton's firm didn't file point is whatever you're it that's what the allegations favorable to your client are i didn't i didn't screw up my client screwed up my client being conveniently dead on in both counts now and  you know the facts speak for themselves you missed the deadline without information or the ability to meet the deadline which would lead a reasonable attorney to believe they would not be subject to a malpractise claim because they didn't commit any failure in the first well he didn't he didn't he had a chance to contact the client as i recall and i mean there was a quote there was a gap in time here between when he knew that the materials were supposed to be filed and when they were not filed and we have documented at and brings information that this brings us back to this question of what a reasonable attorney would expect and i think that in cases involving claims of legal malpractise there's a particular temptation by the court to substitute its opinion as an expert juror but but this was a that it would not do in a medical malpractise case i mean this that might be true in cases like even perhaps the summary judgment question here where you're it where mr shelton so attorney was in the very courthouse on the day that the very hearing occurred and she said she let everything fly right by that might have been an arguable although the mississippi supreme court and court of appeals found out otherwise but this was an open and shut you file your claim you get the money because that's what that vioxx pot of money is all about and again your honor the permit the the evidence harben they knew about harbin they didn't rescind the policy they simply excluded harbin so to me that's reformation that's not rescission that's not taking the whole policy back so even if we see him argue endo that had they known about ch they would have excluded chism like they did with carbon i don't think that would affect tyler because the the policy would have still been in effect and in fact they knew about harbin and didn't explore and say well what did you have any other vioxx people that didn't that you didn't submit stuff on time they just proceeded forward so we know they didn't resend on harben and so at most that would affect the chism claim that wouldn't a chat fact the tada claim which was what my earlier questions were directed to right that was the testimony b the insurance representative who said that they would have been issued an incident exclusion not rescinded the policy that would limit limited only to the just klein and so in the court made no findings about the tyler claim on the question of rescission in any fashion and in fact i believe the reason for that is the testimony by that insurance person was that that information might have only resulted in a higher premium not even though claim exclusion or rescission but back to the point which your honour's have already written my replying to is an insurance company start to question an application where they have to grant risk exclusion after exclusion well i'm just rhetorical the asking the record doesn't give us the answer than summary judgment should have been granted you know that's up to the insurance company to prove well harbin we only did the exclusion but if we'd known about harbin and schizm we would have rescind it actually then said that is what they would have done the incident exclusion on chi on the day of summer judgement here in the shelter an attorney was present in the court has told him the unit did absolutely nothing number eight the state court granted summary judgment to at c in the amount of two point nine million dollars on the basis of the admissions and the fact that supposed to conclude from that order on him to me that he knew that something that he that much evidence and gone back to the case you're about to cover himself or you're out of the the point which is addressed in our brief is that my client did not enter into the case or begin representation in this matter until after its mission had already been made his agent i mean it's no your honor his is a net no one from my client's firm represented this client as of the date the admi requests for admissions were served nor that when the when they were do they represented them in the proper bankruptcy matter which was dismissed without prejudice the case was refiled in circuit court with a former attorney from the farm who had opened his own practice and my client did not begin representation of this client until almost three years after the represent the request for admissions had been made but yet he came in for it was the the motion to deem them admitted when they had already been a bankruptcy court has no power to transfer a case from federal bankruptcy court to state court it must be dismissed and then refile at that point any prior admission on behalf of a client the bankruptcy court is invalid you have to have a new court when the new admission was made in the circuit court it was not clyde it was by former attorney who used to work for him and opened his office now the client later than fires that attorney rehires ma client which occurred only mississippi supreme court in order to verify that you did receive a copy of that notice your there was a finding by the mississippi supreme court about that which occurred after the application was made there was a finding by the circuit court that notice was given to his attorneys of record which included not only my client but other attorneys who were not my client correct now your client still screwed up according to the mississippi court of appeals and so the question then becomes whether the merits of the claim have any bearing as to whether a reasonable attorney would expect to be followed and if he had no defense if there was no way you could excuse me but you have time for about a thank you you've gotten at least the next few minutes  may please the court your honor as i would also like to address based on the court's instructions the impact of the one beacon decision and i believe that judge jolly's question is very crucial in understanding a distinction between the one between case and the cases that are currently before this court and you first of all address whether you see mississippi law as different from texas law on this point in other words is one beacon i believe it is relevant in that it actually reinforces the interpretation that the district court employed if you based on the court's request that we look at that i've gone i went back and looked at that district court filings and as referenced in your decision judge chains the court adopted the interpretation that was urged by the insured law firm in that case which was to say look at the wrongful act and what a reasonable attorney believes a malpractise claim could result and i think that's exactly what the district court in this case did now i apologize if my argument may have been overbroad as judge bangs you suggested in your question but there's a a key distinction i think here respondent you mentioned not taking a deposition or not taking some some action and that judgment calls could lead to a claim for malpractise what we're talking about here were not judgement calls responding to judgment call you know i'm not i'm not saying it is what i'm saying is that your policy is really pretty worthless except to provide attorney's fees a defense in a completely frivolous case that no one could have possibly seen and so it makes the claims made policy just pretty much useless that's the problem and that's what one beacon was addressing if you're going to say did you do the act and do you know that you did the which is how your policy is worded to it matches up very squarely then of course you knew you did the act and so then it's never going to be covered unless it's just ridiculous i mean you did everything perfectly and still lost and and the claim is just ridiculous i think i think there's two points there your are as the court decided the use of the word act in the definition of wrongful act does seem a bit overbroad but as this court decided in one what you do is you look at the act that's alleged to have led to the mouth practice calling the not appearing for the summary judgment motion the not responding to a summary judgment motion and tyler the failure to submit a claims package by a court mandated deadline in chisholm those are simply acts those are errors and omissions that are also included in the definition of wrongful i mean there we have the problem that whether we alternately believe the she group they have an argument that for example they didn't get notice of the hearing that the court found otherwise doesn't change that they're saying no we didn't get it somebody may have gotten one of these three different law firms but we didn't get it and then on  saying we can't file a bunch of information that we don't have and so we've all represented clients that haven't been as quick on the draw in responding to our request as we would like and you go and you try to get extensions of time and you keep calling the climb you try in you're just the client isn't giving you what you need and i think i think that is the other point that i would i would raise your honor is that an insurance company such as imperium is not merely concerned about insuring for a claim where a verdict is actually entered against its insurer it's also concerned about the risks because of the duty to defend risks associated with potential claims because that they're in this vioxx you they didn't file on hard and rightly or wrongly whatever the facts for why would you say hey how many other heart vioxx people do you have or we're going to do an exclusion of vioxx or we're going to charge a higher premium because this looks like an area as you say where we might get a lot of claims valid or other wise they the application did in fact request information similar to what you're asking why imperium chose not to do more of an investigation harben i don't know that there's any record evidence in the record that answers that question specifically but what i would point to is the fact that that claim was reported i believe three days prior to the effective date of the policy so there wasn't a great deal of insured under another company's policy that in fact his his policy these submitted i believe was even on the paperwork for the prior company taurus insurance the insurance agent made a decision to put him with assume that that moni for his taken out this particular policy at this particular time was related to these alleged malpractise events none your honor no your honor but  voice their displeasure and i think that's a key factor if with respect to the chisholm clime you mention there is a i think a distinction between tyler and chisholm i understand their defense in chisholm is that well we couldn't do anything because they didn't give us the documentation but you also knew that the representatives of the day were coming out to coming to you and explain expressing displeasure well you also knew that there was a plane deadline that's correct exactly and i think that's sort of but there is really no evidence that they would have presented in fact the evidence is they would have done an incident exclusion and the court did not find rescission and tyler only found prior knowledge exception and so unless we're court's decision to not address rescission in its in its opinion but if you look at the prior knowledge exclusion and the question in the policy application they're both getting to the same point well might ask let me ask this question honor the the demand that was the suggestion on the face of the complaint i may have been less than that i would have to i would have to double check that complaint but there was thousand dollars or seventy five your honor the complaint says in excess of fifty thousand dollars as i understand record in other words seventy is not referred to just one i believe there was a settlement demand at one point your honor indicating that the plaintiff's counsel certainly in excess of fifty that range between fifty and seventy five thousand would not trigger jurisdiction but the complaint itself and  i would like to double check that your honor that there was never any indication in our mind that the actual amount that the plaintiff hoped to recover in chisholm exceeded the jurisdictional amount of the core certainly it was not my and my analysis was if the policies rescinded it's rescinded and there's no coverage for tyler at all that is correct and isn't rescission an equitable remedy that the company can that in saying tyler hey we've already rescinded in schizm so we're good it did not but i think what what's important to the point i was making was that those two the exclusion and the policy application question are really getting to the same point is there some instance of your representation of a client that could lead to a climb we need to know that because that affects the materiality of all risks and the evidence was in tyler that that imperium may well have have chosen to rescind it the insurance agent was asked what would have happened and his answer was it would be the result of that approval pending in x and incident seclusion a higher premium not to write the risk at all and under mississippi law rescission is allowable policy may be voided where and where an insured makes a misrepresentation on the policy and that misrepresentation is respond to a motion for summary judgment had failed to appear at a motion for summary judgment and while he felt his defense to that was adequate that there was a lack of notice that the circuit court had already expressively rejected that argument shell was known they found that shelton's attorneys will had had had had in fact gotten a and so and that's and that i think your honor goes back to the distinction with one weekend one begin at the time the application was submitted there was not a pending dispositive risk on the table for that attorney that he was merely under an order to supplement discovery and as your honor had complied with it but he had not complied with but his deadline to to comply had not yet expired and even then as this court's opinion suggest it was somewhat unusual for the court to take that step to actually dismiss there is a distinction in our case it's not for coming in to dismiss a claim or to grant summary judgment where a party opposing the motion doesn't oppose up doesn't appear doesn't respond to a motion let me ask you in the connection with their stand they did not give notice certainly i would if i were the attorney for the estate i would i would certainly point to those facts as as supportive of my claim that he received notice but in the context of this appeal the significance of that fact is that shelton knew it he knew his argument that he didn't receive service had been rejected he knew it a year in advance of submitting that application so for the position he takes  i wasn't served so i couldn't i couldn't forsee a malpractise claim no when a circuit judge rejects your argument you see certainly can a reasonable attorney certainly can appreciate there's a risk that a malpractise claim might result in that situation it's very similar to the baker and jackson case which we cited in our brief which basically stands for the proposition that when a court of competent jurisdiction hands down a decision that is dispositive and adverse to your client and points out that part of the basis for its decision is an omission heidi was the attorney i'm looking at your brief for you side this thing from the circuit court and it says defendant talor was properly noticed through his attorneys of record at the hearing is there anything that's would have to check double check the exact record site i know there was the notice of service itself was included in the record on appeal that listed the address that they sent to mr shelton i believe that's the evidence that  i would submit your honor consistent with the point that i've been trying to make here that regardless of that even if mr shelton is it even if there's some accuracy there that it's referring to some other attorney well it doesn't matter because he obviously argued to the mississippi supreme court that his firm didn't give notice which is why the mississippi supreme court explicitly rejected that but it questioning so we had to have understood that in the week of purist precisely your honor rather whether there's truth to the lack of service argument he is aware when they say and it's left a fish courts the question was it wasn't the case against him that was being appealed it was a case against his client the questions if the client didn't notice through an attorney so if there were three attorneys out there and one of them got notice that would be good enough for both the circuit court and the mississippi supreme court but it wouldn't be good enough for saying shelton guy that's the point that i'm making these were different issues what was before that core was whether tyler through his attorneys got noticed and they said yes he did but that's different from whether this guy is responsible for the screw up well his attorneys at that point are unquestionably shelton and associates well there are said all its questioning service showed it to the shelton address yes your honor so if you know if there's some allegation that the mail didn't get there that the address was incorrect i'm not aware of that but there is when the circuit court says your attorneys of record were noticed and your attorneys of record are the law firm of shelton associates with you is the farm to which this policy was it was issued this is not jason shelton attorney of law itself an associates the law firm representing paul tyler mr shelton as a reasonable attorney has to appreciate at that point that there's a potential for a malpracti if there are any further questions i'll be happy to address them but i think that the points are have been i think thoroughly briefed and i would i would i would pass the remainder of my time all right so i thank you very much  would you address that please the question of whether the circuit court clearly found it was shelton as opposed to an attorney like shelton and associates that got the notice you are my recollection is the same that you cited which was the  that only mean one attorney your no opposite just said that has to mean shelton and associates when they said attorneys of record and you made earlier said it doesn't have to mean that obviously the record exhibits speak for themselves but i believe if you do look at that particular service it was not if that is correct your honor that was an exhibit that's in the like you're saying there are other there are other attorneys listed on that same certificate but that has nothing to do with the kind of risk that may be involved because the policy would cover his genuine issue he he would not have appealed it sorry he had to know that was an issue because he had do a brief that to the mississippi supreme court which then wrote explicitly didn't plot that fact out of mit out of thin air and again you are coming back to back correct or not correct what did the briefs say your honor i do believe that that was the case that issue was in fact briefed to the mississippi so he had to know i do not know the date of the date of that briefing i don't know whether when that's included versus the at the date of the application but the mississippi court of appeals opinion clearly raised the issue in his mind so he knew which result and i believe the appropriate standard based on one begin is whether it would likely result and the factors that the court would look to i think the actually case is instructive on that point because the actually cases that there are at least two considerations aside from the merits of the claim one is dissatisfaction of the client and one is the lapse of time between the end of representation filing a claim it goes on to say that these are not the only factors when considering these and other relevant factors now there was a mention of dissatisfaction by the chosen parties this is also been briefed but the question is not whether they're dissatisfied with the result which was the indication of the record in the summary judgment evidence in favor of my client their argument is if they were upset with the actions of mr shell to what degree do expert opinions in cases like this create a fact issue but what about that that was one of the next points your honor that that because we are dealing with the question of what a reasonable attorney would do and because for the same reason that it makes coverage illusionary to say a simple knowledge of a breach is sufficient all these are tied in together that what a reasonable attorney would do is subject to expert opinion there's cases that i've cited in my briefing as to that point as to prior knowledge exclusion and well i didn't read those opinions so i can't limit but let me ask you a question there is a there is a principle that you can't mislead the insurance company and by retroactive coverage for a claim you have recently you know you already know exists right where the material misrepresentation stand right and isn't that what this provision is getting at it is it is wrong because there's i mean you can still have claims made that spring up because of bad various things that happened litigation which are surprising which is why one beacon is a perfectly reasonable decision but when you know you missed the headlines it's not reasonable to conceal that from the insurance company that's not the only factor in that it's also required to prove a clear and convincing evidence of the burden being only insurance company that it was material meaning that they would not have issued the coverage in the points that have been already been argued both in chisholm and in tyler the only proof before this court is that it would either result in a incident exclusion or potentially a higher premium these two claims if mississippi law allows the insurer to rescind why can't the insurer go to court and ask for a solution they did your honor i'm simply saying they didn't cure their burden to do so in this case because it requires clear and convincing evidence that they would not and they would in fact have not issued the policy they didn't carry their burden to do that here the only evidence is that they might have but they might also have issued an incentive exclusion or they might have just raised the premium and that's the only person for the significant and doesn't specifically because if all they had done is say if you said oh well i'm harboring there's also chism and they all ok will exclude that then that would not effect tyler whereas if they set up and we're not going to issue the policy at all well then that would affect either so i mean i think it says i'm affecting tyler issues a fairly significant point here that the district court frankly didn't address and there was a distinction by the testimony of the insurance company with specific respect to chisholm they said the potential outcomes were a policy exclusion or not right the coverage with respect to tyler the said policy exclusion not write the coverage or increase premiums in either instance there were multiple it is that they didn't cure their burden to establish