form that was approved by the appropriate insurance department did not permit conversion after the age of seventy so there was a mistake in the way the policies were when you say interested parties are not something within link in life or or  w within law these policies were issued on florida forms and all insurance policies have to be approved by the floor you know by the insurance department whatever the state is and the form that was approved here allowed for conversion benefits up to the age of seventy or the end of the ten year term whichever was earlier so the these policies should not have been sold to this particular insured because he was he was seventy five at the time mr wilson he had the option to sell policies from other companies that would have had this problem but he sold these policies it was it was a mistake in the underlying lawsuit what was the underwriting policy or underwriting procedure for the insurance company to for lincoln to review what the salesman had done the agent had done were there some process by which they would verify information and verify representations about the insurability of let me let me be clear there was no put there is nothing wrong if you want to buy this policy for example if you think that you're not going to live beyond ten years and you're not really going to need to convert the policies it could make perfect sense to buy these policies because the premiums were cheap or if you're looking to make sure that you have these policies at the end of the ten years these probably weren't the right product for you but the agent james wilson his job is to determine what his client needs and make sure his client gets the right policy in the underlying case the the claim against lincoln benefit was that these policies should be convertible they should get the benefit of what they thought they were buying they won that case in this lawsuit lincoln benefit particularly after seeing what happened through the underlying lawsuit link and benefit brought a lawsuit against mr wilson because he completely failed to do his job he was obligated to know what his clients needed he was obligated to know what the terms of the product were that he was selling he was obligated to read the product before he delivered it to the insured he didn't do any of that and because he didn't do any of that that was one of the reasons that lincoln benefit found itself in a lawsuit with its policy holder and you permitted him if i understand your initial argument here you permitted him to use a policy there was if if i cut you said if it was authorized but it was sold to be converted to seven days and stead of seventy five but the proof for form was at seventy five that right if the the form provided that the policy could be converted at the end of the ten years or your seventieth birthday whichever comes first then if he was seventy five when he got the policy that conversion right didn't really exist because the earlier of those two things had already occurred your argument is that what was sold was not an unapproved no no it was approved it was it was approved he what i'm saying is he wilson had no ability to change those terms because the conversion privet provision in the policy was what the company sells and as i read the record wilson didn't change those terms it was your company that what this is this is the gist of our case in the underlying case one of the theories and the primary theory that went to the jury and why these policy should be deemed convertible when sold was because that was what mr wilson promised to the policyholders they won that case so the jury found because the agent represented that these policies would be convertible they got the benefit of that is that the conduct you're suing him because the question in the underlying case was whether wilson was our agent the jury found that he was our agent it's a separate question of whether he breached the agency agreement in our case we asserting that even though he was deemed to be our agent and we are stuck with the errors that he made these of the the policyholder he is still he is not off the hook with liability to us let me give you an example so in the first place he said he wasn't your agent and now you're saying yes well no i'm saying the jury found that he is we i mean we said that he wasn't our asian he was actually a variation the jury found that he was our agent when we're not trying to undo that finding he has an agency agreement with us whether he's an independent independent agent or a captivation his conduct is governed by an agency agreement and he breached that agency agreement let me explain to you what i mean of conduct that you're saying he that was the the action that breached the agency agreement is the same conduct that was if you in terms of the creation of a convertible impala use you say he wasn't authorized to do that correct he was not he was not authorized to refers cases he was authorised to do that now the first case said that he was our agent and they're entitled to rely on the statements of our age in this case says he wasn't authorized let me give you an easy example if  s driver causes an accident and the party who's injured brings a lawsuit there's a good chance that u p s will be on the hook for the harm to that that injured driver if you p s later on fires the driver because he was drunk and speeding and the driver suze u p s he's not going to be able to say you are finding the finding of liability against you with respect to that third party absolve me of the consequences of my conduct so in this in this situation you're contending that the your agent was drunk and whatever else because he passed along information that you authorized him to pass no we were yes to the first part no to the second part we did we did not authorize him to misrepresent the policy we did not authorize that the jury in the underlying case never had to consider whether he was breaching his agency agreement or not the only thing that was germane to that case was whether he was our agent and the jury found that he was there for lincoln benefit was on the hook to the  policyholder but the question of whether lincoln benefit authorized the agent to do what he did that was never before the court there's a difference between agency and breaching the a agreement you can be for purposes of a third party the principal will be on the hook for anything that the agent does that's within the scope of the agency agreement so that protects people like  policyholders in the underlying case because they think this they think this guy is doing what he's supposed to be doing and they're entitled to get the benefit of that they can rely on that but if he's not doing what he's supposed to be doing and he's actually breaching his agreement the principle still has the ability to go after the agent for that breach and in this case those errors and it up it was a about a fifteen million dollar premium swing that or the damages to lincoln benefit in this case was posed the principal ratifies what the agent did does that eliminate the ability of the principal to go after the agent it could it could doesn't it under nebraska law and to the bar to case the and i yes i mean ratification can i don't think right ratification happened here is what i'm saying but if it did happen then it would eliminate the ability to go after the agent if there is a r completely i do think if the jury found that the company ratified everything that mr wilson did that everything if it ratified the offering of a convertible policy isn't that what really you're saying he did wrong well well i didn't question to ratify that by i think the finding that the company agreed in the facts that the policy would be convertible the jury was never asked to consider whether that facts constituted a ratification the question of ratification came up with respect to some of the other questions in the jury verdict form but the jury was not asked to determine whether the facts was ratification by and substance was in that i don't think so why isn't that in substance what they found when they concluded that the facts modify the subject term policy and gave plaintiff the right to convert their why didn't that ratify wilson's offer to convert offer of a policy with the ability to convert i think there are two problems with that finding for purposes of collateral first of all it's inconsistent with the first theory the first theory is that the policies were convertible when sold the alternative theory was that the facts modified and non convertible policies to make them convertible that inconsistency how the jury was it to say the jury was told to answer both questions so it found that both were true i don't think both can be true because either they were convertible when sold or they were modified to become convertible and you can't have both the jury found that they were both it's clear the jury wanted the policyholders to win and i see that doesn't the second question sara lee the answer necessarily mean they found the facts gave them the right to convert whether the modification part is inconsistent with the first part or not yes it does it i think yes that's the upshot of it but for purposes of collateral estoppel i don't think that means we don't have a right to to go into court and sue mr wilson for his breach of his agency agreement didn't explain that if the second question means that the jury found that the company by its facts gave the plaintiffs the right to convert why didn't that ratify wilson wilson's act of giving the plaintiffs the right to  the mr wilson i think would be perfectly within his rights to argue causation as a defense in this case he can say wait a second it's not all me you guys also sent this fax and that's part of your own problem in part of your own damages that's fair game but not as a matter of collateral estoppel the jury's finding of the facts was not the finding with respect to the facts is a different issue than whether mr wilson breached his agency agreement and the jury was never asked to consider if that facts constituted a ratification of the the policies being sold with conversion rights the jury wasn't asked to determine ratification it would be inappropriate for the district court it was inappropriate for the district court to say that the jury found ratification and and therefore late would you have the gratification means i mean if the jury found that the company gave a right to convert and what you're complaining about wilson doing was that he offered a right to convert but it what what more is there to finding a ratification than that but if we're if we're here saying this could have been a ratification if you think about it logically it could have been a ratification that's not how you can decide a collateral estoppel issue because there has to be a finding that the jury actually made a ratification before that would become a a bar to our claims against mr will i know i'm asking what more would they have had to find to conclude that there was a ratification what more would they have to find beyond finding that the company in its facts gave the mr wilson was part of the case if there are claims against mr wilson in all in the underlying case then the jury's finding maybe it could be a ratification but i think you need to have it that has to be presented to the jury the question of has to be presented to the jury and it wasn't that was presented as an alternative theory if they found that the policies were not convertible when sold so i have are saying you haven't identified anything else that needed to be presented dance of course right to be a finding that the collaterally of stops a future claim yes in turn if they were asked that could they have found that this was rather cation yes they could have but they weren't asked to do that that's that's my point if they weren't asked to do that the second court can't come in later on and and say that the same issues were decided because that issue was not put before the jury even even if your theory is correct what is the essence of the fifteen million dollars and damages you see from mr wilson this policy provided a certain premium level for the first ten years after that ten years the premiums went way up and it was a term policy understandable ok if if the policies were convertible then the premiums would not have gone up as much and the amount the differential was fifth eighteen million dollars still has to do basically with whether you're on the hook or not to the insured this case what well we were on the hook we paid the twenty nine million dollars in death benefits and the damages that we should have had x amount of premium the used to pay that but we had oh yes want to thank you may please the court my name is dennis d'antonio i represent mr wilson in this case i also tried the underlying case and the court in this case had the entire record of the underlying case which it required before it decided any of the motions and addressing my colleagues arguments the facts of how these policies come into existence is tried to the jury has some relevance on all of the argument that is being made mr wilson did not sell this specific form contract because it wasn't in his hands as he was selling the policy to the insured the way it actually worked is he goes out to an insured representing different products obtains an application from the insured as to what it is that the insured wants in coverage and then he submitted through an intermediary to lincoln benefit life who then agrees to the terms this to wilson's testimony was the policy was sold by lincoln benefit life with him as an intermediary to have conversion after ten years which conform to what the purchases requirements were it wasn't until months later that the insurance company after accepting almost a million dollars in premiums finally issues the contract the contract which is the subject of this sort of those contracts were received by the insured is evidence that they frequently go into a file at that point don't get looked at but in this particular case the c f o of the edge of the insured person names are the salt and read the policies and he had a question as to how this policy would convert because of that seventy year requirement which was not consistent what lincoln benefit was originally offering and mr wilson then received an inquiry from mr salt and that he transmitted directly to lincoln benefit life he didn't answer it and self he said because his answer doesn't matter that has to come from the carrier the carrier at that point could have said and should have said if that's their position today that these policies do not have conversion rights at that point the coverage was only six months old if there was a dispute regarding could version of rights which was a material term the insured had options at that point to reject the offer ask for the premiums back and accept one of the other offers that were being made by a different carrier that gave them the requi of the conversion rights instead and what wasn't discussed here this morning lincoln benefit has a policy on the front page of the policy that says the terms of this contract can be changed only by an officer of the company and the change has been righted and it's been our contention that the policy that was issued six months after it was sold wasn't the correct language lincoln benefit selected that policy if it didn't conform to florida law that's lincoln benefit selection of the policy wilson has no role in selecting the actual contract that is sent so in this case we say mistake was discovered and that the form they used didn't give the conversion rights because the applicant was already seventy years old at the time it was sold the inquiry was made to the carrier and the carrier could have said no you're wrong there are no conversion rights in which case the premiums probably would have had to have been returned and that the insured would have gone elsewhere and what is this had to do with the issues before it comes up because mr wilson didn't do any of the selection of the policy where the contract and actually going to that's a good question let me bring it right forward so so so so the way it went to the jury on the two first two questions of the jury verdict sheet that they say are inconsistent the jury agreed that the contract as so all the policy coverage as sold originally did titled term benefits and that the contract itself when it was subsequently issued didn't have the conversion rights and by the july letter they amended the written form contract to conform to what the right terms the de lydia trevino letter that was out in july of two thousand making reference to the officers mister shelley stand shelley agrees that these policies should have conversion rights that's the that's the dispositive act on the behalf of lincoln benefit life that conferred the conversion rights on the insured because even if as they contend wilson sold a policy that didn't have conversion rights without authority they selected the contract for him wilson solve the policy there's no evidence he acted outside the scope of his agency other than an argument and what appeared to have happened was that the for that lincoln benefit life sent that it selected for the policy and sent didn't conform to what was originally sold and antonio we are applying new york collateral estoppel law is that correct yes it seems to me this case comes down to whether or not what was before the court here is the same thing that needed to be or that was decided in new york how are the issues the same when the company is attempting to make an argument for liability against the er agent giving their reasons and  it as seems to have been described this morning had to do with the his representations to the ultimate insured about the characteristics of the policy howard are th against him decided and in the same issue that was decided in the new york case yesterday and i can address that i'm essentially what the new york case decided a number of issues which preclude claim against wilson under the theory of collateral estoppel the evidence that was presented in the new york case on collateral us stop our the issues the same that in that what we have they're identical in the sense that it was lincoln benefit life by its own actions that wrote the policy that convert conversion rights on the insured that on two or three separate occasions in the two years subsequent to the issuance of the policy could firmed verified as judge cult raised cotton raised ratified the original sale of the policies and if in fact there is a finding by the jury that lincoln benefit life so well the policy that had conversion t at the end of ten years and there was ample evidence that they did there's no evidence whatsoever that the broker's actions had anything to do with the fact that these policies had conversion rights  was litigated before the court in new york there was no allegations in new york with rick that by the carrier that the policy that was sold by mr wilson was as a result of his negligence they had the opportunity to raise that and they did and under call lateralus stoppel i think the way it was established in the york was if there's a representation made by a carrier in this case lincoln benefit that there is coverage which they did that the policy is interpreted to afford coverage which they did in the on two occasions the record pages being three eighty five five six one three and confirmed also on five six one five if they make a representation to a policy holder that's lincoln benefit that you have coverage under these policies and you have conversion rights and the insured relies upon that and the reliance is reasonable in this case it was because it was in writing and it was on a letterhead and this is exactly the way audit argued the case below the representations had been made that at the end of ten years  these representations were not by jim wilson but rather by lincoln benefit life that at the end of ten years these policies had conversion rights that and to the extent that the final requirement is that the insured relied upon it to its detriment which it did it accepted the representations the policy had conversion rights and it did nothing further that collateral estoppel argument precludes any claim against mr wilson because for the jury to find collateral estoppel in the case below they found it on the basis of linking benefits actions that in fact ratified confirmed publicized to the insured that these policies had conversion rights all  benefit had to do and was obligated to do if the policies didn't have conversion rights when given the chance in two thousand and two thousand and two was to respond saying there were no conversion rights and as judge kopp below points out his decision mr wilson had no role in any of this the policies were sold and everything there after it was decided by lincoln benefit lincoln benefit acknowledged at the conversion right when the inquiry was made lincoln benefit put it in writing it was by a court officer the court an officer not a court officer a corporate officer i just want to address the argument that the jury verdict answers were inconsistent and they're not your hon policies at the time the policies was salt they accepted the testimony of the policyholder and mr wilson that that is what it was that he was selling remember he didn't have the actual policy language subsequently the contract that was issued by the carrier unilaterally did not had an ambiguity as to that conversion right and that's the ambiguity that was challenged at trial saying this policy is not the policy that should have been sent to us and the evidence relevant to that was when this was raised back in two thousand they beat it lee wrote a letter saying an officer of the company has confirmed that these policies had conversion rights it was signed and it was sent to us and the argument below was a how was it modified by to the extent that the written contract was ambiguous on on conversion rights the lydia trevino letter modified the written contract to clarify the ambiguity by saying the first question said it wasn't ambiguous that they did get conversion rights at the time the policies for sold no it doesn't the first question says did plenty of prove i'm reading policyholder had the right to convert the term policies and that could be based upon what was sold to them at what was told to them because at the time of the transaction judge the contracts didn't exist they didn't have a contract in hand when they sent the premium and the contract is evidence i elicited the testimony a trial they sell it on a verbal approval of an application you're saying they might have the jury might have said they had a right to convert based on something outside the policies yet at the time it was sold because there was no policy at the time it was sold if you go to a life insurance company to buy life insurance they don't hand you a contract and you pay a premium you submit a proposal an application they prove it they bill you you pay the premium and then they send you the contract so at the time this particular policy was sold and this is what i argued to the jury they went out and they sold this policy with conversion rights and jim wilson testified he had the authority and permission from the underwriters at lincoln benefit who had never spoken in this case presented by the lolly tags and crackers child that i represent wilson correct i represented lollie todd's i tried the case against lincoln benefit at the price trial and all of these theories presented all of the evidence when wilson made his his claim for the premium and they sued him he came to me i cleared it with my client and i took the case i knew the case better than anybody at that point and i knew that lincoln benefits all this policy i knew that for years afterwards they ratified and confirmed that the policy had conversion rights and they collected all of the premiums that they would have  collected for these policies which obligated them to pay the commission as was decided none nothing that happened in this case was the fault of jim wilson jim wilson sold a policy insurance policy purchaser purchased the policy read the contract that lincoln benefits selected to confirm the transaction and sent six months after it was salt after the premiums have been paid read the policy and saw there was an ambiguity based upon the seventy years old inquired of lincoln benefit immediately as per the rules of the policy and lincoln benefit issued a document that that was a significant material legal document because it referenced an officer of the company and it was signed and the policy itself said that if there is if there's a mistake in this policy as we issue it and it's going to be changed it can't be changed by the agent it can't be changed by verbal it can't even be changed by a letter it has to be an officer of the company and it has to be signed and that's why the lydia trevino letter that was issued in two thousand is so important and she has had to engineer in your view is is she to question to in this case one hundred percent we've seen it cannot end a case because it irrespective of and even assuming argue window that wilson didn't have the authority of underwriters to sell a policy that had conversion rights after ten years it was incumbent upon the the carrier to communicate truthful and accurate information to the insured in response to an insured in corrie as to whether there are conversion rights that has nothing to do with mr wilson putting aside the fact that it supports mr wilson's position in this case which is he didn't act without authority he had authority to sell a policy with conversion rights that's somewhat buttressed by the fact that in two thousand when the question was raised six months after the contract was delivered right after the contract was delivered that the callee it must've looked at their records they had an officer come back and say that these policies do have conversion rights after ten years they put it in writing they gave us the name of the officer and they signed the document so even if they're written contract that they issued it and give the conversion right after ten years that letter modified the contract to give the conversion right and that's the beginning and end of this analysis it doesn't go any further than that and if the carrier wanted to say that these policies was sold in error jim wilson did something wrong they would have to present evidence of that there is no evidence of that and the evidence is all to the contrary because when they were asked directly in two thousand to clarify conversion rights they i don't think they will be nearly without looking at their own internal files and underwriting files wrote a letter from an officer of the company saying these policies as sold do have conversion rights and they did it in such a manner that they knew would modify the written contract because they cite to the officer who is stating this and they send it signed and that corresponds to the policy language as to how you would go about changing policy terms so in two thousand they changed the policy time that's what we argued the policy being the written contract not the terms of the underlying sale we always maintain the term of the underlying sell high conversion rights that's what the competitors were offering and that was important given this the guineas age that there be conversion rights because when he died there needed to be twenty nine million dollars to pay the shareholders and the shareholders were paying for the policy they were the beneficiaries so conversion rights w critical because when ever he died that twenty nine million dollars had to be paid so they didn't want to ten year term policy they wanted a policy that would always be in force in effect to do exactly what it did do and if in fact lincoln benefit years later wants to take the position that mr wilson didn't have the authority to sell this policy that issue has been tried because they it's already been established by into raga tory number two that they changed the policy in two thousand so even assuming argue when doe that he didn't have the authority to sell it and we say he did otherwise they would have changed the policy they would have called it a mistake or an agent acting without authority they endorsed it they  it they modified the policy to conform to exactly what it was that the insured in this to wilson was saying they had agreed to additionally and they've never put an underwriter on trial in either case or an affidavit from an underwriter that says that we don't agree that this was originally sold as a policy with conversion rights they've never produced that so so the questions that were answered in the jury verdict sheet are not mutually exclusive  found that the policyholder did have conversion rights at the time the policy was sold again it's not the contract being delivered to that by the preponderance of the evidence we proved that the july thirteenth two thousand  modified a written contract that was given to us too was to conform to what we say had been sold to us from day one once the jury says yes to that there's no further case here and any effort to not  mr wilson's commission which he was entitled to from the premium is that they collected would be unfair unjust not supported by the agency agreement and it's just and not the vindictiveness because the company doesn't like the fact that they were proven wrong and how to pay twenty nine million dollars and death benefits on a policy and we feel there's no legal or factual basis to deny the commission obligation that they pay on those additional premiums they collected in this case that's the jury in the new york case never considered whether mr wilson breached his agency agreement the his violations of that agreement just weren't part of that case there wasn't any reason for that to come in come out and what other violations  in well this suit beside the nature of the it is essentially the entire manner in which the policy is sold what mr d'antonio is saying is only partially true the way insurance policies are sold and insurance company like lincoln benefit appoints producers who are licensed under whatever the local law is and mr wilson has appointments with multiple insurance carriers companies likely to benefit his obligation is to go sit down meet with his clients find out what do they need what type of policy do they need how much do they want to pay for it what are the different what are the different features that make sense for their particular plan this is especially true when we're dealing with high net worth people to us or not tell me again what do you say the essence of the damages are that you seek in this lawsuit this policy if it had been i mean if we didn't lose if it didn't lose the underlying case and have to give the benefit of convertible policies lincoln benefit would have collected substantially more premiums on the if in years ten eleven and twelve before mr gandy died then they did because the jury gave them the benefit of conversion policies they would have collected fifteen million dollars more in premium then they actually collected these these but the jury from the evidence it appears that your jury gave them the benefit of the conversion because your company said the policy provided for convers respect leaser i don't think that's what happened in the underlying case in the underlying case mr d'antonio i was not involved mr d'antonio was i become an admirer of his work i've read and studied his closing argument and he argued to the jury that you have to find in favor of the policyholder owners because they thought they were buying convertible policies and why did they think that because that's what jim wilson told them that's what he told them in our case we're pointing out that jim wilson was told by us that these policies were not convertible we gave him policy specimens so he can see the exact terms of the policy we gave him multiple illustrations that say clearly on the front of them these policies are not convertible if you're over the age of seventy and we asked mr wilson in his deposition in this case why didn't you adhere to those warnings in all of these documents telling you that these policies were convertible and he said that i don't pay any attention to that stuff that's what is the effect of the letter that well and i think i mean candidly i don't think question won i think the judge just simply got it wrong on question one question two that's a little bit different and i do think that if the jury was given  the letter gave the plaintiffs the right to convert because that's what you're arguing is wilson wilson gave them a right to convert that wasn't in the policy and what more do they to find what happened in this wilson did in two thousand and three in two thousand and three the company received a request to convert the policies and they said sorry you can't convert these because you don't have that provision then they said hey what about this fax what about this fa i think if you look at that fax you can say all right i understand why you thought that that gave you the right to convert i don't think the company was ratifying what what wilson did i think the jury found ok they're allowed to rely on that fax i think that's what happened here of course they can it's a little bit ambiguous it doesn't say mr wilson can convert it actually reiterate the language in the policy but it has a name on it and it has his age on it and if you're a policy holder and you're not sophisticated you have this fax maybe you can rely on that but that was not lincoln benefit saying hey we agree these policies are convertible well but the jury found that the jury found lincoln benefit gave them the right to convert in that letter they but they also found that the policies were already convertible these are great i think all of these are worthy arguments to defend this case but these are not collateral estoppel arguments because the jury was not asked to decide  problem the question what they're essentially trying to say is that our the and i think they agree that the question of wilson's whether he breaches agency agreement wasn't really in the underlying case what they're saying is that we can't go out we can't complain that he caused our damages because we caused those damages are elph and that's a like that's fine but you can't say that based on collateral stoppel we cited to the pan am decision your time's expired thanks very much and you as well mr dunne tonio we appreciate the arguments you provided to the court this morning it's helpful in resolving the case and appreciate the briefing as well will take the case and