know as you get ready there were the were the lawyers in the courtroom when the announcement was made about the possibility of some disturbance this morning ok we were told that there's some work on the elevators could be some loud booms during the morning so that happens we'll just stop momentarily and just per justice roberts famously stated that a court's role is to call the balls in the strikes in this case the district court went far beyond that role the court staged a nd game that was not on the schedule and for certain players to change positions or even change all of which was required to create a federal jurisdiction that did not exist at the time of file because there was no jurisdiction over this case at the time of filing this court should determine that everything that has happened since that point was not a direct action was there subject managers to action below yes yes a argument does depend on the notion that it was a direct action but i would point out that you know the key question is how is this particular statute interpreted in missouri because we're talking about a specific missouri statute three hundred and seventy nine thousand two hundred and the missouri supreme court has on several occasions referred to it as a direct action  his court in the case that that we mentioned in our twenty eight day response the lancaster case referred to in action under three hundred and seventy nine thousand two hundred as a direct action numerous missouri federal decisions in the district courts have referred to it to cases under that statute is direct action and i understand that there are cases from other jurisdictions that hold differently but ultimately you know this this court's northstar in the terminating you know what whether there is a direct action here or not should be that particular statute how it's interpreted and i think the pendergast case in particular from i believe is the eastern district bork really impacts that and explains well why the missouri statute or similar to the louisiana statute that was initially creek sort of the basis of the jurisdictional rule regarding direct actions well can i ask a question this is no one touched on this in the briefing so it probably of a final judgment for loss or damage on account of bodily injury or death or damage to property in this case does not involve any of those causes of action or claim just as one example you know we haven't had a chance to brief that since it wasn't raised until this to reply and so it sticking point for the board of it was or something in missouri or is there a missouri case out there that says that liberally construes the statute and makes it applicable any time there is a recovery a judgment secured in which the defendant mutual insurance company or fifty seven southwest there are three hundred and forty admittedly it's not on point because a specific issue is not addressed in any detail but it was a case where there were the client had to change obtain a judgment against an attorney and a malpractise case and then it was brought under this statute and i just have to collect from the attorneys ensure it goes all the way to the supreme court and the supreme court addressed the case on the merits without anyone  arguing or having a problem with the fact that it was brought under this statute and the other thing i would point to is we cited a master for a different reason which is this idea that you don't have to have the defendant being named that's a missouri supreme court case that said that the defendant is not an indispensable party and in this kind of action under three hundred and seventy nine thousand two hundred i would cite that as an example of a liberal construction of that particular statute even though it's not exactly on point in terms of the issue that you raised this we've questioned the meaning of that in glover haven't we in whether or not the missouri court i'd put it delicately really meant what they were saying there whether it would apply applied more broadly let's put it that way yes that's right your honor the court did question the love of her but it was not an ultimate holding it was it was dicta in a case that was decided on another basis  and two points on that i would say you know st of all ultimately this court's guide in determining missouri law is what the missouri supreme court has said and while in mazda it was a procedural issue which is which glover points out the mazzer court felt like it had to determine the substance in order to determine whether it was ok to raise the issue for the st time on appeal and so they actually go through the analysis and determine that the that the insured is a defendant is not an indispensable party so that's the best an have but i think the larger point is the district court should have never gotten there you know the district court should have done exactly what the eastern district did in flamming which was to look at the parties and see what we have is a case without subject matter jurisdiction there it's based on this missouri statute that may or may not be properly filed but instead of doing what the district court did in essential a fixing what what the district court saw as a problem the court only had jurisdiction to remain at that point because the case as filed there was no jurisdiction and then the question of how that missouri statute should be applied is ultimately a question of missouri law that the missouri court should decide and that is on jurisdiction is the group date of flux case from the u s supreme and the reason that case is important is that it reaffirms the time of filing prince there was some question about whether another case called caterpillar head of vista rated this idea that the time of file filing principle is sort of the guiding principle for all of these subject matter jurisdiction decisions and what group data flux says is no all caterpillar did was apply the one and only exception we have which is if you dismiss a part then that is a proper way to create subject matter jurisdiction but that remains the only way so if we look at this case we agree with us on whether it was a direct action which which you should based on missouri precedent that there was no jurisdiction at the time of filing so then the question is can it be created in the way that the district court created it by severing it and realigning the park the insurance company liberty because they are viewed as a missouri resident under that statute if it is a direct action and so then under grupo data flux the only exception to a case that is filed without jurisdiction the only way to create it is to dismiss somebody and if you look at the district court's order the order is very clear that no one is being dismissed the court explicitly says that no one is being dismissed and says that it is severing the action and creating these two distinct cases and realizing the parties doing all of those things i'm going to just do the limited time i'm going to quickly jump to the contract issue because we do think the clear is if the court takes jurisdiction the clearest basis for reversal would be that the contract exclusion does not and there's one point that we didn't make in the briefing that i think that i think is really important with the katie they have st of all there's a case called markey from the kansas supreme court and everybody agrees that kansas law applies substantive issues and in mark e the court basically says that if there is an insurance exclusion for a particular type of claim it has to exactly match the claim that is the basis for potential coverage here the claim for which we sought coverage is a breach of fiduciary duty and there is no exclusion for breach of fiduciary duty but the district court case in two thousand and nine just federal district of kansas called continental casually that we cited that really an act that and and and determined whether markey was limited to automobile situations or whether it applied to all insurance exclusion s and what you ask goes right to the point i was getting to with regard to katie which is something that i had missed in the brief but wanted to say here in the key in the katie case when they are discussing mark he they say the marquis court felt compelled to reject the majority view because of rules governing the interpretation of exclusions in insurance contracts so katie was limiting marcie to exclusions and insurance contracts not to a particular type of exclusions but all exclusions that's on page ninety seven for the pacific reporter and that's exactly what we have here is an exclusion that does not apply because it does not match the underlying cause of action and i'm under three decision which we put into our rule twenty eight dollars letter came down after our brief what it recognized is that circuit courts have uniformly found that direct actions are those types of actions where you either determine gateway decision from the th circuit that came down this year what it it recognized this sprinkling of cases and it specifically referred to right to get and it mentally that sprinkling rain seems to be a little heavier missouri than it may be in other jurisdictions however what the gateway says about the grass is exactly on point it's just wrong they collapsed a step of good in judgment with the step of collecting a judgment and it's exactly that st step of getting the judgment st or getting it within the action that creates the direct action as contemplated by one thousand three hundred and thirty two c and what all of those circuits have held uniformly allowed you to skip suing the insured in a car accident case and simply sue the insurance company in those cases the fall those were essentially negligence cases or the fault of the insured would be determined so in one thousand nine hundred and sixty four congress and thirty two dollars c as a direct response to those types of statutes so every circuit court decision including this court that has looked at this issue in different contexts like workers comp claims directly insurers st party claims against insurers bad faith claims against chairs every circuit court that has looked at this has determined that the key is if the fault of the insured is determined and that action then it's a direct action at the fault of the insured is not determined in that action and is not a direct action but ultimately none of this actually matters what direct action no one they didn't plead it so the court could certainly exercise jurisdiction by finding that there was no way quibble garnishment going that was made however what the problems have never explained is you have two separate claims you have the contract and bad faith claim brought by the insurers and then you have this purported separate equitable garnishment appellants have never explained why the court simply couldn't separate those as it did and then exercise jurisdiction over that part of the case that it had jurisdiction over even if the equitable garnishment case is a direct action so there's no doubt that there was jurisdiction over the case we have before us once you sever out the other case and they've without explanation without a case cite their claim is that this direct imputes missouri citizenship to liberty insurance for not only the equitable garnishment claim but also for the contract in bad faith claim and there's absolutely zero case law that would support that this however the fact that there were other options potentially available to the district court is irrelevant the question is whether or not they could the court could do what it did in the answer is of course it can't so what the court recognized that the fleming court did not recognize is that because of the way the action was played because they named the insured as a plaintiff and not a defendant if the case were mandate to state court and the state court determined that the insured should be  that doesn't mean anything because it was a raise and it wasn't but on its face the statute says that it applies to property damage of bodily injury money damages are consistently in the state of missouri not considered to be property so how this jurisdiction over the entire case and so that being the case it could obviously sever do whatever it wanted to with both sides of the case and i also think inherent in in the district court's order is that  believed that this was not a direct action or and or believe that it that direct action imputation of citizenship didn't apply to the claims brought by the i'm sure that wasn't the holding though was it was it wasn't but if you if you i guess look kind of past the holding if if if the court believed that it was a direction action and that liberty insurance was a missouri citizen or both half of the case then it would be a local defendant and it can't be so and that's what happened in prendergast there wasn't it wasn't that there was a lack of diversity between the parties it was that once you have the imputation of missouri citizenship you become a local defendant you can't  court had believed that this was a direct action and somehow that direct action applied to two separate and distinct claims that had been brought together it would have had to remain that because you know had a local defend so i think inherent in that order is the court recognized two things one is they pled or wrong and to correct that mr warrender you had to separate them and two is not a direct action but again i think it comes down to simply  court exercised appropriate jurisdiction and discretion remembered rule twenty one dollars severance the court has almost unlimited discretion to do it when it believes it to be appropriate and we get you know the it's much simpler just simply say it's not a direct action obviously has either is or it isn't obviously we believe it's not but once you get to the rule twenty one dollars i mean even if you had a non diverse party on a portion of the case the court could do exactly what it did mean that the understood had known what the citizenship of the trust us so again we go back to if the court waited for the citizenship of the trust obviously the court did not believe that the direct action imputation of citizenship mattered because it would have had a basis to remain so kind of in some here that their whole argument is premised on look at another court did it differently another court exercised its jurisdiction differently that does not mean the court couldn't do what it did well here the dis court recognized is the court has an obligation to look through the pleading and reorganize parties as their true waitress lie and on its face they claimed it was an equitable garnishment quite the court didn't recognize it as such but to line it had to add the insurance as a defendant in the action so it is it is a correction of a missed jointer that allows those two suits to actually be brought because they can't really be brought together the way they played it and have been sure to be plaintive and they defended they could have simply named the insurance is it abundant and then had the insurance been across claim against liberty charan's and if that had occurred none of this would would be here on this particular case but they didn't do that so they chose for whatever strategic reason to name the insured as a plaintiff and that's what created the jurisdiction so just addressing the merits here and the time i have remaining there's two arguments here is that they've now focused on the but do shiri coverage but the that whole claim is premised on their contention that the definition of a plan under the policy is very broad however the definition of a prep the plan of the policies actually extremely limited while various types of benefits could fall under the definition of a plan those plans must be solely for the benefit of the employees of the company so even though there may be multiple kinds of plans that fall under that definition they are all limited by their purpose a purpose must be solely for the benefit of the employees in this case the record is one hundred percent clear that the the beneficiaries of that shareholder agreement of the buy sell and the life insurance distribution the beneficiary of that agreement was the trust it was the trust that held the stock it wasn't an employee the two the two beneficiaries of the plan as they call it the succession plan was the company because it allowed it to to retain the stock as a closely held company  and it but it's also the shareholders those are the beneficiaries of it it's not the employees so they argue while the officers are also employees while that may be true as as the plan is as the policy is define plan it has to be solely for the benefit of the employees so the fact that we know that the entire purpose of the insurance payout was to pay the shareholder trust  for the stock that that trust held we know it's not solely for the benefit of the employees and the trust that held the stock and elizabeth cady who was the beneficiary of it neither one of those employed or carson cage were acting as fiduciary of a plan the the judgment against all russell was soley for his position as an officer of the company and basically diverting these funds that were intended to go to the single fact that was filed a judgment there's a zero evidence of it and they have the burden to show that they fall under the fiduciary cover on the contractual exclusion i'll say in my remaining time a marquee doesn't say i think mr davis referred to as mark he says that the exclusion and the cause of action must exactly match it says nothing like that clearly you can contract around marcie this case a subsequent to it that  that occurred here so when you combine the definition of claim with the definition of arising out of based on claim means a legal action by me and it doesn't mean a cause of action so collectively when you read that in the definition it refers to anything or any lawsuit that arises out of breach of contract so regardless of the applicability of marquis whether it's good law bad law should be ignored it doesn't matter please the court first i want to address the question of direct action and this question of whether an action for money damages damage to property and i think the key point here as it relates to jurisdiction is that it is a direct action and then this there is a separate merits question as to whether that direct action can recover for the loss of money but numerous missouri supreme court cases a case in this court have described an action brought in these circumstances against an insurer to recover damages from an underlying action without naming the insured as a defendant have been all this direct actions and what that what what the appellee are trying to say now is that this is an instance of fraudulent jointer but that's simply not the case regardless of how your honors read the statute jointer is a doctor and where an additional defendant added in order to defeat diversity here there is only one defendant so if this if the merits of the claim were a basis to deny jurisdiction every case could be removed a defendant c here's my notice of removal and now here's my told b six motion there is no valid claim against me that is not what the doctrine of fraudulent jointer is so this is not a jurisdictional issue at all in terms of what the statute says this court should do exactly what the fleming court did and say there is no jurisdiction at the time of filing there are doubtful questions about the interpretation of this statue we are going to send it back to the missouri state court and so the state court can apply this doctrine of missouri  law counsel for liberty stated that we were asking this court to be an outlier it is not what we are asking this court to do we are asking this court to apply the decisions of the missouri supreme court on missouri law as this court is obligated to do and last point i'll hit is with regard to rule twenty one counsel is saying that there is virtually unlimited jurisdiction and i would agree with that in cases where there is already jurisdiction once there is already jurisdiction yes the court has unlimited jurisdiction to to sever cases but our point is that there never was jurisdiction and that rule twenty one has never by any federal court been held to be a valid way to create jurisdiction and for that i say the raven ravenswood case is discussed in our brief from the th circuit and they explain and the case with very similar facts or at least procedural history why career doing exactly what the district