an insurance contract and it's controlled by the legislature because the legislature as made an insurance contract different than a regular contract and under this case the insurance company was under an didn't do that you found your your your action and they counter claim the claim material misrepresentation and if you want to address the issue of whether that's forfeit if you can do that at this point right to claim that it is voidable well under the statute they did because under the statutes they have to use the act the precisions promptly they didn't do it under one fifty five of the insurance co to one fifty six of the insurance co that's an obligation of duty they have a right to go to court and ask for a recession they can throw the burden on the insured but wish to his you know that the case law is fairly clear that when there's a duty to defend the insurance company hasn't had a specific application such as filing a complaint or depending on your reservation of rights or if they don't do so but the case law isn't as clear as we would like as far as when they watch rescind do they have to file a complaint immediately well i don't think the case law is clear but i certainly understand your position so i'm this later question when they filed a counter claim what here or if it's six months it has to be done within the six months they didn't do that so isn't the question really at this point whether sending the wedding which clearly was done with in that time frame is actually filing a lawsuit within that period of time is required to matter here is to be a question of first impression in the state of illinois could be however the statute clearly requires  effect what they're doing mr fishman is they're saying that there is material misrepresentation which negates the contract and whether there are correct that there was such a misrepresentation push back issue to the side and day by sending this letter fulfill me obligation of taking some prompt action and i mean other and were they were acquired by a law to take the formal step of filing a lawsuit or a counter claim either of the two within that period of time well in our opinion they were obligated to do so first of all at one fifty five because it's a bad faith that for them to require the insurer to file the lawsuit this was an issue of coverage and if you take a look at the act if if there is an issue of coverage under one fifty five the insurance company has to do something if they force the insurers to file the lawsuit that's a bad faith then it is not a different question than the one i've asked well i mean you agree with me don't you that there is they say it's an equitable remedy and equitable remedy is something that you have to go to court to do it and you cannot just rescind the policy just by saying we don't like it in this case what they do is they throw the entire burden on the insured in under the statute they shouldn't be able to do that because they had a legitimate situation and they will release questioning whether or not my fellow my my client was living in phoenix permanently or was he there to take out a policy and he was dealing with a pos agent that's another issue but the fact of the matter over here was they should have gone to court and the act requires recession if they had but in terms of misrepresentation would you agree that generally those are questions that there is no question is a question of that but in the utan ordinarily in the usual scenario third party don't have that here this is this is a different it arises for different back set pattern and what were we all agree i think everyone does the law is very clear what has to happen in the instance of a duty to defend and d indemnify case this is different this is a claim under contract to even a greater duty in my opinion and that is because as a first party action they have a duty that's the same kind of the media they would have in the third party action except for one thing only dealing with their insurer at this point they're not dealing with a third party and if you're dealing with your insurer you have to give the insured the duty of good faith which would mean that if the law requires and the act says rescission it doesn't say unilateral recession it says recession and if you take a look at the meaning of recession in all the cases it's an equitable remedy while an equitable remedy needs to go into court  who is going to defend me and whose cost this is a situation where at least arguably when that letter saying you from misrepresented something to us is sad there are two possible responses now in the vast majority of cases as in this x factor the response would be i didn't misrepresent anything you still owe me on this policy but there is at least the possibility of somebody saying you know you're right i didn't make the right representation and conceivably i don't have coverage and in those circumstances because there's no lawsuit to defend it's conceivable although not likely that the insured would say there's no reason for a lawsuit because i don't dispute that and that's it least one of the factual distinctions about how this case arises and how it arises in a duty to defend case wouldn't you agree well the duties of defen is it's similar in the sense that the insurance company has to do something to protect its unsure where there's no third party it's only between the insurance company and the insurer and the threat of the burden on the insure making the insurer go to court and file it the cleric torrie when it's the insurance company that should conduct an investigation it's the insurance company that should have done the pullin their work and if they had time to pull a marriage work they never would have filed this lawsuit now was there a letter back from i don't see in the record but was there a letter back to the insurance company at the time they sent the letter saying no we disagree with  you claim that there's been a material misrepresentation and we can test that there was a better than that and the insured call them up and there's it right in their claims file and said i'm not living in in  automobile is in illinois by light drivers licenses in illinois and he and they refused to change their position that's how we got the case we got the case after they refused to pay for the automobile iana was a brand new car and they wanted to walk away from a twenty six thousand dollar risk by just sending a letter out and this unfair for the insurer to be kicked into this and let me just say one thing if the insurance company can do something like that they can get away with it ninety percent of the times because in ninety percent of the times the people who are have a claim now go to a lawyer they'll just take it and they will and the they have to then file a lawsuit i or a lawyer file a lawsuit and go to court in a situation like this we have spent hour after hour after hour on this case story through all the all the facts of the case including the motion for summary judgment and in our opinion let's assume the force as well they can just send a letter out and that's the end of it then it's up to the insurer day and i don't see i don't see where the statute says that a statute says they have to go they have there have to be recession within six months or within a year depending upon the term of the policy meaning the insurance company gets by that burton and they file their counter claim as they did here last year you want to briefly address the issue of who's burden to do this well that's the next question that's why i ask that or the james river case insurer instead of being a defendant in a lawsuit and having to defend the situation he has to prove a negative and that's a no no and that's a very hard hard for him the proof and an expensive b five star laundry you lived in illinois he resided in illinois his wife was in illinois he had a lease in illinois but his business sent him to kowtow to phillips and the p r s agent said rod we couldn't write a policy in phoenix if he was living there so we wrote the policy based upon the fact that he was living in illinois had the insurance company done its work before and this lawsuit was filed it brought out and found out and they don't take an oral statement from him nothing it into an investigation they did nothing they saw a police report and the police report it in the address where he called in the pic i was stolen keeping in mind he was living in phoenix in the in the as the guest house the five star  about damages not yet we never even got to their you know i know ok and we never even reach that point there was a directed verdict and maybe again on this issue there could be some work larry that when the issue comes up about insurability based on a misrepresentation that the burden of proof is on the insurance company to shell that the insured misrepresented their solo we need the cases certainly suggest that it would hildebrand and then be sure we never get to the issue of whether damages were proved and i recognize in your brief do you judge white to that issue right but i think you'd be better spending your time to address those prove the breach of contract action then pursuing to the let's assume this is the breach of contract is i have contract of insurance i didn't get paid when my car was totally destroyed after it was stolen and burned i paid  premiums i didn't accept this premium back i've been damaged substantially because i didn't get the car back i had to keep paying those loan payments for something i didn't even have anymore i couldn't get a new car for months the car was purchased for twenty five thousand and there's thirteen thousand miles on it when it was stolen so let's assume that judge gillespie was wrong there were damages  do you mean we would then have the burden of proving our counter claim that the material misrepresentation was material or was a misrepresentation and then we would have had to prove that he was residing in phoenix how does one ever rescind an insurance policy in illinois if you want to rescind policy because you say there's something wrong how do you normally go about doing it well typically this case is as you noted as a little bit different but typically the insurance company has a right to it's usually a third party claim in which case the duty to defend is broader than the duty to in worse the yes it's a very double policy and it can be that voidable policy can be waived in reaffirmed by the insurer not insured or the insurer has to commit some kind of proactive something in order to effectuate a rescission to put those parties back where they originally work and what the insured has done is they wrote a letter we're sending the policy and return the premium and false decision  that this is this contract is white or white people they have to do something they have to go in to work you don't get it and i'm saying you don't get precision just by the act by saying something which can only be done in the court of ect but we also right but here's the point if you take the position that your letter has not rescinded that why is it your obligation to file  well in mali and they went ahead and rescinded the policy that's where they waited twelve days to notify the insure grounds of misrepresentation must elect to do so promptly after learning of the fraud or misrepresentation months must announce this purpose and must adhere to it and i would submit that a s i has done that they announced their purpose and they've appeared to have any kind of stone counsel said that we least hypothetically where we could rescind the policy send a letter out to the insured and the insured would say oh yeah i had to do what they didn't do that this case did that and so were you know the insurer is contesting your position assumes that we would not have filed a complaint had the plaintiffs not file a complaint well you would have been beyond the period of time to assert that which would be another issue sure and here's the other problem here mr fish alluded to it you're basically can concocting by this theory yet another application for the insured if that is you take a closure because it's no longer your obligation to want to send a simple form letter aren't you i guess and i'm missing a question well i'm sure that the that well let me just state it except you're creating an application that doesn't appear anywhere in the contract where you're basically saying to the to your customers the other part of the contract if we claim that you first you've made a material misrepresentation and that therefore we would be entitled to an equitable remedy imprecision then it is your obligation insur which really doesn't say that an insurance company has just take some steps and real issue here is whether you know whether in this case if this is the case where we should say that false and that it was done with an intent to see the case to say that they've been saying it were ever the burden of this issue is with the insurance company not sure which has ok so what if you if you consider your letter the step sure then you filed a complaint whose burden is with burden is to show misrepresentation it would have been auburn to show the misrepresentation certainly but again we never got to that point because the plainest from the fact she case wasn't established but if you take this from the beginning it was really the insurance company that was claiming misrepresentation so yes the action in the first instance probably should and they are the ones claiming you misrepresented we're not going to pay you so we want to rescind the policy i don't know that the laws clear that we have that as excellent so the statue itself in visions of bird rests clearly on the insurance co when they want to avoid a policy they have to shell the misrepresentation would be can be false and made with an intent to deceive or it can be material to the rest assumed and i think that's the position it has i took is that had he lived in phoenix a size not licensed right in arizona i mean they never would have issued the policy and that was in the first instance court that i didn't make a material misrepresentation is that what you're advocating no he would have to prove his breach of contract claim which includes an but if you only dispense to the breach of contract claim is that he is made a material misrepresentation why does back procedure all the situation relieve you of your