who committed a misrepresentation to get away with this howard let me ask you this knew you were talking about policies individual policies and so it seems a stretch to say that a misrepresentation as to an earlier how the scene should be allowed to avoid a future policy where there is no misrepresentation made as to the pyramid of that policy in two thousand and eight s to wish there had been a misrepresentation that was the contents of the two thousand and nine policy which was the renewal at no misrepresentation the claim was made in two thousand and nine when it's a confused analysis of that case is say that you can't go back to a prior misrepresented yes because what the court held was there was no misrepresentation because the question on the original application said in the last five years as any member of the law firm did kara claim against any member of the law for the answer was no but they presented a lawsuit which had been there was a lawsuit which had been firm was dismissed as a result of intentional misconduct toward the court and failure to pay a five thousand dollars fine the answer on that renewal application was a misrepresentation a reasonable lawyer who has his client's case dismissed because he refused to pay the five thousand dollars fine against the sure to an order that said if the fine is not paid on the first day of probe the case will be dismissed with prejudice his certainly aware of it attentional claim when he doesn't pay the fine the suit is dismissed it's very sneaky to new to represent that person now even though the lawsuit was dismissed last year was dismissed they no longer represented that person fact and even according to the lawsuit filed against bruce c wasn't disclosed that policy was renewed but on the two thousand and ten we knew all application there was a question fifteen any member of the firm subject to disciplinary complaints grievances requests for renewed even though the complaint with the indiana supreme court commission was not reported this goes on march two thousand and eleven the renewal for the eleven twelve policy years none of the things wasn't discovered but because it wasn't a misrepresentation so the fact that there was a non disclosure in two thousand eight of something i guess be unusual fuck should have been the policy gets renewed or no nine a lawsuit filed and all ni and then they look back it was not because of it i mean it was because there had been no misrepresentation because the court was of them on who lawsuit question about whether any claims made in the last five years did not include lawsuit so there was no misrepresentation now we don't want a decision from this court that would act as a signal to applicants that they can live on an application and secure coverage which they may not have otherwise or the one year limitation in section one fifty four talks about policies in section one forty three point thirteen of the insurance co it's not a professional liability policy that's an auto policy or a  homeowner's policy or a personal or family related doesn't apply to business as i said this course no stranger to that provision because it decided standard neutral versus lay percent of neutral versus john's where people decided when they asked the answer to question about who lives with you they forgot they had two kids and one of the kids totals the car but it was too late to bring the recession super's the policy had been renewed in fact i was told you're making the argument in the wrong for make it immediately after the renewal policy which issues such that the recession suit could be brought the policies would be gone the fact it was illinois permits close claim under right it doesn't happen that it happens when a lawsuit comes in over the cars and their clients bruce little and his wife and their trust were assessed was a piece of sanctions and penalties by the federal district judge it began as a third party complaint in federal court by the settles against the for the imposition of attorney's fees as a sanction you can slice right through it cast it as it is it is a transparent attempt to plead into coverage this is a concept which is endemic to the practice of insurance coverage happened here at the time the suit was filed in st clair county with this to close your judgement we citizens who have been on file for more than a year or two here in the spring through this court dealt with the concept of transparent attempt to put in the coverage in farmers vs downer justice nec you were on that panel with the justice attorney who wrote the opinion justice hope wrong reason decided to sack with the fact is  you can file a lawsuit take a position the insurance company biles the coverage to suit based on that position see their position and then a man as if you and he the farmers cases that is an amazing example of that that is a suit where kids are playing ball the father goes on to somebody's property the owner of that property decides i don't want these people on my land so he jumps into his pickup truck driv down the lane at a great rate of speed and runs into the man standing between the front of the pickup truck and a fence knocks him down with the truck then gets out of his truck goes to the back and gets a golf club and beats the guy public policy it's like allowing a week to buy insurance so that when he's caught the insurance company can pay for the property the thief stole you can do it no insurance carrier should act as a surety when a party and his lawyers filed su which should not have seen the light of day the civil suit from the cars liquidated damages are already assessed the sanctions and penalties in the federal court and seek reimbursement of those sanctions there is no coverage for sa alleging is the transparent attempt to plead into coverage here if they took those words out and all they said were seeking recovery of two point one five nine million dollars when you're honest i think what unanimously said all they want to be reimbursed by an insurance company for the sanctions and against them in the federal district court we're not going to allow that so there were they were aware of our position because our position had been on file for significant amount of time before they refile that third party complaint as a last that's where the court looks to the totality they look at you have to look to the pleadings that led to the entry of that judgment and there's another the other reason is that we're dealing with the claims made and recorded policy for there to be coverage under that policy the claim must be made against the insured and the insured must report it to the insurance company in the same policy period for so it's not made and reported in the same policy period so for those reasons we're suggesting to the court that there is no duty to defend if the policies aren't we send it then you have to go to the duty to defend the civil suit we suggest there is  harris let me start with the last argument was made by a few and that is that the lawsuit by the settles is actually a suit for indemnity there's really just absolutely nothing to that argument they found there is that the sales federal complaint had the word damaging in a footnote and they they grabbed on to that there is nothing in any of the pleadings that suggest that's what they're asking for mr chambers argued that this settle this lawsuit that was brought by them says in explicit language over and over and over that the lawsuit is based upon the professional duty that was owed by cars to the settles says it three or four paragraphs she orders the studio good care pressure found a qualified breach that duty and as a result we separate these damages and that's the issue here every first year law school understands the difference between liability and damages liability is what we're really talking about here what is the liability that are imposed against the cars it's for professional negligence there is no other way to read this they're saying settle said in their lawsuit you had an them because of my bad ass that's what damages are i'm out practice case what my clients suffer in this instance it's very clear what they suffered the signals suffered in a war of two million dollars or whatever it is based upon the shifting provision in the contract that was in the underlying lawsuit that had nothing to do with indemnity it had to do with if you lose this lawsuit for me this was a contract case if you lose this lawsuit against me i'm going to get hit with attorney's fees you shruti that i lost this lawsuit against me i got it for a fee shifting it wasn't penalties m that the amount of money that was that this settles were hit with was not a violation of a duty of the court or not sanctions violation of the duty set forth in that contract that conflict that was the heart of that lawsuit was scuse me if you lose you'll pay my fees so that it's not sanctions it's rule federal rule fifty four award of fees so the damages are the proximate result the amount practice it's not indemnity nowhere is an indemnity is a measure of damages is what the defendant got hammered for because of them our practice of the cars that's all it is that's why you buy insurance is to be protected from exactly that now going back to the first argument that we've made it's clear from the briefs and now it's more clear from from mr chambers argument that this whole appeal is really they want to second chance  chance to litigate that same issue broached was nothing magical gross was based upon two things it was based upon section one if you will for the insurance co it was based upon contract that issue it was not it was not some common law judge created area of law it was based upon a statute and a contract and there really was no other way to decide that case and i will point out by the way  that aside one of the arguments or one of the comments that your honor made was that you know these are separate policies mr chambers makes the classic his words were it's a continuum of coverage was the phrase he uses the policy that in two thousand and eight is the same as the policy issued in two thousand and thirteen it's a continuum that's just wrong it's completely wrong and b in fact if it was true i would have used that argument not in one hundred cases i would gone back and use the policy language from the policy i had by five years ago because i like that better than the policy i got today and so i'll be continuing coverage every policy stands alone as we all know have car insurance and house insurance  policies change that declarations paid changes the premiums change what is covered and not covered changes the policy evolves over time each policy on every given year is a new policy best way to analyze that is let's assume that the cars have been insured by pekin or by somebody else or pearl and they decided in two thousand and twelve to come to us be am and say i went to church they would have gotten the exact same application and that application using their own words they wrote it says are you aware of any claims in the last twelve months cars would have said no they would have gotten the insurance it's a unique distinct policy the fact that if they had been sued back in two thousand and eight and had lived to pearl is irrelevant to this policy they stand alone in the end bros didn't create new law books just did what is perfectly logical first they look at section one fifty four and say the legislature recognized that insurance companies have a propensity to raise small minor or weird defenses to policies and then completely void them you can't do that anymore you have to file the statute and then just as importantly it looks that the the the contract that was drafted by the insurance company that said it has a look back period it doesn't say in the application have sued have you ever lost your license it says if you had been sued or lost your license in one year they could change that very easily the application could be different it's not so therefore brooks was properly decided so and they  ten and two thousand and eleven is when that federal court down in kentucky finally ruled on the motions for the sanctions against attorney for violation of the right work yes so it was after that day that remember here's what if i can answer your question i think what i think you're asking the four things that i used to be a says should have put us on notice are the dismiss all of the other cases that that guys be a mutual has been involved in on this issue of had you lied in your application you should have known you had a claim in every one of those other cases what is at issue is what did the we don't even have that here there is not one single piece of evidence of a correspondence or a phone call or a memo between the client and rex or bruce carr saying i think you screwed this up in fact the testimony the only evidence you have is the deposition of mr settle who said you know what i thought they were doing a great job up until june of two thousand and twelve when i filed a lawsuit against him this is a completely there is no other case out there where an insurance company amount parts insurance company says the lawyer should have known that a claim had been made or was going to be made against him based upon extr circumstantial evidence every other case is analyzing the words impoundments made by the actual client to his lawyer one case we're going to go to war second cases i want my filing to take it to another lawyer of course of trying to figure out is that enough for a reasonable lawyer to say oh man you're going to get sued i get that there's an issue there we're not even there at no point after up until they filed a lawsuit that this federal say we're coming after you so what they're asking this court to do is to impose on the lawyers the burden of looking at a loss or a result in a case  deciding man i may have screwed that up or why that didn't turn out the way it should have i wonder if it was my malpractise or i wonder if the clients matter that is an unreasonable bird i have no idea you know i i representing a client yeah you lose cases it happens when does it become a loss that you think has to be reported it doesn't in my opinion and till the client says i've got a claim against you well does that mean the cases that you discuss also suggest that that's the only way the warrior could know what this client dissatisfaction the only  that's the only test that's ever been in any of the reported cases there's no one reported cases case where the court looks at it and goes you should have known just from experience or badness that it always was the client firm enough and his statement so you screwed up that's that's already there is never a case that says you should have known just because you're a lawyer you should've known in your own heart that you screwed that case up there isn't one like that and there can't be one  the statute of limitations if the client's not smart enough to know that that was the cause of them not having to go to court or if the client chooses for whatever reason i'm letting that one go and that happens we've got there's all kinds of reports case i wish i could cite them to you where the client says yeah that was a flier i knew it was a flyer i didn't think it was a good case we lost the possession limitations we're done i'm out yeah that matters that has to be some indication from the client that i'm going to sue you i want i want i don't i don't disagree i'm just inquiring whether there's anything else i don't think is the client dissatisfaction yeah because that's what insurance is i'm not insuring against my screw ups i'm sure against being sued for my screw ups that's a big difference i don't have insurance for just making a mistake  they're asking only are subjective so how can it just be based on the klein well it's a subject like you're seeking the lawyers opinion on have you done something that may give someone a claim against you right someone to claim against you it's based upon do you believe that person is going to claim it's not did you make the mistake and i think that's the big difference i'm saying i know i lost the case maybe i lost a case because i really did screw something up but the client doesn't know ok that happens do i think that's something i need to disclose no i'm not go sued i know i'm not going to get sued even though i screwed up i know i'm not going to does it lead to something that i thought i could get i think it's asking for lawyers and i think this is a perfect example and i understand i did it because i'm a lawyer i got sure if i could get it but i don't like to say why these cases all the time but you know if you're a litigation you lose cases and when you side it's a hard loss it's statute of limitations and that's pretty clear you're saying that there would be no obligation to report that there's a potential someone having a potential claim against you i think that's absolutely true because there are many scenarios where you would blow the statue of limitations that doesn't necessarily mean you're going to get sued doesn't back doesn't at all mean you're going to is that what they're asking are you going to get sued or are they asking are you potentially who want to it's now they're asking do you believe that you're going to get sued that's it so you have the potential parties do you believe that you're going to get sued it's subjective but i keep thinking of the client that sits for six months and doesn't talks to their family and says you know i had this case and i thought it was a good one and i hired this guy and something happened to i just feel uncomfortable and the client or the nuclear family lawyer looks at it  i know very little about litigation but i know that there was a statute of limitations in your your your lawsuit being filed and then the insurance company asks as they did here should you have it should you sued even though you haven't heard in the client yes i think there are certain situations where absolutely you can make a decision i disclose this even though the client has a contract so perhaps you know absolute black and white i just blew the statue limitations yet maybe you have to but i think there are a lot of cases where you blow the stage limitations where it's not clear that you're going to get sued if the client brings a complaint to you you know the day before the station limitations and you bust your hand and you can't get it that's not my practice you just blew it so i don't think it's a bright line either way but i think there are scenarios where yeah even if you haven't heard from the client maybe that is close what we have here is not that what we have here is a situation where they took up a very difficult case everybody concedes the depositions are clear everybody knew this is a tough case in fact that positions will show that the current firm retained a separate law lawsuit tough case they lost it and they lost it the judge was very critical of them but based upon the totality of the relationship between that settles what they knew before the lawsuit was filed and what they knew when they lost it the cars were absolutely entitled to believe there's no lawsuit here there's no practice here there's not to be a claim against the sales and it is i think it has to be conclusive on this issue that the settlers themselves said i didn't seem out of practice here in till a month before on the last year in two thousand and twelve that hasim means something that they believe that they are they understood this was a tough case they understood the cars were going on all of them they understood that if they lose they're going to get nailed for attorneys fees those things all happen that doesn't mean that there was something that you could be reporting  if you are ultra cautious and you disclose things that a new year position you you might not need to disclose but you want to be transparent that's going to change your the issu absolutely happens that the insurance companies take the position that whatever you disclose of it half f x you're insurability here if it's a frivolous claim even if you shouldn't even tell me about it right the fact that i know it fact that this little nickel dime small claims case went south they're going to either raise my rates they're going to increase my deductible or they're going to refuse to issue the policy don't you want to make that decision and that the kicker is to answer your question  is within the complete control of the insurance company if they want to make it such that you have to disclose every nickel dime problem on your application they should make it that way they should part of the reason you don't disclose the nickel dime is because because the page two thousand and seventeen and you report that you blew the statute of limitations in a case that got dismissed may ninth two thousand and seventeen if your policy is removed and you're sued next year you're covered that's why you report potential claims just the white west about yes you report on a policy applies to a claim which is a demand for money or services or the filing of a suit or arbitration it is also an incident or circumstance of which the insured has knowledge that may result in a demand against the insurer that seeks damages arising out of a wrongful laugh so if you think about it you should be smarter than your dismissed you have a bit of a claim but if you don't tell the insurance company about a potential claim now then when you're sued next year there is no coverage that's why you report a claim for what the insurance company does and i think you'd see it it's almost my old it to think that just because you report a potential claim that has an impact on premium deductible or whatever it doesn't what it does you already have a policy and you talk about oh wait dismissal that was actually indiana and that order said court grants and it's a big sixteen of our open group the court rooms of the defense motion to dismiss due to the ication from the cars against the court rule fifty four awards here indemnification for two point one five nine million dollars it's not  board under a federal rule fifty four we talked about books adams and drew this is not a second bite this court's not bound by what the first district decided in fact the other divisions five other divisions in the first district are bound