grant the cross motions for summary judgment filed by the executor of the art or don't you state to deny standard banks motion for summary judgment and three deny standard banks motions to reconsider the probate court committed reversible error with regard to guaranty was limited to three hundred thousand dollars and to that even so mr not only was distinguished but sorry discharged from his liability due to what the court called the commercially unreasonable actions of the bank the standard of review is the novo this case is at bottom a contract case the guarantees that mr nardone executed along few sociate of loan documents at issue are the operative documents there are the contracts that this court is to interpret as this court knows guarantor liability is determined from the guarantee contract which courts interpret under general principles of contract interpretation bank of america versus shorts and three or five illinois appellate court third nine forty one first district hundred nine guaranteed contracts must be interpreted in a manner that gives effect to all of the provisions and the court must control construe the contract as a whole as it would in construing any contract has to read each term in light of all of the others the language of the guarantees goblins here and they show clearly why this court should reverse the probate court i'd like to structure my argument by dealing with the astor guarantee first and then the kappa state guarantee i think it'll be easier for the court to follow that way if it pleases the court mr rhodes only was one of three members of an l l c called auster acquisitions astor was a party to two loans from stanford one in two thousand and six one in two thousand and eight the two thousand and six loan was for two million dollars the two thousand and eight loans for four million dollars from time to time the terms of those loans were changed extended additional credit was extended such that by the time mr nardone died in august of two thousand and ten the amount due and owing on the two notes by auster was approximately seven point two million dollars those two loans had the same loan number four zero three three seven  zero zero one at the end so call it loan number one the second had a zero zero two with the end loan number two mr no dummy executed personal guarantees in connection with both loans the key language in those guarantees is identical it said page number c zero one four nine four of the record here's the key the guarantees are absolute and unconditional that's in the first line of the guarantee there are no conditions associated with these guarantees second indebtedness is defined as the principal amount outstanding arising from any and all debts liabilities and obligations of any nature and form that pastor  obligations there is then a section which says that the guarantee is continuing and there's a section called duration of guarantee the duration of guarantee section has language which is important to that language is this guarantee shop b a state as to the indebtedness created both before and after guarantor staff or incapacity regardless of lenders actual notice of guarantees the consolidation of that the consolidation not affect the obligation of the of state on those guarantees and the reason is that the third which will cause a loan number three which was executed about two weeks after the independent executor was appointed in about three and a half months after mr nor dhoni died there is simply a substitution of the two existing notes as of the date that third note was executed which by the way had the same wrong number with zero zero three at the end the amount of indebtedness was approximately seven point one two million dollars that was the amount owed on the two notes the amount of the third mill was that exact amount but it was a consolidation a new country it was not a new members of oster which were mr nardone have dug in and thomas best studious and where there guarantees essentially similar and their terms yes the guarantees were all we're all i think identical they all work i'm limited guarantees and they all contain the language that all of these guarantees have which is that century that the bank does not have any obligation to pursue one guarantor another guarantor the right so on twenty ten alon new guarantees on the twenty ten along with the other two guys if you didn't need them it is common practice at the bank to obtain fresh guarantees even if the old guarantees are still good simply as an acknowledgement by the  just just looking at it you say well wait a sec you know you get a new long and they didn't rely on the terms of the twenty or six of the twenty eight guarantees they didn't have enough confidence that those survived the new long so they went out got a new guarantees you don't have a new guarantee for fearne are gone what i would say to you is that the premise of your question is not supported by the record the concept that the bank didn't have confidence in the earlier guarantees and that's why it went out and got new guarantees what happened here whereas with the loan with the new no executed in two thousand and ten there's a loan package and there's a series of documents that are executed and the guarantees are just routinely in that in that package the repayment terms changed so that's why the new loan was executed so when that new call animal was used to support oh how much was it worth the new collateral  not know but like the other collateral on the other on the bank refused to either give it back to the state or used to set up if there's nothing in the record which suggests that the bank in  loan that the probate court on the initial motion for summary judgment of standard that was denied in the cross motion for summary judgment of the state which was granted found in its order  only in the for you in one nine hundred thirty two first district case commonwealth trust and savings bank vs hard to sixty eight eleven three twenty two and eighteen eighty eight second district case whole national bank of chicago versus government thirty il at five thirty five  death of mr nardone revoked his guarantee but there's lots of law since those cases which says what i had let off my my presentation with and that is that guarantees are to be construed by the language of the contract the intent of the parties will be dictated by what the guarantees say in this case the guarantees that mr nardone executed say explicitly as i mentioned before this guarantee shot by and guarant revoked the guarantee had guarantees with language like that none of them so the question for the court has read is the intent of the guarantee the intent of the guarantee is contained probate judge said beyond the fact that the death revoked again i'm also finding that the execution of the december two thousand and ten note number three was a no facial which relieved the guarantor of his obligations on the first two notes and therefore the auster claim should be denied for that reason as well so by the time the motion to reconsider had been decided now that the probate court had two grounds yes for four finding in favor of the executor no there there is not there just isn't one well there are there are plenty of cases in which there is consideration of whether or not a guarantee out lives versus brokaw in illinois supreme court case from one thousand nine hundred eight and cincinnati insurance company versus leighton seventh circuit case from two thousand and five but there isn't both of those cases are wholly distinguishable from this one in mclean the bank had a guarantee with the guarantors were husband and wife mr and mrs broke off and they guaranteed the debt of their son in his business as the son's debt increased the brokaw's executed new guarantees  last guarantee that to break was executed was for two hundred thousand dollars and the bank requested the execution of a new guarantee for two hundred fifty thousand dollars only mr brokaw signed it this is brokaw didn't sign it the  pursued mrs brokaw and the court found that mrs brokaw was not a party to the to the two hundred fifty thousand dollars guarantee and therefore she could not be liable on it that is not what happened here here's the guarantee of mr remained in place it was never replaced by a later guarantee the claim does not provide a basis for the probate courts holding in favor of the executor but what about cincinnati insurance back ace doesn't support the finding of innovation either the key to that case is language at page eighty eight of the opinion there the seventh circuit distinguish the cincinnati case from two illinois state appellate court cases champagne national bank versus babcock two seventy three document language which is what this court should do as well in babcock the fourth district noted that began to get issue had the following language no release of any person primarily or secondarily liable shall affect the liability of any of the undersigned here rounder inclined the first district noted that the indemnity agreement said that the indemnity for quote shall not be relieved of liability here under by any change addition substitution continuation renewal extension successor or new obligation so what is the language say in these guarantees in the intel in this paragraph a language the language of this guarantee is that indebtedness includes future advances support transactions that renew extended modify refinance consolidate or substitute those debts liabilities or obligations and that's a good note number three wides you could put not number three under virtually any of those descriptions and find that a force within the language of mr nor danis guarantee it could be considered to be a renewal it because be considered to be an extension it be could be considered to be a refinance if you considered to be a consolidation it could be considered to be a substitution those under the guarantee mr nardone side constitute indebtedness that his guarantee guarantees this is not an ovation there the second district noted there were no good news another no and is not in payment of that note the renewal does not extinguish the original that or change the debt the key is no money changed hands when note number three was in august of two thousand and nine mr nardone on behalf of kappa state executed a one million dollar promissory note with standard bank he also executed a commercial guarantee which had substantially the same language as the commercial guarantees we looked at in the  default under any agreement or other instrument binding upon guarantor and do not result in a byelection of any one of regulation or to preorder applicable to guarantor in addition the guarantor in that guarantee waived all rights or defenses based on surety ship or impairment of collateral the contract language guarantee language is that the guarantor waived defenses based on impairment of collateral and that's important for the cap a state loan will get to that moment mr lloyd only also executed two other noteworthy documents a control agreement which gave jackson boulevard capital management a hedge fund in which mr duggan and mr nardone had an interest the authority to herd stock and distribute the proceeds of the stock including dividends to standard and a business loan agreement and you going to hear a lot about the business loan agreement from the counsel for the executor the business loan agreement says in a section called guarantees prior to dispersement of any loan proceeds the ball cap the state has to front of it was to sorry i'm not quoting it but under the  apologize under the carriage he section the power kappa state was to frodo executed guarantees of the loans by nardone in an unlimited amount but still this in the amount of seven hundred thousand dollars and diving in the amount of seven hundred thousand dollars so what you is you really have a conflict in the documents the guarantee of mr dove mr nardone says that his guarantee is absolute and unconditional the business loan agreement says that standard will not disperse the loan proceeds until it receives the three guarantees that dug into the studious and nardone guarantees and why is that a conflict it's a conflict because as you know mr dug of contribution from mr duggan and therefore his guarantee was limited to only three hundred thousand dollars and the probate court came up with that figure by taking the one million dollars in the note which was guaranteed by mr  reducing the seven hundred thousand dollars reduce it by the seven hundred thousand dollars of the dugan guarantee that the bank never received as you know courts are supposed to try and harmonize provisions of documents even if they may be in conflict can this court harmonize the language of the business loan agreement that the loan is conditioned on the of to on obtaining the three guarantees and the language of the guarantee which says that the guarantee is absolute and unconditional yes it can and because it can it should the way that the court can harmonize the those provisions is by fighting the provision of the business loan agreement  take the position in their papers that there's no genuine disputed material fact in trial court say sorry we're having a trial is that something that could happen here or should happen here what i would say to you is there are lots of facts which these parties dispute and the banks position is that remain would be appropriate in this case if the court finds that that's what should happen now with regard to the commercial and reasonable business that's a little different argument than the three right to what your honor is saying jackson capital was a hedge fund it own positions in multiple companies that don't have a stake in jackson in early two thousand and eleven or late two thousand and ten jackson capital was shutting down jackson capital was holding positions in certain companies which belonged to mr nardone but for which standard at the control of agreement and the control agreement said that standard was entitled to any dividends or other distributions relating to those stocks when jackson shut down because it had the control agreement that sent the stock to standard and standard said you know what this stock is still titled in mr nardelli as a name it doesn't do us any good because if there are any distributions made because jackson doesn't exist anymore and the control agreement doesn't apply anymore if they're in  dividends or distributions they're to go to mr nardone to the estate and so standard took an action that is entitle to take under the loan documents and that is it sent them back to jackson and said hey before you shut down we title b s in standards name and it did it and they did now here's what's important that the probate court completely ignored the two companies that are at issue here national bank shares and e were privately held companies and they were privately held companies with no market how do you know that it's wife and it says you are receiving shares in stock of no to both positions national bank shares and e p a we assume both positions will be liquid in the next eighteen months these were not stocks for which there was a market so the executors position that standard acted commercially unreasonably and holding these and refusing to give them up is bill wide by the record there is nothing in the record before this court it really is sort of like that is sort of a question of fact i would agree with you on that but there is nothing in the record because the most surprising that  and wait until there's a market for one of the companies which though this is not in the record it turns out there was later because national bank shares went public now that's not in the record because that happened after the decision of the pro but i'll just tell you and this well you know back question i might have to stop you there ok on the record i don't think that's very fair enough but what the bank should have done is exactly what it did hurt the stop until there's a market for it and then liquidate it which it did the bank is still holding the e p a shares because there is no market for that doesn't have a national  two hundred fifty thousand dollars should stand and then with regard to cap a state the court should find number one the guarantee was not limited to three hundred thousand dollars and i will come back to that on rebuttal and want to flesh that out a little bit more and number two that there was no commercially unreasonable behavior on the part of the bank so  a state claim should also stand thank you thank you what he testified to there was no testimony that any of these stocks were of no work and quite simply it would make no sense for a commercial bank to secure alon stocks to us we will negotiate oh we'll try and sell them because we want the stocks applied to that now at that point that that happened in march of two thousand and one what happened is that  possession was a standard bank they got the control and what did they do with them they took the sas notwithstanding the executors request to try to stop the stocks to buy that and they put it in the fall so they had title applicable law it was our position that once a bank takes possession in five especially the situation like this they have to do something with it then they can sell them they can sell it apply it to the fish and  case that that situation dealt with you know the same situation the language of you know this is condition did not appear specifically in the undisputed testimony from kevin boyle that th three members of austria it's undisputed that the three members each signed personal guarantees with respect to this long i bet it's also undisputed that convey from time to time would enter into change in terms of agreement with the powers w they would a very from time to time the terms of the law now as of the december fifth two thousand and ten according to the record of the lok at the the balance at that time was about three point one million dollars with respect to long which is a separate line that dealt with a new infusion of money that was signed in may of two thousand and eight and it's also one disputed that three members of oster  note was signed by the three members of oscar and it also included a change in germany which specifically change that separate long now according to the long history as of december fifth two thousand and eight the amount it was about three point one acting as executor at that time in the record there is a document this is this was a decision that standard bank made if there are commercial back if they make decisions like this they and they have made decisions like this for decades what they did is that they went t which is again a supreme court case in the cincinnati it's in the mclean case which was a supreme court case count you know a council already went over the facts but what the supreme court considered when he was he was aware of and in this situation these cases quite clearly say that the that this new obligation in this case long dream was a separate new obligation with the whole adderall and what i'd like to do on rebuttal is address the auster case the auster claim first since we seem to be going in that order and then the kappa state claim with regard to australians have a couple of comments number one counsel for the executor stood here and said this was a new all new loan said it over and over he did not address the fact that the principal amount due on loans one and two and the principal amount due on loan three was identical and also did not address the fact that no money moved simply taking the two old loans and replacing them with a new one this wasn't a fresh loan there was no fresh money that went to auster there was no capitalization that happened here this was simply taking t documents and turning them into one second if you raise the issue of where does the probate status the probate estate close where does a probate estate cut off that's it that argument should be rejected by the court in any state whether it's a pro estate a bankruptcy estate or any other kind of a state there's a claim process and claimants file claims just like standard did in this case in february of two thousand and eleven it filed two claims in the nardone a state that's the value of the that's the claim that is to be liquidated and that's the claim to which the independent executor objected the concept that you can't close a probate estate while you've got claims outstanding is we believe a red herring it's pretty straightforward when the claim is filed the claim is to be fixed based on what's filed and that's how the the probate estate would pay out well but how would that work with a guaranteed because a guarantee isn't a claim as if it's that doesn't become a claim until until they foreclose on for five years on this loan i think those just stay at the bank needs to file a claim within the prescribed claim period as it did here and that's the amount of the bank's claim as of the date that the claims are cut off and that's the we're we're not we're not trying to i'm eating yeah point is that you might call it a claim but it's not due and owing it it's just a guarantee hey let's say you extend the loan for five years and you're saying that the cap a state i took a look at the two cases that were cited there's nothing in those cases with regard to the language of the guarantees i think counsel indicated he thought there was i was both listening to him and reading the cases but i believe there's nothing there that's the state bank of the small the case of the mt prospects the state bank case in addition i think the court should be troubled by the argument that the independent executors making that this third guarantee the guarantee of mr duggan was a significant issue to mr nardone mr nardone was the president of kappa state had the state was borrowing million dollars cap a state took the money this is not like state moline where you've got thirteen the limited partners and twelve of them signed in the thirteenth doesn't this isn't right now prospect statement where they're i think ninety six guarantors this is one guarantor and this guy is the president of the company that loan was was dispersed a year before he died should be able to play gotcha with a million dollars if if you take the money and you sign the guarantee the expectation should be that you're on the hook for that guarantee and even the trial cou that the guarantee was valid the trial court just found that it should be reduced which we think it should finally there is a case that cited the f d i c versus no new look ace which is in the briefs but i did want to bring it to the court's attention with regard to the three guarantor issue in that case the court found that that the bank could waive waive the obtaining the third guaranty and with that thank you very much for your time we hope that you