or the next case intelligent digital systems versus beasley insurance may please the court my name is ira levine and i represent the appellant's in this action the district court made fundamental errors in contract and document interpretation when it decided the various motions below particularly the initial motion which was in which they improperly which the district court improperly converted a police twelve b six motion into a motion for summary judgment and found that the insured verses in short exclusion when it found that inversion the problem or the commit ruling i'm sorry was the conversion from a motion to the smith's to summary judgment the problem or was that the ultimate conclusions in this particular case your honor it was both but why would it matter at this point after trial up on appeal whether it was a twelve b six or whether it was converted to it is  it is it was an error in the procedure but who's also in error in the substance because the court below overlooked well settled principles of law which for which hold that the insured vs insured exclusion does not apply to individual claims brought by claimants in their in their individual well settled law in this particular case princeton university vers national union fire insurance where in the clause the insured for vs insured clause in that case have some limiting language would doesn't exist in our case it had some limited language but the law any limiting language in this case in the clause in this case a no no there no there was not however the appellate division when it decided the case stated stated clearly that it rejected the contention that the policies ensured vs insured exclusion apply to claims brought against in the end of against in short entities by individual insurance acting in their individual capacity language here is any claim by iran behalf or at the direction of any of the insureds that's cover that that is correct but any language that says in their capacity as officers and directors in this particular case no there is the language and us to read that language into the clause absence absolutely because the purpose of the the purpose of the insured vs insured exclusion particularly with within the facts of this case the cause of action that accrued by the appellants against the underlying corporation and the individual insureds actually accrued before the alleged arguably collusion here when the other directors agreed to the entry you know more than two million dollars in judgments against them which they knew could be collected though that's not that that is not the collusion would be with the commencement of the litigation why wasn't this why when this qualifies collusion when when they know they can't be touched for those judgments but they're setting it up so that the insurance would have to pay for claims claims the the device of taking non recourse non recourse assignments of claims where where the insured essentially confer a consents to a judgement has never by any court been deem collusive claim and if in fact it was a collusive claim the court did have would have the remedy to either vacate or set aside the claim these types of these types of assignments are routinely given where there is an issue of coverage where where an insurance company decline declines coverage and the issue is then brought by the plaintiff who has the capability and the and the where with all and the imperative to assert the cult to as to challenge as in this case the the the denial of coverage the other the other particular some type of ambiguous phrase and in doing so the court below ignored well settled principles of new york law which following your position as mr ross was not duly elected or appointed that is correct and explain why that your position v the board of visual management systems in july of two thousand and seven expanded its board by by a vote by a vote in which they first expect had a formal expansion from four to five and then appointed upon the newly created vacancy of a of a fifth board member in this particular case as we've pointed out that did not take place there was no expansion zero by law that requires a formal summary vote to increase the number of board members the the b the bible or does it require and makes reference to newly created vacancies so what the bylaws sit what the buy and was states therefore is in the first instance as part of proper corporate governance and if they had one vote that said we're going to create a six they can see and then had an immediate second vote appointing mr ross that would be fine that would be that would have been acceptable motion the motion and i'm paraphrasing is that the motion is made to expand the board and upon the expansion of the of the board to a point i believe mr mole as the fifth director a similar type unitary motion that  that would have that would have solved that issue would have been sufficient in this particular case there wasn't even any any motion like that the motion was simply that in the event the transaction closed and the operative word in the resolution was if then mr then mr ross would be become would become a director and action because the transaction did close there was no indication however there was no corporate resolution there was no testimony or any evidence to suggest from v a m s listed by the appellee as to when the alleged appointment was was in effect and as a matter of fact the record is clear that mr ross strained to find out when his effective date was when he became a director and there was no there was no like to address the first is the primary point made by appellants that they do not believe that the insured vs insured exclusion should apply to mr ross in this case because the claim he brought was not brought in his capacity as we should read that language into the clause correct your honor and the courts respectfully should not read such language into the clause the trustees of princeton university case is very clear in reading both the trial court ruling and then the first department affirmation of the trial court's ruling that in fact the church versus insured exclusion there was quite limited trial court footnoted that this is that the exclusion in that matter was more limited than the ordinary insured vs insured exclusion indian all policies and therefore the first approach the partment when affirming the trial court's rejection of the argument that the clause they are applied to claims brought by individual directors against other individual directors directors it was because the i v i exclusion in that case did not exclude it you respond to the argument that the i v i clause was not intended to address all claims but only the kind of claims where where where they're suing in a capacity and a director officer with the intent of the parties in the insurance agreement is to be construed through ordinary examination of the four corners of the document and the i v i clause in this case makes plain that the parties intended to exclude any claim brought by an insured which was defined as a director an officer which is further defined as a director a director an officer is one who is who was a point was was is or is in the future shall be duly appointed an officer and director of the company in fact if you consider the language here that includes shelby appointed in the future this policy actually intent was intended to the language it was intended to include claims precisely of the sort brought by mr ross here that is when he began negotiating and in this underlying sue as he as is alleged his claims accrued he was intended to be a director and in fact became a director but because you focused on the duly appointed director aspect of this i guess there was a kind of conditional appointment based on the expected merger but the bylaws seemed to outline core procedures for filling vacancies and newly created directorships resulting from any increase in the authorized number of directors here it looked to me as though the there was an implicit resolute there was a resolution which was implicit that the number of directors would be increased and mr russ would fill that position but it's struck me as odd still that there would have been a resolution saying we're now increasing the number of directors to x we nominate mr russ to fill that position and we vote to appoint him wouldn't that be do appointment why should we treat this as duly appointed because under the the question is whether the exercise of the board's authority on february twenty sixth two thousand and eight was pursuant to the bylaw well just examination of the particular bylaws we believe puts to rest any question of ambiguity and the board's authority two point six reads a majority of the authorised number of directors so constitute a quorum unanimously voted two point one indicates that the shall be no there's no cap on the number of directors the board is empowered to increase the number of directors therefore it's undisputed is unambiguous and undisputed that at the board meeting they had the authority to increase the board of directors and that's critical they had the authority under the by laws to point to reads that a newly created directorship resulting from any increase in the authorized number of directors may be filled by a majority of the directors there too it's clear and undisputable that the board had the authority to not only increase the number of directors but to appoint a person or persons to fill the newly created directorship seats when you look therefore at the february twenty sixth two thousand and eight minutes and you examine whether the board had the authority to do what it did under the un and big u s review of those by laws the answer comfortable with the kind of implicit reading that you're offering well the answer is yes there is no vattel law on the principle that for corporate board action to be effective there needs to be substantial compliance with the bylaws and we have argued that to the court that even if you view what had happened as not being technical compliance but we would disagree but even if you were to view it that way it can't the act of the board cannot be undermined or on now now we also cite a case in the absence of specificity in the bylaws about how to handle a situation where the board wants to do both increase the seat by one and point someone to fill it does not create an ambiguity and we similar situation under a shareholder agreement not by laws but shareholder and the quote from that case that is relevant here is that we conclude that the failure to specify a procedure for filling the seats of retiring directors does not constitute an ambiguity in shareholders agreement here too the absence of the specificity that the appellant's imagine should exist and i might point out that i think probably most of us in this room by virtue of where we practice law have have seen our share of corporate bylaws there isn't that kind of procedure there isn't that kind of directive within a by law to tell a board how to carry out the thorny that is granted to them in the by submit your honor that when there are five directors the only directors of the board sitting around in a room and introduced to j ross and words fully contemplated and discussed that he is going to become a member of the sport if this deal close and he's excused from the room so the liberations may take place and there's outside counsel in house counsel the president of the company is describing the terms of the deal when there is a unanimous vote by all five directors to approve the appointment of russ to the board conditioned only on the closing of the transaction that the intent to increase the number of seats from five to six is implied and made me appropriately and should have been appropriately held by the trial court here as a matter of law an appropriate exercise of the board's authority i would ask respectfully that the court uphold the district court's final judgment we went to trial the court didn't agree with the argument i just made we went to trial we proved before a jury that in fact all corporate formalities and requirements that were necessary were undertaken and that this was in fact a very straightforward exercise of the board's authority and as a matter of fact the jury i would respectfully point out to the court that the phrase duly elected or appointed or the word duly is not is not opponents word it is the word of the policy you agree that nevada law requires  substantial compliance no i do not i do not agree for two reasons first of all the contract if i don't believe that nevada law applies in this case because one of the findings of the interpretation of the of application of the c followings cetera he went to meetings why wasn't there substantial compliance there wasn't a substantial compliance because the board itself did not take a very necessary ross in additional director for two reasons the words the words of the of the resolution suggested further board action number one number two added the words we will create a spot and we will fill it with mr ross that would be enough if if there were some if there was some board action by which the board expanded its just as it did at the at the most prior board meeting had it taken it had taken a step whereby it expanded its number formally from five to six then yes but in this particular case they did not and with all due respect i i submit to the court that a corporation especially a public corporation should not should not be allowed to to act on what one would call implicit actions we're talking about art respectfully submit that a public corporation with bylaws with with the responsibility for public filings should be explicit in its in its actions open transparent but nonetheless explicit in its actions thank you we thank you very much your argument will reserve decision