we have two issues before the court the first of which is mark hell's duty to defend their beaks in an underlying lawsuit under directors and officers liability policy issued by mark helped to color star growers the so with regard to mark helps duty to defend it course i know the court has spoken extensively on the standards for the duty to defend it's much broader than the duty to indemnify and what we know is that the duty to defend is based solely on what the allege and only what the pleadings allege the allegations are to be taken is true there cannot be an inquiry into the truth or falsity the allegations that are made and if there's any doubt as to whether or not there's a duty to defend that doubtless be resolved in favor of the insured in cases involving policy exclusions like this one markel bears the burden to show that one hundred percent of the allegations that are made arctic included within of the exclusion unambiguously excluded as the standard all of the facts must be alleged to support the exclusion that's asserted that for beaks on the other hand have a very minimal burden to show that a single allegation just wind a single allegation taken is true is potentially covered under the policy and again all of doubts about that have to be resolved in the favor of the insured in this case asserted that a policy exclusion for was on account of claims or suits brought by creditors of color star suing in a creditors capacity as such applies to the underlying lawsuit the underlying lawsuit alleges that there were beaks and other persons who were not parties to this lawsuit negligently in intentionally misrepresented color starts financial condition in the course of restructuring color stars debt so what's that issue here is whether or not the plaintiffs in the underlying lawsuit are creditors of color star and if so whether or not they have sued their verbeek solely in their capacity as creditors of color star and the answer to that question is clearly both of those questions is clearly no so i'm looking to the allegations in the pleadings there are four plaintiffs in the underlying lawsuit at m c g solutions capital loaned any money to color star in fact on the record pages five ninety nine is six hundred the pleadings allege that solutions capital was the sole lender of the junior lo the pleadings same record reference allege that m c g was administrative agent for the solutions capital and that m c g invested in solutions capital the pleading specifically allege that m c g was induced to invest in the lung by the misrepresentations made by the for beaks and other parties and importantly the pleading specifically allege the m c g was damaged by its investment in solutions capital which is found on page  thirty and six twenty of the record on appeal so the district court's ruling was erroneous because the district court failed to take these allegations as true as required under the corner she will and instead made an inquiry as to whether or not the united states supreme court's decision in us vs how we tended to show whether m c g was actually an investor or a creditor and color star and this violates one of the fundamental tenets of the a corner sure which is that the carrier has an obligation to defend regardless of whether the allegations made are fraudulent false or groundless so the district court could not in in should not have inquired as to whether or not and c g was an five seventy four of the record on appeal the pleadings filed by m c g define m c g capital to be jointly solutions capital and m c g the pleadings also allege this solution is capital was the sole lender the pleadings also allege that m c g was induced to enter into the subordinated credit agreement and related or the loan and related agreements and the pleadings sent a reference to subordinated credit agreement in the pleadings are not clear which is why the get the benefit of the doubt the district court cannot connect those dots and make assumptions about who are parties to what documents their support made a credit agreement referred to specifically in the pleadings and other documents other loan documents specifically referenced in the there are other reasons why the creditor exclusion does not apply to the allegations made in the underlying pleadings but that is the primary reason i'm not point alone of the district court's decision on the duty to defend should be  introducing evidence to the district court from the bankruptcy proceedings indicating that all of the parties to the underlying litigation regions of the three lender solutions capital and at comerica were stripped of their creditor rights by the cram down order that was entered in the bankruptcy proceedings because been given the opportunity to introduce that evidence to the court they could have in our deuced affidavits from bankruptcy trustee or the lawyers that were involved the order itself and other pleadings in the bankruptcy proceedings and perhaps even the documents that which i thought i recalled it made for a judge in a district court look to the nature of the claim underlining you know in texas which allays agree just kind of fraud it cetera et cetera and that that was you know damages from a creditor position that that was what the stream of thinking below in terms of this invested versus creditor and so i heard to say well part of the error was the district court did not they couldn't have been a creditor they could only have been an investor and that the district court was required to construe pleadings in that that like maybe i'm misunderstanding because you got to lose our lawyer here in mississippi  here and this is the texas or so for me just help me understand how that analysis works looking at the lawsuit you follow i'm saying it's just trying to make sure i'm not mis understanding you in terms of the people that know the words party could be both an investor and a creditor and so cain which capacity making the calling as an investor as a creditor so whether you are in  where you've got to construe language in our favor we say investor therefore you go with that versus the district court can't look at whatever the underlying nature of the dispute to say they're suing for damages body by the by they're not seeking as an investor quote to recruit only we say would an investor you know somebody is trying to recoup the benefit of their investment dividends etc and i understood the court below to see the full forth so the question is more convoluted then i know your answer will be but just help me understand why you're saying all the court should have been doing is just looking straight up at the pleadings and if they based on prevailing supreme court texas supreme court authority that allegation has to be taken as to the duty to defend markel as a do to defend even if that allegation is false fraudulent or groundless at mar urging the district court look to the court to put origin of damages in reaching the conclusion that this really looks like a creditor claim not an investor plain but this report is not allowed to do that because of the specific allegations in the pleading the origin of damages analysis directs the court to look at whether the facts pleaded support the cause of action alleged not to look to the damages and so that's the distinction is that the court took the claim the g was an investor and said that's a theory of liability let's look at the case law and see if they really are an investor or creditor and the most important point is that this policy exclusion applies only to claims brought by creditors of the company in the creditor the passage is such a creditor of that term must be given its plain ordinary meaning it is not the same thing as an investor the term investor is not used in the policy exclusion at all so to the extent that m c g brought claims as a creditor and that investor investor claims fall outside of the purview of the exclusion does that answer your question i tell you you answer me way more succinctly than i asked that question but you our quest and i know they please the court the exclusion in this case deals with the creditor of the company in the creditors capacity as such quote so lender on quote the what were the damages mean saw the damage is being sought or if you go back in and yes i mean potentially that if you go back and trace the history you know where did that come from you know certainly solutions could have come from that  they don't pass because the facts clearly say they want to linger other solutions could a sign that the note or any debt in there they have not done so and i mean that is straight out of the of pleading and then the pleadings state numerous times the m c g invested in the note i'm sorry invested in the loan invested in solutions so we know from the facts that color star did not borrow money from m c g m c g did not allow money to color store and mc g invested somehow in the know are in the debt so they can't be a creditor that they can it doesn't just because it doesn't say how they invested doesn't mean that somehow we that they're not a credit that from that we look and say they didn't pass the first test they're not a credit looking you know if we the origin of damages and all that that's a wrong analysis but it's also a red herring because because they can't pass that first test you you have to has not done so at this time close quote when you have numerous allegations that m c g invested so we can't make  the chance to write this policy and they wrote it they got to choose the words the phrases they could have excluded certain things they could have excluded misrepresentations in connection with the extension of a credit or the purchase of a debt instrument which is actually the language that was in a policy another policy that enraged bank of louisiana kinley they chose instead to limit it to a creditor of the company in a creditors capacity as such we know in this case that they don't even pass the first test the second test we haven't even gotten into i can tell you they don't pass that test either and i'd see silent the other one puts it up the pronunciation of council what's a housekeeping your own thank you may please this honorable court i want to continue down the road in which counsel for the better for bakes left off and that is who were these plaintiffs in the underlying case and what were they suing for and then secondly address the origin of damages analysis who are these plaintiffs they've come before this court and they've indicated that m c g in no way shape or form was sitting in the capacity as a creditor but if the court only looked to the record at six thirty three and six thirty four for six thirty five in their claim for the damages they specifically say the m c g plaintiffs the m c c g plaintiffs characterize themselves and find themselves that they're pleading that included both m c g and solutions capital and what do they say they said that they had been quote harmed by entering into subordinated credit degree meant and by loaning color star thirteen point five million dollars that will not be recovered then they go on to say and that they are quote entitled to damages from defendants of at least thirteen point five million that's page six thirty three of the record page six thirty four and thirty five make the exact same pleading allegation and not only is that set out in my brief but at the beginning of their brief the verb beaks talk about the capacity clearly in which all these plaintiffs were suing on page three of their brief and they cite to the record they say that the for beaks were sued into consolidated lawsuits by regions bank co america solution capital m c g capital and here's a quote from the brief each of whom allege the verbeek negligently recklessly or intentionally misrepresented called the stars financial condition as a means of what they say quote securing the thirty five million dollars junior loan issued by regions and the thirteen point five million dollar junior mon facility and to come off and say that because of her beats throughout their pleading address the loan m c g capital as loaning money in one place and then in their pleading m c g capital characterizes its participation as an investment is merely using the term loan and investment synonymously because what is an investment an investment can be many things it can be your traditional buying of stop or you could lose your principal it could be placing money in mutual funds which is an indirect purchase of stock what you can lose your principal or an investment can be just like it was played in this case placing money into a credit facility as m c g play and that money in the credit facility created the junior one which then was bundled with the senior loan provided by regions and then all of that together was loaned to color st none of these plaintiffs would have sued the verb eats have they not provided these loans look through the pleading what is the only reasonable construction that can be provided in these pleadings which combined use the word loan two hundred eighteen times to describe these transactions then look at the origin of the damages claimed i will respectfully disagree with the verbeek that the origin of damage test when they say it it's not the test that is absolutely a positive lean in act or an incorrect statement of  law just a south one may recall sitting in the same place about five years ago i was here on a case evanston vs legacy of life and in evanston vs legacy of  the court could not come to a determination of how texas law would interpret a certain policy provision as applied to human remains tissues and organs so it certified it to the texas supreme court and the texas supreme court in the answer t certify questions which this court then later adopted in its published opinion and in legacy of like the texas supreme court tells us that the test is you look at the factual allegations that give rise to the origin of the damages being claimed when you're doing your duty to defend analysis now another thing which you have to do is disregard how m c g capital if it's calling itself an investor and it made an investment i will say factually when you look at how it invested it invested it as a loan to but if verbiage want to sit here and try to say day use the word investment and c g capital and it was an investment and not alone well saying you invested without looking at the facts behind construing the word invested maybe in its other context of possibly buying of stocks or mutual funds you're coming to the wrong conclusion in this court does not have to accept the war investment on its face as this court has indicated an admiral versus for that you look past what someone call something in a pleading if it just doesn't make sense and you look towards would it really is what are the facts that are giving rise to the conclusion of investment here and add more with this court was looking at was a professional liability policy or some strange pleading said well the defendants who were not engaged in professional services trying to circumvent it to get to that g l policy did x y and c in this court said no you don't except that pleading allegation you look to trigger property damage coverage under the evanston policy and this court found when it adopted the texas supreme court's interpretation in holding that no you do not look at it being called property and have to take that as true you have to look at the underlying factual environments which gave rise to this conclusion saying here look at the irony in the pleadings were there any damages sought beyond recovery of the of the loam absolutely not just profit and that is an excellent question and that goes to the heart of the capacity each one of these creditors  the underlying litigation specifically set out what they loaned and then you look at every legal theory pled in the legal theory has to include you know duty breach and damages so the element of the damages being sought by each and every one of these individual plaintiffs in the underlying litigation was the exact amount of lo principal that they each provided to color star whether it was through the senior one or through the general loan that combine to create this credit facility and when you go in you you look at these underlying pleading allegations and you use the everyday ordinary definitions which you should do sense the policy doesn't define creditor let's look at what creditors are creditors are merely entities or individuals that are owed something according to black's marian webster an online financial and transaction dictionaries and here they even talk about what an investment is in the ordinary everyday uses of that term investments can be the various things in the definition includes a loan an investment is merely putting out catch or something and expecting a return and what was the return on this quote investment this low it was interest they even say that in their pleading so just to say it's an investment an investment has numerous different categories one of them being alone and through out this planing the m c g  capital solutions plaintiffs say our investment was alone now administrative agent let's talk about the administrative agent read the context in which m c g talks about it being it in ministry of agent it talks about it in the context of the credit facility that it was administering the loan well it doesn't make any pleading allegation that any thing that the verb beaks did caused them independent damages as an administrative agent the reference to the administrative agent  function of m c g capital was informational only it doesn't seek any damages in its capacity as an administrative  agent and when you read it you can see that i think it actually does i think in their administrative agency capacity in one of the pleadings it talks about how it had claims against cohen america because it was supposed to get fees to be an administrative agent and it was seeking those fees from america and that capacity but as to the for b s commerically is not in insured under this policy so we can't look at any of the claims that may be asserted by in between these these creditors themselves you have to look at the claims being asserted by the creditors against the insured and it's only in their capacity as creditors of the company really and truly if the for beaks made these misrepresentations and for some reason these entities m c g capital solutions call american the like never made the loan never put out this principle you would never have the damages so what is the origin of the damages it's these loans that we're talking about this particular interpret this particular exclusion neither side has been able to get any guidance from any appellate court in the united states about what it means what it says and what it does the closest that we've come to was a district court case here in the wheezy ana that both sides talked about the ten wind chop and that exclusion was a little differently warded and the court there held it didn't apply to those circumstances but what is very insightful in the the kenwyne case is really when the court talked about that exclusion not applying in that case it gave an example of when a creditor exclusion would apply and my gosh that example is on all fours with what we have here that help the exclusion is to apply to cases where you have bond holders who are considered creditors of the corporation the bondholder see the directors for some alleged wrongful act which resulted in the bonds being worthless what would we have here we have lenders who are considered predators of the corporation other star and the lenders here sue the directors  of the summary judgment i will strongly concede because it was without contest that the district court below did not give ten days notice but the standard or review was harmless error and applying the harmless error standard to this case would you have to do you have to look and see that if on appeal was some evidence presented in the  which would make this court believe you could have defeated the duty to indemnify well we've got a couple of issues here why they cannot meet that standard and overcome that hurdle first of all we don't really even need different evidence because the district court in addressing the susanto summary judgment granting indicated in farmers texas mutual case versus griffith and the reasoning is it's apples here it says if you have the same reasons that negate the duty to defend and the duty to indemnify you can roll on the duty to indemnify so it's the same reasons it's the same facts and the district court was looking at the facts before and said under these facts no matter what happened since all of these underlying plaintiffs are suing solely in the capacity of creditor there's never going to be a duty to indemnify so the facts were already there well what the for bigs have presented in their brief and try to say here's the additional evidence which we would have offered is soley some findings in conclusions of law from a different case namely the color star bankruptcy case this court has clearly said that that type of evidence one cannot be considered and two sets it cannot be considered it cannot raise a fact issue in a summary judgment proceeding such as this and that was in the r i restructuring cas as well as the liberty mutual cases cited in in my brief are restructuring is a two thousand and twelve decision and then it relied upon and referenced the liberty mutual case which was specifically a case involving findings of fact in conclusions of law from a different perceiving the only thing that that evidence raises and you can take judicial notice of was there were findings conclusions of law issued by the bankruptcy court that's the only way it can be considered however the rule of law is that whatever the findings of fact more cannot be considered as facts in this case that it is improper to take digital notice of them as being truthful facts and without facts you cannot raise a genuine issue of material fa therefore we had harmless error by the suv sponte granting of summary judgment about ten days notice on the question of the duty to indemnify unless this honorable court has any other issues for which it would like me to address i will see the rest of my time and give it back thank you cannot separate these parties out in determining which party is being placed into one bucket and therefore we get the benefit of the doubt on that but the pleadings allege the m c g capital view themselves as investors in a credit facility transaction and were motivated to enter into the subordinated credit agreement by the valuable return on investment including interest so what marco want to do is assume that that means the loan plus interest and that's it and that is not permissible under the  is have to be made in favor of coverage of the pleadings have to be liberally construed but what other damages would there be besides recovery of the dermont of the loan and interest well that m c g specifically alleges that it was damaged by the amount of its investment in junior loan so it calls that an investment it look we don't know how much the m c g loaned to solutions capital it could have been part of it or all of it the pleadings are not clear on that in in we are  get the benefit of the doubt on that but the pleadings also allege specifically that m c g was also granted a security interest in real estate and were given deeds of trust so it is possible that m c g mean i heard your even your line are you brave but i mean with limited time which to best case or cases you're a lying on i will read those cases we will absolutely a group what you're saying well there are no cases on point to the creditor exclusion but there is an abundance of cases on the books guide one tiny notes all that are cited are briefing this if you cannot use any you cannot contradict specific allegations in the pleadings this pleading alleges that solutions capital was the sole lender of the junior loan which means that epstein must be suing in some other capacity and if i can give you one quick example there just is not a case on point i mean the banker is he any cases is a good example of how mark help could have drafted it to use the broader is a creditor we don't know if i'm stingy is a predator or not we don't know the pleadings allege that they are an investor in solutions capital i mean it specifically alleges that entity invested in solutions capital so when an investor is not a where there is a legal conclusion that there investor or you know whether they're an investor or creditor they allege facts specifically saying that they invested and what is important i think by their year we're not talking to tourists coming we're talking about these people who are yes the loss of mc t specifically states that it did not loan money because solutions was the sole lender solutions did not assign any part of the debt to him c g those are specifically alleged so then m c g alleges numerous times that invested in solutions that invested in the junior line that invested in debt those are not legal characters a legal characterizations those are facts sank in c g why are you here they're here because they invested in the love they invested in isolation you agree we look in the tower pleading to figure out what the meaning of those words or and that's i'm not saying that gives up your case it still may not get to where the district judge did but i'm a little concerned about all of the banks arguing that if the word invest appear somewhere game over you've got to figure out from the whole pleading correct what the pleadings me such as you know you ask me know you are i'm i was going to try to give an example that i think might be helpful we don't know how they invested we know that they allege facts that they invest and want to stand up but would you agree with my con struct that when you try to interpret pleading you look at the entire pleadings and read them together so so you know the to make an assumption otherwise would be do ignore the facts to to take an origin of damages well they say thirteen point five and that's the amount of the loan therefore had to be somehow out of reason out of a loan well that actually takes the exclusion and turns it upside down because that's not what the exclusion people ought to be able to rely upon the language of the policy if the language of the policy says so claim by a creditor of the company in its capacity as am tomorrow morning