for the receiver of independent trust corporation fice waterhouse coopers we are here today and our appeal of to summary judgment rulings that were issued by the trial court in this case and the case involve later pleadings it was a very curious ruling for us because we never waived nor abandon our claim that that march tenth two thousand letter constituted noticed importantly we included a copy of that letter in this document is part of the record this document cost all the talk and then the whole you know which you know we have to come back how long we had last fall behind that one but this truce in our case basically says you can't change your positions once you've adopted one that's correct fourteenth two thousand receivership filing just was not supported by the record we believe not only the notice probably be given to k b s by the march tenth two thousand rather and by the telephone regarding the claims themselves into this on yes crime be it because it's i'm certainly not very well acquainted with it but mike what i was hoping to do is clarify based on a comparison to malpractise insurance and there's claims citing claims policies where the claim has to be made within a policy terms of the not practice insurance and then there's notice coverage or that the notice to be provided after the policy lapses but it had the event had to have occurred within the policy life what sort of what what how how does this crime bind claim work claims are covered as long as they are discovered during the policy period  in order for it to become one now that's not necessarily the case that the wasp occurred before because the period and this is actually the renewal of a previous policy the last could have occurred prior to the policy as long as it's the scholar during the policy period here which was one nine hundred ninety nine to two thousand itself the insurance company would be liable for some sort of criminal act before its policy covered well i don't are very important i know that the court has had the opportunity to read the briefs but i would like to briefly touch upon the salient points this morning let's go back to the letter fa do you think that letter i beg your to say yes definitely complying with all of the requirements for notice under the policy i think the purpose of a notice provision is to give the insurance company enough information to spark it into action whereby it can either investigate or not investigate but they have enough information at their disposal to actually investigate and that's exactly what happened here so notice here k b s had not information at its disposal to investigate a lost whether it did sell or not so for that reason additionally i would submit that there was proper notice and i would ask the court to take a look at that case the this is the handsome justice going well let me ask you this there seems to be a lot in the two orders that were issued by the pacific court and but it seems that the  don't need to get to that although why did find that you were addict you addict who provided that a quick proof of loss and then he went back and look that again and said but she didn't really give any notice before they receive it was a point well of that i don't think they were required to cross appeal just protect themselves they could have as i certainly would have if it was me well yeah but maybe whether they are it isn't really my major focus i understand it's a very narrow issue instead there are broad issues with potential negative impact on the state of illinois and we're talking about public policy on public policy yes while we ask the question just how long do we have to write the decision here or do we have to well you're entitled to look at it it might be deemed to be persuasive the thirty but is not binding on this score can stand there yes but you want us to find it's a matter of public policy that those sections well should go out well that's certainly one of  arguments today that the public policy grounds why section twelve can't be enforced i don't think you have to go that far in reversing summary judgment if the court's because you want you to provide another reading for six seven one well determining that no notice was provided prior to the april fourteenth two thousand receivership filing if the koran's to narrowly focused on specific facts rather than looking at the broad policy considerations the cour in the court would find for the receiver and or summary judgment for the receiver on those specific backs that notice was provided prior to the bond terminations and therefore no other claim was perfected prior to the receivership filing so i don't think you have really reached if you say to use the word perfect claim perfect well why did it have to be perfect in the trial courts if you notice of claim notice of ross and that they prove that ross had to be provided prior to the april fourteenth two thousand receivership filing otherwise you're out the box and the i cannot stand when there has to be evidence of a claim or evidence of a right of action that's what the statute refers to  claims and rights of action that's saying anything about giving notice with respect to claims or rights back i believe the trial court erred in many respects so i would agree with your honor but i'm just telling you the same for you i mean but just you know i'm leading them down the path right like this who questions for them i really don't have that many more for you you can reserve ya the balance of your time like i could i would be happy to do so if the court would like me to touch on any of my at any of the other arguments  questions i'd be happy to reserve my time to claim exist exist if the receiver was appointed did the right in passion exist before the receiver was appointed forget about notice from right action did not wasn't discovered automatically extinguishes their rights under the policy once the receiver was a point well that already standing in public policy works let me ask you this regarding a discovery in and  occur causing the receiver to be appointed and to that extent someone discovered it in the general use of that word that crimes have been of the crimes were not identified or maybe were not discovered in that general sense but it seems to me that a nuff was there to say that something was discovered that might have triggered coverage under the insurance policy and therefore that march letter was issued why why isn't could be found recovered for i don't believe that at that point in time that's then the right it is credit not in the other thing that could have been explained by any other way who stole it whether it was stolen what happened to it or who did i don't believe was  the thing about giving notice to the insurer says any claim or right of action that existed before the receiver was appointed the receiver has six months to make a determination as to whether or not he has i looked up the word claim ok not claimed in the statute i think as it's common area in ordinary legal meaning here in illinois and it's the explosion the assertion of an existing right even if contingent or provision now presumably whoever lost the money and was insured against that lost even though they didn't know they had lost the money had the right the clue or the claim that they could bring once it was discovered ok recently that's how i understand the same is true right of action that's the right to bring a specific case to court you may have the right even though you don't know what understand legally how you can reach that position when the statute clearly says the claims are rights of action in favor or against the beneficiary which exist at the time that the receiver is appointed continue one for another six months while he makes this investigation and let me add something to that because it seems to me that if we read appointment of receiver and the terminations day that april day a receiver was appointed and yet the whole noise statute says that it's not what should happen at least that's the plain language  wholeheartedly if all we had before us was your policy but we also have a statute and the statute doesn't say anything about establishing proof lost it just says a claim or a right of action correct but we're talking about a claim that that under your analysis the receiver because there was no action with respect the notice and proof of loss has no rights whatsoever against you the insurer because your policy terminated as of that day now i can understand why your policy would terminate with respect to any future actions that took place outside the terms of policy and to terminate the policy of the appointment of the receiver makes perfect sense and that context but does it make perfect sense to not give the  receiver the same right that and innocent member of the board of directors would have had on the same  that's that's the evidence that purchasing insurance right next to the contract that they purchased and another until the day that the receiver was appointed up until the very hour of the receiver was appointed that institution would have had a right for ect and you say that it's completely read your way that the statute is against public policy and should be repealed you're taking the opposite position and saying basically if i were if we read the statute that way then the statute should be repealed too because it would be against public would be an infringement upon country with respect to this contract under these circumstance can you think of a good act where would be applicable basically a confession ids individuals that they've stolen this money in order to get a claim under a policy that under his terms is that the these individuals are not seeking steps and in that conversation the president of the corporation was adamant that they couldn't possibly have money had been stolen it's a matter of we don't know where this point up but he was adamant that march letter was notice because they didn't give you notice of the discovery it was a notice of the policy yeah whether or not it was sufficient notice frankly as an academic have to insure it has to have knowledge of facts fishing for them to have reason to believe that criminal conduct the conduct of her which would be a recovery of course would you have three years suspicion would you agree that at least in the context of this case that the interaction between your section twelve and your policy which is a very common section throughout the country and has been held up well in many cases mostly in federal mostly in cases where there's been no statute involved which might put a restriction ok and most of the federal cases say that in the absence of any statutory kind of strike which would conflict with section  which the section of language that terminations upon appointment of the receiver is perfectly appropriate freedom of contract cetera et cetera would you agree that the interaction between is no and never has been any comparable federal statute that would address insurance because there is no national insurance no no no national law that addresses honour's i would point the court out through the liberal construction maxim a and insurance policy is to be liberally construed in favor of coverage court should not bend over backwards to apply a policy exclusion especially one that has not been proven by the insurance company to apply and i don't think that the notice exclusion applies here for the reasons cited in the brief and also discussed this morning provide the insurance company with enough information to begin its investigation they certainly had enough information at their disposal to conduct an investigation whether they did sell or not what kind of investigation what they have to  have to determine what happened to that money they very easily could have taken any number of steps to determine that there was a sixty eight million dollars shortfall in the escrow account as we've seen ed i would ask you to review that  the case involving independent trust the reinsurer fidelity had the exact same information before it at the end the exact same timeframe one day prior to notice being delivered here and they were sparked into action and they determined that there was a big sixty eight million dollars shortfall that k b s done what it was supposed to do it very easily could have determined the same thing with very little after whether they did so or not is not the point the point is rather rely on that very same information to establish that a claim was discovered i intrust the fall within a month maybe we should have included that now briefs take a look at my street ten two thousand letter because that's important and for whatever reason the courts decided not to give due weight so that water and applying the mental health doctrine and telling us to one of the other day  were not asserting and noticed the fence here frankly i wish we were here after a for an examination of the coverage issues for the trial court but we're actually not here were on that particular front were here are related to question and then k b s had actual knowledge because they had a telephone conversation admittedly with two really interesting plays on the same day and you know we don't have a transcript of that telephone conversation as we quires this to interpret a statute which doesn't have a single case o interpreting anything that's true but i think the facts are pretty parents here that sufficient notice of loss and claim was provided to the insurance company at a date prior to the receivership filing we're talking much i don't think so i think the courts that's that's meeting in your favor i think at worst it could be a question well it is a question of fact i think it's easily disposed of in taking a look at the march ten two thousand ladder and conjunction with the telephone conversation all right my position is with the with respect to notice that the acts were minimum i would ask the court to remand the matter back to the trial court for consideration of the coverage