well i will shift gears here may please the court ever present the bank of you bank of utah in this matter and the question presented here involves insurable interest the question presented is whether the district error in finding upon summary judgment in contrast to the prior case which was a bench trial upon summary judgment that there was no insurable in the in interest in the policy taken out by mr close and also the question whether the district court should have granted summary judgment against the bank of utah because there was no we should have granted some reduction in favor of the bank utah because there was no evidence in this record of a lack of insurable interest as justice holmes explained more than a century ago and gr y versus russell insurable interest is required to ensure that the person taking out the policy the life insurance policy is not doing so as a wager betting on and hoping for an early demise of the insured case that it is property that can be sold and freely alienated and has the raiders case recognized that often you can only obtain the value from the policy by selling it to someone without an interim interests well here we have a policy purchase by mr cl and mr close is of course the insured in that the person subject to the policy and under the christianson case the minnesota supreme court case where the insured is taking out the policy generally there's no need for even further inquiry on insurable interest more than we have the beneficiary the part of the policy being mrs close which is another classic insurable interest the wife of the person subject to the policy and there is no dispute if mr close had passed away at any of the timed while he owned the policy during the twenty eight months that he owned the policy that mrs close would have been the beneficiary of the five million dollars policy some of that was a real insurable interest was taken out she is the real beneficiary and had he died she would have recovered under the policy could get more of a classic insurable interest and that you think that's the end of the case that even if there was an agreement that it would be transferred to c f c in two years that it would still be good your honor of course there's an exception for where a policy is either taken up by a close so that he could transfer this policy to c f c you're in your hypothetical often overlook that if he died during the contestability period it would not be crystal clear based on what we just heard in the last case absolutely but that would be true whether the insurable interest or not that's a second separate question of contestability and what p h l is trying to do here is after the expression after the expiration of the contestability period used the fact that mr close was likely the source of the misstatements of the finances on his form and they can't cancel the policy based on it because of the two years have passed so they're trying to do so by reaching back into insurable interest where mr close takes out the policy and his wife is the fide person at the time there has to be an agreement as to a specific party that would receive that policy that's the holding of the paulson case and we believe that is correct that you know you could have various you know hypotheticals the about in the identity of the third person could be a group of people or cetera but there needs to be as in the words of judge doty a mutual intent a preconceived agreement the policy is going from a to b that you're taking out as a cover  as a straw man for it whether be a group or an individual or a business who is the real purchaser in those cases the minnesota courts say that you the insured is not are not really taking out the policy of the good faith bona fide purchaser you're just doing it as a cover for ratified you don't concede you lose if we have if we followed the law we don't we don't see that and there was different factors and daub out the intent in that case but let's look at the do you think the district court applied the legal standard that you see should a correct interpretation of minnesota law and paulson requires there to be a mutual intent a preconceived agreement between the parties but if you look at it at the intent between the parties here there is no mutual intent to move the policy from mr close to c f c and d the evidence here to extent we have any evidence about what was intended by mr close is that he took out this policy with the hope in the expectation of selling it on the secondary market that was the testimony of mrs close that was the sell it to a third party and he and he would sell it to a third party exception doesn't apply as long as it's a third party on the open market while paulson says that we think that's right but see if there's no evidence about see if he having intent whether he's going to sell it on the open market or if he's going to refinance it or he's may use his own assets to pay for it there's simply no evidence regarding that whatsoever and but it would be natural for a party like c s c the lender to expect that this policy if it's worth one dollar more than the loan that is not going to be turned into c f c because that's you know economics want to one that you're not going to if it's worth more than the loan you're going to sell it on the secondary market or going to refinance and keep it yourself or if you know you're sick might refinance or use your own assets to pay for the policy there's no reason c f c would expect to have this policy back absent market failure and certainly see if he didn't have a crystal ball back when this policy was issued knowing that it would at the end of the day  end up with the policy that the district court here found i mean there's no mutual intent it was one hand we have an intent by mr close to some degree that he intended to to sell this  expectation he would be able to sell this on the open market which is a twenty billion dollars secondary market for these insurance policies and hopefully profit on it and then you have c s c who is a lender on it and there's no evidence that they had any preconceived agreement that this policy would end up with c f c or sold on the secondary market they had no is nothing to suggest they had any knowledge whatsoever about mr closed his plans were dreams effective control there is  with us now we have a letter being sent from b n c the trustee who is supposedly also on this massive conspiracy spelling out for options for mr close to refinance with c f c to refinance with someone else to repay with other assets particularly its summary judgment to rule against the bank of utah in this circumstance we think it was wholly inappropriate your honor who is agent was friedman what were freemen to someone who is authorized to sell the policies by p h l and to submit them for you know just like we talked about in the prior case he testified he had no relationship with c s c no kickbacks from c s c no relationship with c of c or from or from news stream so there's no there's no way you can make a finding of fact that he policies taken out as opposed to a decision even the day after policy issues to sell and there's nothing in this case country a daw to suggest that there was any agreement that mr close we nothing in this record to suggest that but if mr friedman was trying to sell you know he said i'm going to sell this paul and secondary market and then fail to do so or if there was some agreement with c f c and you know to try to basically just goes at the motions and not  policy or violation of financial rules but none of that has to do with insurable interests which is what the district court here said they said at the inception here there was always a plan to get this policy from from close to the lender and where we have the only evidence the record about what was motivating mr close was to sell it on the secondary market and do it and do it at a profit and finally in our brief we  through in detail about all the fact finding that was done in summary judgment by the district court here so we think as a matter of law you should be reversal and entry of judgment for work for our client here but in no in no way can this decision be up in summary judgment the district court made fact finding after a fact finding and took inference after inference against the nonmoving party just identify one or two the district court said that mr close had no risk involved in this policy at all and therefore that was evidence there was no insurable interest a zero four the record shows that he had a personal liability of ninety two thousand dollars on this policy at page seventy six of the record it says that if there was fraud involved in the application he would be one hundred percent libel on the policy which would be over three hundred thousand dollars and there was fraud in the application here because he put in false information so then just this fact finding at summary judgment there's facts that mr kloet surrendered the policy when he could have sold it and really should have been able to sell it that's a fact finding by the district court that mr freeman is a liar you know he said he tried to sell it on the open market he was unable to do so due to the market failures we have other documents we submitted to support that and mr crane's testimony that there was this market failure at the time and there was no growth on the lungs some masses which was that which was the long fact said and that and recommended that he get an additional can't scan mrs close said that she believed at the time he was healthy mr freeman testified in his deposition that he was mostly healthy at summary judgment you can't thank you your honor smith please the court your honors i argued the dock ace to the delaware supreme court and that case is exactly like this one the investor in that case g three is had a similar program to the investor in this case new street these are premium these premium financing programs are shams to take over policies that's all they are and the facts in this case are completely conclusive on that this fact  issue stuff at the end of the brief it's only because they view the standard of minnesota law incorrectly and they view it through their own lens and so they say well there must be fact issues where under minnesota law i had a little trouble that from your brief as to what the mutual intent has to be well i think mutual intent comes from paulson trying to figure out what the minnesota supreme court would be i think the standard under minnesota law is exactly what it was underdog which relied on old common law in reaching almost every state in this country and if you look at christiansen it talks about the continuation of life it talks about how when you take out insurance if you look at the footnote of the paulson opinion talks about something that is intended to dampen the risk versus to permit speculation these programs allow hedge funds to speculate on the lives of older americans the way you stated it is too broad because that would seem to apply just when the insured on his own unilateral wants to sell it as a wager the other side has to be involved i thought even you agreed with that in your brief i do so what is the mutual intel the mutuality comes from paulson and that's where the big dispute about is the holding a paulson is that there has to be a mutual intent to evade the law against wagering contracts that's exactly what the case says the preconceived ed agreement idea is an example of how you might find that intent and that's consistent with the secondary sources judge doty cited in that opinion so it's the mutual intent to evade the law against wagering contracts just montgomery did exactly what they wanted her to do she looked at the standard and applied mutual intent they just don't like the fact that the facts show that there was a mutual intent to evade the law against wagering contracts what they want you to do is exalted form over substance approach the exact same thing that was argued in dawe and in numerous other courts around the country to say we need a bright line test and the reason we need one is so we can paper around it because if we set up these complex transactions you heard me just got up here and said mr close took out a policy on his life and his wife is the beneficiary not true a trust procured this policy and the trust is the beneficiary of the policy the trust was created by i guess to the investor there's two trustees they both report to the investor the trust was planned to be terminated in two years this isn't a case of sell it on the open market after two years that's my only interest in having this policy because i can make money off it on the open market and i got a lender who is willing to finance that for me for the two years so i can then make t ransactions with that violate minnesota public policy it would if there was another party according to minnesota minnesota law that was wagering on the life of the insurer the other party and i have pathetically unknown at that time it's to be whoever wants to take the bet in two years that's a captive state farm agent it's a cap to state farm agent it's exactly what the court did here you have to scrutinize the circumstances of the transaction under your hypothetical your honor if paulson had done this using premium financing i think the transaction would be fine he was an individual with a means to pay for the policy he had his own individual unilateral intent to transfer a policy and there's no question that somebody zone life interest but and that's why judge mcgovern he looked at the factors that courts around the country including dog have looked at if you if you don't have the ability to ever pay for the insurance you can't have the legitimate decision you know i'm going to commit fraud and use a premium financed loan to take out this policy so maybe i can make a buck down the road that's when it becomes a wager and really i think the most illustratively part of minnesota common law on this is actually this court's opinion and bankers reserve it's a opinion that arose under arkansas law but arkansas law like almost every state in the union it's common law developed lockstep with the common law in minnesota and the federal common law not be davis and grigsby versus russell and in that case the court actually makes clear that it's not this court makes clear that it's not going to endorse a form over substance approach it says in banker's reserve you can't just look at the beneficiary on paper because the real intent may be to do something else with it and it emphasizes good faith which brings me back to da da says over and over and over again it has to be a bona fide transaction there has to be good faith there has to be a reason for taking out the insurance that's the purpose for insurance you know overall your honour's insurance is considered a social good because it protects against loss when you use it as an ability to wager it becomes a problem it violates longstanding insurable interest law so all of this is is a modern twist on a problem that we've been having in this country for two hundred years and there's case after case after case including all the one sided in our brief in minnesota christianson appeal raters and this court's opinion in banker's reserve that support the result reached in this case in the record in this case in this summary judgment record what do we see here that mr close did not understand that he didn't understand he did not understand well this about this whole structure that that that he was made a part of i think he understood it perfectly well his intent was and it's not even disputed on mr close to side of the transaction his intent was to sell the policy and to make a buck that's how it was presented to him that's what his wife said understood right up front it was going to be sold and there was going to be a third party and they said like they always do just like with mr joseph sign here you know scientists signed this trust agreement appoint your trustee now would any wealthy person really want to take out an asset for themselves appoint the bank's trust protector and an administrative agent for the lender those are the two people that control this trust you know there's there's no say if he had done all that was own money that would be not against public policy i would it makes against i think it would be against public policy and i think that the older cases support that but the test conceived by judge doty in judgment gunnery suggests that if you're preying on seniors who couldn't properly procure the insurance then that that is a factor to consider and the and doc considered that and said you know who's paying the premiums i want to do this with my own money i don't have enough money but i can get somebody to lend it to me but i'm not going to sell to them i'm just going to borrow from them and then sell it on the open market i still think it's a i still think it's a cover for a wager because he's not taking out insurance to protect against an identifiable loss he's taking it out to speculate now you could argue but see with when he looked at paulson remember paulson was an early case judge montgomery had years of additional you know cases to look at you know paulson didn't involve stoli under one of these programs because the policies were purchased in zero two and zero four you know these things really started late four zero five and so what you had was a wealthy person saying i'm going to do this and i want to sell these things down the road i think under the longstanding minnesota case law including peel and this court's opinion and bankers reserve that's not a transaction made in good faith which is the touch tone in minnesota but court struggle with that just like you're struggling with a judge and the reason you look at whether they can afford to pay the premiums is it shows that there is a wager just my governor said there has to be a wager these people do no loan underwriting look at the facts of this thing it's agreed just they signed a collateral assignment that's a document you give to the insurance company to show you have an interest in the policy as a lender on august the tenth the loan application wasn't even signed until august the seventeenth by mr close they decided with no underwriting no questions on august the eighteenth they sent him a summary of the term financing facility and on august the twentieth he signs the financing agreement there's no underwriting here don it's a total smokescreen they install a guy that's the trust protector on all their trust and then they get a credible bank who is both their administrative agent and the administrative trustee with no authority to be on the documents if you look at the the bank signs for both sides of the transaction then in the schedule of loans they say we're going to go ahead and terminate upfront we're going to you've got to have a link to new stream here because a bank the banks just a premium financing company can do all this it's apparently it's unclear in the record whether maybe close intentionally did that made the misrepresentations that made the policy of it makes a lot of money as a head as a hedge fund you don't have this you don't have the mutuality link i don't see well get there on summary judgment well c f c could have been the wager right but the new stream of the same new stream own and but and i think summary judgment if you have to have the mutuality just to make sure that it isn't it isn't someone ok if he's wealthy enough to buy the premiums that's that's probably the end of the story if he isn't wealthy enough but he's willing to lie on the application in order to get something that he wants to sell that's fraud but that's not the public policy that we're worried about so you have to have you have to loop in another another party well yes your honor but the summary judgment piece is is a little bit of a red herring here this is an equitable issue involving public policy and there's nothing they can point to nothing in the record they say it's not fair that purposes with which we are run aware i'm an actor or judge collins question worth worth maybe fraud but where's where's the how does it file it that way during public policy well i would i would encourage you to go look at this court's opinion bankers reserve versus matthews where the court said if it inception an assignment was contemplated by the insurer contemplated by there was this whole mutual intent standard came up as a way to to deal to deal with  or that destroys the secondary market if that's the law which but nothing to make as warned us about it right nothing about sham premium financing transactions is going to destroy the secondary market your honor if wealthy people and they say in their brief wealthy people who need estate planning used premium financing him you intend at the outset focusing on clothes well you've got close intent which is which is undisputed in this case he wanted to get rid of the policy he took it out as a wager on his own life the the and set up this trust to do it again remember that insurable interest and the trust is particular in this policy he didn't have insurance or interest because there was a there was a lender on the other side of the transaction who set this policy up to own it from day one think about this your own lender set it up on itself i think it i don't know that it comes down to that but i think that's the evidence of the intended to gamble and that's why it violates public policy your honor the the whole premium financing company that knows the insured project prospective insured the intent that you s it's created a policy for which there was no insurable and well not necessarily if the if the transaction is legitimate the transaction makes these cases have people dying and the policies are already gone they're in the hands of the lender they get nothing for them i mean this isn't you can't just surrender a policy they don't do a foreclosure they don't have a commercially reasonable sale they don't give the difference to the trust because it's their trust they set it up the whole transaction is designed to put the policy in the hands of the investor which is exactly what happened here which is why c f c policies are their bankruptcy filings are riddled with their policies that's what happened here this is a wager it violates longstanding minnesota law the decision is thoughtful it factors in the factors that have been considered by courts around the country and it should be  dawn never intended to retain the policy it always always intended from the inception to mediately transfer the policy to an unrelated third investor not it not anybody but g three the private investing in it he said this is your classic cover man purchase that's not what we have here as your questions to opposing counsel show mr close never intended to transfer this policy to see if he tried to sell it on the secondary market they argue the premium financing here is a fraud and that it's basically always a fraud in these kind of cases and that's not you know mr they issue this policy knowing that there was premium financing knowing that the c they approved this policy knowing all that for them to now say that is you know per se fraud and sham agreement is remarkable and as is your question suggest this rule that they're arguing is going to destroy the secondary market but also destroy the alien ability of insurance policies which has been recognized since the raiders case and since the grigsby case this is property that can be only need no one will want to buy an insurance life insurance policy if this kind of fuzzy standard is hanging over the head of the policy because even after that is concern is if it's a clear standard like you suggest that it's too easy to get around it it's too easy for these jams to be created without clear enough intent to void him under public policy so how do you address that what do you think the rules should be and how does it serve the policy concerns that the question is in all these cases for more than one hundred years has been is each transaction a cover for just a wager contract with a person is actually the straw man that's an issue that comes up in a variety of legal context where someone is not allowed to do something to wreck the uses someone else to do it for them you know and that's the kind of question here that was in the dog case they found in that case there was a the fix w from the beginning to immediately transfer to the investor who was a stranger and could not buy it on its own they keep bringing in other factors and other equities and other policies they don't like premium financing although they benefit from it all the time i understand and art art o