case seventeen dash five eight seven seven and seventeen five eight nine five sun life assurance company versus qantas toga trust services l l c argument not opposing counsel's brief i think the panel probably is opposed to host i would rather just be told about it it's a distraction i have a big board up there mr all when you're ready you may proceed we have the briefs you can just tell us what page can weave it into your presentation you know whatever you think it's relevant very good may please the court in the in sunlight brief they have a counter statement of the issues for  l and i before you get to that can i just ask you a fundamental question which i'm not sure i follow conestoga as an l l c with one member right yes which you tell us is a citizen of wyoming what is the member in wyoming corporation an individual what i believe there is a corporation where was it incorporated yeah i looked into all those facts but i don't have all those facts regarding the citizenship bill isn't that a problem because you say we have diversity of citizenship but we can't even determine i mean that issue was addressed in the trial court at the trial court to the trial court satisfaction liability company organize an existing under the laws of the delaware comprised of one member which is a citizen of the state of wyoming but we need to know where it seemed corporate and where its principal place of business i assume the principal place of sunlight has a counter statement of issues on appeal and we kind of agree with sun life and so that's why i wanted to focus my argument around that it says whether the district court properly held on summary judgment i'd like to stop there just for one second probably goes without saying but i have to say it that in deciding a motion for summary judgment a court must view the factual evidence and draw all reasonable inferences in favor of the nonmoving part so what does that mean for this case if after the trial court drew all reasonable inferences in favor of conestoga the evidence was such that a reasonable jury could that it was issued in march well worth the stage now my understanding of the record is that the effective date was early april the issuance date was late april one you know you have some headwinds here i mean the georgia address you know it's not on tennessee paper i mean you know you have some headwinds here i'm going to address all that this counter statement i think it sets forth the standard we agree on the standard when is a policy is still the policy it's still a policy when there's an entity lacking in insurable interest in the life of the insured procured the policy in funded the and it is a document seventy six fifty twenty one forty eight and it shows that houghton's was paid a twenty five thousand dollars brokerage fee he was not reimbursed for any premium  eighty two thousand dollars went to collins collins reimbursed houghton's for the where the columns get the eighty two thousand from the investor because better as a policy there's absolutely nothing wrong with taking out a policy and then selling it there's been not a single case that has ever held that it is illegal or somehow makes a policy boyd just because you take out a policy  of selling it i mean was it a coincidence that you know really after the initial exchange of monies for the policy that i mean just right at the time the policies issued that collins gets the eighty grand or whatever it was and sends the twenty odd thousand back i mean for purposes of whether there was a preexisting agreement it would seem like a remarkable coincidence that all all of this was ready to go back and forth as soon as it was issued well i think there's no question that a potential buyer was contacted to see if they might have an interest in buying this policy if it was issued no question about it but there was no preexisting agreement and i can i can give the court two reasons why that is one hundred percent the southeast ok there were two other policies that weren't purchased by life well maybe there is only one preexisting agreement and that's the one we're here on everything was the same everything was the same on both policies everything was a saint so if there was a preexisting agreement then they would have bought both the but we don't have and we have an e mail exchange relative to this agreement that at least looks like it sketching out terms for an immediate sale we don't have anything as to the other policy in the other policy just doesn't seem to be relevant here there is a member you have to draw all inferences in favor comes to within limits there is nothing from life asset saying that we agreed to that by this policy or committing to buy this policy and there's a condition that had to be met and that my i mean i think it's basic contract law correct me if i'm wrong and this may well be the pivot point of the case that there is such a thing as as an agreement with a condition precedent if if i agree i agree right now that if a certain thing happens i will do this other thing i mean that's one l contract law where is the evidence of that agreement it would not there and it would seem to i mean their argument and i think the issue you have to contend with is the possibility that the record does  status as a matter of law that life asset agreed agreed in early april that if this policy in fact issues i'll pay green will pay great if they had an email from speaking for a life asset and this wasn't a yes he was the birth broker when they pray they quote prices to grin which i understand to mean they'll pay eighty thousand dollars for this policy if it's issued is that is that right go to you and i say hey if i'm able to get this car might you be interested in buying it and you know yeah you don't even get to look at the car i just tell you about the model in the brain and say you know what i want to reprise might you be if in pain if i'm able to get this car but you still have to look at the car you have to evaluate the car and we know there were two other policies that they looked at that they didn't buy the trial court completely ignored all the due diligence didn't even address in the opinion all the due diligence that the fund did after the policy was issued they didn't even address it and remind us of some examples of i guess we're talking things that happened after la the actual offer to buy the policy something actually from life asset was in may that's when they made the offer to buy it and then after that they researched the validity of the policy and the trust they looked up information regarding any tax liens they looked in the u c c filings these are all in documents that were obtained by life assets they're all part of the record seventy three seven pages seven hundred seventy nine through twelve o one that's seventy three seven at pages eleven seventy nine through twelve zero one and that's obviously the other columns policy they looked into it and decided they didn't want to buy this one they  you know and i want to mention something else in it before book and that is are so much inflammatory language used by sun life really there's nothing wrong with making an investment that is based on the longevity of another person if there was something wrong with that and there was something illegal about that would have to shut down all the insurance companies in this country and that is because they not only sell life insurance but they sell annuities but i but there is something wrong if if from from the you know initiation of the policy comes into being precisely because some investor wants to make that bet not because the insurer has personal reasons for wanting coverage i don't know or there's something wrong with that in tennessee think something's wrong with that always has apparently well i agree that we have to do with the tennessee case law and the tennessee case law says if a stranger bester both procured the policy morning michael miller for sun life two fundamental point number one this policy it was an illegal human life wager so it's going to have an issue well that's the question here well that's the first one the second one of course is because it's void have show this court should leave the parties in the premiums where they find them and i'll start with the first and i start with tennessee law and i'll be brief there's a long line of tennessee cases standing for the basic proposition that life insurance policies in tennessee in this context when you're evaluating them substance matters over form and number two the policy has to be acquired in good faith can't be some attempt to get around the rule against a way to eat what your opponent argues and you address case different than a case where the premium and the investment was by the same person there stood your honor let's go there number one mr wolf was deposed at great length mr wolfe admitted multiple times in his deposition all of these deals with life that set and halogens work the same life asset would price it as a percentage of the premium and then they would front the party they would price the policy as a percentage of the face amount of the policy and then they would front the premium and help sions would be reimbursed we and what how can it always be a reimbursed by like the collins person whoever that is if they be reimbursed by life asset and it happened through collins and you explain the two thousand a different position talk about a judicial admission they admitted express leave that house in front of the money and then life asset reimbursed help since through collins and it here's the quote from conestoga in their summary judgment collins paid him i mean i mean did the money did collins get the cash and then you know did some back but so then you know why isn't he to pay your first off that's what they're actually saying in their brief right now i think and i think mr moore said that today as well as i understand it and so but why isn't that collins paying as opposed to somebody else well that was a loan and collins was somehow being provided with the you know it was fronting the money and that this was collins is repaying them as alone as a district were recognized there'd be terms there'd be a repayment schedule there'd be a maturity date there be an interest rate there'd be a note there's none of that all you have is this one hundred seven thousand dollar deal it's two million four percent of that is eighty thousand and then twenty seven thousand dollars we know that was the premium amount so they one hundred seven that they say that here's what we know life asset paid that much in the district court recognized it exactly this way the collinses ended up with sixty thousand dollars in their pocket and how chins ended up with forty seven thousand dollars in his pocket twenty seven thousand was to reimburse him for his but his net was was twenty exactly then he takes twenty thousand dollars and and put it in his brain and when you look at the papers you know what you say in your brief that you life passed it paid twenty five thousand out or just why i'm getting to the two thousand and eighty two or something to the columns but they didn't pay the money to houghton's they paid it to collins who paid it to how well they paid the twenty five to halogens and then they gave eighty two to the collinses and the collins as took twenty two and gave it one more time you reset he said you're going to go slowly her oh i'm sorry that's right i just want to hear one more time that it's a two million dollar policy the only thing that ever gets negotiated in the context of a life asset deal is what percentage of the face amount  there's one material term it's that percentage here it was four percent four percent of two million is eighty thousand the other item that's a part of these deals and will testify that this is how it always works is the  reimbursed for whatever premium you front we know what the premium once it was twenty seven thousand dollars we have his checks we know that he paid ok so it's one hundred seven thousand dollars owed by life asset for the deal and the way they disperse the money was they gave twenty five halogens up front and they gave eighty two to the collinses but right after that like that day e mails them send me what they give life asset gave twenty five up front so they pay his broker tree it's referenced as i mean it's a reimbursement for premium and when you look at net which is what the district court didn't she was correct to do it you knew that that collins has got eighty two you have held since emailing the collins is saying give me my twenty two they do so they get sixty he gets forty seven twenty seven to reimburse over the paper for the deal specify that the twenty five that life asset paid how actions directly is or something other than reimbursement of there's a line item for a broker fee these are black market it's a broker fee if it's called a broker fee that that payment that's what it's referred to in the settlement ship after the policy is issue then so but then collins gets what eighty two collins originally got eighty two and then how chins writes the email give me my twenty two they send it over to him they net sixty so i mean he gets a wire transfer or something of eighty two grand or chap allen's he gets there he takes possession of the eighty two is his proper moment and i'm just curious about you know  the mechanics of this i mean so then the he write a check to houghton's for or i guess what it's twenty two twenty two does he write a check how does the twenty two move you know we have i'm not sure we have that other than that we have his note to them give me my twenty two and and i have to file that so now i'm still in the file it's a checked forgive me it's a check it's in the record it's seventy six dollars fifty one it's barely legible but it's the you know they got the money on june eighteenth houghton's directly depends on how you want to add the money he got forty forty seven twenty seven was a reimbursement we're all agree on that yes and twenty two of that reimbursement came from collins and five of that came from life that you can think about however you want you because he got twenty five and twenty two and out of the forty seven you could say life asset dave my point has got columns never the whole premium back to correct it's impossible for that to have happened because they only gave twenty two yeah oh go ahead forgive me back to the agreement i would think the district court did an excellent job of outlining this there are a lot of facts here obviously but this really got going reached out to life asset and told them about the life expectancy information with respect to colleagues what they'd like that said do and he said at the end of his email or more seventeenth please press and then a week later they write back and they say four percent it'll be eighty that's march twenty fourth and then he writes back and it's smoking gun evidence it's april third we will close with you at four percent it's on disputed that he acted as collins as agent there's a agent agreement they have with collins i'm acting as your agent in connection with selling this policy so we was him in the collinses we'll close a self explanatory the four percent is the only material term they had to deal ok what happened after that it's amazing your honor reference that contingency e mail it comes two days later that contingency e mail confirms that this is a deal and there's just a couple of contingencies that need to be worked out there is references to will where the original papers mean that seems to be clear on the face of the other but there needs to you need to make to fifteen surance company figures this out and they back out then we can't have our stoli deal i mean so i mean so you would agree with the remember this whole idea of whether there's even an agreement standard there's no tennessee court that sets the standard that it's true that in quinn and klein meant there were agreements and it's true here we've got one but they concede themselves what you're really looking for is was there a meeting of the minds and we know that happened here i mean look fundamentally it's a black market transaction rate after that april fifth the old the policy gets paid for by how much as we have these checks able to twenty second in april twenty fifth the policy gets issued on april thirtieth application for it wasn't even until march thirty first it got paid for in like i said twenty second and twenty fifth it's issued on the thirtieth and then they join up these contracts and the contracts when you look at them this is what i love about this case they match the terms shifting to that right now i mentioned the general rule when a policy's void ab initio courts leave the parties where they find you're not to aid parties to it what's your best case because it seems like there are some cases sick of the other way it's a burden issue your honor fundamentally  the general rule is you leave them or you find them the party that i mean what's your best case for the regime that you're now describing because it seems like you know we as i said i'm sorry yapped i'm talking about tennessee law i mean it's a question tennessee law you know i mean do they have to pay it back or not or do you have to pay it back we don't know and and i want it this way and i guess i'm just wondering what tennessee authority do you think is most helpful to you so i've read a number of cases and it seems like they're kind of going the other way thank you i've studied this for a long time the answer i have yours is actually the correct answer and you look at the restatement of restitution section one line you say what's the best and when they get all three of them the branson case the cook case and the washington case consistent with the restatement they establish that they get out from under the general rule of the party that wants to upset the generals got to prove something ok and i read those cases your hon well your judges will course read them here are three ways you can get the premium back one is there's no fraud in the application a second is you've got an innocent beneficiary maybe third that you had a bad insurer agent and the here is they have none of the three there was fraud in this application so they can say oh this is a perfectly clean application where there was no fraud there was lots of fraud there was there were lies about net worth well in the washington case yes they are they said there that i guess they said the present plaintiffs was guilty of no intentional fraud or wrong killing hinge point of your argument on this well you don't argue that conestoga engaged in fraud when it bought what we argue is they stand in right you don't you don't argue that correct that though they need to prove that they didn't engage in fraud or that they have this was a good policy we looked at this we looked at that they come in here your honor and say no we're not going to prove anything we're the success igneous let us off the hook when the status quo is where we are now they want to risk free bet they knew what they were investing in life insurance policies on total strangers they know these deals can go bad but they have gotten all the paper for this or is that typically happen we don't know that i didn't get the e mails and all that i guess you could they could investigated whether was fraud the application they would have known they were lies about net worth there was a lie about it the intent to use the policy for a state planning they would have known that the policy didn't they find out there's a law about now or i'm not sure i follow your same these people were worth million dollars there were in the application the representations with respect to income and net worth and you know this isn't in the record but the way this interview works is you can investigate these policies not in the record you can't but i  know but that's the point it was their obligation to upset the general know assume it evidence of way to militants women if they say there's no fraud we did an investigation and you want to show in response that there is fraud at your burden that that would be then i mean and i'm this isn't tennessee law but these things are happening all the time in the in the other cases your honor becomes down the cases we're we're premiums are returned our mistakes by panels that look at these like rescission cases or they fail to follow the burden of proof and if you follow the burden of proof they have to prove something whether thought authority or are you getting this burden from i mean you know i think that i think when you read washington and branson and cook use there's references to there's where to fayette in those cases i didn't see that they have the burden in this case i mean they just said you know there's no evidence if there was proof and it would have come from the party seeking the return of the premiums and we don't have any so what you're arguing as i understand it is i mean set aside let's stipulate that kind of still good didn't engage in fraud just hypothetically you saying even if that's true they can't have any greater rights than life asset correct and where are you getting that authority i hate to be you know that's that's sort of at your peril as an insurance guarantee association it's started in our briefs two thousand and five west law day one thirty eight forty eight address the last issue first if you don't mind the return of the premiums only because you didn't have that yeah i mean i just think that there's never been a case that is held that when you have an innocent purchaser of a policy never  they're saying you had a due diligence duty and you didn't do it and you didn't put forward evidence that you did due diligence does that make sense yeah you know i don't think that that is a requirement in order to in order to recover ok they said the settlement statement which is document seventy six fifty twenty one forty eight says that the twenty five thousand dollars w brokerage fee but that's not all we have they keep on trying to say that's a reimbursement or premium they asked mr wolfe what that was in his deposition and he said it was not a reimbursement a premium and all that some  why did the collins only pay him twenty two thousand when the premium was twenty seven i don't i don't know why that they did that it was there certainly not summary judge judgment you know evidence in their favor on that issue on that issue i don't know why they would pay twenty isn't it obvious that there was an agreement in place for that that dictated exactly how all this money would move back and forth and that agreement was in place before the policy issues that's why you know collins it's not a coincidence a collatz happens to write a check you know probably hours or days after policies issued because everything was in place so that suggests that says there's a preexisting group there was an agreement between houghton's and collins that if we sell this policy you'll reimburse me yeah there was an agreement there there's no we have testimony from wolf saying that there was no preexisting agreement summary judgment  not here to tell us whether there's an agreement i mean that's a judgment for the court to make based on whether the record materials as a matter of law show a meeting of the minds i mean it's just irrelevant whether he said in his view there was court an agreement he was he was the one that was communicating on behalf of life hasn't he he's essentially the party he says there was no agreement you got some documents that are i mean what if just because if this is a car accident case just because you know what the witnesses say that doesn't mean the judge gets to decide who was negligent i mean believe me we're very aware of the summary judgment standard and we're we're not going to cut corners on all these things were in princes that the trial judge drew against conestoga when it should have been the trial judge should have been doing the opposite ok all right well thank you both for your arguments case to be submitted clerk may call