please the court my name is jason gosling go drink a bill and read i represent the appellant's sunlight this appeal presents two issues the first is whether the district court erred in finding th is whether the district court erred in finding that sun life engaged in objective bad faith merely by initiating an investigation when it received a six million dollar death and i'm here on behalf of sunlight asking the court to reverse that the district  before i go any further i want to i don't want to talk too much about the facts but if there is one fact i think it's important to bring out this dismiss case both both the breach of contract claim against sun life and the bad faith claim against sun li were decided on a motion on the pleadings sunlight actually had pled the affirmative defense that the policy at issue was an illegal wagering contract under this and gaming statute we allege certain facts that created an inf that this was likely a wager the truth of the matter is sun life never completed its investigation so it never truly made a final decision but there was enough in dishes that the company felt it was important to begin the investigation  ss for purposes of the trial court below and the appeal to the question is whether the anti wagering statute has no effect because of the wisconsin courts supplied the area where you drink statute to insurance contracts i'm not aware of any cases where it goes well i would look to that statute has been on the books for a very long time it seems odd to say that a federal court should say that it applies to interests contracts when the state tradition here appears not to have done so well and let me let me correct myself there yes the wisconsin supremes court has insurance case and the position that the trial court took is that it's never been applied to a life insurance case so it doesn't apply to life insurance the our our position is that the statute itself says that all gaming contracts   void no matter how you styled and it's clear from the words of the statute that the that the substance controls over the form and there's a carve out for insurance contracts and it says that if an insurance contract is made in good faith for the taken out for the security or indemnity of the party insured then it is within the scope of you wagering statute we believe there really is no conflict because gambling and the absence of insurable interest they are related things but they are not the same thing and to explain what i mean insurable interest describes a relationship or a relationship perhaps between me and another person another thing if it's the inherent desire to preserve whatever that other thing is so if we're talking about my wife for example said that life insurance policies are not void it merely because they lack insurable interest and that language that limiting language is very important because there are plenty of reasons why a policy a contract of any kind could be declared void there are many defects the contract formation gambling lack insurable interest at least under the common law giraffes lack of consideration you name it this is what would be an to some of these in our brief and this this kind of thing comes up from time to time the example that i would use is if you have an elderly neighbor for example who you're very fond of very close to that elderly neighbor tells you it at some point that he or she is going to provide money to cover your children's college tuition if you decide that you would like to ensure that because you you you are now sort of expecting to receive that gift in the future there's no obligation to make that gift but it's something  teammate permitted even if you don't have an insurer boone well if you look at the the cases that we cite the pre nine hundred seventy five cases they many of them involve disputes where the policy seems to have been taken out in need for the policy in the inn and it's not a wager so if i mean there's a difference between the scenario i just described you have it you have a person that has a a relationship there's an expectation of some sort of financial benefit from the continued life of that person that's an insurance need that's an insurance need and while there may not be a technical insurable interest that is not gambling and the disclosure of the insurance company when you buy the you think the money come in handy the the insurance company and there's the way the insurance company would look at it is they would want to know a lot more about that relationship and whether there's an obligation they may or may may not issue the policy but but the question was give me a situation where there may not be uninsurable interest but it's not a gamble that that's the kind of thing and the one nine hundred seventy five amendments to the statute make it so that we don't even have to dispute that anymore because that policy is always going to be valid policy or was taken out in good faith but where there may not be insurable interest we don't worry about those anymore but those are very different than policies that are taking taken out as plain old fashioned gambling those order then i apologize my memory on the on the case could be wrong i will check when i sit down and make sure that i've gotten it right but that's but my understanding is that the the supreme court of wisconsin has held that the and that the in the waiting statute eight  e that applies in the insurance context but there are no life insurance contract contracts that i'm aware of i think i mean the language of the statute itself makes it clear that it applies in the life insurance car the insurance context because it mean my my memory is that is the case that says it applies to insurance contracts ok well however but but the statute itself we know it applies to insurance contracts because it draws it is a distinction between insurance contracts made in good faith in ones that aren't made in good faith and the ones that aren't made in good faith could be within the general general prohibition so the amount that amendment in one nine hundred ninety six retained this distinction for insurance contracts made in good faith versus this case differ well it in what we know in this case is that we have a insured in california took out a policy and there was a wisconsin trust that owned the policy the company knew that much in two whether this policy was valid at inception or not there is that i know this court is aware of stoli it's a it's a phenomenon that has affected the insurance industry they know much more about stoli now than they did in two thousand and seven and when they get a claim if it stoli they asked some questions in this case they asking questions they contacted some family members they had no idea a policy had ever been issued so that's not going to be true in your  well in my in my elderly neighbor example i'm assuming the owner of the policy is the family the insured is the elderly neighbor and the family is the one submitting the claim later ron so it's the same party just an elderly neighbor leave you some money and you wanted to guarantee them so you take out a life insurance policy on him right yes and that's ok say well maybe that's what i'm saying is that you interest and you're worried that this is third party financing the insurance company can totally defeat that scheme by paying the money to the trust or to the survivors then the people the outsiders who  you take the money and you deposit it in the courts registry and you say we're not interested in who gets it but here are the potential claims did you deposit six million dollars in the court's registry no we did not then you did not  don't come up with empty words on the what one of the thing that we cannot lose sight of and i'll try to be very brief the if the  permitted authorized authorized gambling with life insurance then it did violate wisconsin's constitution and one of the things that we cited i don't have time to go into all of it but one of things we cited was the wisconsin legislative reference bureau's evolution of authorized gambling and consistent with what we argued it's very clear that the state of wisconsin simply does not permit any form of gambling whatsoever except what specifically permitted in the constitution anything else is prohibited in one nine hundred seventy three the state of wisconsin amended their constitution so that churches could engage in bingo and and at the same time the appellee suggest that the of insurance upon a life in which he is sure it has no interest is a pure wager that gives the insured a sinister counter interest in having a life come t to address to public policy concerns one is the moral hazard don't create an incentive for somebody to kill the ensure that the story insured property worst public policy concern ever in any part of insurance and the second is that and society was uncomfortable with that and so insurable interest regrows to try to address those to privacy concerns professor skim bowl in twenty years of study on this said it's an important underwriting point but as a policy point to prevented it claim it having that as a basis for policy and validity doesn't in fact deter doesn't in fact advance those the better way to advance those two policy interests is to put all of the incentives on the insurance company to do really thorough underwriting do its homework at inception prevent this from happening in the better sounds like a formula for driving up the price of insurance right you can't issue an insurance policy without hiring a private detective to figure out who's really buying it it was really good to get it well it's a competitive business it will be the insurance company paying for the private detective that will be the insured so there will be a hundred or two hundred or three hundred people who are not trying to pull the wool over anybody's authorize who have to pay for a private detective and then wait the time it's needed to have it done and they're not getting any benefit out of it they i appreciate that and that's and that's certainly a logical view judge easterbrook but the reality is that right now insurance underwriters do that analysis they ask questions they look at documents they get inspection reports from or policy that was issued where the insured did not consent to a third party buying policy the most pernicious type of of wager and in that circumstance the legislature said the policy is not invalid so insurance company must pay they in judge easterbrook words have to write a check but if there are competing claimants if there is somebody with a superior equitable right then the court with appropriate jurisdiction that's in the statu it can address those competing claims and distribute the proceeds accordingly that's the policy rationale for that in the legislative commons and in the world professor kind of wish you would stop saying policy rationale so it's we're talking here about a policy of insurance i'm sort of very confusing the legislative rationale was to put the onus on the insurance company to do more diligent so that in the first instance would do a better job of producing wa be paid to somebody who has an interest in the interest that statue for moves the incentive for somebody who lacks an inch or a bill interest to get the policy because then presumably they pay the premiums and get nothing in the end absolutely right so that's the that's the legislative rationale and that's and then there is no doubt that that's what the legislature intended here this is not a circumstance we have to guess but so do you agree with mr goss slim's example of the  the neighbor the elderly neighbor who you think might give you some might leave you something as well but just to be on the safe side to take out an insurance policy on his life i'm sorry you doing this without the permission of the insurer well if that's true that would violate the consent requirement in wisconsin law and so well that a lot of these cases in which there's no insurable interest if there is no insurable interest and hence the policy is a wager because those two things are the same there is no difference then under six thirty one the policy would not people wade it would be it would be enforceable and there would be if there were competing claimants of proceeding to address that it actually other states like this one in illinois a common law say when you say enforceable the insurance company wants a call but not necessarily by the not necessarily to the benefit of the person who took out the policy not necessarily but if the policy owner is the only one that's made a claim right and might have fathers made a claim if others and children of the elderly neighbors something then they might then then rule a court with jurisdiction over those parties appropriate jurisdiction of six thirty one says could address those competing claims as a matter of equity here we don't have competing claims so in life new at the time of filed exams or that the were not going to be competing claims they didn't do a proper in or pleader and here us bank is the doesn't exist in ninety five this gambling statute it's never been applied to life insurance but the good faith exception has been applied and property insurance weist by the wisconsin supreme court ben hur which cited the insurance code section the six hundreds supersedes any conflicting statute a b insurance code says that in six hundred forty twelve so it ninety five only deals with insurable interest doesn't add anything to th prohibits but further your honor the wisconsin supreme court has interpreted the constitutional provision about gambling only to apply to games of chance that's the dairyland against will case in the panzer against oil case two thousand and four two thousand i'm sorry two thousand and four and two thousand and six binding authority that says that provision doesn't apply the insurance or commercial contracts sunlight has no way out supreme court cases wisconsin supreme court cases consistently hold that song life has no case to the contrary there's no contrary authority that they've cited there's no there's no dispute about that six thirty one trumps the ninety five if there's a conflict by the explicit provisions of the insurance claim there is no here reasonable dispute about what the law was there's no disputed cases and so their position is not good to keep all this money no sun life the decision below it should be affirms that they pay the six million dollars of the death benefit that they pay they pay the six million dollar death benefit t bank that they pay twelve percent statutory interest and that they pay whatever the district court concludes or the reasonable attorney's fees that those are good decisions below they certainly keep the premiums of two and a half million that they've collected on they certainly keep the premiums of two and a half million that they've collected for the bargain of issue in the past frankly no you have some life does  so so the policyholder paid two and a half million in premiums over seven years for this policy the six million dollar policy the judgment below which should be affirmed is that some life would pay the six million dollars death benefit to us bank plus interest plus the fees but what plus plus the statutory interest plus the attorney's fees on the power of using a period or unit for fusing to pay in the beginning not paying within thirty days when the claim became do and the six million is that that's the insurance policy that's the insurance policy that's the face amount of the insurance policy and there's no there's no superior claimant to it there there is none of the family members told us bank we don't know about this this isn't our policy where not making any claim us at some life filed sort of a pseudo winner pleader a declaratory judgment but they didn't name any other banks position and in that case we can come to one conclusion which is that the legislature authorized life insurance to be used as a wager in one nine hundred seventy five in our position is that if it actually intended to do that and we don't think it did but if that's the conclusion then the legislature went beyond its authority granted in the constitution and be historically going back to the constitution in eight hundred forty eight the  constitution says that all lotteries are banned and the lottery was understood very broadly it was anything that required a prize consideration and some element of chance so the definition of a lottery historically is what we sort of understand gambling to be this this you know these three things so you want the six million well if the policy is the way to the music not the pig you want to keep the money well yes we didn't  and let me be very clear if this is a wagering policy we want to keep the money if it is not we want to pay the money the insurance company they investigated this claim and shlaim and the law there's  three some states don't we will do whatever the law requires us to do we haven't gotten there in this case but we will and we've done it in the past but now just a nuisance threat and what what is your basis for keeping the six million if the policy is if it's an illegal contract so this policy why don't you get the six well if it's an illegal contract there there was no million we have a claim for six million dollars on a on a policy if the policy is an illegal contract begin with then there's no so you're not asking for any money no no no we we were seeking in the middle of investigating a claim we got sued for breach of contract because we didn't pay the claim already and our response to that was we have been disha that this is a wagering policy and we're investigating it to find what you want  i don't i don't i actually don't agree with that if it's not a wagering policy we will pay the six million dollars we never got the chance to make a determination because we got sued and then we asserted the affirmative defense the judge entered judgment on the pleadings against us we had no  added penalties under wisconsin law so given what you've just said why is it your position that you will pay the six million dollars but you don't think you owe the additional penalty amounts that doesn't seem to be your position well respectfully the the judge said we are not allowed to invoke the wagering defense we answer the complaint we never took any discovery the plaintiffs state law the judge told you the meaning of state law he told you the truth over the six million and you were fused to carry out that part of the judge's order now anybody isn't trying to ask us to reverse right but all of us are i think baffled by your statement we want to pay the six million you are asking us for an order freeing you of any obligation to pay the six million you can't stand up and say we want to pay  opposing it and have opposed it from the get go in well case what let me right now you're just making the members of the bench angry at trial i'm sorry but there's a basic rule when you're in a hole stop digging see your time is running we'll see her say you know you can have another i want look i don't i don't want to dig a hole but i want you know you've already dug i apologize your honor if you don't have to apologize to me you might have to apologize to your client we the company never had the chance to make a claim determination because it got sued that's what happened here the company had it had the chance to complete its claim decision it may have i a while so why would being sued prevent from continuing to investigate whether it had a claim we it can investigate and has done as much as it can do without without getting discovery that's that's why that's at the company trying to get information in discovery or in total cooperation of the insured we didn't get that we asked for we asked for documents from the insurer and we didn't get that then you could say we're failing to pay the policy because the insured