will be attorneys who argue though poorly argue please approach the podium and introduce yourselves i will try to reserve about four minutes for rebutt your honor for the protection of policyholders in the state of illinois and elsewhere illinois statute authorizes a director of insurance to place insurance companies in liquidation right it's a curious kind of protection because the effect of an insurance liquidation on insurance policy holders is brutal the policy holder is by judicial fee out for an indefinite period of time cut off from the protection of his policy he is barred from suing the insurer even though the insured has is inevitably default in providing him the defense indemnity for which he's part and but on the other hand no injunction stops a plaintive from suing the insured nothing stays those lawsuits they go on and the insured as well as the plaintiff is allowed to submit a claim to the liquidation estate but it is perfectly clear that no answer will be received from the liquid ation estate in time to protect the policyholder from losing that lawsuit the policyholder may also appeal to the insurance guarantee funds and the insurance guarantee funds to a very fine job of providing the defense of the lawsuit for the policyholder to cover this and they got an automatic stay with us bankruptcy is now the the the crux of this is isn't at this juncture point where the there was a mediation yes let's go into the mediation and the transfer of the rights to the claimed rights to the insures that would have been available but for the it would be and therefore it is under the under the fact charged with the responsibility of determining the or of submitting for the approval of the court the proper claims that can be made against the liquidation the state of the insurance co does not however authorize these liquidator to make up whole new rules about what is a claim and what isn't he's bound by the contracts of the insurance company in the end it's policyholders this court in the dump to pitch in what i call the dunk of have the the lot governing those contracts does not change so but the insurance code also contains a profession that it is up to the claimants the power see holders and the claimant creditors to liquidate their claims before they can be allowed by the liquidation court now how do you liquidate a claim you reduce it to dollar money value and if you cannot do that before the deadline that's provided in a liquidation coq then you're out of luck you're going to get kicked to the next level a priority and have to obtain approval of an estimated claim maybe and if you can't make it have enough certainty for that you're just going to be completely out of luck your claim is going to be completely part so it is not the liquidators job to decide how much the claims are it's a liquidators job and the court's job to recognise the claims once the parties have liquidated them but you cost for the defense themselves but then they became the the under the terms of the agreement with the family than they became the would become the that a transaction which is signed to individuals the the benefit of an insurance policy if you get sick of it and a claim against the company in liquidation is perfectly permissible the law of illinois is that in general claims may be assigned and they may be assigned to anybody family members investors whatever claim should be freely assignable unless there's some public policy reason that prohibits it now the co here initially concluded and i think probably stuck to the position that the claims could not be assigned because they were personal injury claims but in fact is this court recognized in dunk of h and in other cases once  case has been settled once it has been quote liquidated then it is no longer a personal injury claim it's a contract line and it can be assigned like anything else so the fact that the parties the the real question that's raised by this case around and i'm sympathetic to are you trying to go is that what exactly is it that the policyholder and the claimants are supposed to do during the ten years they can expect to wait before the liquidator gets around with dressing their claims and the answer is they got to do the best they can with what's available now here they were and unlike in dunk of a two apparently the landlord was judgment proof they were valuable assets that the plaintiffs could get their hands on and they wanted them and they were it but in that if if they had been allowed to continue to do that what would have been the social benefit that resulted that a seventy year old family business would have been destroyed the community service would have been disrupted and it really does nobody any good there's absolutely no good to man or beast that would have been there would have resulted from that transaction and that's why it should and could you that i believe even the station that it is the court whose who is responsible for determining the who are the creditors of a liquidated the state it is not there is nothing in the statute that gives the liquidator any degree of discretion in determining claims against the estate of the liquidator in this case did not argue that he had any degree of discretion to decide which were which now the court did make one line that said the liquidator chose to choose to save the state's assets to pay for what she considered real claims instead of these assigned once but but but there decides whether to accept it and holds a hearing at which the other side is permitted to present evidence and so forth so no the liquidator does it the liquidator makes initial call the liquidator gets a degree of deference but the liquidator does not change people's contract rights by deciding that he likes this kind of claim and he doesn't like that kind of claim the legislature established the priorities for payment of claims against the estate it's got a whole long list of them i think they reach up to age these are claim be the liquidator is not the eye but does not have to discretion to decide which kinds of claims are better than others but it in this case the first let me thank you for your brief these are deadly cases generally perceived by many of us with me family has the right to collect the amount of the so agreement judgment that should be paid by fireman's fund or interstate national road with associated one insurance policy was assigned to the tally family they thought that was a better bet because it that now don't give it works well when you have a judgment proof defend because then it makes sense for the plaintiff to give that defendant a release in order to get hold of the right chase for the insurance  there's a simple answer to that your honor and that is that nobody has decided the amount of the claim in this case if the liquidator wanted to make a recommendation for what a fair and reasonable amount would have been he could have done it and supported it with evidence but he didn't do that that could this court may be one way to know when civilians who he is only basis for that was that that was the amount that ten years ago the plaintiffs plaintiffs paid in addition to all the costs of the bankruptcy and all of the whole lots of other things that the liquidator didn't take into account the court never put us in a position where we could present evidence as to whether or not one point two million dollars was an appropriate number the court ruled on this case as a matter of law that the assignment and of the claim of the tally family to the pokey family was invalid as a matter of law and that the judgment that was rendered against the barrington transportation was could not be given any consideration or any weight again as a matter of law so we never had the opportunity to present evidence as to what the proper amount w solvent insurance estates and the reason for that is they take a heck of a long time to mature and to pay off twenty thirty years is relatively common and people have different tolerances for how long they can afford to wait for their money money now could be worth a lot more than money later and you bring in people with a lot of you put together people with a long view and a short view and there is now a thriving secondary market in claims against an insolvent insurance that states there was not such a market for these people in legion simply because the state was so new and nobody knew anything yet there is now that you could sell this claim that the quite get it it's not a windfall if someone buys a claim on spec and collects more money later on if it's way too much money a court could do something about that perhaps but that's that's a question the court did not address and there's ok i want to do at least five  the settlement agreement may be assigned secondly the court decided that the fact that a judgment was involved in the settlement with with the transportation by a consideration of the settlement that is also incorrect the statute does not bar consider any consideration of judgments reached in the cases in liquidation giving them conclusive weight again same point you were just making that be interesting to see what becomes of the rest of the case later on would like the opportunity to get their thank you  i think fairly stated and on usual situation where the liquidator has offered to pay to the claimants every dime that they paid to resolve this wrongful death personal injury claim of the parents of christine talley and they reject it and insistent stad that they're entitled to foreign a half million dollars more than what they paid there is no authority in the illinois insurance code to liquidation provisions of the illinois insurance code that allows such a strange result there is no authority in illinois case law that allows such a result and the facts of this case show there's good reason for for those conclusions let me just correct one incorrect part of my colleagues argument the duncan bitch case did not involve an assignment involved a covenant not to sue and it had the situation where the injured party retained its rights to proceed under two zero nine six directly against the liquidator of the insurance company that's a that's a much different situation that then we have which is the injured folks or the claimants rather trying to assert the claims of the injured folks and in order to resolve this case i suggest that all the court needs to do is to look at the liquidation provisions of the illinois insurance code specifically we've got a complex statutory scheme that sets all precisely how these kinds of claims are to be litigated are to be investigated are to be resolved the only possible claims that the appellant's can assert is their own claim under two zero nine four which is where the insurance company and i think counsel described it very accurately may assert a claim at the appropriate time  gets evaluated if they did that there's no doubt at all they get is one point two million dollars because that's what they paid to resolve this so it can't be that is the claim that the really talking about and it's not the claim that they're really talking about of course is the tallies claim under two hundred nine six which allows an injured party to proceed directly now as to that there's a real problem for the claimants in trying to advance that claim as judge mikva help and that is first of all personal injury claims are not assignable there's one hundred years of illinois jurisprudence on that doctor and they acknowledge it and can see that instead they talk about well if you liquidated if you settle it and so forth then you can assign those kinds of claims and we agree if you settle a personal injury lawsuit you have a settlement agreement it becomes something other than a personal injury claim that can be assigned happens all the time structured settlements things of that nature you know we don't argue that but the problem for them is within a liquidation provision proceeding rather no judgment has any a fact if it's entered post order of liquidation as to liability or damages so what happened in december of two thousand and three when they created the resolution of the tally claim there was this reference to a stipulated judgment in the bankruptcy proceeding for the claim that the parents had filed their of seven and a half million dollars then there was the consideration that was paid and the stuff with the other insurance companies and the guarantee funds aren't really a political here but s to these claimants  to pay one point two million dollars to the tallys parents and they did and then what did the tallies do they acknowledge that was the sole consideration that barrington bisque responsible for and then they said well assigning anything that's left with respect to matters pertaining to legian insurance company well the essence of the assignment and their argument is this stipulated judgment it has no effect in the liquidation proceeding because it occurred post order of liquidation so therefore if the tallies had filed their claim all they would have had is a claim under two all nine six which is the personal injury claim for the wrongful death of their ten year old daughter and they could have proceeded to rankly in the liquidation proceeding with that claim what they can't do is sign that claim to someone else to assert on their behalf and this discussion about me liquidate claims and we sell claims and b has nothing to do with personal injury claims has nothing to do with two zero nine six direct claims and there is not a piece of case of the worthy or statutory support for that proposition but the new south intermediate be if this is something new  there may need to be but if there does that's up to the illinois general assembly of course and not our courts in order to craft new provisions into the illinois insurance code but it there is no case that supports what they're trying to do here and therefore what they're trying to do here which is collect more oil than they pay i mean that you know counsel would be answer your question directly about hey look if it if you collect what you're asking for which is five point seven million dollars and you paid one point two million isn't that afford a half million dollar windfall and isn't that repugnant to our case law well developed then what insurance is supposed to be and what it's not supposed to be and it's clear what it's not supposed to be it's allowed windfall recoveries and then she started to say something about well it's not really that because there were attorneys fees paid to defend this that the other thing was she never answer the question and there can be no question but of course it's a windfall because if you paid one point two million klak five and a half million the difference is more than you paid that's a windfall in this circumstance under these cases and they know it is because before judge mikva they filed a brief that said they were entitled to quote unquote a tidy profit given the facts of this case that their company was was it was in straits because they couldn't defend the case and they didn't have the assets to do it but they said that may be true but that doesn't allow them to do what they're trying to do here the only thing that could allow that is if they can point to a provision in the statute or they can put a point to controlling case authority to allow this result they can do neither because there is no support in the statute and there is no support in the case law and this is one of those rare cases where if you step back and you look at what happened and what they're asking the court to do it there's something wrong with that there's just something very very wrong with that and i know you know that the facts are clear i don't think i need to explain more than that and i would respectfully ask your honour's to affirm judge mi gives you a kind of a funny feeling the only thing that puts me back on the straight and narrow path is all of the alternatives that were available to the parties in this case back in two thousand and four or two thousand yeah they just  worse we were facing the destruction of a business we're facing a litigation that could be extended for a further ten years all of those things are worse yes and  the the idea of how the insurance works and the liquidation of these things is to marshal the assets and then to pay them on a priority basis and so how can you square the the the liquidator has the discretion obviously you agree in order to to determine the liquidated amount of these claims no your honor i do not you know why is it the nothing in the statute says he does it directs him to zero determine the amounts of the claims but then to submit them to the court right for approval and as this court has said ultimately we don't permit private citizens or even people appointed time but in the construct of this did you say as much as is available to pay out as many of the claims as possible under the priorities of the stitching so that if someone else gets a windfall like this it's money that's going to long ago we had a bankruptcy involving the dutch boy paint company who owned a claim against pine top insurance company and at the time nobody was sure when or when or if my top was ever going to pay out and they needed the money and we held an auction in the bankruptcy court as a five million dollar claim the winning bidder paid three and a half million dollars and six months later less than six months later pi paid out one hundred cents on the dollar that bidder made a lot of money that's not a windfall that's a good investment but the but the  they can go to work and there's a there's there's with embedded within this code is a distribution under the fairness as defined by the illinois general assembly and actually it's basically the n e a i see the national association of surance commissioners these are these are these are statutes that are basically uniform and so the philosophy of this is i'm trying to get as you keep talking about this as a as a financial opportunity instead of something that here's to a code that's supposed to distribute assets that are available to as many people this possible not those who have the money to come in and buy a claim so i think the disconnect here is that you have an assignment of a right from a direct insured person who suffered the loss to somebody who's putting a bad off it is that howard of supposed to determine the rights under this cold feet availability of a secondary market in insurance claims benefits policyholders when policyholders need money now they don't need money in ten or fifteen or twenty years when the liquidator gets around to paying it out those policyholders to save their family company from bankruptcy this family needed to be able to deal with this now they got their money back and the rest of the money would have been excess well check they don't have their money back to this date your honor our motion to look at least pay as much as the  liquidator agreed he ought to pay was turned out by the court that's a secondary piece of r p m but to say that when you make an investment in an extremely speculative uncertain payout in the future that you've been adequately compensated if you get your money back is silly and yet if nobody was willing to make that kind of investment this case could not have settled and of the barrington bus company would be out of business but if you from the muslim millionaires and the money well in this case i'm reasonably sure that it will come from a reinsurer it will not reduce the amounts paid to policyholders by one dime the liquidator has already decreed that every single including what they paid on this claim the liquidators job is to take all of the proper claims against the estate and without playing favorites or deciding which people have white hats or deciding which ones are the claims he likes better to divide the assets that are available equitably among everybody according to the size of their claims now a number of years back this state of california the liquidation of executive life insurance company got the bright idea that some classes of insurance policies and executive life were owned by investors and they thought that those people should get treated differently and the supreme court of the state of california said a policy's policy if i legislature wants to make a difference for priority classification for investor own claims versus claims owned by mom and pop they can do it they do with the fact that the guarantees associations we provide guarantee association protection to little guys and  but it acts as though it has the model actor the same philosophy runs through it but it is not up to the liquidator to decide that one kind of claim fitting within the classifications