Atlantic Lloyd's Ins. Co. of Texas v. Susman Godfrey, L.L.P.
| Decision Date | 26 August 1998 |
| Docket Number | No. 05-96-00981-CV,05-96-00981-CV |
| Citation | 982 S.W.2d 472 |
| Parties | ATLANTIC LLOYD'S INSURANCE COMPANY OF TEXAS, Appellant, v. SUSMAN GODFREY, L.L.P., Jeffrey W. Chambers, and Thomas A. Adams, IV, Appellees. |
| Court | Texas Court of Appeals |
Thomas B. Alleman, Winstead Sechrest & Minick PC, Dallas, for Appellant.
Barry C. Barnett, Susman Godfrey, L.L.P., Dallas, for Appellees.
Before OVARD, MALONEY and BRIDGES, JJ.
This is an appeal from a summary judgment in a declaratory action brought by an insurer, Atlantic Lloyd's Insurance Company of Texas (Atlantic), to determine coverage under a general liability insurance policy issued to the law firm of Susman Godfrey, L.L.P., including two of its attorneys, Jeffrey W. Chambers and Thomas A. Adams, IV (collectively "the Firm"). The pivotal issue is whether an attorney's solicitation letter sent to a prospective client provided a professional service. We conclude it did not. For this and other reasons set out below, we affirm.
Several years ago, the Firm represented an injured woman in a medical negligence suit against Dr. Larry Likover. Likover and the woman settled the lawsuit, and the settlement agreement included a confidentiality clause. On January 21, 1994, Adams allegedly violated the confidentiality clause by sending a letter to a former patient of Likover informing the patient of the previous lawsuit filed against Likover. In the letter, Adams invited the former patient to contact the Firm to discuss the patient's particular circumstances and offered to answer any questions if the patient chose to file a lawsuit against Likover. Likover learned of this letter, which can best be characterized as a solicitation letter, and sued the Firm for defamation, among other claims.
The Firm maintained an insurance policy with Atlantic which imposed on Atlantic a duty to defend and indemnify the Firm for suits seeking damages for bodily injury, property damage, personal injury, and advertising injury. Pursuant to the insurance policy, the Firm tendered Likover's lawsuit to Atlantic. Atlantic filed a declaratory judgment action seeking a determination that it had no duty to defend and indemnify the Firm. Atlantic argued that the policy did not cover the underlying injury of the Likover suit, or alternatively, the policy contained a provision excluding coverage for incidents involving professional services. The Firm filed its own motion for summary judgment stating that Atlantic had a duty to defend or indemnify the Firm.
The trial court's final judgment expressly granted the Firm's summary judgment motion while denying Atlantic's motion. The final judgment, however, also included the following language:
It is ORDERED that [Atlantic] has a duty to defend [the Firm] in the underlying lawsuit.
The final judgment fails to address Atlantic's duty to indemnify the Firm. The judgment concludes that "[a]ll other relief not expressly granted herein is denied."
In five points of error, Atlantic contends the trial court erred in rendering summary judgment for the Firm because (1) the Firm's policy does not provide coverage because the underlying injury is not an advertising injury, and (2) alternatively, if the underlying injury is an advertising injury, a "Designated Professional Services" exclusion precludes coverage. To the extent the trial court's final judgment does not provide Atlantic with a duty to indemnify, the Firm argues in a conditional cross-point the trial court erred in denying its motion for summary judgment for indemnity.
The standards for reviewing a summary judgment are well established: (1) the movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to summary judgment as a matter of law; (2) in deciding whether there is a disputed fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and (3) every inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). A defendant who moves for summary judgment must show that the plaintiff has no cause of action. A defendant may meet this burden by either (1) disproving at least one essential element of each theory of recovery, or (2) conclusively proving all elements of an affirmative defense. Wornick Co. v. Casas, 856 S.W.2d 732, 733 (Tex.1993).
An insurer's duty to defend and duty to indemnify are two distinct and separate duties. Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 821-22 (Tex.1997). The duty to defend an insured is based upon the terms of the insurance contract. National Union Fire Ins. Co. v. Merchants Fast Motor Lines, 939 S.W.2d 139, 141 (Tex.1997). A duty to defend arises if a plaintiff sues an insured, alleging facts that potentially support claims for which there are coverage. Id. The duty to defend is determined from the face of the pleading, without reference to the truth or falsity of the allegations. Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W.2d 22, 24 (Tex.1965). The insurer is to compare the four corners of the complaint with the four corners of the insurance policy to determine if the allegations potentially fall within the coverage of the policy. Id. at 23-25. The focus of the inquiry is the facts alleged; legal theories alleged are not determinative of the duty to defend. See Maayeh v. Trinity Lloyds Ins. Co., 850 S.W.2d 193, 195 (Tex.App.--Dallas 1992, no writ).
Before we address the central issue of whether an attorney's solicitation letter to a potential client provided a professional service, we must first address Atlantic's argument that the Firm's policy does not cover the underlying suit. Specifically, Atlantic argues that Likover's injury as a result of the January 21, 1994 letter written by Adams to Likover's former patient does not constitute an "advertising injury."
The Firm's insurance policy provides coverage for advertising injuries and provides the following definition of such an injury:
1. "Advertising injury" means injury arising out of one or more of the following offenses:
a. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services;
b. Oral or written publication of material that violates a person's right of privacy;
c. Misappropriation of advertising ideas or style of doing business;
d. Infringement of copyright, title or slogan.
Contrary to the Firm's claims, Atlantic does not concede that the injury is an advertising injury. 1 Therefore, we must analyze the nature of the underlying claim to determine if the policy covers the incident.
It is well established that the construction of insurance policies is governed by ordinary contract principles. Barnett v. Aetna Life Ins. Co., 723 S.W.2d 663, 665 (Tex.1987). The construction of the insurance policy is a question of law for the court to determine. Coker v. Coker, 650 S.W.2d 391, 393-94 (Tex.1983). If a term is susceptible to only one reasonable construction, it is the court's duty to give the word used its plain meaning. Puckett v. United States Fire Ins. Co., 678 S.W.2d 936, 938 (Tex.1984).
The policy defines the term "advertising injury" as an injury arising from a written publication which slanders a person. Based on Adams's letter, Likover asserts a defamation cause of action. The crux of Likover's lawsuit is that Adams attempted to influence a former patient to sue Likover because of his allegedly deficient medical work. Adams's letter characterizes Likover's work as "sloppy, callous, unacceptable, impersonal, and indifferent," and states that his conduct was "so outrageous" that previous litigants obtained a multi-million dollar settlement. Clearly, the purpose of Adams's letter is to cast Likover in an unfavorable light to encourage a lawsuit against Likover. Adams then boasts about the Firm's previous success to gain the business of Likover's former patient. 2 Given the policy's plain meaning, it is clear that Likover's lawsuit falls within the term "advertising injury" provided by the policy.
Having concluded that Likover alleges an advertising injury, we now address the pivotal issue: whether an attorney's solicitation letter sent to a prospective client provided a professional service. It is Atlantic's argument that the professional services exclusion clause precludes coverage for an attorney's solicitation letter. The professional services exclusion contained in the Firm's policy provides:
EXCLUSION--DESIGNATED PROFESSIONAL SERVICES
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Description of professional services:
LEGAL SERVICES INCLUDED BUT NOT LIMITED TO COUNSELING, ADVICE, OR ANY OTHER SERVICES REGARDLESS OF WHERE, HOW AND BY WHOM PROVIDED WHICH MAY BE OR ARE PROVIDED OR RENDERED BY LAWYERS, PARALEGALS AND OTHERS WORKING IN A LAW OFFICE AND/OR ADMINISTRATION, MANAGEMENT OR OTHER SERVICES ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LEGAL SERVICES DESCRIBED HEREIN.
With respect to any professional services shown in the Schedule, this insurance does not apply to "bodily injury," "property damage," "personal injury" or "advertising injury" due to the rendering or failure to render any professional service.
Atlantic claims that the phrase "professional services" includes acts that are an integral aspect of the practice of law, and the solicitation of clients is an integral aspect. The Firm contends Adams's letter, however, merely creates the opportunity to provide professional services for others. The letter does not render legal services and does...
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