Western Rim Inv. Advisors Inc. v. Gulf Ins. Co., No. 4:02-CV-112-Y.

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
Writing for the CourtMeans
Citation269 F.Supp.2d 836
PartiesWESTERN RIM INVESTMENT ADVISORS, INC., et al., v. GULF INSURANCE CO.
Docket NumberNo. 4:02-CV-112-Y.
Decision Date17 June 2003
269 F.Supp.2d 836
WESTERN RIM INVESTMENT ADVISORS, INC., et al.,
v.
GULF INSURANCE CO.
No. 4:02-CV-112-Y.
United States District Court, N.D. Texas, Fort Worth Division.
June 17, 2003.

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COPYRIGHT MATERIAL OMITTED

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Robert L. Chaiken, Chaiken & Chaiken, Dallas, TX, for Plaintiffs.

Rick J.W. Graham, Graham, Bright & Smith, Dallas, TX, pro se.

Sidney H. Davis, Jr., Touchstone, Bernays, Johnston, Beall & Smith, Dallas, TX, for Gulf Ins. Co.

ORDER DENYING DEFENDANT'S PARTIAL MOTION FOR SUMMARY JUDGMENT AND GRANTING PLAINTIFFS' PARTIAL MOTION FOR SUMMARY JUDGMENT

MEANS, District Judge.


Pending before the Court are the parties' cross-motions for partial summary judgment, both filed on October 16, 2002. Having carefully considered the motions, responses, and replies, the Court concludes that the defendant's motion should be DENIED and the plaintiffs' motion should be GRANTED.

I. RELEVANT BACKGROUND

In July 2001, the plaintiffs1 (collectively referred to as "the Western Rim entities") were sued in the 44th Judicial District Court, Dallas County, Texas, by Monarch Service Company and others ("the Monarch lawsuit").2 The plaintiffs in the Monarch lawsuit ("the Monarch plaintiffs") allege that the Western Rim entities, through their agent, American Blast Fax, sent 80,000 unsolicited facsimiles advertising apartment complexes to prospective tenants.3 The Monarch plaintiffs allege that, by sending these faxes, the Western Rim entities have "violate[d] [their] right to privacy," "force[d] them to incur an expense which they did not request," and "deprive[d] [them] of the full use of their property." (Monarch Pis.' Third Am. Pet. at 6-7.) The Monarch plaintiffs claim that the facsimile advertising conducted by the Western Rim entities, through American Blast Fax, is in violation of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, et seq.,4 which provides a private cause of action for a party who receives unsolicited facsimile advertisements. The Monarch plaintiffs seek recovery

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of both statutory damages under the TCPA and actual damages for negligence per se.

The Western Rim entities were covered by a commercial general-liability insurance policy ("CGL policy") issued by defendant Gulf Insurance Company ("Gulf').5 On December 10, 2001, the Western Rim entities sent a copy of the petition in the Monarch lawsuit to Gulf and requested that Gulf defend them pursuant to coverage provided by the CGL policy. Subsequently, on January 24, 2002, Gulf sent a letter to the Western Rim entities denying the existence of coverage and refusing to undertake the duty to defend. After several weeks of exchanging correspondence, the Western Rim entities, on February 7, filed suit against Gulf in this Court for: (1) a declaratory judgment that, in essence, Gulf had a duty to defend the Western Rim entities in the Monarch lawsuit; (2) breach of contract; (3) breach of the duty of good faith and fair dealing; (4) violation of article 21.55 of the Texas Insurance Code ("the TIC"); (5) violation of article 21.21 of the TIC; and (6) negligence.

The Western Rim entities claim that Gulf owes a duty to defend them against the Monarch lawsuit because two sections of the CGL policy provide them with coverage: (1) property-damage section and (2) advertising-injury section. In addition, the Western Rim entities claim that because Gulf has breached its contract by refusing to defend them, Gulf is liable for the statutory penalties under article 21.55 of the TIC.6 Gulf, on the other hand, argues that it does not have a duty to defend the Western Rim entities because either none of the allegations in the petition in the underlying Monarch lawsuit trigger the coverage under the CGL policy or the allegations are excluded from coverage.

The section in the CGL policy providing coverage for property damage states:

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of ... "property damage" to which this insurance applies. We will have the right and duty to defend any "suit" seeking those damages....

....

b. This insurance applies to ... "property damage" only if:

(1) The ... "property damage" is caused by an "occurrence" that takes place in the "coverage territory" ....

(Pis.' App. to Mot. for Summ. J. ("Pis.' App.") at 48.) The policy defines "occurrence" as "an accident,6 including continuous or repeated exposure to substantially the same general harmful conditions." (Pis.' App. at 57.) Furthermore, the policy defines "property damage" as:

a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or

b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it.

(Pis.' App. at 58.)

The section in the CGL policy providing coverage for advertising injury states:

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a. We will pay those sums that the insured becomes legally obligated to pay as damages because of ... "advertising injury" to which this insurance applies. We will have the right and duty to defend any "suit" seeking those damages....

....

b. This insurance applies to

....

(2) "Advertising injury" caused by an offense committed in the course of advertising your goods, products or services ....

(Pis.' App. at 51.) "Advertising injury" is defined as an 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; or

d. Infringement of copyright, title or slogan.

(Pis.' App. at 56.) The CGL policy does not define the phrase "right of privacy" and excludes coverage for an advertising injury that "aris[es] out of oral or written publication of material, if done by or at the direction of the insured with knowledge of its falsity" or that "aris[es] out of the willful violation of a penal statute or ordinance committed by or with the consent of the insured." (Pis.' App. at 51.)

II. APPLICABLE LAW

A. Summary-Judgment Standard

Summary judgment is proper when the record establishes "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). An issue is considered "genuine" if "it is real and substantial as opposed to merely formal, pretended, or a sham." Bazan v. Hidalgo Cty., 246 F.3d 481, 489 (5th Cir. 2001) (citing Wilkinson v. Powell, 149 F.2d 335, 337 (5th Cir.1945)). Facts are considered "material" if they "might affect the outcome of the suit under governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). To determine whether there are any genuine issues of material fact, the Court must first consult the applicable substantive law to ascertain what factual issues are material. Lavespere v. Niagara Mack & Tool Works, 910 F.2d 167, 178 (5th Cir.1990). Next, the Court must review the evidence on those issues, viewing the facts in the light most favorable to the nonmoving party. Id.; Newell v. Oxford Mgmt. Inc., 912 F.2d 793, 795 (5th Cir. 1990); Medlin v. Palmer, 874 F.2d 1085, 1089 (5th Cir.1989).

In making its determination on the motion, the Court must look at the full record including the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits. See Fed. R. Civ. P. 56(c); Williams v. Adams, 836 F.2d 958, 961 (5th Cir.1988). Rule 56, however, "does not impose on the district court a duty to sift through the record in search of evidence to support" a party's motion for, or opposition to, summary judgment. Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n. 7 (5th Cir.1992). Thus, parties should "identify specific evidence in the record, and ... articulate" precisely how that evidence supports their claims. Forsyth v. Barr, 19 F.3d 1527, 1536 (5th Cir.1994). Further, the Court's function is not to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249, 106 S.Ct. 2505.

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To prevail on a motion for summary judgment, the moving party has the initial burden of demonstrating that there is no genuine issue as to any material fact and that he is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A defendant moving for summary judgment may submit evidence that negates a material element of the plaintiffs claim or show that there is no evidence to support an essential element of the plaintiffs claim. See Celotex Corp., 477 U.S. at 322-24, 106 S.Ct. 2548; Crescent Towing and Salvage Co. v. M/V Anax, 40 F.3d 741, 744 (5th Cir.1994); Lavespere, 910 F.2d at 178.

To negate a material element of the plaintiffs claim, the defendant must negate an element that would affect the outcome of the action. See Anderson, 477 U.S. at 247, 106 S.Ct. 2505. If the defendant moves for summary judgment alleging no evidence to support an essential element of the plaintiffs claim, the defendant need not produce evidence showing the absence of a genuine issue of fact on that essential element. Rather, the defendant need only show that the plaintiff, who bears the burden of proof, has adduced no evidence to support an essential element of his case. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548; Teply v. Mobil Oil Corp., 859 F.2d 375, 379 (5th Cir.1988).

When the moving party has carried its summary-judgment burden, the respondent must go beyond the pleadings and by his own evidence set forth specific facts showing there...

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  • Schuetz v. State Farm Fire & Cas. Co., No. 05 CVH-08-9371.
    • United States
    • Court of Common Pleas of Ohio
    • March 29, 2007
    ...Inc. v. Gulf Ins. Co. (C.A.5, 2004), 96 Fed.Appx. 960 (affirming W. Rim Invest. Advisors, Inc. v. Gulf Ins. Co. (N.D.Tex.2003), 269 F.Supp.2d 836); Universal Underwriters Ins. Co. v. Lou Fusz Auto. Network, Inc. (C.A.8, 2005), 401 F.3d 876, 881; Park Univ. Ents., 442 F.3d at 1251; Hooters o......
  • Italia Foods Inc v. As The Representative Of A Class Of Similarly Situated Persons, No. 2-08-1148.
    • United States
    • United States Appellate Court of Illinois
    • April 27, 2010
    ...statute to a penal one), aff'd, 157 Fed.Appx. 201 (11th Cir.2005); Western Rim Investment Advisors, Inc. v. Gulf Insurance Co., 269 F.Supp.2d 836, 849 (N.D.Tex.2003). But see Kruse v. McKenna, 178 P.3d 1198, 1200-01 (Colo.2008) (holding that state law determines matter of assignability and ......
  • Terra Nova Ins. Co. v. Fray-Witzer
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • July 10, 2007
    ...(S.D.Ga.2003), aff'd by unpublished opinion, 157 Fed.Appx. 201, 208 (11th Cir. 2005); Western Rim Inv. Advisors, Inc. v. Gulf Ins. Co., 269 F.Supp.2d 836, 848-849 (N.D.Tex.2003), aff'd by unpublished opinion, 96 Fed.Appx. 960 (5th Cir.2004). Such a finding would ignore the basic nature of t......
  • Whole Enchilada v. Travelers Prop. Cas. Co., Civil Action No. 07-1533.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. Western District of Pennsylvania
    • September 29, 2008
    ...while receiving the same can result in an invasion of privacy."); See also Western Rim Inv. Advisors, Inc. v. Gulf Insurance Co., 269 F.Supp.2d 836 (holding TCPA violation triggered "material that violates a person's right to The underlying litigation in this case, however, allege......
  • Request a trial to view additional results
40 cases
  • Schuetz v. State Farm Fire & Cas. Co., No. 05 CVH-08-9371.
    • United States
    • Court of Common Pleas of Ohio
    • March 29, 2007
    ...Inc. v. Gulf Ins. Co. (C.A.5, 2004), 96 Fed.Appx. 960 (affirming W. Rim Invest. Advisors, Inc. v. Gulf Ins. Co. (N.D.Tex.2003), 269 F.Supp.2d 836); Universal Underwriters Ins. Co. v. Lou Fusz Auto. Network, Inc. (C.A.8, 2005), 401 F.3d 876, 881; Park Univ. Ents., 442 F.3d at 1251; Hooters o......
  • Italia Foods Inc v. As The Representative Of A Class Of Similarly Situated Persons, No. 2-08-1148.
    • United States
    • United States Appellate Court of Illinois
    • April 27, 2010
    ...statute to a penal one), aff'd, 157 Fed.Appx. 201 (11th Cir.2005); Western Rim Investment Advisors, Inc. v. Gulf Insurance Co., 269 F.Supp.2d 836, 849 (N.D.Tex.2003). But see Kruse v. McKenna, 178 P.3d 1198, 1200-01 (Colo.2008) (holding that state law determines matter of assignability and ......
  • Terra Nova Ins. Co. v. Fray-Witzer
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • July 10, 2007
    ...(S.D.Ga.2003), aff'd by unpublished opinion, 157 Fed.Appx. 201, 208 (11th Cir. 2005); Western Rim Inv. Advisors, Inc. v. Gulf Ins. Co., 269 F.Supp.2d 836, 848-849 (N.D.Tex.2003), aff'd by unpublished opinion, 96 Fed.Appx. 960 (5th Cir.2004). Such a finding would ignore the basic nature of t......
  • Whole Enchilada v. Travelers Prop. Cas. Co., Civil Action No. 07-1533.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. Western District of Pennsylvania
    • September 29, 2008
    ...act, while receiving the same can result in an invasion of privacy."); See also Western Rim Inv. Advisors, Inc. v. Gulf Insurance Co., 269 F.Supp.2d 836 (holding TCPA violation triggered "material that violates a person's right to The underlying litigation in this case, however, alleges no ......
  • Request a trial to view additional results

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