Preview
e e
La
CAUSE NO. DC-12-03577 | L E D
12 AUG 30 PH 3:15
IN THE DISTRICT; COURT, QF
piste
REPUBLIC LLOYDS
v.
§
§
§ ALL .iry
§ DaLLasepth TEXAS
LEGACY RESTAURANT GROUP, —§ My eoesury
LTD. and STEAK HOUSE § 160th JUDICIAL DISTRICT
MANAGEMENT COMPANY,LLC §
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT
Pursuant to Rule 166a of the Texas Rules of Civil Procedure, Plaintiff Republic Lloyds
(“Republic”) files this Motion for Partial Summary Judgment and Brief in Support.
Respectfully submitted,
WILSON, ELSER, MOSKOWITZ, EDELMAN
& DICKER LLP
J. Price Collins
State Bar No. 04610700
Blake H. Crawford
State Bar No. 24065096
Bank of America Plaza
901 Main Street, Suite 4800
Dallas, Texas 75202
Telephone: (214) 698-8000
Facsimile: (214) 698-1101
ATTORNEYS FOR PLAINTIFF,
REPUBLIC LLOYDS
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 1
1439018.2TABLE OF CONTENTS
Page
1. INTRODUCTION AND SUMMARY OF ARGUMENT .............:0::::eseteteesseeeeees 6
Il. SUMMARY OF JUDGMENT STANDARD ......cessscesssseesseceseecesseessnsesseseaseesnensanesareesnass 6
Ill. | GROUNDS FOR SUMMARY JUDGMENT...
IV, SUMMARY JUDGMENT EVIDENCE wu......ccesssssesescsssssssssescessseeseesssseesnneccsnneesssnsessennnneee 7
Vv. STATEMENT OF UNDISPUTED FACTS ........eeeeceseereeieees
A. The Policy ......esescssessessssssscceceesessnesssesecanesseecsseseaseecaesnneaseeeresauecarenueannessesaeeneanneds 7
B The Underlying Suit........0..ccssesssecssecseesessesseeeeseessceiseneesernneansets
VI. > ARGUMENTS AND AUTHORITIES. ...scccssssssssssssecssseeccesssessenseecennneesseaeesnnnansersneettcsty 14
A. No Duty to Defend Exists in the Underlying Suit Because Neither the
Coverage A Insuring Agreement nor Coverage B Insuring
Agreement is Triggered .........essssescssssseecsssscssesenseeeseessnneeseecsseeesonsenneessarersetenseeees LA
1. Interpretation of insurance policies under Texas law .........sccneeeree 14
2. Texas law on the duty to defend ......cccsccssecsescsesessesssesesseesssssssessneeeeee 1S
3. The Coverage A Insuring Agrecment is not triggered... eeeeee 16
a. There are no allegations of “property damage” in the
Underlying Suit..
b. There are no allegations of “bodily injury” in the
Underlying Suit... ccseessssscsseeeseecneensessiesseenneenees
c. Even if there was “property damage” or “bodily injury,” this
damage or injury did not result from an “occurrence.”
4. If the Coverage A Insuring Agreement is triggered, the “expected or
intended injury” exclusion bars COVErage. ........1.-cesseceteccesseseeeeeeesee 20
5. The Coverage B Insuring Agreement is not triggered... 21
6. Republic has no duty to defend Legacy or Steak House Management
as a matter of law....
VII. CONCLUSION AND PRAYER ......cccsssecssssssseessnssssneceesecsoecssaesonessaseesanensnesansenneeeensenney 2D
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 2
1439018.2TABLE OF AUTHORITIES
Cases Page
TEXAS SUPREME COURT
Argonaut Sw. Ins. Co. v. Maupin,
$00 S.W.2d 633 (Tex. 1973)..ccecsseecssecsseessneersvessnneecorseesseeenrecsneeessesesssarsnesssenssssesssecsssneseveesaneessseess 1D
Browning-Ferris, Inc. v. Reyna,
865 S.W.2d 925 (Tex. 1993)...ceescesssssnseeeesccessssnceereevsssnnesscesssssussiceeesnsssseeeccesannameeseerenseateerseren LD
Carroll y. Timmers Chevrolet, Inc.,
592 S.W.2d 922 (Tex. 1979)...cesccsessssessnecssseecsneecssesssssessasssvesssseeesisenseceessessaneesantes
Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd.,
940 S.W.2d 587 (Tex. 1996) .....ccceecsecceceeee ccc teeenteseecseeeetntereesneeerennesenteaaeennnags 15
DeWitt County Elec. Coop., Inc. v. Parks,
1 S.W.3d 96 (Tex. 1999)... ceeccsecessssesseeeteessesseesnersnsesesstesuessnesssesreceeceacseneesuecaacaneeasessecaesnnenseenets 14
Don’s Bidg. Supply, Inc. v. OneBeacon Ins. Co.,
267 S.W.3d 20 (Tex. 2008).....seccescrreccsnesssnesssessssersssesessecesusesssseenneessnarsansecenceesnegnnscsonieesnesesees 15, 23
Elliott-Williams Co. v. Diaz,
9 S.W.3d 801 (Tex. 1999). ccccccscccsssssessseccsteessseessueesssessesesssnecssecssseessunsssvessaseessiectanecossesnnnessssesaneestas 7
Evanston Ins. Co. v. Legacy of Life, Inc.,
2012 Tex. LEXIS 569 (Tex. June 29, 2012)... wll
Havlen v. McDougall,
222 S.W.3d 343 (Tex. 2000)... escccsssseeeseesssssnneeseeceessneeseesessaniseeesssssseessessnmatescecnnnmnsererranennee: ©
Lamar Homes, Inc. v. Mid-Continent Cas. Co.,
242 S.W.3d 1 (Tex. 2007)... creeecscsssscsnieecesssssnnesseeceesnnenreeseesnectessssismeessssnmaeceennnaasseeras 18, 20
Mid-Century Ins. Co. v. Lindsey,
997 S.W.2d 153 (Tex. 1999). esssssssssessssssssnneeeresseesenmseeessssssmeessssesssssectossnmmaeeseesannaeeserrannmnees 18
Nat'l Union Fire Ins. Co. v. Merchs. Fast Motor Lines, inc.,
939 S.W.2d 139 (Tex. 1997) oo. ececsescsteessecssstesneenseess
Pine Oak Builders, Inc. v. Great American Lloyds Ins. Co.,
279 SW 3d 650 (Tex. 2009) ....... cee ceee cece cece cee cece cette eee tee nnn nr ee tere tear eee teerteeeee 16
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 3
1439018.2Teer v. Duddlesten,
664 S.W.2d 702 (Tex. 1984)... sesscsccssessssecsssccsstessseessnecssuessureessnesseeessscessnesssnesassessesensessossersaneenseessay 6
Trinity Universal Ins. Co. v. Cowan,
945 S.W.2d 819 (Tex. 1997). - 14, 17, 18, 20
Utica Nat'l Ins. Co. v. American Indem. Co.,
141 S.W.3d 198 (Tex. 2004)... cccsesseecessessscsesssseecnecsessnesnssscsniesseasecsseaseeseesnecenscaseeneenses 15, 16
TEXAS APPELLATE COURTS
CU Lloyd's v. Main St. Homes,
79 S.W.3d 687 (Tex. App.—Austin 2002, m0 pet) .......cccececcseeeeeereneeissnessesscssvesseerseranensnes 19
Colony Ins. Co. v. H.R.K., Inc.,
728 S.W.2d 848 (Tex. App.—Dallas 1987, 90 W1it) .....ccccecscecseesecesseeeneeneeneeeneeeasearenneenneess 16, 23
Exxon Corp. v. Allsup,
808 S.W.2d 648 (Tex. App.—Corpus Christi 1991, writ denied) .......cccscesseseeseecsesesteeeseessee 1D
Great Am. Lloyds Ins. Co. v. Mittlestadt,
109 S.W.3d 784 (Tex. App.—Fort Worth 2003, no. pet.) ......ccssssssssssssssnssennnniseceesessstsssscsssassees LT
Hartrick v. Great Amer. Lloyds Ins. Co.,
62 S.W.3d 270 (Tex. App.—Houston [Ist Dist.] 2001, no pet.) .......sccssecsssscesecceneceesneeeseeee 1S.
McCarthy Bros. Co. v. Cont’l Lloyds Ins. Co.,
7 S.W.3d 725 (Tex. App.—Austin 1999, no pet.).
Pa. Pulp & Paper Co., Inc. v. Nationwide Mut. Ins. Co.,
100 S.W.3d 566 (Tex. App.—Houston [14th Dist.] 2003, pet. demied) .........ccccesenee 14, 16, 22
State Farm Lioyds v. Kessler,
932 S.W.2d 732 (Tex. App.—Fort Worth 1996, writ denied)... ce sesseessesseseseeseesessseeseee LT
Terra Int'l, Inc. v. Commonwealth Lloyds’ Ins. Co.,
829 S.W.2d 270 (Tex. App.—Dallas 1992, no WTit) ......ecceccssseseseesesseeeseeseessnceacestesnessesssseseeseee LT
Winn v. Cont’l Cas. Co.,
494 S.W.2d 601 (Tex. App.—Tyler 1973, no Wiit) eee eceeeessesenneeececssnnetecsssnnencscceseneee 1S
FIFTH CIRCUIT
PYCA Indus. v. Harrison sou Waste Water Mam D Dist.,
81 F.3d 1412 (5th Cir. 1996)... seseessesaetese sessueeesaeessneecsuetansessanasssessesssssessseessseeasseessses 22
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 4
1439018.2Sentry Ins. v. R.J. Weber Co.,
2 F.3d 554 (Sth Cir, 1993) occesssssecssecsssesssseessesesnsersssessssecssseesseesssersarenssnesssesssassssserssectsessnnerserses 1S
FEDERAL DISTRICT COURTS
State Farm Lloyds v. Jones,
2008 U.S. Dist. LEXIS 104866 (E.D. Tex. 2008) ......ccccscsesssseessssessessnsersnsessnsceseesaneesenenntescaniees 20
Union Mut. Ins. Cos. v. Stotts,
837 F. Supp. 814 (N.D. Tex. 1993) 0... cece eceeeeeeeeeeeetersaneeeeeeeeeerianeeeercesecen ne sasenss 17
STATUTES AND RULES
TEX. R. CIV. P. 166a(C) ooescessesssecceecesseesenesneecnessnsesseaseessscsacsaeeseereeeanserecsnecantensensaseessecsesasseasseennects 1
SECONDARY AUTHORITIES
BLACK’S LAW DICTIONARY (9th ed. 2009)...
BLACK’S Law Dictionary 576 (6th ed. 1990).
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 5
1439018.21
INTRODUCTION AND SUMMARY OF ARGUMENT
This is an insurance coverage dispute in which Republic secks a judicial declaration that
it has no duty to defend or indemnify Legacy Restaurant Group, Ltd. (“Legacy”) and Steak
House Management Company, LLC (“Steak House Management”) in an underlying lawsuit filed
by Michelle Nouvel (“Nouvel”). In the underlying lawsuit, Nouvel alleges that Legacy and
Steak House Management tortiously interfered with her employment relationship, ultimately
causing her to be fired from her job.
The claims asserted and damages sought by Nouvel in the underlying lawsuit are not
covered by the policy issued by Republic. Nevertheless, Republic agreed to provide a defense
for Legacy and Steak House Management, subject to a reservation of rights. Thereafter,
Republic filed this coverage lawsuit secking a declaration of its rights under the policy. The
uncontroverted material evidence establishes that neither insuring agreement of the commercial
general liability portion of the policy is triggered by Nouvel’s factual allegations in her pleading.
Accordingly, Republic is entitled to judgment as a matter of law that it has no duty to defend
Legacy or Steak House Management under the policy in the underlying lawsuit.
Il.
SUMMARY JUDGMENT STANDARD
Summary judgment is proper when “there is no genuine issue as to any material fact and
the moving party is entitled to judgment as a matter of law.” TEX. R. Cv. P. 166a(c); see also
Teer v. Duddlesten, 664 S.W.2d 702, 704 (Tex. 1984). A party seeking summary judgment has
the burden of proving conclusively all elements of the movant’s claim or defense as a matter of
law. Havien v. McDougall, 222 §.W.3d 343, 345 (Tex. 2000). To survive summary judgment, a
non-movant “must come forward with more than mere intuition, conclusory allegations,
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 6
1439018.2improbable inferences and unsupported speculation.” Elliott-Williams Co. v. Diaz, 9 S.W.3d
801, 803 (Tex. 1999).
Il.
GROUNDS FOR SUMMARY JUDGMENT
Republic has no duty to defend Legacy or Steak House Management in the underlying
lawsuit as a matter of law, because neither the Coverage A Insuring Agreement nor Coverage
B Insuring Agreement of the commercial general liability form of the policy is triggered.
Iv.
SUMMARY JUDGMENT EVIDENCE
In support of its Motion, Republic relics upon the pleadings on file with the Court and the
following summary judgment evidence, which is attached to this Motion and incorporated herein
by reference as set forth in full:
e Exhibit 1; The Affidavit of Carol McDaniel and the following documents attached
thereto:
Document “A” True and correct copies of the following forms within
policy number CMP 5645531 05: Common Policy
Declarations, Commercial General _ Liability
Declarations, Commercial General Liability Coverage
Form, and endorsements modifying the terms under
the Commercial General Liability Coverage Form.
Document “B” Nouvel’s First Amended Petition in the underlying
lawsuit filed on November 22, 2011.
Vv.
STATEMENT OF UNDISPUTED FACTS
A. The Policy.
Republic issued to Legacy “Commercial Lines Policy” number CMP 5645531 05 for the
policy period from December 31, 2010 to December 31, 2011 (the “Policy”). Exhibit 1,
Document A, Common Policy Declarations, REP-LEG 0286. The Policy provides commercial
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 7
1439018.2general liability coverage,’ subject to a $1,000,000 limit of liability for each occurrence, a
$1,000,000 personal and advertising injury limit of liability, a $2,000,000 general aggregate
limit, and a $2,000,000 “products-completed operations” aggregate limit. /d., Commercial
General Liability Declarations, REP-LEG 0392.
The Coverage A Insuring Agreement of the Policy provides in pertinent part:
SECTION | - COVERAGES
COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY
4, tnsuring Agreement
a. Wewill pay those sums that the insured becomes {egally obligated to pay as
damages because of . . . “property damage” to which this insurance applies.
We will have the right and duty to defend the insured against any “suit”
seeking those damages. However, we will have no duty to defend the
insured against any “suit” seeking damages for . . . “property damage” to
which this insurance does not apply. We may at our discretion, investigate
any “occurrence” and settle any claim or “suit” that may result. But:
(1) The amount we will pay for damages is limited as described in Section
{ll - Limits Of Insurance; and
(2) Our right and duty to defend ends when we have used up the
applicable limit of insurance in payment of judgments or settlements
under Coverages A or B or medical expenses under Coverage C.
No other obligation or liability to pay sums or perform acts or services is
covered unless explicitly provided for under Supplementary Payments —
Coverages A and B.
b. This insurance applies to “bodily injury” and “property damage” only if:
(1) The “bodily injury” or “property damage” is caused by an “occurrence”
that takes place in the “coverage territory”;
{2) The “bodily injury” or “property damage” occurs during the policy
period; ....
Exhibit 1, Document A, Commercial General Liability Coverage Form, REP-LEG 0401.
The Coverage B Insuring Agreement of the Policy provides in pertinent part:
COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY
1. Insuring Agreement
" Any reference to the term “Policy” means the Commercial General Liability Coverage Form, as this is the
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page &
1439018.2a. We will pay those sums that the insured be-comes legally obligated to pay
as damages be-cause of "personal and advertising injury” to which this
insurance applies. We will have the right and duty to defend the insured
against any "suit" seeking those damages. However, we will have no duty to
defend the insured against any "suit" seeking damages for "personal and
advertising injury” to which this insurance does not apply. We may, at our
discretion, investigate any offense and settle any claim or “suit" that may
result. But:
(1) The amount we will pay for damages is limited as described in Section
Ul - Limits Of Insurance; and
(2) Our right and duty to defend end when we have used up the applicable
limit of insurance in the payment of judgments or settlements under
Coverages A or B or medical expenses under Coverage C.
No other obtigation or liability to pay sums or perform acts or services is
covered unless explicitly provided for under Supplementary Payments —
Coverages A and B.
b. This insurance applies to “personal and advertising injury" caused by an
offense arising out of your business but only if the offense was com-mitted
in the “coverage territory" during the policy period.
Id., REP-LEG 0406.
The Policy also contains an exclusion for Expected Or Intended Injury, which states in
pertinent part:
2. Exclusions.
This insurance does not apply to:
a. Expected Or tntended Injury
“Bodily injury’ or “property damage” expected or intended from the
standpoint of the insured... ..
Id., REP-LEG 0402. The Policy also provides several pertinent definitions, including:
3. “Bodily injury” means bodily injury, sickness or disease sustained by a
person, including death resulting from any of these at any time.
13. “Occurrence” means an accident, including continuous or repeated
exposure to substantially the same general harmful conditions.
only potentially applicable coverage form at issue in this coverage litigation.
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 9
1439018.214. “Personal and advertising injury’ means injury, including consequential
“bodily injury”, arising out of one or more of the following offenses:
a. Includes all “bodily injury’ and “property damage” occurring away
from premises you own or rent and arising out of “your product” and
“your work” except:
b. Malicious prosecution;
c. The wrongful eviction from, wrongful entry into, or invasion of the
right of private occupancy of a room, dwelling or premises that a
person occupies, committed by or on behalf of its owner, landlord or
lessor;
d. Oral or written pubtication, in any manner, of material that slanders
or libels a person or organization or disparages a person’s or
organization's goods, products or services;
e. Oral or written publication, in any manner, of material that violates a
person's right of privacy;
f. The use of another's advertising idea in your “advertisement”, or
g. Infringing upon another's copyright, trade dress or slogan in your
“advertisement”.
17. “Property damage” means:
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.
Id., REP-LEG 0413 to REP-LEG 0415.
B. The Underlying Suit.
The underlying lawsuit is styled Michelle Nouvel v. Legacy Restaurant Group, Ltd., Steak
House Management Company, LLC, and RNDC Texas, LLC d/b/a Republic National
Distributing Company; Cause No. CC-11-07242-B in the County Court at Law Number 2 of
Dallas County, Texas (the “Underlying Suit”). Exhibit 1, Document B, p. 1. In the First
Amended Petition filed in the Underlying Suit (“Underlying Petition”), Nouvel alleges that she
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 10
1439018.2has more than twenty-five years experience in the food and beverage and hospitality industries.
Id, p. 2. From April 2004 until May 2011, she allegedly served as a marketing brand manager
and national accounts manager for McCormick Distilling Company (“McCormick”). /d., pp. 2-
3. As part of this job, Nouvel would allegedly organize dinner outings and othcr marketing
events for McCormick’s distributors, vendors, and employees. /d., p. 3.
On April 24, 2011, Nouvel allegedly made a dinner reservation at Bob’s Steak & Chop
House in Plano, Texas (the “Restaurant”) for a large group of McCormick employees and two
colleagues in the advertising industry. /d, To make this reservation, Nouvel allegedly used the
online reservation service “OpenTable.” /d, Nouvel’s supervisor allegedly required that any
restaurant selected for this type of dinner carry McCormick’s liquor brands. /d. Nouvel allegedly
called three days prior to the reservation to ensure that the Restaurant had such products
available. Id.
Nouvel alleges in the Underlying Petition that she was not pleased with the services
provided by the Restaurant. /d The following day, she allegedly received an e-mail request
from OpenTable seeking feedback on her dining experience. /d., p. 4. Nouvel alleges that she
understood that Legacy and Steak House Management encouraged OpenTable to seek this input
to enable it to use any constructive criticism to improve its products and services. fd Nouvel
allegedly completed the feedback form, describing the multitude of service issues but giving the
overall dining experience a positive rating of four out of a possible five stars. Jd. Nouvel alleges
in the Underlying Petition that it was her belief that the feedback would be anonymous. /d.
An employee or representative from Legacy and Steak House Management? allegedly
viewed Nouvel’s feedback after it was posted online. /d. It was determined that this feedback
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 11
1439018.2related to the McCormick function organized by Nouvel. /d@ Allegedly furious over what it
perceived as negative publicity, Legacy and Steak House Management did not contact Nouvel or
McCormick, but instead demanded that McCormick’s distributor, RNDC Texas, LLC d/b/a
Republic National Distributing Company (“RNDC”), have the feedback removed from the
OpenTable website. /d. Nouvel alleges that Legacy and Steak House Management make
substantial wine purchases from RNDC, and that they threatened RNDC that they would no
longer purchase any wine from RNDC unless it caused the negative feedback to be removed. /d.
In response, RNDC demanded that McCormick have OpenTable remove Nouvel’s
feedback from the website. [d. McCormick allegedly had little choice but to accede to RNDC’s
demands, as RNDC was McCormick’s vendor partner and the sole distributor of McCormick’s
products. /d Ned Russo (“Mr. Russo”), McCormick’s southwest regional vice president,
instructed Nouvel to arrange for the removal of the feedback. /d. Nouvel allegedly contacted
OpenTable and submitted multiple requests for the feedback to be removed. /d., pp. 4-5.
On May 3, 2011, RNDC requested via e-mail that McCormick notify when the feedback
had been removed. /d., p. 5. Russo allegedly reported on Nouvel’s efforts. /d. In response, the
RNDC executive vice president allegedly sent Russo the following e-mail:
This has been a nightmare all caused by someone in the industry [Nouvel] that should
know better. I am sure [Legacy and Steak House Management] will want to know what
the employment fate of this person will be. They are pissed and have now put us at risk
for something we have nothing to do with.
Id.
Russo allegedly forwarded this e-mail to two other members of McCormick management
and indicated in the subject line that Legacy and Steak House Management were “looking for
? In the Underlying Petition, Nouvel alleges that the Restaurant is owned and operated by Legacy and Steak
House Management. She refers to them collectively as “Bob’s” throughout the Underlying Petition.
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 12
4439018.2Heads to Roll.” /d. That same day, Russo allegedly sent a “strongly worded” e-mail to Nouvel
and several other McCormick executives, informing Nouvel that her actions had “cost us an
account and (RNDC] any future placements for any of their brands.” /d.
Nouvel asserts that she was ultimately successful in her efforts to remove the feedback
from the OpenTable website. /d. Legacy and Steak House Management were allegedly not
content with Nouvel simply erasing her criticism; rather, Legacy and Steak House Management
allegedly insisted upon exacting revenge by forcing McCormick to terminate Nouvel from her
employment. Jd. Because of Legacy and Steak House Management allegedly tortious
interference with Nouvel’s employment, McCormick allegedly terminated Nouvel on May 9,
2011. id, Nouvel has allegedly suffered substantial and continuing damages from Legacy and
Steak House Management interfering with her employment relationship with McCormick and
the resulting loss of her employment position, including past and future mental anguish. /d.
Nouvel alleges that a conservative estimate of her lost future wages is $3,573,369. Td, pp. 5-6.
Nouvel further secks a maximum of $2,000,000 in past and future mental anguish damages and
the account amount of past and future medical expenses to be proved at trial. /d., p. 6.
Nouvel asserts causes of action in the Underlying Suit for tortious interference with
employment relationship, noting that Legacy and Steak House Management willfully and
intentionally interfered with her employment with McCormick. /d Nouvel further asserts a
claim for negligence, asserting that Legacy and Steak House Management had a legal duty not to
damage Nouvel’s employment relationship, but failed to use reasonable diligence in carrying out
this duty. Jd Nouvel also asserts that Legacy and Steak House Management entered into a
conspiracy to commit the tortious and unlawful conduct alleged. /d., pp. 6-7.
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 13
1439018.2Nouvel further claims that Legacy and Steak House Management acted with gross
negligence because their actions involved an extreme degree of risk considering the probability
and magnitude of the potential harm to others. Jd. p. 7. Additionally, Nouvel asserts that
Legacy and Steak House Management had actual subjective awareness of the risk involved, but
acted with conscious indifference to the rights, safety, and welfare of others. /d. Nouvel asserts
that she is entitled to $11,000,000 in exemplary damages because the statutory cap in the Texas
Civil Practices & Remedies Code is inapplicable because the defendants committed commercial
bribery. /d. In the alternative, she secks exemplary damages of $7,896,738, which represents
two times her economic damages. /d., p. 8
VI.
ARGUMENT AND AUTHORITIES
A. No Duty to Defend Exists in the Underlying Suit Because Neither the Coverage A
Insuring Agreement nor Coverage B Insuring Agreement is Triggered.
The undisputed factual evidence demonstrates that neither the Coverage A Insuring
Agreement nor the Coverage B Insuring Agreement of the Policy is triggered by Nouvel’s
factual allegations. Republic is therefore entitled to a judgment as a matter of law that it has no
duty to defend Legacy or Steak House Management under the Policy in the Underlying Suit.
1. Interpretation of insurance policies under Texas law.
Under Texas law, an insurance contract is subject to the same rules of construction as any
other contract. See Trinity Universal Ins. Co. v. Cowan, 945 §.W.2d 819, 823 (Tex. 1997); Pa.
Pulp & Paper Co., Inc, v. Nationwide Mut. Ins. Co., 100 S.W.3d 566, 570 (Tex. App—Houston
(14th Dist. 2003, pet denied). The language of a contract is to be is to be given its plain
grammatical meaning unless to do so would defeat the parties’ intent. DeWitt County Elec.
Coop., Inc. v. Parks, 1 S.W.3d 96, 101 (Tex. 1999).
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 14
1439018.2When the terms of an insurance policy are unambiguous, the terms must be interpreted in
accordance with their plain and ordinary meaning. See Utica Nat'l Ins. Co. v. American Indem.
Co., 141 S.W.3d 198, 202 (Tex. 2004). If an insurance contract can be given a definite and
certain legal meaning, then it is not ambiguous and must be construed as a matter of law and
enforced as written. See Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d
587, 589 (Tex. 1996); see also Hartrick v. Great Amer. Lloyds Ins. Co., 62 8.W.3d 270, 274
(Tex. App.—Houston [Ist Dist.] 2001, no pet.). The burden is on the insured to show that the
claims against it are potentially within the coverage provided by the insurance policy. See Sentry
Ins. v. RJ. Weber Co., 2 F.3d 554, 555 (Sth Cir. 1993) (Texas law).
2. Texas law on the duty to defend.
Texas law is well established on the duty to defend. Specifically, Texas courts follow the
“eight comers” rule to determine if an insurer has a duty to defend under a liability policy. Nar‘?
Union Fire Ins. Co. v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997); See
also Winn v. Cont'l Cas. Co., 494 S.W.2d 601, 604 (Tex. App.—Tyler 1973, no writ) (noting
that the obligation of a liability insurance company to defend a lawsuit brought against its
insured by a third party is to be determined by the allegations in the underlying petition).
Pursuant to that rule, a court will consider only the allegations in the underlying pleading and the
terms of the liability insurance policy. McCarthy Bros. Co. v. Cont’! Lloyds Ins. Co., 7 S.W.3d
725, 728 (Tex. App.—Austin 1999, no pet.).
In analyzing an insurance coverage dispute, Texas courts conduct a two-part analysis,
first examining the language of the policy and then the factual allegations in the pleading to
determine if coverage exists. The duty to defend is triggered only if a plaintiff alleges facts that
would give rise to a claim against the insured. Don's Bldg. Supply, Inc. v. OneBeacon Ins. Co.,
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 15
1439018.2267 S.W.3d 20, 31 (Tex. 2008) (citing Utica Nat'l Ins. Co. v. Am. Indem. Co., 141 S.W.3d 198,
201 (Tex. 2004)). However, if the underlying pleading does not contain allegations that fit
within the scope of coverage provided by the liability insurance policy, an insurer is not legally
required to defend a suit against its insured and the insurer has no duty to defend. Pa. Pulp &
Paper Co., Inc. v. Nationwide Mut. Ins. Co., 100 S.W.3d 566, 570 (Tex. App.—Houston [14th
Dist.] 2003, pet. denied). In deciding the duty to defend, the court should not consider extrinsic
evidence from either the insurer or the insured that contradicts the allegations of the underlying
petition. Pine Oak Builders, Inc. v. Great American Lloyds Ins. Co., 279 SW 3d 650, 655 (Tex.
2009). As one Texas court has explained:
While the obligation to defend an action against an insured is broader than the obligation
to pay, an insurance carrier cannot be called on to furnish a defense for the insured
unless the third party’s claim against the insured is shown to be within the coverage
provisions of the policy.
Colony Ins. Co. v. H.R.K., Inc., 728 $.W.2d 848, 850 (Tex. App.—Dallas 1987, no writ)
(emphasis added).
3. The Coverage A Insuring Agreement is not triggered.
For the Coverage A Insuring Agreement of the Policy to be implicated, there must be
allegations of “property damage” or “bodily injury” caused by an “occurrence.” Exhibit 1,
Document A, Commercial General Liability Coverage Form, REP-LEG 0401. Here, Nouvel
makes no such allegations in the Underlying Petition. Accordingly, the Coverage A Insuring
Agreement is not triggered as a matter of law.
a. There are no allegations of “property damage” in the Underlying Suit.
The term “property damage” is defined in the Policy as “[p]hysical injury to tangible
property, including all resulting loss of use of that property,” and as “[IJoss of use of tangible
property that is not physically injured.” /d., REP-LEG 0415. Nouvel makes no allegations of
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 16
1439018.2physical injury to tangible property or loss of use of tangible property in her pleading. Rather,
Nouvel asserts that she was fired from her job because Legacy and Steak House Management
tortiously interfered with the employment relationship that she had with McCormick. See
Exhibit 1, Document B, p. 5. Nouvel’s alleged economic loss resulting from the actions by
Legacy and Steak House Management do not constitute “property damage” under Texas law.
See Great Am. Lloyds Ins. Co. v. Mittlestadt, 109 S.W.3d 784, 788 (Tex. App—Fort Worth
2003, no. pet.) (“property damage” does not encompass economic loss); State Farm Lloyds v.
Kessler, 932 S.W.2d 732, 737 (Tex. App.—Fort Worth 1996, writ denied); e.g., Terra Int'l, Inc.
v, Commonwealth Lloyds’ Ins. Co., 829 S.W.2d 270, 273 (Tex. App.—Dallas 1992, no writ)
(economic losses, i.e., the loss of investments, subscription funds, and profits are not property
damage). The undisputed facts therefore establish that the “property damage” requirement of the
Coverage A Insuring Agreement has not been satisfied as a matter of law.
b. There are no allegations of “bodily injury” in the Underlying Suit.
The term “bodily injury” is defined as “bodily injury, sickness or disease sustained by a
person, including death resulting from any of these at any time.” Exhibit 1, Document A,
Commercial Genera! Liability Coverage Form, REP-LEG 0413. The Texas Supreme Court has
held that the term “bodily injury” does not include mere mental anguish or emotional distress.
Trinity Universal Ins. Co. v. Cowan, 945 §.W.2d 819, 823-824 (Tex. 1997); see Evanston Ins.
Co. v. Legacy of Life, Inc., 2012 Tex. LEXIS 569, *6-10 (Tex. June 29, 2012)° (holding that
"bodily" modifies injury, sickness, and disease and that a physical manifestation is required for
sickness or disease to be covered under a general liability policy.); Union Mut. Ins. Cos. v. Stotts,
837 F. Supp. 814, 817 (N.D. Tex. 1993). Specifically, the Texas Supreme Court found that
> This opinion was released for publication on August 10, 2012.
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 17
1439018.2“bodily injury” unambiguously requires an injury to the physical structure of the human body
and does not include purely emotional injuries. Cowan, 945 S.W.2d at 823.
While Nouvel alleges in her pleading that she suffered from “past and future mental
anguish,” she does not allege that the actions by Legacy and Steak House Management caused
her to suffer injuries to the physical structure of her body. Accordingly, these bare allegations of
purely emotional injuries do not constitute “bodily injury” under the Policy. See Cowan, 945
S.W.2d at 823; Exhibit 1, Document A, Commercial General Liability Coverage Form, REP-
LEG 0413; Exhibit 1, Document B, p. 5. The undisputed facts therefore establish that the
“bodily injury” requirement of the Coverage A Insuring Agreement has not been satisfied as a
matter of law.
c. Even if there was “property damage” or “bodily injury,” this damage
or injury did not result from an “occurrence.”
Even if there were allegations of “property damage” or “bodily injury,” the Coverage A
Insuring Agreement requires that this damage or injury have resulted from an “occurrence.”
Exhibit 1, Document A, Commercial General Liability Coverage Form, REP-LEG 0401.
“Occurrence” is defined as “an accident, including continuous or repeated exposure to
substantially the same general harmful conditions.” /d, REP-LEG 0414. An accident is
generally understood to be a fortuitous, unexpected, and unintended event. Lamar Homes, Inc. v.
Mid-Continent Cas. Co., 242 S.W.3d 1, 8 (Tex. 2007). Stated otherwise, “an injury is accidental
if ‘from the viewpoint of the insured, [it is} not the natural and probable consequence of the
action or occurrence which produced the injury; or in other words, the injury could not
reasonably be anticipated by insured, or would not ordinarily follow from the action or
occurrence which caused the injury.” /d. (quoting Mid-Century Ins. Co. v. Lindsey, 997 S.W.2d
153, 155 (Tex. 1999)).
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 18
1439018,2In the Underlying Petition, Nouvel specifically asserts that Legacy and Steak House
Management were not content with Nouvel crasing her criticism of the Restaurant on the
OpenTable website. Exhibit 1, Document B, p. 5. Rather, Legacy and Steak House
Management “insisted upon exacting their revenge by forcing McCormick to terminate Nouvel.”
Id. According to Nouvel, Legacy and Steak House Management engaged in actions that
constitute tortious interference with employment relationship. /d., p. 6. She further alleges that
Legacy and Steak House Management entered into a conspiracy to commit this tortious and
unlawful conduct. /d. Nouvel specifically asserts that Legacy and Steak House “willfully” and
“intentionally” interfered with the Nouvel’s employment and that they intended to cause her
substantial injury or harm by their actions. /d., p. 7.
Tortious interference is an intentional tort. See Browning-Ferris, Inc. v. Reyna, 865
S.W.2d 925, 927 (Tex. 1993); Exxon Corp. v. Allsup, 808 S.W.2d 648, 659 (Tex. App.—Corpus
Christi 1991, writ denied). Conspiracy is neither a tort nor a derivative tort; rather conspiracy is
a type of participatory liability used to establish joint and several liability for those who
participate in an agreement to commit a tort. See Carroll v. Timmers Chevrolet, Inc., 592 $.W.2d
922, 925 (Tex. 1979). The Texas Supreme Court has specifically held that when a defendant
commits an intentional tort, there is no accident, regardless of whether the results of the
defendant’s actions are unintended or unexpected. Argonaut Sw. Ins. Co. v. Maupin, 500 S.W.2d
633, 635 (Tex. 1973); see CU Lloyd's v. Main St. Homes, 79 8.W.3d 687, 693 (Tex. App.—
Austin 2002, no pet.) (“if the tortfeasor's acts are deemed intentionally harmful, there is no
accident, therefore no occurrence, no duty to defend, and no policy coverage.”). Additionally,
the Texas Supreme Court has held that a person’s acts are not accidental when he commits an
intentional act that results in injuries that ordinarily follow from or could be reasonably
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 19
1439018.2anticipated from the intentional act. See Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819,
827-28 (Tex. 1997).
The actions by Legacy and Steak House Management were intentional and done with the
specific purpose to have Nouvel terminated from her employment with McCormick. According
to Nouvel’s factual allegations, Legacy and Steak House Management took steps to tortiously
interfere with her employment even after Nouvel removed the perceived negative feedback
about her experience at the Restaurant removed from the OpenTable website. Thus, even if there
were any allegations of “property damage” or “bodily injury” in the Underlying Petition, the
undisputed material facts establish that this damage or injury was not the result of an accident or
fortuitous, unexpected, or unintended event. See Lamar Homes, 242 $.W.3d at 8; Maupin, 500
S.W.2d at 635; Main St. Homes, 79 S.W.3d at 693. Accordingly, the “occurrence” requirement
of the Coverage A Insuring Agreement has also not been satisfied as a matter of law. Based on
the foregoing, the undisputed material facts demonstrate that the Coverage A Insuring
Agreement is not triggered as a matter of law.
4. If the Coverage A Insuring Agreement is triggered, the “expected or intended
injury” exclusion bars coverage.
Even if there were allegations of “property damage” or “bodily injury” caused by an
“occurrence,” the “expected or intended injury” exclusion a. is implicated. This exclusion bars
coverage for “bodily injury” or “property damage” that is expected or intended from the
standpoint of the insured. Exhibit 1, Document A, Commercial General Liability Coverage
Form, REP-LEG 0402. The plain and ordinary meaning of the term “expect” is “to await; to
look forward to something intended, promised, or likely to happen.” State Farm Lloyds v. Jones,
2008 U.S. Dist. LEXIS 104866, *9 (E.D. Tex. 2008) (quoting BLACK’s Law DICTIONARY 576
(6th ed. 1990)). The plain and ordinary meaning of the term “intend” is “[t]o have in mind a
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 20
1439018.2fixed purpose to reach a desired objective; to have as one's purpose” and “[t]o contemplate that
the usual consequences of one's act will probably or necessarily follow from the act, whether or
not those consequences are desired for their own sake.” BLACK’S LAW DICTIONARY (9th ed.
2009).
As noted, Nouvel alleges in the Underlying Petition that Legacy and Steak House
Management desired and took affirmative steps to have Nouvel fired from her position with
McCormick based upon the perceived negative review she posted to OpenTable. Based on the
factual allegations in the Underlying Petition, Legacy and Steak House therefore had the “fixed
purpose” of having Nouvel terminated from her job, even after she had removed her comments
from the OpenTable website. See Exhibit 1, Document B, p. 5. Thus, even if there was any
“property damage” or “bodily injury” caused by an “occurrence,” the “expected or intended
injury” exclusion would apply to bar coverage under the Policy because any damage or injury
was both expected and intended from the standpoint of Legacy and Steak House Management.
5. The Coverage B Insuring Agreement is not triggered.
For the Coverage B Insuring Agreement of the Policy to be implicated, there must be
allegations of “personal and advertising injury.” Exhibit 1, Document A, Commercial General
Liability Coverage Form, REP-LEG 0406. Here, Nouvel makes no such allegations in the
Underlying Petition. Accordingly, the Coverage B Insuring Agreement is not triggered as a
matter of law.
The term “personal and advertising injury” is defined, in pertinent part, as follows:
injury, including consequential “bodily injury,” arising out of one or more of the
following offenses:
a. False arrest, detention, or imprisonment;
b. Malicious prosecution;
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 21
1439018.2c. The wrongful eviction from, wrongful entry into, or invasion of the right of
private occupancy of a room, dwelling or premises that a person occupics,
committed by or on behalf of its owner, landlord, or lessor;
d. Oral or written publication, in any manner, of material that slanders or libels a
person or organization or disparages a person’s or organization’s goods,
products, or services;
e. Oral or written publication, in any manner, of material that violates a person’s
right of privacy;
f. The use of another’s advertising idea in the insured’s “advertisement”; or
g. Infringing upon another’s copyright, trade dress, or slogan in your
“advertisement.”
id., REP-LEG 0414.
The Underlying Suit arises out of Nouvel’s termination from her employment with
McCormick. Nouvel alleges that Legacy and Steak House Management were intent on “exacting
their revenge” by forcing McCormick to terminate Nouvel from her employment. Exhibit 1,
Document B, p. 5. Nouvel specifically alleges in the Underlying Petition that Legacy and Steak
House Management tortiously interfered with her employment relationship with McCormick. /d.
Tortious interference with business relationships is not considered to be a claim for “personal
and advertising injury” under a commercial general liability policy. See generally Pa. Pulp &
Paper Co., Inc. v. Nationwide Mut. Ins. Co., 100 §.W.3d 566, 573 (Tex. App.—Houston [14th
Dist.] 2003, pet. denied) (holding that even giving a pleading a liberal construction, claims for
tortious interference with prospective business relationships do not fall under the definition of
“advertising injury”); PYCA Indus. v. Harrison County Waste Water Mgmt. Dist., 81 F.3d 1412,
1420 (Sth Cir. 1996) (Mississippi law) (finding that the alleged tortious interference with
contract claims clearly does not fall within the scope of the insuring agreement).
There are no also no allegations that Legacy, Steak House Management, or any of their
agents, employees, representatives, or contractors made or published any disparaging,
slanderous, or libelous comments about Nouvel. Rather, the gist of Nouvel’s claims against
Legacy and Steak House Management is that they wrongfully and intentionally interfered with
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 22
1439018.2her employment by taking steps to have her fired from her job, all done in retaliation for
perceived criticism she posted about her dining experience at the Restaurant. The undisputed
material facts therefore establish that the “personal and advertising injury” requirement of the
Coverage B Insuring Agreement has not been satisfied as a matter of law.
6. Republic has no duty to defend Legacy or Steak House Management as a
matter of law.
The undisputed material facts establish that the Policy does not apply, as neither the
Coverage A Insuring Agreement nor Coverage B Insuring Agreement is triggered. Even if the
Coverage A Insuring Agreement is somehow triggered, the “expected or intended injury”
exclusion applies to bar coverage. Republic is therefore entitled to judgment as a matter of law
that it has no duty to defend Legacy or Steak House Management in the Underlying Suit. Don's
Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 §.W.3d 20, 31 (Tex. 2008); Colony Ins. Co. v.
HRK,, Inc., 728 S.W.2d 848, 850 (Tex. App.—Dallas 1987, no writ).
VIL.
CONCLUSION AND PRAYER
WHEREFORE, Republic respectfully asks the Court to grant partial summary judgment
in its favor as follows:
1. The Coverage A Insuring Agreement is not triggered based on the factual
allegations by Nouvel in the Underlying Suit;
2. The Coverage A “expected or intended injury” exclusion a. bars coverage to the
extent the Coverage A Insuring Agreement is triggered;
3. The Coverage B Insuring Agreement is not triggered based on the factual
allegations by Nouvel in the Underlying Suit;
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 23
1439018.24. Republic has no duty to defend Legacy or Steak House Management in
connection with the Underlying Suit;
5. For such other and further relief to which Republic may be justly entitled, whether
in law or in equity.
Respectfully submitted,
WILSON, ELSER, MOSKOWITZ, EDELMAN
& DICKER LLP
By: AL :
J. Price Collins
State Bar No. 04610700
Blake H. Crawford
State Bar No. 24065096
Bank of America Plaza
901 Main Street, Suite 4800
Dallas, Texas 75202
Telephone: (214) 698-8000
Facsimile: (214) 698-1101
ATTORNEYS FOR PLAINTIFF,
REPUBLIC LLOYDS
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document was served on all
counsel of record in accordance with Rule 21a of the Texas Rules of Civil Procedure on this the
30th day of August, 2012.
Via Certified Mail, Return Receipt Requested
Beverly B. Godbey
Melissa R. Holman
GARDERE WYNNE SEWELL LLP
3000 Thanksgiving Tower
1601 Elm Street
Dallas, Texas 75201
4.
Blake H. Crawford
PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 24
1439018.2Exhibit 1CAUSE NO. DC-12-03577
REPUBLIC LLOYDS §
§ IN THE DISTRICT COURT OF
v §
§ DALLAS COUNTY, TEXAS
LEGACY RESTAURANT GROUP, §
LTD. and STEAK HOUSE § 160th JUDICIAL DISTRICT
MANAGEMENT COMPANY, LLC §
AFFIDAVIT OF CAROL MCDANIEL
STATE OF TEXAS §
§
COUNTY OF DALLAS §
Before me, the undersigned notary, on this day personally appeared Carol McDaniel.
After I administered an oath to her, upon her oath she said:
1. My name is Carol McDaniel. I am over the age of eighteen, have never been
convicted ofa crime involving moral turpitude, and am fully competent to make this Affidavit
2. I am a claims representative for Republic Lioyds (“Republic”), and as such, I
have personal knowledge of the matters set forth in this Affidavit.
3. This Affidavit is submitted in support of Republic’s Motion for Partial Summary
Judgment and Brief in Support in the above styled and numbered action.
4. Republic issued to Legacy Restaurant Group, Ltd. (“Legacy”) “Commercial Lines
Policy” number CMP 5645531 05 for the policy period from December 31, 2010 to December
31, 2011 (the “Policy”).
5. The Policy provides commercial general liability coverage, and true and correct
copies of the Common Policy Declarations (REP-LEG 0286 to REP-LEG 0289), Commercial
General Liability Declarations (REP-LEG 0392 to REP-LEG 0396), Commercial General
Liabitity Coverage Form (REP-LEG 040! to REP-LEG 0416), and endorsements modifying the
‘AFFIDAVIT OF CAROL MCDANIEL PACEL
1459998,2—~—YnV/J\ 9 ®
terms under the Commercial Gercral Liability Coverage Form (REP-LEG 0423 to REP-LEG
0443) are attached hereto and collectively referred to as Document “A”.
6. On November 22, 2011, Michelle Nouvel filed her First Amended Petition in a
lawsuit styled Michelle Nouvel v. Legacy Restaurant Group, Ltd., Steak House Management
Company, LLC, and RNDC Texas, LLC d/b/a Republic National Distributing Company, Cause
No. CC-11-07242-B in the County Court at Law Number 2 of Dallas County, Texas, a true and
correct copy of which is attached hereto as Document “B”.
FURTHER AFFIANT SAYETH NOT.
Carol McDaniel
Sworn to and subscribed before me by Carol McDaniel on the Zz day of
Alugusce, 2012
Notary Public for the State of Texas
My Commission Expires: De We. 2, 2013
’
M s
“Hera
ae
%,
”,
%
"AFFIDAVIT OF CAROL MCDANIEL ‘PAGEDDocument A01/27/201202:05PM e@ rd
COMMON POLICY DECLARATIONS
POLICY NUMBER: CHP_ 5645531 05 RENEWAL OF NUMBER: CHP 5645531 0408
COMPANY NAME AGENT NAME, ADDRESS & CODE
REPUBLIC LLOYDS ROBERTS & CROW, INC.
$525 LB FREEWAY 12221 MERIT DR STE 600
DALLAS, TX 75240-6241 DALLAS, TX 75251-2260
(800) 344-2275 4201616
(972) 770-4450
NAMED INSURED LEGACY RESTAURANT GROUP LTO
As Per Named Insured Endorsement
MAILING ADDRESS 5760 LEGACY DR, STE B-1
PLANO, TX 75074
POLICY PERIOD: FROM 12/31/2010 TO __ 32/31/2011 AT 12:01 A.M. STANDARD
TIME AT YOUR MAILING ADDRESS SHOWN ABOVE,
FORM OF BUSINESS CORPORATION
BUSINESS DESCRIPTION | RESTAURANT
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS
' POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATEO IN THIS.POLICY.
THIS POLICY CONSISTS OF THE FOLLOWING COVERAGE PARTS FOR WHICH A PREMIUM IS
INDICATED. THIS PREMIUM MAY BE SUBJECT TO ADJUSTMENT.
PREMIUM
COMMERCIAL GENERAL LIARILITY COVERAGE PART $6,326.00
COMMERCIAL INLAND MARINE COVERAGE PART $1,169.00
COMMERCIAL LIQUOR LIABILITY COVERAGE PART $2,134.00
COMMERCIAL PROPERTY COVERAGE PART $9,376.00
TERRORISM - CERTIFIED ACTS (GENERAL LIABILITY) $237.00
TERRORISM - CERTIFIED ACTS (INLAND MARINE) $82.00
TERRORISM - CERTIFIED ACTS (LIQUOR LIABILITY) $87.00
TERRORISM - CERTIFIED ACTS (PROPERTY} $215.00
TOTAL: $19,626.00
Countersigned: By.
(Date) {Authorized Representative)
ISSUE DATE: 12/29/2010
COMM-PACKAGE-DEC Pago 1 ot a O
Original
REP-LEG 028601/37/2012 02.06 PM” @ e
SUPPLEMENTAL - NAMED INSURED
POLICY NUMBER:CHe 5645531 05
LEGACY RESTAURANT GROUP LTO
BOB'S STEAK & CHOP HOUSE
BOB'S STEAK & CHOP HOUSE CLUB
COMM-PACKAGE-DEC Original Page 2 of 4
REP-LEG 028701/27/2012 02
Preview
e e La CAUSE NO. DC-12-03577 | L E D 12 AUG 30 PH 3:15 IN THE DISTRICT; COURT, QF piste REPUBLIC LLOYDS v. § § § ALL .iry § DaLLasepth TEXAS LEGACY RESTAURANT GROUP, —§ My eoesury LTD. and STEAK HOUSE § 160th JUDICIAL DISTRICT MANAGEMENT COMPANY,LLC § PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Pursuant to Rule 166a of the Texas Rules of Civil Procedure, Plaintiff Republic Lloyds (“Republic”) files this Motion for Partial Summary Judgment and Brief in Support. Respectfully submitted, WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP J. Price Collins State Bar No. 04610700 Blake H. Crawford State Bar No. 24065096 Bank of America Plaza 901 Main Street, Suite 4800 Dallas, Texas 75202 Telephone: (214) 698-8000 Facsimile: (214) 698-1101 ATTORNEYS FOR PLAINTIFF, REPUBLIC LLOYDS PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 1 1439018.2TABLE OF CONTENTS Page 1. INTRODUCTION AND SUMMARY OF ARGUMENT .............:0::::eseteteesseeeeees 6 Il. SUMMARY OF JUDGMENT STANDARD ......cessscesssseesseceseecesseessnsesseseaseesnensanesareesnass 6 Ill. | GROUNDS FOR SUMMARY JUDGMENT... IV, SUMMARY JUDGMENT EVIDENCE wu......ccesssssesescsssssssssescessseeseesssseesnneccsnneesssnsessennnneee 7 Vv. STATEMENT OF UNDISPUTED FACTS ........eeeeceseereeieees A. The Policy ......esescssessessssssscceceesessnesssesecanesseecsseseaseecaesnneaseeeresauecarenueannessesaeeneanneds 7 B The Underlying Suit........0..ccssesssecssecseesessesseeeeseessceiseneesernneansets VI. > ARGUMENTS AND AUTHORITIES. ...scccssssssssssssecssseeccesssessenseecennneesseaeesnnnansersneettcsty 14 A. No Duty to Defend Exists in the Underlying Suit Because Neither the Coverage A Insuring Agreement nor Coverage B Insuring Agreement is Triggered .........essssescssssseecsssscssesenseeeseessnneeseecsseeesonsenneessarersetenseeees LA 1. Interpretation of insurance policies under Texas law .........sccneeeree 14 2. Texas law on the duty to defend ......cccsccssecsescsesessesssesesseesssssssessneeeeee 1S 3. The Coverage A Insuring Agrecment is not triggered... eeeeee 16 a. There are no allegations of “property damage” in the Underlying Suit.. b. There are no allegations of “bodily injury” in the Underlying Suit... ccseessssscsseeeseecneensessiesseenneenees c. Even if there was “property damage” or “bodily injury,” this damage or injury did not result from an “occurrence.” 4. If the Coverage A Insuring Agreement is triggered, the “expected or intended injury” exclusion bars COVErage. ........1.-cesseceteccesseseeeeeeesee 20 5. The Coverage B Insuring Agreement is not triggered... 21 6. Republic has no duty to defend Legacy or Steak House Management as a matter of law.... VII. CONCLUSION AND PRAYER ......cccsssecssssssseessnssssneceesecsoecssaesonessaseesanensnesansenneeeensenney 2D PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 2 1439018.2TABLE OF AUTHORITIES Cases Page TEXAS SUPREME COURT Argonaut Sw. Ins. Co. v. Maupin, $00 S.W.2d 633 (Tex. 1973)..ccecsseecssecsseessneersvessnneecorseesseeenrecsneeessesesssarsnesssenssssesssecsssneseveesaneessseess 1D Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925 (Tex. 1993)...ceescesssssnseeeesccessssnceereevsssnnesscesssssussiceeesnsssseeeccesannameeseerenseateerseren LD Carroll y. Timmers Chevrolet, Inc., 592 S.W.2d 922 (Tex. 1979)...cesccsessssessnecssseecsneecssesssssessasssvesssseeesisenseceessessaneesantes Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587 (Tex. 1996) .....ccceecsecceceeee ccc teeenteseecseeeetntereesneeerennesenteaaeennnags 15 DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96 (Tex. 1999)... ceeccsecessssesseeeteessesseesnersnsesesstesuessnesssesreceeceacseneesuecaacaneeasessecaesnnenseenets 14 Don’s Bidg. Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20 (Tex. 2008).....seccescrreccsnesssnesssessssersssesessecesusesssseenneessnarsansecenceesnegnnscsonieesnesesees 15, 23 Elliott-Williams Co. v. Diaz, 9 S.W.3d 801 (Tex. 1999). ccccccscccsssssessseccsteessseessueesssessesesssnecssecssseessunsssvessaseessiectanecossesnnnessssesaneestas 7 Evanston Ins. Co. v. Legacy of Life, Inc., 2012 Tex. LEXIS 569 (Tex. June 29, 2012)... wll Havlen v. McDougall, 222 S.W.3d 343 (Tex. 2000)... escccsssseeeseesssssnneeseeceessneeseesessaniseeesssssseessessnmatescecnnnmnsererranennee: © Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1 (Tex. 2007)... creeecscsssscsnieecesssssnnesseeceesnnenreeseesnectessssismeessssnmaeceennnaasseeras 18, 20 Mid-Century Ins. Co. v. Lindsey, 997 S.W.2d 153 (Tex. 1999). esssssssssessssssssnneeeresseesenmseeessssssmeessssesssssectossnmmaeeseesannaeeserrannmnees 18 Nat'l Union Fire Ins. Co. v. Merchs. Fast Motor Lines, inc., 939 S.W.2d 139 (Tex. 1997) oo. ececsescsteessecssstesneenseess Pine Oak Builders, Inc. v. Great American Lloyds Ins. Co., 279 SW 3d 650 (Tex. 2009) ....... cee ceee cece cece cee cece cette eee tee nnn nr ee tere tear eee teerteeeee 16 PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 3 1439018.2Teer v. Duddlesten, 664 S.W.2d 702 (Tex. 1984)... sesscsccssessssecsssccsstessseessnecssuessureessnesseeessscessnesssnesassessesensessossersaneenseessay 6 Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819 (Tex. 1997). - 14, 17, 18, 20 Utica Nat'l Ins. Co. v. American Indem. Co., 141 S.W.3d 198 (Tex. 2004)... cccsesseecessessscsesssseecnecsessnesnssscsniesseasecsseaseeseesnecenscaseeneenses 15, 16 TEXAS APPELLATE COURTS CU Lloyd's v. Main St. Homes, 79 S.W.3d 687 (Tex. App.—Austin 2002, m0 pet) .......cccececcseeeeeereneeissnessesscssvesseerseranensnes 19 Colony Ins. Co. v. H.R.K., Inc., 728 S.W.2d 848 (Tex. App.—Dallas 1987, 90 W1it) .....ccccecscecseesecesseeeneeneeneeeneeeasearenneenneess 16, 23 Exxon Corp. v. Allsup, 808 S.W.2d 648 (Tex. App.—Corpus Christi 1991, writ denied) .......cccscesseseeseecsesesteeeseessee 1D Great Am. Lloyds Ins. Co. v. Mittlestadt, 109 S.W.3d 784 (Tex. App.—Fort Worth 2003, no. pet.) ......ccssssssssssssssnssennnniseceesessstsssscsssassees LT Hartrick v. Great Amer. Lloyds Ins. Co., 62 S.W.3d 270 (Tex. App.—Houston [Ist Dist.] 2001, no pet.) .......sccssecsssscesecceneceesneeeseeee 1S. McCarthy Bros. Co. v. Cont’l Lloyds Ins. Co., 7 S.W.3d 725 (Tex. App.—Austin 1999, no pet.). Pa. Pulp & Paper Co., Inc. v. Nationwide Mut. Ins. Co., 100 S.W.3d 566 (Tex. App.—Houston [14th Dist.] 2003, pet. demied) .........ccccesenee 14, 16, 22 State Farm Lioyds v. Kessler, 932 S.W.2d 732 (Tex. App.—Fort Worth 1996, writ denied)... ce sesseessesseseseeseesessseeseee LT Terra Int'l, Inc. v. Commonwealth Lloyds’ Ins. Co., 829 S.W.2d 270 (Tex. App.—Dallas 1992, no WTit) ......ecceccssseseseesesseeeseeseessnceacestesnessesssseseeseee LT Winn v. Cont’l Cas. Co., 494 S.W.2d 601 (Tex. App.—Tyler 1973, no Wiit) eee eceeeessesenneeececssnnetecsssnnencscceseneee 1S FIFTH CIRCUIT PYCA Indus. v. Harrison sou Waste Water Mam D Dist., 81 F.3d 1412 (5th Cir. 1996)... seseessesaetese sessueeesaeessneecsuetansessanasssessesssssessseessseeasseessses 22 PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 4 1439018.2Sentry Ins. v. R.J. Weber Co., 2 F.3d 554 (Sth Cir, 1993) occesssssecssecsssesssseessesesnsersssessssecssseesseesssersarenssnesssesssassssserssectsessnnerserses 1S FEDERAL DISTRICT COURTS State Farm Lloyds v. Jones, 2008 U.S. Dist. LEXIS 104866 (E.D. Tex. 2008) ......ccccscsesssseessssessessnsersnsessnsceseesaneesenenntescaniees 20 Union Mut. Ins. Cos. v. Stotts, 837 F. Supp. 814 (N.D. Tex. 1993) 0... cece eceeeeeeeeeeeetersaneeeeeeeeeerianeeeercesecen ne sasenss 17 STATUTES AND RULES TEX. R. CIV. P. 166a(C) ooescessesssecceecesseesenesneecnessnsesseaseessscsacsaeeseereeeanserecsnecantensensaseessecsesasseasseennects 1 SECONDARY AUTHORITIES BLACK’S LAW DICTIONARY (9th ed. 2009)... BLACK’S Law Dictionary 576 (6th ed. 1990). PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 5 1439018.21 INTRODUCTION AND SUMMARY OF ARGUMENT This is an insurance coverage dispute in which Republic secks a judicial declaration that it has no duty to defend or indemnify Legacy Restaurant Group, Ltd. (“Legacy”) and Steak House Management Company, LLC (“Steak House Management”) in an underlying lawsuit filed by Michelle Nouvel (“Nouvel”). In the underlying lawsuit, Nouvel alleges that Legacy and Steak House Management tortiously interfered with her employment relationship, ultimately causing her to be fired from her job. The claims asserted and damages sought by Nouvel in the underlying lawsuit are not covered by the policy issued by Republic. Nevertheless, Republic agreed to provide a defense for Legacy and Steak House Management, subject to a reservation of rights. Thereafter, Republic filed this coverage lawsuit secking a declaration of its rights under the policy. The uncontroverted material evidence establishes that neither insuring agreement of the commercial general liability portion of the policy is triggered by Nouvel’s factual allegations in her pleading. Accordingly, Republic is entitled to judgment as a matter of law that it has no duty to defend Legacy or Steak House Management under the policy in the underlying lawsuit. Il. SUMMARY JUDGMENT STANDARD Summary judgment is proper when “there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” TEX. R. Cv. P. 166a(c); see also Teer v. Duddlesten, 664 S.W.2d 702, 704 (Tex. 1984). A party seeking summary judgment has the burden of proving conclusively all elements of the movant’s claim or defense as a matter of law. Havien v. McDougall, 222 §.W.3d 343, 345 (Tex. 2000). To survive summary judgment, a non-movant “must come forward with more than mere intuition, conclusory allegations, PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 6 1439018.2improbable inferences and unsupported speculation.” Elliott-Williams Co. v. Diaz, 9 S.W.3d 801, 803 (Tex. 1999). Il. GROUNDS FOR SUMMARY JUDGMENT Republic has no duty to defend Legacy or Steak House Management in the underlying lawsuit as a matter of law, because neither the Coverage A Insuring Agreement nor Coverage B Insuring Agreement of the commercial general liability form of the policy is triggered. Iv. SUMMARY JUDGMENT EVIDENCE In support of its Motion, Republic relics upon the pleadings on file with the Court and the following summary judgment evidence, which is attached to this Motion and incorporated herein by reference as set forth in full: e Exhibit 1; The Affidavit of Carol McDaniel and the following documents attached thereto: Document “A” True and correct copies of the following forms within policy number CMP 5645531 05: Common Policy Declarations, Commercial General _ Liability Declarations, Commercial General Liability Coverage Form, and endorsements modifying the terms under the Commercial General Liability Coverage Form. Document “B” Nouvel’s First Amended Petition in the underlying lawsuit filed on November 22, 2011. Vv. STATEMENT OF UNDISPUTED FACTS A. The Policy. Republic issued to Legacy “Commercial Lines Policy” number CMP 5645531 05 for the policy period from December 31, 2010 to December 31, 2011 (the “Policy”). Exhibit 1, Document A, Common Policy Declarations, REP-LEG 0286. The Policy provides commercial PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 7 1439018.2general liability coverage,’ subject to a $1,000,000 limit of liability for each occurrence, a $1,000,000 personal and advertising injury limit of liability, a $2,000,000 general aggregate limit, and a $2,000,000 “products-completed operations” aggregate limit. /d., Commercial General Liability Declarations, REP-LEG 0392. The Coverage A Insuring Agreement of the Policy provides in pertinent part: SECTION | - COVERAGES COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY 4, tnsuring Agreement a. Wewill pay those sums that the insured becomes {egally obligated to pay as damages because of . . . “property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for . . . “property damage” to which this insurance does not apply. We may at our discretion, investigate any “occurrence” and settle any claim or “suit” that may result. But: (1) The amount we will pay for damages is limited as described in Section {ll - Limits Of Insurance; and (2) Our right and duty to defend ends when we have used up the applicable limit of insurance in payment of judgments or settlements under Coverages A or B or medical expenses under Coverage C. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments — Coverages A and B. b. This insurance applies to “bodily injury” and “property damage” only if: (1) The “bodily injury” or “property damage” is caused by an “occurrence” that takes place in the “coverage territory”; {2) The “bodily injury” or “property damage” occurs during the policy period; .... Exhibit 1, Document A, Commercial General Liability Coverage Form, REP-LEG 0401. The Coverage B Insuring Agreement of the Policy provides in pertinent part: COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY 1. Insuring Agreement " Any reference to the term “Policy” means the Commercial General Liability Coverage Form, as this is the PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page & 1439018.2a. We will pay those sums that the insured be-comes legally obligated to pay as damages be-cause of "personal and advertising injury” to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "personal and advertising injury” to which this insurance does not apply. We may, at our discretion, investigate any offense and settle any claim or “suit" that may result. But: (1) The amount we will pay for damages is limited as described in Section Ul - Limits Of Insurance; and (2) Our right and duty to defend end when we have used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B or medical expenses under Coverage C. No other obtigation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments — Coverages A and B. b. This insurance applies to “personal and advertising injury" caused by an offense arising out of your business but only if the offense was com-mitted in the “coverage territory" during the policy period. Id., REP-LEG 0406. The Policy also contains an exclusion for Expected Or Intended Injury, which states in pertinent part: 2. Exclusions. This insurance does not apply to: a. Expected Or tntended Injury “Bodily injury’ or “property damage” expected or intended from the standpoint of the insured... .. Id., REP-LEG 0402. The Policy also provides several pertinent definitions, including: 3. “Bodily injury” means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time. 13. “Occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. only potentially applicable coverage form at issue in this coverage litigation. PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 9 1439018.214. “Personal and advertising injury’ means injury, including consequential “bodily injury”, arising out of one or more of the following offenses: a. Includes all “bodily injury’ and “property damage” occurring away from premises you own or rent and arising out of “your product” and “your work” except: b. Malicious prosecution; c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor; d. Oral or written pubtication, in any manner, of material that slanders or libels a person or organization or disparages a person’s or organization's goods, products or services; e. Oral or written publication, in any manner, of material that violates a person's right of privacy; f. The use of another's advertising idea in your “advertisement”, or g. Infringing upon another's copyright, trade dress or slogan in your “advertisement”. 17. “Property damage” means: 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. Id., REP-LEG 0413 to REP-LEG 0415. B. The Underlying Suit. The underlying lawsuit is styled Michelle Nouvel v. Legacy Restaurant Group, Ltd., Steak House Management Company, LLC, and RNDC Texas, LLC d/b/a Republic National Distributing Company; Cause No. CC-11-07242-B in the County Court at Law Number 2 of Dallas County, Texas (the “Underlying Suit”). Exhibit 1, Document B, p. 1. In the First Amended Petition filed in the Underlying Suit (“Underlying Petition”), Nouvel alleges that she PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 10 1439018.2has more than twenty-five years experience in the food and beverage and hospitality industries. Id, p. 2. From April 2004 until May 2011, she allegedly served as a marketing brand manager and national accounts manager for McCormick Distilling Company (“McCormick”). /d., pp. 2- 3. As part of this job, Nouvel would allegedly organize dinner outings and othcr marketing events for McCormick’s distributors, vendors, and employees. /d., p. 3. On April 24, 2011, Nouvel allegedly made a dinner reservation at Bob’s Steak & Chop House in Plano, Texas (the “Restaurant”) for a large group of McCormick employees and two colleagues in the advertising industry. /d, To make this reservation, Nouvel allegedly used the online reservation service “OpenTable.” /d, Nouvel’s supervisor allegedly required that any restaurant selected for this type of dinner carry McCormick’s liquor brands. /d. Nouvel allegedly called three days prior to the reservation to ensure that the Restaurant had such products available. Id. Nouvel alleges in the Underlying Petition that she was not pleased with the services provided by the Restaurant. /d The following day, she allegedly received an e-mail request from OpenTable seeking feedback on her dining experience. /d., p. 4. Nouvel alleges that she understood that Legacy and Steak House Management encouraged OpenTable to seek this input to enable it to use any constructive criticism to improve its products and services. fd Nouvel allegedly completed the feedback form, describing the multitude of service issues but giving the overall dining experience a positive rating of four out of a possible five stars. Jd. Nouvel alleges in the Underlying Petition that it was her belief that the feedback would be anonymous. /d. An employee or representative from Legacy and Steak House Management? allegedly viewed Nouvel’s feedback after it was posted online. /d. It was determined that this feedback PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 11 1439018.2related to the McCormick function organized by Nouvel. /d@ Allegedly furious over what it perceived as negative publicity, Legacy and Steak House Management did not contact Nouvel or McCormick, but instead demanded that McCormick’s distributor, RNDC Texas, LLC d/b/a Republic National Distributing Company (“RNDC”), have the feedback removed from the OpenTable website. /d. Nouvel alleges that Legacy and Steak House Management make substantial wine purchases from RNDC, and that they threatened RNDC that they would no longer purchase any wine from RNDC unless it caused the negative feedback to be removed. /d. In response, RNDC demanded that McCormick have OpenTable remove Nouvel’s feedback from the website. [d. McCormick allegedly had little choice but to accede to RNDC’s demands, as RNDC was McCormick’s vendor partner and the sole distributor of McCormick’s products. /d Ned Russo (“Mr. Russo”), McCormick’s southwest regional vice president, instructed Nouvel to arrange for the removal of the feedback. /d. Nouvel allegedly contacted OpenTable and submitted multiple requests for the feedback to be removed. /d., pp. 4-5. On May 3, 2011, RNDC requested via e-mail that McCormick notify when the feedback had been removed. /d., p. 5. Russo allegedly reported on Nouvel’s efforts. /d. In response, the RNDC executive vice president allegedly sent Russo the following e-mail: This has been a nightmare all caused by someone in the industry [Nouvel] that should know better. I am sure [Legacy and Steak House Management] will want to know what the employment fate of this person will be. They are pissed and have now put us at risk for something we have nothing to do with. Id. Russo allegedly forwarded this e-mail to two other members of McCormick management and indicated in the subject line that Legacy and Steak House Management were “looking for ? In the Underlying Petition, Nouvel alleges that the Restaurant is owned and operated by Legacy and Steak House Management. She refers to them collectively as “Bob’s” throughout the Underlying Petition. PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 12 4439018.2Heads to Roll.” /d. That same day, Russo allegedly sent a “strongly worded” e-mail to Nouvel and several other McCormick executives, informing Nouvel that her actions had “cost us an account and (RNDC] any future placements for any of their brands.” /d. Nouvel asserts that she was ultimately successful in her efforts to remove the feedback from the OpenTable website. /d. Legacy and Steak House Management were allegedly not content with Nouvel simply erasing her criticism; rather, Legacy and Steak House Management allegedly insisted upon exacting revenge by forcing McCormick to terminate Nouvel from her employment. Jd. Because of Legacy and Steak House Management allegedly tortious interference with Nouvel’s employment, McCormick allegedly terminated Nouvel on May 9, 2011. id, Nouvel has allegedly suffered substantial and continuing damages from Legacy and Steak House Management interfering with her employment relationship with McCormick and the resulting loss of her employment position, including past and future mental anguish. /d. Nouvel alleges that a conservative estimate of her lost future wages is $3,573,369. Td, pp. 5-6. Nouvel further secks a maximum of $2,000,000 in past and future mental anguish damages and the account amount of past and future medical expenses to be proved at trial. /d., p. 6. Nouvel asserts causes of action in the Underlying Suit for tortious interference with employment relationship, noting that Legacy and Steak House Management willfully and intentionally interfered with her employment with McCormick. /d Nouvel further asserts a claim for negligence, asserting that Legacy and Steak House Management had a legal duty not to damage Nouvel’s employment relationship, but failed to use reasonable diligence in carrying out this duty. Jd Nouvel also asserts that Legacy and Steak House Management entered into a conspiracy to commit the tortious and unlawful conduct alleged. /d., pp. 6-7. PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 13 1439018.2Nouvel further claims that Legacy and Steak House Management acted with gross negligence because their actions involved an extreme degree of risk considering the probability and magnitude of the potential harm to others. Jd. p. 7. Additionally, Nouvel asserts that Legacy and Steak House Management had actual subjective awareness of the risk involved, but acted with conscious indifference to the rights, safety, and welfare of others. /d. Nouvel asserts that she is entitled to $11,000,000 in exemplary damages because the statutory cap in the Texas Civil Practices & Remedies Code is inapplicable because the defendants committed commercial bribery. /d. In the alternative, she secks exemplary damages of $7,896,738, which represents two times her economic damages. /d., p. 8 VI. ARGUMENT AND AUTHORITIES A. No Duty to Defend Exists in the Underlying Suit Because Neither the Coverage A Insuring Agreement nor Coverage B Insuring Agreement is Triggered. The undisputed factual evidence demonstrates that neither the Coverage A Insuring Agreement nor the Coverage B Insuring Agreement of the Policy is triggered by Nouvel’s factual allegations. Republic is therefore entitled to a judgment as a matter of law that it has no duty to defend Legacy or Steak House Management under the Policy in the Underlying Suit. 1. Interpretation of insurance policies under Texas law. Under Texas law, an insurance contract is subject to the same rules of construction as any other contract. See Trinity Universal Ins. Co. v. Cowan, 945 §.W.2d 819, 823 (Tex. 1997); Pa. Pulp & Paper Co., Inc, v. Nationwide Mut. Ins. Co., 100 S.W.3d 566, 570 (Tex. App—Houston (14th Dist. 2003, pet denied). The language of a contract is to be is to be given its plain grammatical meaning unless to do so would defeat the parties’ intent. DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 101 (Tex. 1999). PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 14 1439018.2When the terms of an insurance policy are unambiguous, the terms must be interpreted in accordance with their plain and ordinary meaning. See Utica Nat'l Ins. Co. v. American Indem. Co., 141 S.W.3d 198, 202 (Tex. 2004). If an insurance contract can be given a definite and certain legal meaning, then it is not ambiguous and must be construed as a matter of law and enforced as written. See Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996); see also Hartrick v. Great Amer. Lloyds Ins. Co., 62 8.W.3d 270, 274 (Tex. App.—Houston [Ist Dist.] 2001, no pet.). The burden is on the insured to show that the claims against it are potentially within the coverage provided by the insurance policy. See Sentry Ins. v. RJ. Weber Co., 2 F.3d 554, 555 (Sth Cir. 1993) (Texas law). 2. Texas law on the duty to defend. Texas law is well established on the duty to defend. Specifically, Texas courts follow the “eight comers” rule to determine if an insurer has a duty to defend under a liability policy. Nar‘? Union Fire Ins. Co. v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997); See also Winn v. Cont'l Cas. Co., 494 S.W.2d 601, 604 (Tex. App.—Tyler 1973, no writ) (noting that the obligation of a liability insurance company to defend a lawsuit brought against its insured by a third party is to be determined by the allegations in the underlying petition). Pursuant to that rule, a court will consider only the allegations in the underlying pleading and the terms of the liability insurance policy. McCarthy Bros. Co. v. Cont’! Lloyds Ins. Co., 7 S.W.3d 725, 728 (Tex. App.—Austin 1999, no pet.). In analyzing an insurance coverage dispute, Texas courts conduct a two-part analysis, first examining the language of the policy and then the factual allegations in the pleading to determine if coverage exists. The duty to defend is triggered only if a plaintiff alleges facts that would give rise to a claim against the insured. Don's Bldg. Supply, Inc. v. OneBeacon Ins. Co., PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 15 1439018.2267 S.W.3d 20, 31 (Tex. 2008) (citing Utica Nat'l Ins. Co. v. Am. Indem. Co., 141 S.W.3d 198, 201 (Tex. 2004)). However, if the underlying pleading does not contain allegations that fit within the scope of coverage provided by the liability insurance policy, an insurer is not legally required to defend a suit against its insured and the insurer has no duty to defend. Pa. Pulp & Paper Co., Inc. v. Nationwide Mut. Ins. Co., 100 S.W.3d 566, 570 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). In deciding the duty to defend, the court should not consider extrinsic evidence from either the insurer or the insured that contradicts the allegations of the underlying petition. Pine Oak Builders, Inc. v. Great American Lloyds Ins. Co., 279 SW 3d 650, 655 (Tex. 2009). As one Texas court has explained: While the obligation to defend an action against an insured is broader than the obligation to pay, an insurance carrier cannot be called on to furnish a defense for the insured unless the third party’s claim against the insured is shown to be within the coverage provisions of the policy. Colony Ins. Co. v. H.R.K., Inc., 728 $.W.2d 848, 850 (Tex. App.—Dallas 1987, no writ) (emphasis added). 3. The Coverage A Insuring Agreement is not triggered. For the Coverage A Insuring Agreement of the Policy to be implicated, there must be allegations of “property damage” or “bodily injury” caused by an “occurrence.” Exhibit 1, Document A, Commercial General Liability Coverage Form, REP-LEG 0401. Here, Nouvel makes no such allegations in the Underlying Petition. Accordingly, the Coverage A Insuring Agreement is not triggered as a matter of law. a. There are no allegations of “property damage” in the Underlying Suit. The term “property damage” is defined in the Policy as “[p]hysical injury to tangible property, including all resulting loss of use of that property,” and as “[IJoss of use of tangible property that is not physically injured.” /d., REP-LEG 0415. Nouvel makes no allegations of PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 16 1439018.2physical injury to tangible property or loss of use of tangible property in her pleading. Rather, Nouvel asserts that she was fired from her job because Legacy and Steak House Management tortiously interfered with the employment relationship that she had with McCormick. See Exhibit 1, Document B, p. 5. Nouvel’s alleged economic loss resulting from the actions by Legacy and Steak House Management do not constitute “property damage” under Texas law. See Great Am. Lloyds Ins. Co. v. Mittlestadt, 109 S.W.3d 784, 788 (Tex. App—Fort Worth 2003, no. pet.) (“property damage” does not encompass economic loss); State Farm Lloyds v. Kessler, 932 S.W.2d 732, 737 (Tex. App.—Fort Worth 1996, writ denied); e.g., Terra Int'l, Inc. v, Commonwealth Lloyds’ Ins. Co., 829 S.W.2d 270, 273 (Tex. App.—Dallas 1992, no writ) (economic losses, i.e., the loss of investments, subscription funds, and profits are not property damage). The undisputed facts therefore establish that the “property damage” requirement of the Coverage A Insuring Agreement has not been satisfied as a matter of law. b. There are no allegations of “bodily injury” in the Underlying Suit. The term “bodily injury” is defined as “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.” Exhibit 1, Document A, Commercial Genera! Liability Coverage Form, REP-LEG 0413. The Texas Supreme Court has held that the term “bodily injury” does not include mere mental anguish or emotional distress. Trinity Universal Ins. Co. v. Cowan, 945 §.W.2d 819, 823-824 (Tex. 1997); see Evanston Ins. Co. v. Legacy of Life, Inc., 2012 Tex. LEXIS 569, *6-10 (Tex. June 29, 2012)° (holding that "bodily" modifies injury, sickness, and disease and that a physical manifestation is required for sickness or disease to be covered under a general liability policy.); Union Mut. Ins. Cos. v. Stotts, 837 F. Supp. 814, 817 (N.D. Tex. 1993). Specifically, the Texas Supreme Court found that > This opinion was released for publication on August 10, 2012. PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 17 1439018.2“bodily injury” unambiguously requires an injury to the physical structure of the human body and does not include purely emotional injuries. Cowan, 945 S.W.2d at 823. While Nouvel alleges in her pleading that she suffered from “past and future mental anguish,” she does not allege that the actions by Legacy and Steak House Management caused her to suffer injuries to the physical structure of her body. Accordingly, these bare allegations of purely emotional injuries do not constitute “bodily injury” under the Policy. See Cowan, 945 S.W.2d at 823; Exhibit 1, Document A, Commercial General Liability Coverage Form, REP- LEG 0413; Exhibit 1, Document B, p. 5. The undisputed facts therefore establish that the “bodily injury” requirement of the Coverage A Insuring Agreement has not been satisfied as a matter of law. c. Even if there was “property damage” or “bodily injury,” this damage or injury did not result from an “occurrence.” Even if there were allegations of “property damage” or “bodily injury,” the Coverage A Insuring Agreement requires that this damage or injury have resulted from an “occurrence.” Exhibit 1, Document A, Commercial General Liability Coverage Form, REP-LEG 0401. “Occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” /d, REP-LEG 0414. An accident is generally understood to be a fortuitous, unexpected, and unintended event. Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1, 8 (Tex. 2007). Stated otherwise, “an injury is accidental if ‘from the viewpoint of the insured, [it is} not the natural and probable consequence of the action or occurrence which produced the injury; or in other words, the injury could not reasonably be anticipated by insured, or would not ordinarily follow from the action or occurrence which caused the injury.” /d. (quoting Mid-Century Ins. Co. v. Lindsey, 997 S.W.2d 153, 155 (Tex. 1999)). PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 18 1439018,2In the Underlying Petition, Nouvel specifically asserts that Legacy and Steak House Management were not content with Nouvel crasing her criticism of the Restaurant on the OpenTable website. Exhibit 1, Document B, p. 5. Rather, Legacy and Steak House Management “insisted upon exacting their revenge by forcing McCormick to terminate Nouvel.” Id. According to Nouvel, Legacy and Steak House Management engaged in actions that constitute tortious interference with employment relationship. /d., p. 6. She further alleges that Legacy and Steak House Management entered into a conspiracy to commit this tortious and unlawful conduct. /d. Nouvel specifically asserts that Legacy and Steak House “willfully” and “intentionally” interfered with the Nouvel’s employment and that they intended to cause her substantial injury or harm by their actions. /d., p. 7. Tortious interference is an intentional tort. See Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 927 (Tex. 1993); Exxon Corp. v. Allsup, 808 S.W.2d 648, 659 (Tex. App.—Corpus Christi 1991, writ denied). Conspiracy is neither a tort nor a derivative tort; rather conspiracy is a type of participatory liability used to establish joint and several liability for those who participate in an agreement to commit a tort. See Carroll v. Timmers Chevrolet, Inc., 592 $.W.2d 922, 925 (Tex. 1979). The Texas Supreme Court has specifically held that when a defendant commits an intentional tort, there is no accident, regardless of whether the results of the defendant’s actions are unintended or unexpected. Argonaut Sw. Ins. Co. v. Maupin, 500 S.W.2d 633, 635 (Tex. 1973); see CU Lloyd's v. Main St. Homes, 79 8.W.3d 687, 693 (Tex. App.— Austin 2002, no pet.) (“if the tortfeasor's acts are deemed intentionally harmful, there is no accident, therefore no occurrence, no duty to defend, and no policy coverage.”). Additionally, the Texas Supreme Court has held that a person’s acts are not accidental when he commits an intentional act that results in injuries that ordinarily follow from or could be reasonably PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 19 1439018.2anticipated from the intentional act. See Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 827-28 (Tex. 1997). The actions by Legacy and Steak House Management were intentional and done with the specific purpose to have Nouvel terminated from her employment with McCormick. According to Nouvel’s factual allegations, Legacy and Steak House Management took steps to tortiously interfere with her employment even after Nouvel removed the perceived negative feedback about her experience at the Restaurant removed from the OpenTable website. Thus, even if there were any allegations of “property damage” or “bodily injury” in the Underlying Petition, the undisputed material facts establish that this damage or injury was not the result of an accident or fortuitous, unexpected, or unintended event. See Lamar Homes, 242 $.W.3d at 8; Maupin, 500 S.W.2d at 635; Main St. Homes, 79 S.W.3d at 693. Accordingly, the “occurrence” requirement of the Coverage A Insuring Agreement has also not been satisfied as a matter of law. Based on the foregoing, the undisputed material facts demonstrate that the Coverage A Insuring Agreement is not triggered as a matter of law. 4. If the Coverage A Insuring Agreement is triggered, the “expected or intended injury” exclusion bars coverage. Even if there were allegations of “property damage” or “bodily injury” caused by an “occurrence,” the “expected or intended injury” exclusion a. is implicated. This exclusion bars coverage for “bodily injury” or “property damage” that is expected or intended from the standpoint of the insured. Exhibit 1, Document A, Commercial General Liability Coverage Form, REP-LEG 0402. The plain and ordinary meaning of the term “expect” is “to await; to look forward to something intended, promised, or likely to happen.” State Farm Lloyds v. Jones, 2008 U.S. Dist. LEXIS 104866, *9 (E.D. Tex. 2008) (quoting BLACK’s Law DICTIONARY 576 (6th ed. 1990)). The plain and ordinary meaning of the term “intend” is “[t]o have in mind a PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 20 1439018.2fixed purpose to reach a desired objective; to have as one's purpose” and “[t]o contemplate that the usual consequences of one's act will probably or necessarily follow from the act, whether or not those consequences are desired for their own sake.” BLACK’S LAW DICTIONARY (9th ed. 2009). As noted, Nouvel alleges in the Underlying Petition that Legacy and Steak House Management desired and took affirmative steps to have Nouvel fired from her position with McCormick based upon the perceived negative review she posted to OpenTable. Based on the factual allegations in the Underlying Petition, Legacy and Steak House therefore had the “fixed purpose” of having Nouvel terminated from her job, even after she had removed her comments from the OpenTable website. See Exhibit 1, Document B, p. 5. Thus, even if there was any “property damage” or “bodily injury” caused by an “occurrence,” the “expected or intended injury” exclusion would apply to bar coverage under the Policy because any damage or injury was both expected and intended from the standpoint of Legacy and Steak House Management. 5. The Coverage B Insuring Agreement is not triggered. For the Coverage B Insuring Agreement of the Policy to be implicated, there must be allegations of “personal and advertising injury.” Exhibit 1, Document A, Commercial General Liability Coverage Form, REP-LEG 0406. Here, Nouvel makes no such allegations in the Underlying Petition. Accordingly, the Coverage B Insuring Agreement is not triggered as a matter of law. The term “personal and advertising injury” is defined, in pertinent part, as follows: injury, including consequential “bodily injury,” arising out of one or more of the following offenses: a. False arrest, detention, or imprisonment; b. Malicious prosecution; PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 21 1439018.2c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupics, committed by or on behalf of its owner, landlord, or lessor; d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products, or services; e. Oral or written publication, in any manner, of material that violates a person’s right of privacy; f. The use of another’s advertising idea in the insured’s “advertisement”; or g. Infringing upon another’s copyright, trade dress, or slogan in your “advertisement.” id., REP-LEG 0414. The Underlying Suit arises out of Nouvel’s termination from her employment with McCormick. Nouvel alleges that Legacy and Steak House Management were intent on “exacting their revenge” by forcing McCormick to terminate Nouvel from her employment. Exhibit 1, Document B, p. 5. Nouvel specifically alleges in the Underlying Petition that Legacy and Steak House Management tortiously interfered with her employment relationship with McCormick. /d. Tortious interference with business relationships is not considered to be a claim for “personal and advertising injury” under a commercial general liability policy. See generally Pa. Pulp & Paper Co., Inc. v. Nationwide Mut. Ins. Co., 100 §.W.3d 566, 573 (Tex. App.—Houston [14th Dist.] 2003, pet. denied) (holding that even giving a pleading a liberal construction, claims for tortious interference with prospective business relationships do not fall under the definition of “advertising injury”); PYCA Indus. v. Harrison County Waste Water Mgmt. Dist., 81 F.3d 1412, 1420 (Sth Cir. 1996) (Mississippi law) (finding that the alleged tortious interference with contract claims clearly does not fall within the scope of the insuring agreement). There are no also no allegations that Legacy, Steak House Management, or any of their agents, employees, representatives, or contractors made or published any disparaging, slanderous, or libelous comments about Nouvel. Rather, the gist of Nouvel’s claims against Legacy and Steak House Management is that they wrongfully and intentionally interfered with PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 22 1439018.2her employment by taking steps to have her fired from her job, all done in retaliation for perceived criticism she posted about her dining experience at the Restaurant. The undisputed material facts therefore establish that the “personal and advertising injury” requirement of the Coverage B Insuring Agreement has not been satisfied as a matter of law. 6. Republic has no duty to defend Legacy or Steak House Management as a matter of law. The undisputed material facts establish that the Policy does not apply, as neither the Coverage A Insuring Agreement nor Coverage B Insuring Agreement is triggered. Even if the Coverage A Insuring Agreement is somehow triggered, the “expected or intended injury” exclusion applies to bar coverage. Republic is therefore entitled to judgment as a matter of law that it has no duty to defend Legacy or Steak House Management in the Underlying Suit. Don's Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 §.W.3d 20, 31 (Tex. 2008); Colony Ins. Co. v. HRK,, Inc., 728 S.W.2d 848, 850 (Tex. App.—Dallas 1987, no writ). VIL. CONCLUSION AND PRAYER WHEREFORE, Republic respectfully asks the Court to grant partial summary judgment in its favor as follows: 1. The Coverage A Insuring Agreement is not triggered based on the factual allegations by Nouvel in the Underlying Suit; 2. The Coverage A “expected or intended injury” exclusion a. bars coverage to the extent the Coverage A Insuring Agreement is triggered; 3. The Coverage B Insuring Agreement is not triggered based on the factual allegations by Nouvel in the Underlying Suit; PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 23 1439018.24. Republic has no duty to defend Legacy or Steak House Management in connection with the Underlying Suit; 5. For such other and further relief to which Republic may be justly entitled, whether in law or in equity. Respectfully submitted, WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP By: AL : J. Price Collins State Bar No. 04610700 Blake H. Crawford State Bar No. 24065096 Bank of America Plaza 901 Main Street, Suite 4800 Dallas, Texas 75202 Telephone: (214) 698-8000 Facsimile: (214) 698-1101 ATTORNEYS FOR PLAINTIFF, REPUBLIC LLOYDS CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document was served on all counsel of record in accordance with Rule 21a of the Texas Rules of Civil Procedure on this the 30th day of August, 2012. Via Certified Mail, Return Receipt Requested Beverly B. Godbey Melissa R. Holman GARDERE WYNNE SEWELL LLP 3000 Thanksgiving Tower 1601 Elm Street Dallas, Texas 75201 4. Blake H. Crawford PLAINTIFF REPUBLIC LLOYDS’ MOTION FOR PARTIAL SUMMARY JUDGMENT AND BRIEF IN SUPPORT Page 24 1439018.2Exhibit 1CAUSE NO. DC-12-03577 REPUBLIC LLOYDS § § IN THE DISTRICT COURT OF v § § DALLAS COUNTY, TEXAS LEGACY RESTAURANT GROUP, § LTD. and STEAK HOUSE § 160th JUDICIAL DISTRICT MANAGEMENT COMPANY, LLC § AFFIDAVIT OF CAROL MCDANIEL STATE OF TEXAS § § COUNTY OF DALLAS § Before me, the undersigned notary, on this day personally appeared Carol McDaniel. After I administered an oath to her, upon her oath she said: 1. My name is Carol McDaniel. I am over the age of eighteen, have never been convicted ofa crime involving moral turpitude, and am fully competent to make this Affidavit 2. I am a claims representative for Republic Lioyds (“Republic”), and as such, I have personal knowledge of the matters set forth in this Affidavit. 3. This Affidavit is submitted in support of Republic’s Motion for Partial Summary Judgment and Brief in Support in the above styled and numbered action. 4. Republic issued to Legacy Restaurant Group, Ltd. (“Legacy”) “Commercial Lines Policy” number CMP 5645531 05 for the policy period from December 31, 2010 to December 31, 2011 (the “Policy”). 5. The Policy provides commercial general liability coverage, and true and correct copies of the Common Policy Declarations (REP-LEG 0286 to REP-LEG 0289), Commercial General Liability Declarations (REP-LEG 0392 to REP-LEG 0396), Commercial General Liabitity Coverage Form (REP-LEG 040! to REP-LEG 0416), and endorsements modifying the ‘AFFIDAVIT OF CAROL MCDANIEL PACEL 1459998,2—~—YnV/J\ 9 ® terms under the Commercial Gercral Liability Coverage Form (REP-LEG 0423 to REP-LEG 0443) are attached hereto and collectively referred to as Document “A”. 6. On November 22, 2011, Michelle Nouvel filed her First Amended Petition in a lawsuit styled Michelle Nouvel v. Legacy Restaurant Group, Ltd., Steak House Management Company, LLC, and RNDC Texas, LLC d/b/a Republic National Distributing Company, Cause No. CC-11-07242-B in the County Court at Law Number 2 of Dallas County, Texas, a true and correct copy of which is attached hereto as Document “B”. FURTHER AFFIANT SAYETH NOT. Carol McDaniel Sworn to and subscribed before me by Carol McDaniel on the Zz day of Alugusce, 2012 Notary Public for the State of Texas My Commission Expires: De We. 2, 2013 ’ M s “Hera ae %, ”, % "AFFIDAVIT OF CAROL MCDANIEL ‘PAGEDDocument A01/27/201202:05PM e@ rd COMMON POLICY DECLARATIONS POLICY NUMBER: CHP_ 5645531 05 RENEWAL OF NUMBER: CHP 5645531 0408 COMPANY NAME AGENT NAME, ADDRESS & CODE REPUBLIC LLOYDS ROBERTS & CROW, INC. $525 LB FREEWAY 12221 MERIT DR STE 600 DALLAS, TX 75240-6241 DALLAS, TX 75251-2260 (800) 344-2275 4201616 (972) 770-4450 NAMED INSURED LEGACY RESTAURANT GROUP LTO As Per Named Insured Endorsement MAILING ADDRESS 5760 LEGACY DR, STE B-1 PLANO, TX 75074 POLICY PERIOD: FROM 12/31/2010 TO __ 32/31/2011 AT 12:01 A.M. STANDARD TIME AT YOUR MAILING ADDRESS SHOWN ABOVE, FORM OF BUSINESS CORPORATION BUSINESS DESCRIPTION | RESTAURANT IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS ' POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATEO IN THIS.POLICY. THIS POLICY CONSISTS OF THE FOLLOWING COVERAGE PARTS FOR WHICH A PREMIUM IS INDICATED. THIS PREMIUM MAY BE SUBJECT TO ADJUSTMENT. PREMIUM COMMERCIAL GENERAL LIARILITY COVERAGE PART $6,326.00 COMMERCIAL INLAND MARINE COVERAGE PART $1,169.00 COMMERCIAL LIQUOR LIABILITY COVERAGE PART $2,134.00 COMMERCIAL PROPERTY COVERAGE PART $9,376.00 TERRORISM - CERTIFIED ACTS (GENERAL LIABILITY) $237.00 TERRORISM - CERTIFIED ACTS (INLAND MARINE) $82.00 TERRORISM - CERTIFIED ACTS (LIQUOR LIABILITY) $87.00 TERRORISM - CERTIFIED ACTS (PROPERTY} $215.00 TOTAL: $19,626.00 Countersigned: By. (Date) {Authorized Representative) ISSUE DATE: 12/29/2010 COMM-PACKAGE-DEC Pago 1 ot a O Original REP-LEG 028601/37/2012 02.06 PM” @ e SUPPLEMENTAL - NAMED INSURED POLICY NUMBER:CHe 5645531 05 LEGACY RESTAURANT GROUP LTO BOB'S STEAK & CHOP HOUSE BOB'S STEAK & CHOP HOUSE CLUB COMM-PACKAGE-DEC Original Page 2 of 4 REP-LEG 028701/27/2012 02