Altivia Corporation v. Greenwich Insurance Company--Appeal from 270th District Court of Harris County

Affirmed in part, Reversed and Remanded in part, and Majority and Concurring Opinions filed August 26, 2004

Affirmed in part, Reversed and Remanded in part, and Majority and Concurring Opinions filed August 26, 2004.

In The

Fourteenth Court of Appeals

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NO. 14-03-00740-CV

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ALTIVIA CORPORATION, Appellant

V.

GREENWICH INSURANCE COMPANY, Appellee

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On Appeal from the 270th District Court

Harris County, Texas

Trial Court Cause No. 02 05067

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C O N C U R R I N G O P I N I O N

The trial court concluded that Greenwich has no contractual duty to defend or indemnify Altivia. On appeal, Altivia does not challenge Greenwich=s refusal to indemnify for losses sustained in connection with settlement of the underlying claim.[1]

The majority=s ruminations about Acontext@of Hidrogo=s pleadings are not consistent with proper application of the Aeight corners@ rule. In his petition, Hidrogo alleges the following:

Defendant, by and through its agents, has slandered and defamed plaintiff to other trucking companies which has prevented him from obtaining other employment.

(emphasis added)

In the underlying pleadings, there is no description of dates, times, places, or specific persons who made the alleged defamatory statements. Altivia suggests that we consider the possibility that some of Altivia=s employees may have gossiped among themselves regarding Hidrogo=s termination and driving record. The majority appropriately refuses to entertain Altivia=s suggested scenario. However, the majority entertains its own scenario. After correctly concluding that there is no duty to defend if the statements were made in response to routine employment inquiries, the majority opines, Ato the extent the statements were otherwise alleged to be made by Altivia=s authorized agents, such as to subject Altivia to liability, and were false and malicious . . . they would have allegedly been made by Altivia with knowledge of their falsity and thus also outside the scope of coverage.@

I concur with the majority in finding no duty to defend under the Comprehensive General Liability section of the policy but respectfully disagree with their analysis. My colleagues do not sufficiently distinguish between the duty to indemnify and the duty to defend. See Utica Nat=l. Ins. Co. of Tex. v. Am. Indem. Co., 47 Tex. Sup. Ct. J. 845, 2004 WL 1535235, at *4 (Tex. July 9, 2004) (stating that having the duty to defend does not necessarily mean that a carrier is obligated to indemnify the insured). Unlike the duty to indemnify, whether there is a duty to defend does not depend upon the actual facts which might support liability in the underlying lawsuit. Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 821B22 (Tex. 1997). An insurer=s duty to defend is determined by allegations in the pleadings and the language of the insurance policy, commonly expressed as the Aeight corners@ rule. Nat=l Union Fire Ins. Co. of Pittsburg, Pa. v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997). We may not read facts into the pleadings, look outside the pleadings, or imagine factual scenarios that might trigger coverage; however, if the underlying petition contains allegations which, when fairly and reasonably construed, state a cause of action that is potentially covered by the policy, then the insurer has a duty to defend. Nat=l Union Fire Ins. Co., 939 S.W.2d at 142.

The majority erroneously reads facts into the pleadings by speculating about knowledge, intent, motive or authority of Altivia=s employees. On the contrary, we may not consider scenarios outside the plain language of Hidrogo=s pleadings in the underlying case.Our focus should be only the text of factual allegations in the pleadings that show origin of the claimed damage. The focus on origin of damages is consistent with the requirement that there be a causal connection between conduct excluded from coverage and the damages alleged by the underlying plaintiff. Waffle House, Inc. v. Travelers Indem. Co. of Ill. 114 S.W.3d 601, 608 (Tex. App.CFort Worth 2003, pet denied). Reading Hidrogo=s petition literally, without reference to the truth or falsity of the allegation; the damages, if any, arise out of alleged defamatory remarks to prospective employers. Applying the Aeight corners@ rule, I would conclude that defamatory communications to other trucking companies without implying any other circumstance (for or against coverage) alleges an Aemployment related practice . . . such as defamation@ as described in the Employment Related Practices Exclusion. Such conduct as literally expressed in the underlying pleadings is excluded from coverage. Succinctly, the underlying petition does not state a cause of action that is potentially covered by the Comprehensive General Liability section of the policy. Nat=l Union Fire Ins. Co., 939 S.W.2d at 142.

Accordingly, I concur with the majority relative to disposition of Altivia=s first issue and join the majority in reversing and remanding on Altivia=s second issue.

/s/ Charles W. Seymore

Justice

Judgment rendered and Majority and Concurring Opinions filed August 26, 2004.

Panel consists of Justices Fowler, Edelman, and Seymore. (Edelman, J., majority.)

[1] Accordingly, I join the majority in limiting the court=s analysis to the contractual duty to defend.