United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
Kenneth M. Hoyt United States District Judge
the Court are the plaintiff's, 2200 West Alabama, Inc.,
(“the plaintiff”), motion for summary judgment
[DE#10] and the response and cross-motion for summary
judgment of the defendant's, Western World Insurance
Company, [DE#11]. Also before the Court are the reply and
response of the plaintiff to the defendant's cross-motion
[DE# 12] and the defendant's reply in support of its
cross-motion [DE# 13]. The Court has reviewed the
parties' papers and submissions and determines that the
plaintiff's motion should be granted and the
defendant's cross-motion should be denied.
defendant issued its “Commercial General Lines”
insurance Policy Number NPP1356289, effective December 15,
2013, for one-year and thereafter renewed the coverage in
Policy Number NPP1402213 for an additional year during which
term(s), the plaintiff enjoyed liability coverage for
“sums that [the plaintiff] becomes legally obligated to
pay for damages because of . . . personal and advertising
injur[ies].” The Policy also obligated the defendant to
. . . “defend [the plaintiff] against any suit” .
. . that seeks damages covered by the terms of the Policy.
2014, the plaintiff was sued in state court, concerning a
commercial lease where the negotiations went awry and the
tenant, Dubrow Partners (“Dubrow”) sought to
recover damages against the plaintiff and its prime tenant,
Soray, LLC, for failure to timely complete negotiating a
lease agreement in order that Dubrow might take physical
possession and open its restaurant. The lease was not
consummated and Dubrow never took physical possession of the
being served with a complaint, in an underlying suit, the
plaintiff tendered the suit to the defendant claiming that,
under the terms of the Policy, the defendant owed the
plaintiff a duty to defend the suit brought by Dubrow. The
defendant disclaimed any duty owed to the plaintiff while
arguing that Dubrow's claim(s) were not a
“covered” event because Dubrow never physically
moved into the premises. Therefore, the defendant refused to
defend the plaintiff in the underlying suit.
Policy that is the subject of this suit covers
“personal and advertising injury” and, in this
respect defines, in relevant part, the scope of coverage and
define injury as follows:
. . . [I]njury . . . arising out of . . . the wrongful
eviction from, wrongful entry into, or invasion of the right
of private occupancy of a room, dwelling or promises that a
person occupies, committed by or on behalf of its owner,
landlord or lessor.
See [DE 10-1, p. 38-39]. The defendant contends that
the plaintiff cannot establish that Dubrow was wrongfully
evicted, that another party wrongfully enter[ed] the premises
or, that an invasion occurred circumventing Dubrow's
right of occupancy of the premises. The defendant also
asserts that the plaintiff knowingly violated Dubrow's
right to take occupancy and thereby breached the contract.
Therefore, the defendant asserts, the plaintiff's conduct
absolves the defendant of any contractual duty to defend the
plaintiff asserts that at the time that negotiations ceased,
Dubrow had a right of occupancy. It asserts as well that
physical occupancy of the premises is not required by the
Policy(s). The question that controls coverage, contends the
plaintiff, is whether Dubrow gained a “right of private
occupancy.” In support of its claim that Dubrow gained
that right, the plaintiff points to the claims of Dubrow in
the underlying suit. There, Dubrow asserts that the plaintiff
interfered with its “right of occupancy”. To the
defendant's claim that even if Dubrow gained such a right
coverage is excluded, the plaintiff asserts that Dubrow's
assertions against the plaintiff in the underlying suit do
not trigger the Exclusion provision without proof.
Continuing, the plaintiff asserts that the defendant has
failed to proffer any evidence that it violated the lease
agreement or otherwise breached it.
parties agree that Texas law applies, and Texas law generally
endorses the eight-corners rule. “The eight-corners
rule provides that when an insured is sued by a third party,
the liability insurer is to determine its duty to defend
solely from the terms of the policy and the pleadings of the
third-party claimant. Resort to evidence outside the four
corners of these two documents is generally
prohibited.” GuideOne Elite Ins. Co. v. Fielder Rd.
Baptist Church, 197 S.W.3d 305, 307 (Tex. 2006).
“If the [claimant's] petition only alleges facts
excluded by the policy, the insurer is not required to
defend.” Fidelity & Guar. Ins. Underwriters,
Inc. v. McManus, 633 S.W.2d 787, 788 (Tex. 1982).
Further, “[t]he court may not read ...