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Everitt v. Transportation Insurance Company3/22/2000
Opinion by:Sarah B. Duncan, Justice
AFFIRMED
David Everitt, Tennie Everitt, Ernest Murphy, and Practice Management Associates appeal the summary judgment rendered against them on their declaratory judgment action, arguing the trial court erred not only in granting summary judgment for Transportation Insurance Company (TIC), but also in failing to grant summary judgment in their favor. We disagree and affirm the trial court's judgment.
Factual and Procedural Background
TIC provided business liability coverage for Practice Management Associates, Incorporated (PMA), a Texas corporation that provides services to the medical profession. PMA was the named insured under the policy, although the insureds included PMA's executive officers and directors with respect to their duties as executive officers and directors, as well as PMA's employees with respect to their acts within the scope of their employment. Under the policy, TIC promised to "pay those sums that the insured becomes legally obligated to pay as damages because of `bodily injury ', `property damage', `personal injury' or `advertising injury' to which this insurance applies." The insurance applied to advertising injuries "caused by an offense committed in the course of advertising your goods, products or services."
On November 13, 1998, appellants were sued by Ron Lusk, Joe Williams, and Provider Compliance Institute, Inc. (PCI). According to Lusk and Williams, they were approached by David Everitt and Ernest Murphy concerning the formation of a new business. Everitt and Murphy offered to transfer PMA's intellectual property rights in its Internal Operations Audit Manual and seminar packages to the new entity if Lusk and Williams paid for the formation of the new entity and provided a cash flow note for PMA. Williams and Lusk contend they agreed to the offer and Lusk gave Everitt a check for $15,000. The new entity, Provider Compliance Institute, Inc., was formed in February 1998, and a bank account was opened in its name. Lusk and Williams allege Everitt and Murphy had sole control over the bank account and "used the funds contributed by Lusk to PCI's account in large part for PMA's, Everitt's, and Murphy's sole purposes and benefit." Lusk and Williams further allege Everitt deposited the $15,000 initially given to him by Lusk into PMA's bank account, and Everitt paid PMA's phone bills with PCI funds.
According to Lusk and Williams, Everitt and Murphy made several presentations to hospitals and medical care providers between February and June 1998. During those seminars, Everitt and Murphy published brochures, made lectures and audio-visual presentations, and sold copyrighted manuals bearing the name of PCI as the owner and publisher. Lusk and Williams claim all of the materials used and distributed at the seminars contained the PCI logo and PCI copyright. Lusk and Williams further allege that Everitt and Murphy "advertised, published, marketed, displayed, and sold" audit compliance manuals bearing the PCI copyright to the public "without any reservation of rights to PMA, Everitt, or Murphy."
Lusk and Williams then allege Everitt and Murphy attempted to repudiate their agreement, demanding that Lusk increase his investment in PCI. Consequently, Lusk and Williams contend "Everitt and Murphy, acting jointly, severally and in concert with others ... courted a myriad of prospective buyers or merger candidates for PCI's operations and assets," falsely representing that they had the authority to negotiate on PCI's behalf. Everitt and Murphy then allegedly sold the internal audit compliance manual and seminars to Superior Consultant Company, Inc., who knew of Lusk and William's
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