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Butler & Binion

11/22/1995



Appellants, Butler & Binion, a law firm, and several of its partners, appeal from a summary judgement granted in favor of appellees, Hartford Lloyd's Insurance Company and Hartford Casualty Insurance Company. Appellants brought suit, alleging the appellees breached their insurance contracts and their duty of good faith and fair dealing by failing to defend and indemnify them in a prior lawsuit brought by Colette Bohatch. Appellees filed a motion for summary judgment, arguing that no duty to defend or duty to indemnify existed because appellants' insurance policies did not cover the allegations asserted by Bohatch. The trial court granted summary judgment, disposing of all claims asserted by appellants. Appellants bring one point of error contending: (1) a fact issue existed as to whether appellants intentionally caused injury to Bohatch which would have precluded coverage under the commercial general liability policy; (2) Bohatch's claims fell within the "bodily injury," "advertising injury" and "personal injury" provisions of the commercial general liability policy; (3) appellants' commercial general liability policy covered exemplary damages; (4) appellants' workers compensation and employer's liability insurance policy covered Bohatch's claims; and (5) appellees acted in bad faith by failing to defend and fully indemnify appellants in the suit brought by Bohatch. We affirm.


In 1991, Colette Bohatch, a former partner of Butler & Binion, sued appellants, alleging she was constructively expelled as a partner after she reported alleged unethical conduct by another Butler & Binion partner. At the time of Bohatch's alleged injuries, appellants were insured by both a commercial general liability policy and a workers' compensation /employer's liability policy issued by the appellees. In her petition, Bohatch alleged appellants unfairly restricted her access to clients, reassigned her work, and reduced her employment compensation. Bohatch asserted causes of action for breach of fiduciary duty, breach of the duty of good faith and fair dealing and breach of contract. A jury awarded Bohatch actual, exemplary and mental anguish damages and attorneys' fees. Appellees defended appellants in the Bohatch lawsuit under a reservation of rights agreement; but, appellees agreed to pay only one-half of the continuing defense costs during appellants' appeal of the jury's verdict. Moreover, appellees refused to indemnify appellants, asserting that no insurance coverage existed for damages awarded to Bohatch.


When reviewing an appeal from a summary judgment, we must determine whether the proof establishes as a matter of law that there is no genuine issue of material fact. Rodriquez v. Naylor, 763 S.W.2d 411, 413 (Tex. 1989). To decide whether a disputed material fact issue exists, the proof is viewed in favor of the non-movant, resolving all doubts and indulging all reasonable inferences in its favor, and the evidence is taken as true. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex. 1985). A defendant as a movant must either:


(1) disprove at least one element of each of plaintiff's theories of recovery; or (2) plead and conclusively establish each essential element of an affirmative defense. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 679 (Tex. 1979).


The controlling issues in this case are whether the appellees had a duty to defend or indemnify appellants in the prior lawsuit filed by Bohatch. In Texas, the duty to defend and duty to indemnify are distinct and separate duties. American Alliance Ins. v. Frito-Lay, 788 S.W.2d 152, 153 (Tex. App. -- Dallas 1990, writ dism'd). An insurer owes a duty to defend if the plaintiff's petition alle

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