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Click here for the full text of this decision FACTS:In December 2000, a class-action was filed against the Dallas Mavericks, Mark Cuban and other entities connected to Maverick basketball. The class-action claimed the Mavericks violate the Telephone Consumer Protection Act by sending unsolicited fax advertisements for basketball tickets. The plaintiffs sought $500 per advertisement. A second, nearly identical class-action suit was filed a year later. The Mavericks asked TIC Insurance to defend and indemnify them against both suits under the commercial general liability insurance policy TIG issued for the Mavericks. TIG denied coverage in both cases. The Mavericks filed suit against TIG for breach of contract, a declaration that TIG was obligated to defend and indemnify them, and for monetary penalties under the Insurance Code. The trial court granted the Mavericks’ motions for partial summary judgment stating the petitions in the underlying litigation set forth a cause of action potentially covered by the Mavericks’ liability insurance and, accordingly, TIG had breached its defense obligations. In a bench trial, the trial court found that the Mavericks’ claims for a defense fell with Insurance Code Art. 21.55, but the court also held that the penalty available under that section stopped accruing on the date of the summary judgment ruling for the Mavericks. The Mavericks had argued that the penalty of 18 percent per annum continued to accrue until after the damages in the underlying claims have been paid. Both sides appeal. HOLDING:Affirmed in part; reversed and rendered in part. The court first considers whether TIG had a duty to defend against the blast-fax cases. The commercial general liability policies issued by TIG to the Mavericks obligates TIG to “pay those sums that the insured becomes legally obligated to pay as damages because of . . .”advertising injury’ to which this insurance applies.” The term “advertising injury” is defined to include the “oral or written publication of material that violates a person’s right of privacy.” The court agrees with TIG’s contention that “material” is limited to injury arising from the content or substance of the publication. To hold otherwise, the court continues, “would render the words”oral or written’ in the definition of advertising injury meaningless.” But, the court does disagrees with TIG’s characterization of the underlying suits. The only written materials the act applies to is advertising. This is because “Congress recognized that advertising is a form of written communication that can have a uniquely intrusive quality when sent to persons who have requested it.” The content of the faxes was critical to the underlying lawsuits because they contained advertising. All unsolicited advertising is presumed intrusive under the act. “Accordingly, we conclude the petitions in the Rodriguez and Hutchins suits sufficiently allege that the plaintiffs’ right of privacy was violated by written ‘material’ so as to fall within the insurance policies’ coverage for advertising injury.” Though the term “publication” is not defined in the insurance policy, the court finds the faxes in the underlying suits are a publication. The distribution of the advertising to the fax machine owners was a publication of the offending material, the court concludes. The court next weighs the competing arguments over whether TIG violated Art. 21.55, which sets forth deadlines by which an insurance company must respond to a claim. The Mavericks contend TIG violated Art. 21.55 when it refused to defend them; TIG argues that Art. 21.55 only applies to first-party claims for payment, not claims for a defense. The court agrees with TIG. “The entire structure of Article 21.55 presumes a tangible, measurable loss suffered by the insured for which he seeks payment from the insurance company. Any attempt to apply the statute’s structure to a claim for a defense is unworkable and, based on the language of the statute, clearly unintended by the Legislature.” Though the Mavericks argue that they have been forced to pay for a defense because of TIG’s refusal, the court finds that a claim for reimbursement is not a claim under the policy, and Art. 21.55 only applies for claims under a policy. The court acknowledges that its interpretation of Art. 21.55 is contrary to holdings reached by other state and federal courts, but the court says those cases addressed Art. 21.55 only cursorily or relied on faulty reasoning. “Claims for a defense are fundamentally different than first-party claims for payment based on a loss suffered by the insured. The language of 21.55 cannot be applied to claims for a defense in any meaningful way.” OPINION:Morris, J.; Morris, Wright and Bridges, JJ.

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