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Click here for the full text of this decision FACTS:Service Lloyd’s Insurance Co. appeals from a judgment declaring that the company has a duty to defend one of its insureds, J.C. Wink. Inc., in a class action suit brought against the insured by its former customers. J.C. Wink. Inc. is an auto dealership. It obtained a commercial general liability insurance policy from Service Lloyd’s Insurance Co. (SLIC). This liability policy, together with two consecutive policy renewals, provided insurance coverage for Wink from September 1997 through September 2000. The policy issued to the dealership provided errors and omissions coverage. Under the policy, SLIC is obligated to provide Wink a defense whenever Wink is accused of negligently violating any federal, state or local truth-in-lending law. Wink and other auto dealerships were eventually sued by a class of their former customers in September 2002. The plaintiffs’ petition alleges that, as a part of the purchase of their automobiles, Wink overcharged them in various ways. The petition claims Wink’s conduct constitutes, among other things, a violation of the provisions of the Texas Finance Code known as the Motor Vehicle Installment Sales Act. Wink, believing the underlying suit accused it of committing violations of state truth-in-lending laws, notified SLIC and requested a defense pursuant to the E&O provisions of its policy. SLIC refused to tender a defense to Wink, because it believed the factual allegations in the plaintiffs’ class action petition failed to state a claim for violations of any federal, state or local truth-in-lending laws. Wink subsequently filed a declaratory judgment action, seeking a declaration that SLIC owes it a defense in the underlying suit. Wink also sought penalties and damages pursuant to Texas Insurance Code Article 21.55 (prompt payment statute) and Texas Insurance Code Article 21.21 (unfair claim settlement practices statute) based on SLIC’s refusal to provide it with a defense. The trial court granted Wink’s motion for partial summary judgment and denied SLIC’s motion. Pursuant to Texas Civil Practice & Remedies Code 51.014(f), this court granted SLIC permission to appeal the trial court’s partial summary judgment ruling. HOLDING:Affirmed in part; reversed and rendered in part. The court holds the policy is unambiguous as a matter of law. The policy specifies SLIC will provide Wink a defense against claims arising from negligent errors or omissions resulting in civil violation of “[a]ny federal, state or local Truth-in-Lending statute.” The court finds nothing in the policy’s language that would limit Wink’s coverage to actions based on alleged violations of the federal TILA and its specific state or local counterparts. The policy’s plain language suggests that it contemplates coverage for actions based on a variety of truth-in-lending laws, including the federal TILA, the federal TILA’s specific state and local counterparts and such other statute that has as its purpose the same objectives and requirements as the federal TILA. “The fact that the MVISA and the federal TILA/Regulation Z share similar objectives and require many of the same disclosures lead us to believe that the MVISA’s disclosure provisions are state truth-in-lending laws for purposes of this appeal.” The petition indicates the plaintiffs’ damages potentially occurred during Wink’s policy period. While the underlying petition does not give specific dates for the disputed sales transactions, it does allege that all of the defendant car dealers, including Wink, sold the plaintiffs their cars between October 1993 and September 2002 (the date of the suit). This time period clearly encompasses Wink’s policy period. Because the pleadings potentially allege damages from conduct occurring during the policy periods, SLIC owes Wink a defense, the court concludes. The court holds the policy’s intentional injury exclusion does not preclude coverage because the pleadings potentially allege damages arising from negligent conduct committed during the policy periods. SLIC complains the trial court erred by concluding Wink has a valid cause of action under Texas Insurance Code Article 21.55. SLIC argues that Art. 21.55 does not apply to a duty to defend. The court agrees. TIG Ins. Co. v. Dallas Basketball Ltd., 129 S.W.2d 232 (Tex. App. Dallas 2004, pet. denied), stands alone in holding that Art. 21.55 does not apply to claims for a defense under a commercial general liability policy. “We agree with the rationale enunciated by our sister court in Dallas Basketball, Ltd.; therefore, like the Fifth Court of Appeals, we hold that article 21.55 does not apply to claims for a defense. We believe that an insured’s claim for defense costs is not a”first party claim’ as that term is used in article 21.55.” OPINION:Marion, J.; before Stone, Angelini and Marion, JJ. Stone, J., delivered a concurring and dissenting opinion. CONCURRENCE AND DISSENT:Stone, J. “I concur in the opinion of the court affirming the trial court’s judgment regarding SLIC’s duty to defend J.C. Wink in the underlying class action lawsuit. I respectfully dissent, however, from the court’s opinion reversing and rendering judgment that J.C. Wink take nothing from SLIC on its article 21.55 claim.”

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