Full opinion text
AMENDED MEMORANDUM ORDER FOLSOM, District Judge. Plaintiff-insurer filed this declaratory judgment action against its insured, Defendant Atchley, Russell, Waldrop & Hlavin-ka, et. al. (“Atchley Russell”). Atchley Russell counterclaimed for declaratory judgment. Both parties seek a determination of their rights and obligations under a professional malpractice insurance contract. Now before the Court are the parties’ cross motions for summary judgment on the duty to defend and the duty to indemnify (Dkt. Nos. 33 & 34). Also before the Court is Plaintiffs Motion to Strike the Affidavit of Don Morris (Dkt. No. 40). For the reasons stated herein, Plaintiff-insurer’s Motion for Summary Judgment (Dkt. No. 34) is DENIED. Defendants’ Motion for Summary Judgment (Dkt. No. 33) is GRANTED IN PART and DENIED IN PART. Also, Plaintiffs Motion to Strike (Dkt. No. 40) is DENIED AS MOOT. I. PROCEDURAL BACKGROUND Originally, the Court scheduled a hearing for oral argument on the parties’ summary judgment motions. But because this case was set as a bench trial, the Court also gave the parties notice that it would hear and consider evidence on any factual matters that might remain in dispute. At the hearing, Defendants presented live testimony from several witnesses. Plaintiff-insurer insisted that no factual disputes existed on the record and that the motions could be decided as a matter of law; therefore, the company chose not to present any evidence. Instead, it re-urged the Court to enter judgment as a matter of law. The insurer also objected to the taking of any testimony. After the hearing, the Court instructed the parties to submit additional briefing. Those briefs were to aid the Court in determining whether it could decide the indemnification issue, rather than only the duty to defend, before the conclusion of the underlying malpractice litigation in the state court. The Court directed the parties to address Texas law that appeared to restrain the Court from reaching the indemnification issue. The Court has reviewed the additional briefing and the applicable law. Now, the Court issues this Amended Memorandum Order on the parties’ cross motions for summary judgment, both of which focus on interpreting “Exclusion B” under section XIV of the insurance contract. II. SUMMARY JUDGMENT STANDARD Summary judgment is appropriate only “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). “A dispute about a material fact is ‘genuine’ if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Sreeram v. Louisiana State Univ. Med. Center-Shreveport, 188 F.3d 314, 318 (5th Cir.1999)(citing Anderson v. Liberty Lob by, Inc., 477 U.S. 242, 106 S.Ct. 2506, 91 L.Ed.2d 202 (1986)). The district court should construe factual disputes “in the light most favorable to the nonmovant, but only if both parties have introduced evidence showing that an actual controversy exists.” See Edwards v. Your Credit, Inc., 148 F.3d 427, 432 (5th Cir.1998). III. DISCUSSION A. Duty to Defend In Texas, the duty to defend is distinct and separate from the duty to indemnify. King v. Dallas Fire Ins. Co., 85 S.W.3d 185 (Tex.2002) (citing Nat’l Union Fire Ins. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex.1997)). Also, the duty to defend is broader than the duty to indemnify. The first question Texas courts face is whether an insurer, has a duty to defend the insured under the insurance policy. To make this determination, Texas courts apply a specialized analysis. Generally, Texas state courts analyze whether the duty to defend arises by examining only two things: (1) the insurance contract; and (2) the claimant’s petition in the underlying suit against the insured. As the Texas Supreme Court has stated: “An insurer’s duty to defend is determined solely by the allegations in the pleadings and the language of the insurance policy.” King, 85 S.W.3d at 187. Thus, Texas examines only the “eight corners” of the two documents — the pleadings in the suit filed by the claimant against the insured and the insurance contract between the insurer and the insured' — -to determine whether the duty to defend has been triggered. This approach is also called the “complaint allegation rule.” Whether the insurer must defend the insured is determined as a matter of law because the Court need only examine the policy language and the allegations in the underlying petition to make the decision. See also Nat’l Union Fire Ins. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex.1997). Texas’s eight corners approach requires the Court to undertake two basic steps to decide whether the insurer must defend its insured in any given case. First, the Court must construe the contract. Second, it must examine the factual allegations made in the underlying suit and determine whether those allegations could possibly state a claim covered by the insured’s policy. The Court now turns to examine the policy language. 1. Step One: Contract Construction a. General Rules of Construction When interpreting an insurance contract, Texas law requires that the terms be construed against the insurer to avoid excluding coverage, so long as more than one reasonable interpretation exists. Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Willis, 296 F.3d 336, 339 (5th Cir.2002). The insured’s construction of the exclusionary clause must be adopted as long as that construction is not unreasonable. This is the case even if the insurer’s proffered construction would be more reasonable. Insurance Co. of North America v. Cash, 475 S.W.2d 912 (Tex.1971). However, these preferences for adopting the insured’s interpretation only apply where the contract language is ambiguous. Mang v. Travelers Ins. Co., 412 S.W.2d 672, 674 (Tex.Civ.App.1967, writ refd). A contract is only ambiguous if it is susceptible to two or more reasonable interpretations. See Glover v. Nat’l Ins. Underwriters, 545 S.W.2d 755 (Tex.1977). The Court interprets the contract so that every term is given effect, but it reads the terms in the context of the whole contract, so that no provision is controlling. Willis, 296 F.3d at 339. An ambiguity, however, does not arise merely because the parties advance conflicting interpretations. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex.1996); Gen. Agents Ins. Co. v. Arredondo, 52 S.W.3d 762, 766 (Tex.App.-San Antonio 2001, pet. denied). The contract is unambiguous if it can be given definite legal meaning. Id. Texas law indicates that whether an ambiguity exists is determined as a matter of law by “examining the contract as a whole in light of the circumstances present when the contract was entered.” Columbia Gas, 940 S.W.2d at 589. At bottom, the Court’s goal in construing the contract is to give effect to the parties’ intent. Willis, 296 F.3d at 339. b. Construing Exclusion B of the Contract The Court looks first to the policy, which is a “claims-made” policy. The relevant exclusion on which Plaintiff-insurer relies is XIV(B), which reads as follows: This POLICY shall not apply to any CLAIM based upon, arising out of, attributable to, or directly or indirectly resulting from: B. any act, error, omission, circumstance ... occurring prior to the effective date of this POLICY if any INSURED at the effective date knew or could have reasonably foreseen that such act, error, omission [or] circumstance ... might be the basis of a CLAIM. The term “Claim” is defined as: [A] demand made upon any INSURED for LOSS as defined in each of the attached COVERAGE UNITS, including, but not limited to, service of suit or institution of arbitration proceedings or admin, proceedings against any INSURED. The term “Loss” is defined as “monetary and compensatory portion[s] of any judgment, award or settlement.” The Court concludes that this language is unambiguous. The exclusion seeks to preclude coverage in two general situations, as follows: (1) when, before the policy period begins, the attorney has subjective knowledge that a claim will be made against him; and (2) when the attorney is engaged in willful blindness by ignoring the high probability that his actions will result in a claim being filed against him. The following discussion explains how the exclusion’s two prongs function, first standing alone, and then in tandem. (1) subjective component The policy language excludes the following: any act, error, omission, circumstance ... occurring prior to the effective date of this POLICY if any INSURED at the effective date knew '... that such act, error, omission [or] circumstance ... might be the basis of a CLAIM. The policy’s plain language shows that the first prong of Exclusion B applies in three situations. The common denominator in all of these is that the attorney must have had subjective knowledge that his client intended to bring a claim at a point in time prior to the beginning of the policy period. Thus, it does not matter whether any of the following occurred: (1) the attorney did not breach any duty; (2) the attorney did breach a duty but had no knowledge of the breach; or (3) the attorney knew that he had breached a duty. All that matters is that the attorney subjectively knew, prior to the policy period, that his client intended to bring a claim, whether the wrongs alleged were wholly imaginary, were based on a breach of which the attorney was unaware, or were based on breaches of which the attorney was aware. In these situations, the policy provides no coverage. (2) objective prong As for the so called “objective prong,” it, too, has a subjective component. This is because the exclusion must be read so as to ask the following question: What would any reasonable attorney expect, given the facts of which the insured was actually aware? The inquiry does not turn solely on the insured’s subjective interpretation or understanding of the facts, but at a minimum, facts outside the attorney’s knowledge should not be considered. See Seiko v. Home Ins. Co., 139 F.3d 146, 151 (3d Cir.1998) (“First, it must be shown that the insured subjectively knew certain facts.”)• Thus, the Court first must examine what facts the insured subjectively knew. Second, once the Court has determined what facts the insured subjectively knew, the exclusion requires the Court to make an objective assessment of those facts. The question becomes whether a reasonable attorney, in possession of the facts that the insured possessed at the time he applied for insurance, would reasonably foresee both that a professional breach had occurred and that the breach would likely be the basis of a claim against the insured. If the objective calculus indicates that the attorney should have known that his conduct would result in a claim, the policy excludes coverage. See Coregis Ins. Co. v. Goldstein, 32 F.Supp.2d 508, 513 (D.Conn.1998). Plaintiff-insurer takes a rather myopic view of this analysis. The insurer insists that the exclusion applies whenever a reasonable attorney, examining those facts known by the insured, would conclude that a professional duty, in fact, had been breached. The insurer’s interpretation would exclude from coverage all possibly wrongful acts that occurred prior to the policy period, even if the attorney was not subjectively aware that his actions were in error and even though the attorney had no indication that his client intended to file a claim against him. Thus, so long as the attorney was conscious, the insurer’s approach would exclude coverage for any error that occurred prior to the beginning of the policy period, which period is invariably for only one year. This is because the “reasonable attorney” would recognize most, if not all, instances in which any duty had been breached, even if many attorneys would not be aware that a breach had occurred. Indeed, the whole question of whether a duty was breached is an objective one, too. In this fashion, the insurer argues that determining the sole issue of whether a breach did actually occur substitutes for deciding whether the attorney should have known a claim would be filed because of the breach. The Court is mindful that this policy is a “claims-made” policy that is reissued in increments of only one year. In claims-made policies, the insurer must cover only those claims that are actually made against the insured during the policy period. Consequently, the date of the occurrence of the wrongful act on which the claim is said to be based matters less than the date on which the claimant actually makes a claim against the insured for the allegedly wrongful conduct. Thus, the date on which the claim is made against the insured, rather than the date of the allegedly wrongful act, governs whether the policy may provide coverage. The insurer’s interpretation of Exclusion B, however, effectively bars all occurrences, except possibly wholly frivolous or groundless claims, that took place before the policy period, even if the claim based on that occurrence is filed during the policy period. This is because the exclusion’s objective standard, at least as articulated by the insurer, would be precisely the same standard that will be applied in the underlying malpractice suit to determine whether the attorney actually committed malpractice. If the court hearing the malpractice action determines a breach occurred, then the insurer believes that the objective prong of the exclusion would preclude coverage. Oddly enough, if the objective standard governing whether a breach occurred (as applied in the malpractice suit) indicates that no breach took place, then the policy’s exclusion would not be triggered because the attorneys “should not have known” about a claim not based on an actual breach of duty. Thus, the provision does not exclude frivolous claims, but instead, as interpreted by the insurer, it excludes only successful malpractice claims. At best, the insurer’s interpretation seems odd, given that this is a malpractice policy, ostensibly meant to cover claims of malpractice. At worst, it looks like an attempt to avoid coverage for any viable malpractice claim that occurred before the policy period, even if it is timely claimed. In effect, as construed by the carrier, the occurrence and the claim would have to take place during the twelve month policy period for there to be coverage. This construction offers the insured little to no coverage in return for the insured’s not insignificant premiums. That the policy period invariably lasts only twelve months underscores this observation. See generally Ballentine & TamboRELlo, PLLF FL-CLE 6-1 (Main Handbook) Professional Liability of Lawyers in Florida § 6.9 (2002) (noting absence of worth of “occurrence /claims-made combination” policies). In light of the policy’s short, twelve-month term, and considering the nature of claims-made policies generally, the parties could not have intended the exclusion to be read so broadly. Generally, the Court agrees that “a breach of a professional duty and a basis for a claim are thus ‘two peas in a pod.’ ” Coregis Ins. Co. v. Baratta & Fenerty, Ltd., 264 F.3d 302, 307 n. 3 (3d Cir.2001). However, while an actual breach of duty is a prerequisite to invoking the objective prong of the exclusion, a breach alone is not always sufficient. The Court must consider other factors. For example, at least two considerations play a role in determining whether an attorney should have known that his actions would lead to a claim being filed against him: (1) whether the client intends not to bring the claim, as might be evidenced by a lapse of time between the end of representation and the filing of a malpractice suit; and (2) the client’s expression of satisfaction or dissatisfaction or the like. See, e.g., Coregis v. McCollum, 1997 WL 128132, No. 96-1068-CIV-T-17B (M.D.Fla. March 6, 1997) (attorney knew claim would be filed, as evidenced by memo); Coregis Ins. Co. v. Goldstein, 32 F.Supp.2d 508, 513 (D.Conn.1998) (a fact question was presented where the client’s dissatisfaction did not necessarily mean that he would bring suit and a five month delay existed between filing suit and the end of the representation). Without considering these and other relevant factors, a reasonable attorney could not properly determine whether the insured should have known a claim was coming. See id. (“[T]he Court declines to follow [jdecisions [that interpret similar exclusions more broadly] because the Court does not find their reasoning persuasive, but instead, believes they give too expansive of a reading to the exclusion provisions of the contracts they interpret.”). Importantly, some breaches of one’s professional duties are so glaring that the breach itself trumps any other factors. For example, where an attorney fails to prosecute a client’s lawsuit for approximately twelve years and where that failure results in dismissal of the clients suit, there can be no real question that he should expect a claim. See, e.g., Mt. Airy Ins. Co. v. Thomas, 954 F.Supp. 1073, 1080 (W.D.Pa.1997). In these brighter line situations, the inquiry focuses on the following: (1) was the breach caused by reckless or intentional conduct; and (2) what degree of harm would obviously occur as a result of the blatant breach? The Court believes these considerations are what drive many other court opinions interpreting this or similar exclusions. Thus, while some courts give too expansive a reading to the exclusion, they may very well reach the right result because of the presence of a clear indication that an attorney should expect a claim for his rather exceptional breach of duty, regardless of any other factors. See Goldstein, 32 F.Supp.2d at 513 (concluding that Mt. Airy’s interpretation of the exclusion was too broad, and noting that in other cases, much clearer indications that the client would file a claim existed to preclude coverage). Following the reasoning outlined above, the Court concludes that the exclusion’s “objective” language denies coverage in two additional situations. In the first instance, coverage does not exist where an insured has knowledge of facts that would indicate to a reasonable attorney that a glaring or blatant breach had occurred. ■Whether the client has expressed dissatisfaction to the attorney or whether the attorney subjectively believes the client might file a claim is of no importance. The severity of the breach, gauged by its deviation from professional standards and the degree of harm it causes, provides the insured with constructive knowledge of an impending claim. All reasonable attorneys would expect a claim to result from such a breach of professional duty. In the second instance, the exclusion denies coverage where the following two conditions are met. The insured must be aware of facts that would lead a reasonable attorney to conclude that at least some breach of professional duty, even if minor, likely did occur. But the insured must also have some indication that his client is dissatisfied enough to suggest that the client likely will file a claim against him. Thus, in the second instance, the policy excludes coverage where the lawyer knows his client is dissatisfied and where it appears that some breach, though slight, did occur. See, e.g., Goldstein, 32 F.Supp.2d at 513 (D.Conn.1998) (even where the client gave some indication of dissatisfaction, a fact question still remained as to whether the insured should have foreseen a malpractice claim being filed). In sum, Exclusion B denies coverage in three situations, as follows: (1) when the insured has subjective knowledge of an impending claim; (2) when facts subjectively known to the insured would lead a reasonable attorney to conclude that a grossly flagrant or glaring breach of duty occurred; or (3) where facts subjectively known to the insured would lead a reasonable attorney to conclude that at least some breach of duty occurred and where those same facts also indicate that the client is dissatisfied to a point that would lead a reasonable attorney to conclude that the client likely would file a claim. Having construed the exclusion language, the Court now turns to examine whether any facts trigger the exclusion to deny coverage. 2. Step Two: Considering the Underlying Petition’s Factual Allegations Before the Court can apply the construed exclusion language to the facts, it must determine against what set of facts the exclusion language should be read. Texas follows the “eight corners rule.” King v. Dallas Fire Ins. Co., 85 S.W.3d 185, 187 (Tex.2002). Generally, this rule requires the Court to consider only those facts that the claimant has alleged in the underlying malpractice suit against the insured. However, in this case, the parties submitted extensive stipulations about various facts. These facts do not necessarily originate from the claimant’s petition filed against the insured in the state court. In some instances, these stipulations, while not necessarily inconsistent with the claimant’s state court petition, go well beyond the claimant’s allegations in terms of factual specificity. Therefore, the Court must determine whether it should, or indeed whether it may, consider the stipulations of fact proffered by the insured and the insurer in this coverage dispute. The Court looks to state law for the answer. a. Whether Extrinsic Evidence May Be Considered in Determining the Duty to Defend? (1) Texas Supreme Court Authority As stated in King, the Texas Supreme Court does not appear to recognize any exceptions to the strict eight corners rule. See King, 85 S.W.3d at 187. The Texas high court specifically noted that the duty to defend inquiry looked “solely” to the pleadings and the claimant’s allegations in the underlying action against the insured. Furthermore, the Court resolves all doubts about coverage in favor of the insured. See id; Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W.2d 22, 26 (Tex.1965) (doubt resolved in favor of coverage); see also Rhodes v. Chicago Ins. Co., 719 F.2d 116, 119 (5th Cir.1983) (applying Texas state law, citing Heyden); Nutmeg Ins. Co. v. Clear Lake City Water Authority, 229 F.Supp.2d 668 (S.D.Tex.2002) (same). Therefore, if the allegations in the underlying pleadings could even potentially trigger coverage, and the allegations do not on their face conclusively activate an exclusion, then the insurer must defend its insured against the claim. See King, 85 S.W.3d at 187 (“The court should not imagine factual scenarios that might trigger coverage or read facts into the pleadings.”); see also Argonaut Southwest Ins. Co. v. Maupin, 500 S.W.2d 633, 635 (Tex.1973) (duty triggered if pleadings raise a potential for coverage). Additionally, the insured has the initial burden of demonstrating that the claims against it in the underlying lawsuit are potentially covered by its contract for insurance. Canutillo Indep. Sch. Dist. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 99 F.3d 695, 701 (5th Cir.1996); Am. Equity Ins. Co. v. Castlemane Farms, Inc., 220 F.Supp.2d 809 (S.D.Tex.2002). However, the insurer bears the burden of proving the applicability of any exclusions or limitations to coverage. See Canutillo, 99 F.3d at 701 (citing Tex. Ins. Code art. 21.58(b)). Here, only the applicability of the exclusion is in dispute. Significantly, the Texas Supreme Court’s straightforward recitation of the eight corners rule — as it relates to considering extrinsic evidence to decide coverage and whether the insurer must defend the insured' — does not wholly square with the practice of the lower state courts, or even the high court’s own analysis. For example, while King uses strong language to embrace the eight corners rule, its own analysis demonstrates that the courts may examine at least some types of extrinsic evidence alongside the allegations in the underlying lawsuit. King’s analysis makes this point evident, as follows: King evaluated an exclusion clause, which contained a subjective element, and the Court distinguished it from an exclusion clause in Fidelity & Guaranty Ins. Underwriters, Inc. v. McManus, 633 S.W.2d 787 (Tex.1982). Admittedly, the King court did not directly address whether the trial court should have examined extrinsic evidence to determine whether the insurer’s duty to defend had been triggered. However, in distinguishing the case then at hand from McManus, the court made the following observation. In McManus, “a readily determined fact” controlled whether the exclusion applied, and thus, whether coverage existed. See King, 85 S.W.3d at 189. While the King opinion clearly focused on an issue other than whether extrinsic evidence should be examined, the court’s own analysis concedes that the Court may examine at least some facts derived from sources extrinsic to the policy and the claimant’s petition when addressing an insurer’s duty to defend. Critically, King fails to illuminate how narrow or broad this exception cuts into the otherwise strict ban on extrinsic evidence imposed by the eight corners rule. The parties have not presented, nor has the Court found, any other Texas Supreme Court authority that is dispositive of this issue. Therefore, in addition to the general trend of Texas Supreme Court jurisprudence, the Court looks also to lower state court rulings to determine what extrinsic evidence should be evaluated in deciding whether the insurer must defend its insured against the underlying claim. See Lawrence v. Virginia Ins. Reciprocal, 979 F.2d 1053, 1055 (5th Cir.1992). These lower state cases, taken together with the general pronouncements and rationale applied by the Texas Supreme Court will help the Court to predict how the Texas high court would resolve the issue. See Centennial Ins. Co. v. Ryder Truck Rental, Inc., 149 F.3d 378, 382 (5th Cir.1998) (Heartfield, J., sitting by designation). (2) Texas Intermediate Appellate Guidance Unfortunately, Texas intermediate courts of appeal do not agree on the breadth of extrinsic evidence that can be properly interjected into the duty to defend analysis. Add to that the many federal district courts and Fifth Circuit opinions relying on these disparate state cases, and one faces a cacophonous set of rulings indeed. However, the federal cases each rely on possibly outdated circuit opinions or on state appellate opinions that are at either end of the schism that now divides the Texas state courts. For example, in Ohio Casualty Insurance Company v. Cooper Machinery Corporation, 817 F.Supp. 45, 48 (N.D.Tex.1993), Judge McBryde addressed the issue of whether to examine extrinsic evidence to determine whether coverage existed. He determined that the underlying claim against the insured showed, on its face, that no coverage existed under the policy. Therefore, the insurer had no duty to defend. Even so, he also made the following comments: However, even if there were allegations of facts that would indicate the existence of coverage, the insurance company would be entitled in the declaratory judgment action to establish that the facts are false and that, therefore, there is no obligation under the policy, either to defend or to pay. See McLaren v. Imperial Casualty & Indemnity Co., 767 F.Supp. 1364, 1372-75, (N.D.Tex.1991), aff'd, 968 F.2d 17 (5th Cir.1992), cert. denied, 507 U.S. 915, 113 S.Ct. 1269, 122 L.Ed.2d 665 (1993); Blue Ridge Ins. Co. v. Hanover Ins. Co., 748 F.Supp. 470, 473 (N.D.Tex.1990). Here, the true facts are that there is no coverage, with the consequence that plaintiff has no duty to defend and no duty to pay. Id. Thus, based on the Fifth Circuit’s holdings in McLaren and in Blue Ridge, the district court concluded that, even in the context of deciding the insurer’s duty to defend, the courts could always examine extrinsic facts to determine coverage and to contradict the allegations made in the claimant’s underlying petition against the insured. More recent Texas intermediate court holdings seriously undermine such a broad statement. It is true, as the discussion below reveals, that all state courts would consider it proper to examine extrinsic evidence of fundamental coverage facts, such as whether the party bringing the claim is a named insured under the policy. This is in line with the holding in Blue Ridge. Cf. Tri-Coastal Contractors, Inc. v. Hartford Underwriters Ins., 981 S.W.2d 861 (Tex. App.-Houston [1st Dist.] 1998, pet. denied) with Blue Ridge Ins. Co. v. Hanover Ins. Co., 748 F.Supp. 470, 473 (N.D.Tex.1990). And while McLaren presents a thoughtful analysis of several, older Texas Supreme Court cases, its narrow construction of the complaint allegation rule goes against more recent state law opinions. See, e.g., Tri-Coastal Contractors, Inc., 981 S.W.2d 861. Moreover, in other cases, the Fifth Circuit has not been so keen to ignore the stricter version of Texas’ complaint allegation rale. See, e.g., Lafarge Corp. v. Hartford Cas. Ins. Co., 61 F.3d 389, 394 (5th Cir.1995). In refusing to examine extrinsic evidence to defeat coverage for the duty to defend, the Lafarge court noted that “the complaint is simply not as ambiguous as the [the insurer] would have us believe.” Id. The insurer had cited McLaren, Western Heritage, Wade, Boll, and Gonzales for the proposition that it could submit, and that the court should consider, extrinsic evidence that showed the absence of coverage in the context' of the duty to defend. The court noted that these cases were “inapposite; they involve situations in which the complaint either omitted or indisputably misrepresented material facts that would have clearly excluded coverage.” Id. at n. 8. Thus, contrary to Judge McBryde’s assertion, the Fifth Circuit does not appear to believe that Texas law would allow the wholesale admission of extrinsic evidence for the purpose of defeating coverage; at best, some narrower exception applies. ■ More recently, even the Texas Supreme Court has used stronger and stricter language in applying the eight corners rule than McLaren perceived. See, e.g., King, 85 S.W.3d at 187. Thus, it appears that McLaren went too far when it limited the application of Texas’ complaint allegation rule and by limiting its bar on extrinsic evidence. And even if McLaren correctly restated Texas state law as it existed at the time that case was decided, that court did not have to contend with more recent state opinions that would not agree with emasculating the eight corners rale. Instead of relying exclusively on older circuit opinions, the Court looks to recent trends in the jurisprudence of the Texas Supreme Court and Texas’ lower courts for guidance in making this Erie guess. After all, Texas state courts are better positioned than this Court to understand and balance the competing policy issues in contracts for insurance, which are both interpreted by state law and subject to the state’s regulatory schemes. See Omaha Property and Cas. Co. v. Johnson, 923 F.2d 446, 448 (6th Cir.1991) (“The states regulate insurance companies for the protection of their residents, and state courts are best situated to identify and enforce the public policies that form the foundation of such regulation.”)- This Court will not presume that the Texas Supreme Court approves of the federal interpretation of Texas law on this issue, especially where federal interpretations appear to be based on a minority of less recent, intermediate state court opinions. Therefore, the Court turns now to examine how the Texas state intermediate appellate courts handle extrinsic evidence, if at all, in deciding whether an insurer bears the duty to defend. See Centennial Ins. Co., 149 F.3d at 382. (a) Wade’s Exception to the Eight Corners Approach Only one line of Texas cases purports to apply a broad exception to the complaint allegation rule. These culminate in State Farm, Fire & Casualty Co. v. Wade, 827 S.W.2d 448, 452-53 (Tex.App.—Corpus Christi 1992, writ denied), which appears to be the most recent case in which the rule is actually applied, rather than merely cited. The majority in Wade held that an exception to the complaint allegation rule allows the courts to examine extrinsic evidence when deciding an insurer’s duty to defend. A closer look at the breadth of this exception is in order. In Wade, the insurer brought a declaratory judgment action to determine whether an exclusion applied that would defeat coverage. The insurance policy there covered boat accidents that resulted from specific uses of the boat. The court recognized that, usually, it was constrained to view only the allegations in the claimant’s pleadings and the insurance policy to decide the duty to defend. However, the court also noted: “The problem here is that by reading the underlying petition broadly, in favor of the insured, it is impossible to know how the boat covered by the policy was used when it left the [the dock].” Id. at 451. Thus, the eight corners rule frustrated the court’s inquiry into critical coverage facts. Nevertheless, instead of resolving these facts, which had not been alleged in the claimant’s petition, in the insured’s favor to find coverage, see, e.g., Heyden Newport Chemical, 387 S.W.2d at 24, the court said: [t]he insurer is not foreclosed from litigating the application of an exclusion by using evidence and facts outside the pleadings in the underlying wrongful death suit.... It makes no sense to us, in light of these holdings, to say that extrinsic evidence should not be admitted to show that an instrumentality (boat) was being used for a purpose explicitly excluded from coverage, particularly when doing so does not question the truth or falsity of any facts alleged in the underlying petition filed against the insured. Id, at 451, 453. Thus, the court concluded that even in deciding the duty to defend, it could examine and weigh extrinsic evidence relevant to coverage, so long as those extrinsic facts did not overlap or contradict the factual issues that would be determined in the underlying lawsuit between the claimant and the insured. Significantly, Wade relied on three intermediate court cases. In each of these cases, Int’l Svc. Ins. Co. v. Boll, 392 S.W.2d 158 (Tex.Civ.App.-Houston [1st Dist.] 1965, writ ref d n.r.e.), Cook v. Ohio Casualty Ins. Co., 418 S.W.2d 712 (Tex.Civ.App.Texarkana 1967, no writ), and Gonzales v. Am. States Ins. Co., 628 S.W.2d 184, 186 (Tex.App.-Corpus Christi 1982, no writ), the courts faced the question of whether they could examine extrinsic evidence relevant to coverage. Each case depends on the previous one for its analysis and holding, as each descends from Boll, then Cook and Gonzales, finally resulting in Wade. This is the only line of state cases that the Court has found that applies a broad exception to the eight corners rule under Texas law. In Boll, the insurance policy excluded coverage for accidents involving a certain named person. The underlying petition did not allege that the accident was caused by the named person so excluded; rather, the claimant’s petition merely identified the driver as the “son” of the policy holder. After the conclusion of the underlying suit, the parties stipulated that the policy holder’s only son was the same as the named person excluded from coverage. Thus, the court considered extrinsic evidence of the identity of the son, by stipulation, to conclude that no coverage existed and that no duty to defend or indemnify arose. But it did so only after the underlying suit terminated. In Cook, the court examined Boll and Heyden. See Cook, 418 S.W.2d at 715-16. The state court of appeals concluded that the Texas Supreme Court would make a distinction between allowing the examination of extrinsic evidence that went to the merits of the underlying claim and evidence that went only to coverage facts under the policy. While the Cook court recognized that the “character of writ action in Boll deprives it of value of precedent,” the court nonetheless concluded that Boll illuminated a distinction between extrinsic evidence that went only to coverage facts and extrinsic evidence that touched on the merits of the underlying claim against the insured. Also, the court noted that the facts then before it were almost identical to those in Boll. Therefore, the court did examine extrinsic evidence. Gonzales cites and discusses both Boll and Cook. Based on Boll and Cook, and the distinctions those cases draw between “merits facts” and “coverage facts,” the Gonzales court was able to discern the following rule: Where the insurance company refuses to defend its insured on the ground that the insured is not liable to the claimant, the allegations in the claimant’s petition control, and facts extrinsic to those alleged in the petition may not be used to controvert those allegations. But, where the basis for the refusal to defend is that the events giving rise to the suit are outside the coverage of the insurance policy, facts extrinsic to the claimant’s petition may be used to determine whether the duty to defend exists. Gonzales, 628 S.W.2d at 187. Thus, the Gonzales court would not examine any extrinsic evidence that tended to contradict an allegation made in the petition, though it would have examined “coverage only” facts. And in fact, the court looked only to the petition’s allegations to reach its decision. The Court did not reach any extrinsic evidence because the court concluded that the only extrinsic evidence that would trigger the exclusion also contradicted allegations of ownership in the claimant’s underlying suit against the insured; therefore, the claimant’s petition controlled, and the court ignored extrinsic evidence to the contrary. See id. In sum, these cases represent the following broad approach to the eight corners rule: an exception to the eight corners ban on extrinsic evidence exists where the insurer either refuses to defend or defends under a reservation of rights. In these cases, the court may determine the insurer’s duty to defend by examining the petition, the policy, and any extrinsic facts relevant to coverage that do not conflict with the liability facts pled by the claimant’s petition against the insured. Thus, these cases indicate that a court may examine a broad range of extrinsic evidence, so long as adjudication of those facts based on that extrinsic evidence would not result in a conflict with the allegations made in the underlying lawsuit by the claimant against the insured. Therefore, if the Court were to follow the Wade line of cases, it could consider evidence of any facts that did not tend to contradict the claimant’s allegations in the state court malpractice action. (b) TriCoastal Strict Eight Corners Approach Importantly, no Texas Supreme Court case has followed Wade. See Tri-Coastal Contractors, Inc. v. Hartford Underwriters Ins., 981 S.W.2d 861 (Tex.App.-Houston [1st Dist.] 1998, pet. denied). Though Houston’s First District Court first penned Boll, in Tri-Coastal, it declined to apply Wade and Gonzales, which both descended from Boll. Id. Thus, even the court that announced the decision on which the Wade line of cases depends has retreated from the broad version of the exception as it was set forth in Boll. See id. Also, it appears that no other state appellate courts have followed and applied Wade. See id. And given that all three of Cook, Gonzales, and Wade relied to some degree on the reasoning in Boll that line of cases appears much weaker in the face of TriCoastal. Admittedly, Tri-Coastal did not face Wade on all fours. The court noted that, even if the Wade rationale were valid, it did not need to apply it to the case then at hand. This is because the lower court examined evidence that would have barred the claimant (i.e. the party suing the insured) from recovering a judgment, not evidence that would bar only the insured from recovery under the policy. In short, Tri-Coastal concluded that the lower court’s decision, which found no duty to defend, would have been reversed under both Wade and the strict approach because even Wade would prevent a court from admitting extrinsic facts to defeat the claimant’s well pleaded petition (at least as to liability facts). See id. at 863; Wade, 827 S.W.2d at 453. So, Tri-Coastal, while appearing to disapprove of Wade, did not reject it altogether. Another case, Calderon v. Mid-Century Ins. Co. of Tex., also explains that Boll and Cook usually can be distinguished from most duty to defend situations. No. 03-97-00735-CV *3-4 (Tex.App.-Austin 1998, pet. denied) (no publication), available at 1998 WL 898471. In that case, the Austin appellate court noted that the types of coverage facts in Boll and Cook were “fundamental coverage issues whether the property or the individual were covered under the policy” Id. at *4; see also TriCoastal, 981 S.W.2d at 863 n. 1 (fundamental coverage issues consist only of (1) whether person sued is specifically identified as excluded, (2) whether property concerned is excluded, or (3) whether the policy exists). The court went on to hold that it could not examine extrinsic evidence that might prove that the exclusion applied; instead, it was bound by the allegations in the claimant’s petition. Id. In City of Dallas v. Csaszar the Dallas Court of Appeals highlighted the fact that no Texas Supreme Court case has applied the Wade exception to the eight corners rule. No. 05-99-00208-CV, n. 2 (Tex. App.-Dallas 1999, pet. denied) (no publication), available at 1999 WL 1268076. And the Dallas court has never applied the exception. Id. Therefore, after rejecting Gonzales, the court concluded that it must decide the insurer’s duty to defend based on the eight corners of the underlying petition’s allegations and the insurance policy’s terms. It also noted that the duty to defend is determined without reference to what the parties know the true facts to be. Id. (citing Argonaut Southwest Ins. Co. v. Maupin, 500 S.W.2d 633, 635 (Tex.1973)). Interestingly, the Csaszar court even noted that the claimant had not specifically alleged a coverage fact, i.e. that the insured’s employees had acted within the scope of their employment. Still, the court said, “any uncertainty about whether allegations in a complaint state a covered cause of action is resolved in the insured’s favor.” Id. at *4 (citing Heyden, 387 S.W.2d at 26). Thus, the Dallas court applies the strict eight corners approach, and it will not look to extrinsic evidence, even where that evidence might not conflict with the claimant’s allegations in the underlying lawsuit. (c) Reconciling Wade with the Strict Eight Corners Approach Wade is undermined by its own concurrence. The concurrence specifically took issue with “the majority’s observations in dicta that [the insurer] may present evidence other than the plaintiffs pleadings in the underlying lawsuit.” See Wade, 827 S.W.2d 448, 453 (Dorsey, J. concurring). Similar to King and other Texas Supreme Court opinions, the concurrence would have held that “whether the incident ... was covered by the policy should be determined solely from the plaintiffs pleadings in the underlying lawsuit.” Id. at 454. The concurrence further noted that the duty to defend arises anytime there exists a possibility of coverage, i.e. that the duty exists regardless of the outcome of the underlying suit against the insured. Id. Moreover, the Wade concurrence highlights that when Texas courts had previously examined extrinsic evidence in the context of an insurer’s duty to defend, they had done so only for a limited range of purposes. Id. One such purpose was to determine the existence of the contract, e.g. whether premiums had been paid. The concurrence discussed Boll and Cook, and it concluded that both cases inquired into similar fundamental coverage issues. Furthermore, it stated: “No courts have allowed evidence of the specific occurrence to determine whether the occurrence itself is covered by the policy, however.” Id. And to the extent Gonzales might have recognized such a distinction, the concurrence also noted that extrinsic evidence would not be allowed into the equation to contradict allegations of fact by the claimant. Thus, “[e]xtrinsic evidence regarding coverage is admitted in very limited circumstances .... When determining whether the event giving rise to the insured’s liability is covered, we look only to the pleadings of the claimant.” Id. Also, in Cook, the underlying litigation had already come to a conclusion. See Wade, 827 S.W.2d at 453. The statement of facts on which the appellate court relied in making its ruling reflected as much. Thus, while the Cook court concerned itself with coverage issues that ultimately affected whether the insurer had failed to honor its duty to defend, the court did not face the prospect of a range of possible factual determinations that might be decided by two different courts; the underlying claim had already been litigated. Similarly, the Boll case was not a declaratory judgment action sought before the conclusion of the underlying case. It was brought after the facts of the underlying claim were resolved. Thus, both cases were poised much differently than this case; no unresolved facts existed in the underlying claimant’s case. The Texas Supreme Court has persistently commanded that all doubts as to coverage are resolved in favor of the insured; however, these pronouncements can be sharpened and restated. In short, the trends in Texas — as evidenced by state appellate opinions, by repeated similar statements by the Texas Supreme Court, and by academic observation in the journals — show that Texas currently follows a strict eight corners approach. Whether Wade’s analysis is workable or whether it creates an exception to swallow the rule is of no moment. The overwhelming recent trends in state law weigh against the extensive use of extrinsic evidence in deciding the duty to defend. Instead, exceptions to the rule are very rare indeed. (3) Conclusion: Texas Uses Extrinsic Evidence to Decide the Duty to Defend Only in Very Limited Circumstances. Accordingly, the Court concludes that the concurrence in Wade represents the prevailing trend in Texas state law. “[I]f the petition only alleges facts excluded by the policy, the insurer is not required to defend. Similarly, if the petition only alleges facts that are covered by the policy, a duty to defend exists. Between these two poles, the presumptions of coverage exist.” See Wade, 827 S.W.2d at 454-55 (Dorsey, J. concurring) (internal quotations/citations omitted); see also King, 85 S.W.3d at 187 (duty to defend decided solely by the pleadings); Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W.2d 22, 26 (Tex.1965) (doubt resolved in favor of coverage); see also Rhodes v. Chicago Ins. Co., 719 F.2d 116, 119 (5th Cir.1983) (applying Texas state law, citing Heyden). Only in very limited circumstances is extrinsic evidence admissible to rebut those presumptions. Id. These instances are ones in which “fundamental” policy coverage questions are resolved by “readily determined facts.” King, 85 S.W.3d at 189 (readily determined fact, distinguishing McManus)-, Calderon, No. 03-97-00735-CV at *3-4, available at 1998 WL 898471 (fundamental coverage issues only); Wade, 827 S.W.2d at 454-55 (Dorsey, J. concurring); see also Csaszar, No. 05-99-00208-CV at n. 2, (no publication) (refusing to apply Gonzales, and thus, necessarily rejecting Wade), available at, 1999 WL 1268076; Tri-Coastal Contractors, Inc., 981 S.W.2d 861 (diverging from Boll, and noting that no state appellate courts appear to follow Wade). These fundamental coverage issues include the following: (1) whether a person has been excluded by name or description from any coverage; (2) whether the property in suit has been expressly excluded from any coverage; and (3) whether the policy exists. See Calderon, No. 03-97-00735-CV, 1998 WL 898471 at *3; Wade, 827 S.W.2d at 454-55 (Dorsey, J. concurring). And determination of these “fundamental coverage issues” must be able to be made by a readily determined fact that does not engage the truth or falsity of the allegations in the underlying petition. See King, 85 S.W.3d at 187 (“The court should not imagine factual scenarios that might trigger coverage or read facts into the pleadings.”); see also Argonaut Southwest Ins. Co. v. Maupin, 500 S.W.2d 633, 635 (Tex.1973) (duty triggered if pleadings raise a potential for coverage); Tri-Coastal, 981 S.W.2d at 863 (cannot question merits of underlying suit). These conclusions are consonant with the burdens that each party bears at this stage in litigation. The insured carries his burden by offering a petition against him that could possibly fall within coverage; so, the insured must demonstrate that the petition triggers the general coverage provisions. This represents the extent of the insured’s burden. Canutillo Indep. Sch. Dist. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 99 F.3d 695, 701 (5th Cir.1996); Am. Equity Ins. Co. v. Castlemane Farms, Inc., 220 F.Supp.2d 809 (S.D.Tex.2002). Once the insured has shouldered his burden, presumptions in favor of coverage attach, unless a readily determinable fundamental coverage fact — which must be proven through the use of extrinsic evidence that does not overlap the merits of the claimant’s underlying suit — excludes coverage as discussed above, e.g. no policy in effect between the parties, etc. See Canutillo, 99 F.3d at 701 (citing Tex. Ins. Code art. 21.58(b)insurer’s burden to prove exclusions); see King, 85 S.W.3d at 187 (readily determined); Calderon, No. 03-97-00735-CV, 1998 WL 898471 at *3-4 (fundamental coverage facts); Wade, 827 S.W.2d at 454-55 (Dorsey, J. concurring) (limited purpose of extrinsic evidence-fundamental coverage issue). If no “fundamental coverage facts” are offered for the Court’s consideration, then the Court must examine only the policy and the factual allegations contained in the underlying suit between the claimant and the insured to decide whether the insurer has a duty to defend. b. Applying Texas Law to Westport’s Duty to Defend (1) The Parties Offer No Extrinsic Evidence of Fundamental Coverage Facts. In this case, the insurer and insured both offer stipulations of fact for the Court’s consideration. The parties argue that the sum total of these stipulations decide whether the insurer has a duty to defend and the ultimate duty to indemnify. However, none of these stipulated facts go only to a fundamental coverage issue, such as the existence of the policy or whether a named insured or specified property has been identified as being specifically excluded from any coverage. See Tri-Coastal, 981 S.W.2d at 863 n. 1. Because the stipulations do not go solely to fundamental coverage issues, the Court may not consider the testimony elicited at the hearing held on October 11, 2002. That testimony, to which Westport (apparently correctly) objected, is not relevant when deciding the duty to defend. Because no evidence of basic coverage facts has been presented, the Court may not consider any extrinsic evidence, including the testimony and stipulations, in deciding both duties before the conclusion of the state court malpractice action. Therefore, the Court will examine only the facts alleged in the claimant’s petition for malpractice, and it will not imagine, nor will it let the parties suppose, any facts to create coverage or to trigger the exclusion to defeat coverage. See King, 85 S.W.3d at 187 (“The court should not imagine factual scenarios that might trigger coverage or read facts into the pleadings.”); see also Argonaut Southwest Ins. Co. v. Maupin, 500 S.W.2d 633, 635 (Tex.1973) (duty triggered if pleadings raise a potential for coverage). (2) Claimant’s State Court Petition for Malpractice The parties submitted the claimant’s state court petition to be considered alongside the insurance policy. See Dkt. No. 46. The “Plaintiffs’ Fifth Amended Original Petition” is the most recent petition of which the Court has been made aware. The Keatons, the state court plaintiffs, allege breaches of fiduciary duties and contract, negligence, and violations of the DTPA. Each of these theories of recovery focuses on the legal advice that the Atchley Russell firm provided the family over the course of several years. The petition specifically avers that distinct acts of wrongdoing occurred in each of the years 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, and 2001. More specifically, the Keatons allege that their attorneys breached their fiduciary duties in at least one of nine different categories. These include, inter alia, failure to use due care while completing tax forms, estate plans, wills, and in rendering estate planning services. They also allege that the firm failed to use due care in representing the family in negotiations with the IRS. Other allegations include negligent misrepresentation related to the firm’s characterization of IRS assessments of the family’s tax liability, failure to advise the family of potential malpractice claims against the firm, negligently representing the consequences of a settlement with the IRS, and failing to confess to the family all of the firm’s mistakes, transactions, and activities related to the representation of the family. Plaintiffs allege no more specific facts than this. The Court construed the policy exclusion in a previous section. A summary of how the contract has been construed is this. Coverage is excluded in the following three scenarios: 1. the insured subjectively knew that the client intended to bring a claim, regardless of whether the insured breached a duty or not; 2. the insured subjectively knew of facts (a) that a reasonable attorney would conclude amounted to a blatant or glaring breach, the severity of which would lead any reasonable attorney to expect a claim; or (b) that would lead a reasonable attorney to conclude both (1) that some, at least minimal, actual breach of professional duty probably did occur; and (2) that other facts known to the insured, such as a client’s expression of dissatisfaction with the representation, indicated the client’s intent to bring a claim. First, the petitions’ factual allegations do not trigger the exclusion’s subjective prong. The state court petition does not allege that any member of the firm had subjective knowledge that a claim would be filed against it prior to the policy period. To the extent there are no allegations of the same, the Court will not imagine facts to defeat coverage. Therefore, in the context of the duty to defend, the policy’s exclusion, based on the insured’s subjective knowledge of a claim, must fail. For example, the claimant in the underlying malpractice suit could recover on facts that proved the attorney was aware of a claim, or the claimant could recover on facts that prove that the attorney had no prior knowledge of the claim. Thus, the petition states a claim that would potentially be covered with respect to the subjective knowledge exclusion. See Chiriboga v. State Farm Mut. Auto. Ins. Co., 96 S.W.3d 673, 680 (Tex.App.-Austin, no pet. h.) (liability policies cover any potential claim, citing Texas Med. Liab. Trust v. Zurich Ins. Co., 945 S.W.2d 839, 842 (Tex.App.-Austin 1997, writ denied) and Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W.2d 22, 24 (Tex.1965)). Second, nothing in the allegations suggests that any of the highlighted wrongs were so blatant that any lawyer would expect to see a claim because of them. The state court proceedings, however, may develop the actual facts in such a way that the exclusion may yet be triggered. But the actual facts are not relevant here; only the facts that are alleged are relevant. The Court will not add detail to the factual allegations to defeat coverage. Therefore, the second scenario explained in the exclusion language has not arisen on the petition’s factual allegations, and the exclusion cannot remove the insurer’s duty to defend. See id. (any potentially covered claim must be defended). Third, taking the petition’s allegations as true and in the best light as to coverage requirements, it is still clear that the Kea-tons allege that the insured breached their duties before the policy period. This bare observation appears to be the sole foundation for Westport’s Complaint for Declaratory Judgment. The insurer’s Complaint lists the nine categories on which the state court claimants base their claims, and then the insurer concludes: Upon information and belief all [of the alleged acts] occurred prior to the effective date of the Westport Policy. Therefore, it appears that an Insured knew or could have reasonably foreseen that such acts, errors, omissions or circumstances might be expected to be the basis of a Claim. Plaintiffs Complaint ¶24. From these two sentences alone, the insurer’s position becomes clear. If an attorney’s client might be able to make out a case for a breach of fiduciary duty based on an act prior to the claims-made policy period, the insurer believes the claim must be excluded. Apparently, only if the claim is groundless or frivolous would the insurer admit coverage. After all, only groundless claims would lead the insurer to conclude that the attorney should not have known about the claim. While this is a convenient interpretation for the company, it is not consonant with the parties’ reasonable expectations, and as previously explained, it is not in line with the Court’s construction of the exclusion language. The insurer must do more than merely point out that a wrongful act occurred prior to the policy period in order to demonstrate that the insured either subjectively knew or should have known that the action in' question would be the basis of a claim. The insurer cannot make out such proof from the factual allegations in the state court petition. Therefore, the insurer has not proved up the exclusion, and the insurer still must defend its insured. Moreover, the Keaton family alleges that the firm engaged in distinct and separate wrongful acts during 2001. Thus, they allege that acts occurred both before and after the inception of the policy here in issue. This allegation alone, if true, would avoid the exclusion in the policy. This is because the policy exclusion applies only to acts that occurred before the policy period, which began in January, 2001. And the clear rule is that where some of the allegations fall inside coverage and some do not, the duty to defend is still triggered. See Chiriboga, 96 S.W.3d at 680 (liability policies demand a defense of any potential claims), citing Texas Med. Liab. Trust, 945 S.W.2d at 842; Heyden Newport Chem. Corp., 887 S.W.2d at 24. Thus, allegations that wrongful acts occurred during the policy period, taken as true here, prevent the exclusion from defeating the duty to defend. Westport’s only basis for the Court to grant it relief was that the acts occurred prior to the policy period, and therefore, that they were excluded as outside the policy’s coverage. Aside from arguing that the exclusion applies, the insurer does not allege that the state court petition would not otherwise trigger the coverage provisions of the policy. Therefore, having determined that the exclusion does not defeat coverage and noting that Westport does not otherwise dispute coverage, the Court concludes that the duty to defend has been triggered by the state court petition. For these reasons, Westport’s Motion for Summary Judgment on the duty to defend must be DENIED. Also, Defendant Atchley Russell’s Motion for Summary Judgment on the duty to defend should be GRANTED in PART. B. DUTY TO INDEMNIFY 1. Westport’s Motion for Summary Judgment We