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NUMBER
13-06-089-CV

COURT
OF
APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

MARYLAND CASUALTY
COMPANY,

NATIONAL STANDARD INSURANCE
COMPANY,

AND MARYLAND
LLOYDS,

Appellants,

v.

SOUTH
TEXAS
MEDICAL CLINICS,
P.A.,

Appellee.

On appeal from the 23rd District Court

of Wharton County,
Texas.

MEMORANDUM OPINION

Before Justices Yañez, Rodriguez, and Garza

Memorandum Opinion by Justice Garza

This is
a summary judgment case in which appellants, Maryland Casualty Company,
National Standard Insurance Company, and Maryland Lloyds (collectively
AMaryland@),
dispute their duty to defend appellee, South Texas Medical Clinics, P.A.
(ASTMC@), in
an underlying lawsuit against STMC for sexual discrimination, negligence,
intentional infliction of emotional distress, and invasion of
privacy.[1]  STMC, as cross-appellant,
disputes the trial court=s allocation of its defense
costs.  The trial court granted, in part, STMC=s motion for partial summary
judgment and denied Maryland=s cross-motion for summary
judgment and its supplemental cross-motion for summary judgment.  By
three issues, taken out of order, Maryland contends that the judgment
rendered by the trial court should be reversed because:  (1) the
underlying lawsuit does not allege facts which state a claim for false
imprisonment, thus rendering the trial court=s granting of STMC=s motion for partial summary
judgment improper; (2) the underlying lawsuit does not allege facts which
state a claim for invasion of privacy, thus rendering the trial
court=s granting of STMC=s motion for partial summary
judgment improper; and (3) the fortuity doctrine precludes any duty to
defend STMC in the underlying lawsuit brought by three former STMC
employees and a third party.  By one cross-issue, STMC complains of
the trial court=s allocation of defense
costs.  We affirm the judgment of the trial court in STMC=s favor as it pertains to
Maryland=s duty to defend; we reverse the
judgment of the trial court as it pertains to the allocation of defense
costs and render judgment for STMC for all costs expended in defending the
Bollom lawsuit.

I.
Factual & Procedural Background

On June 8, 2000, STMC filed suit
against Maryland and Trinity Universal Company (ATrinity@) for breach of contract.[2]
This suit arose from an underlying lawsuit (the ABollom lawsuit@) brought against STMC for
sexual discrimination, negligence, intentional infliction of emotional
distress, and invasion of privacy.[3]
Maryland answered STMC=s suit, asserting that the
plaintiffs in the Bollom lawsuit did not allege sufficient facts to
trigger coverage under the policies issued to STMC by Maryland.

On February 20, 2001, STMC filed
a motion for partial summary judgment.  STMC alleged that the facts
of the underlying suit triggered coverage under ACoverage B-Personal
Injury,@ a clause contained in the
policy issued to STMC by Maryland, for false imprisonment and a violation
of the right to privacy.

On March 23, 2001,
Maryland filed a response to STMC=s motion for partial summary
judgment and a cross-motion for summary judgment, asserting that the
Bollom lawsuit did not allege sufficient facts to trigger coverage,
thereby eliminating Maryland=s duty to defend STMC in the
Bollom lawsuit.  In conjunction with its response, Maryland
filed a supplemental cross-motion for summary judgment based upon the
fortuity doctrine, in which it asserted that the fortuity doctrine
precludes coverage to STMC for the underlying suit because the damages
sustained by the plaintiffs in the underlying suit were a known loss or a
loss in progress.  Therefore, Maryland contended that it does not
have a duty to defend STMC in the Bollom lawsuit as a matter of
law.

On June 3, 2002, the trial court
granted STMC=s motion for partial summary
judgment with respect to coverage for the false imprisonment claim.[4]
The trial court denied STMC=s motion for partial summary
judgment with respect to all other issues, including its claim for
coverage regarding the Bollom plaintiffs= invasion of privacy
claim.  The trial court also denied Maryland=s cross-motion for summary
judgment and its supplemental cross-motion for summary judgment based upon
the fortuity doctrine.

On November 23, 2005, Maryland
filed a motion to allocate defense costs with the trial court.[5]
The trial court granted Maryland=s motion to allocate defense
costs on December 20, 2005, and established the following defense cost
allocation:  Maryland is responsible for paying two-thirds of the
defense costs sustained by STMC; STMC shoulders the burden of one-third of
the defense costs.  The amounts were to be calculated after the total
defense costs were reduced by the amount of the settlement between STMC
and Trinity.

In connection with the final
judgment of the trial court, STMC and Maryland stipulated that STMC had
incurred $245,370 in reasonable and necessary legal fees and expenses in
defending the underlying suit.[6]
On February 8, 2006, the trial court filed its final judgment.[7]
On February 28, 2006, Maryland filed its initial notice of appeal, which
it later amended on March 2, 2006.[8]
STMC filed a notice of cross-appeal on March 7, 2006.[9]

II.
Standard of Review

The function of summary judgment
is to eliminate patently unmeritorious claims and defenses, not to deprive
litigants of the right to a trial by jury.  Tex.
Dep=t of Parks & Wildlife v.
Miranda, 133
S.W.3d 217, 228 (Tex. 2004) (citing Casso v. Brand, 776 S.W.2d 551,
556 (Tex. 1989)); Alaniz v. Hoyt, 105 S.W.3d 330, 344 (Tex.
App.BCorpus Christi 2003, no
pet.).  We review de novo a trial court=s grant or denial of a
traditional motion for summary judgment.  Creditwatch, Inc. v.
Jackson, 157 S.W.3d 814, 816 n.7 (Tex. 2005) (citing Schneider
Nat=l Carriers, Inc. v.
Bates, 147
S.W.3d 264, 290 n.137 (Tex. 2004)); Alaniz, 105 S.W.3d at 345.

Under a traditional motion for
summary judgment, the movant must establish that no material fact issue
exists and that it is entitled to judgment as a matter of law.  Tex. R. Civ. P. 166a(c); Sw.
Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002);
Alaniz, 105 S.W.3d at 345; Mowbray v. Avery, 76 S.W.3d 663,
690 (Tex. App.BCorpus Christi 2002, pet.
denied).  After the movant produces evidence sufficient to show it is
entitled to summary judgment, the nonmovant must then present evidence
raising a fact issue.  See Walker v. Harris, 924 S.W.2d 375,
377 (Tex. 1996).  In deciding whether there is a disputed material
fact that precludes summary judgment, evidence favorable to the non-movant
will be taken as true.  Nixon v. Mr. Property Mgmt. Co., 690
S.W.2d 546, 548-49 (Tex. 1985).  Moreover, every reasonable inference
must be indulged in favor of the non-movant and any doubts must also be
resolved in its favor.  Id. at 549.  When both parties
move for summary judgment and the trial court grants one motion and denies
the other, the reviewing court should review both parties= summary judgment evidence and
determine all questions presented.  See FM Props. Operating Co. v.
City of Austin, 22 S.W.3d 868, 872 (Tex. 2000); see also Warrantech
Corp. v. Steadfast Ins. Co., 210 S.W.3d 760, 765 (Tex.
App.BFort Worth 2006, no pet.).
The reviewing court should render the judgment that the trial court should
have rendered.  See FM Props., 22 S.W.3d at 872; see also
Warrantech, at 765.

III.
Analysis

In its first and second issues,
Maryland contends that the Bollom petition does not allege facts
which state a claim for either false imprisonment or invasion of
privacy.[10]
As such, Maryland contends that it does not owe STMC a duty to defend the
Bollom lawsuit as a matter of law.  The trial
court=s judgment specifically found a
duty to defend based on the allegation of false imprisonment, not invasion
of privacy.

An insurer has the following
four options when faced with the dilemma of whether

to defend or refuse to defend a
proffered claim:  A(1) completely decline to assume
the insured=s defense; (2) seek a
declaratory judgment as to its obligations and rights; (3) defend under a
reservation of rights or a non-waiver agreement; [or] (4) assume the
insured=s unqualified
defense.@  E & L Chipping Co.
v. Hanover Ins. Co., 962 S.W.2d 272,  274 (Tex. App.BBeaumont 1998, no pet.) (citing
Katerndahl v. State Farm Fire & Cas. Co., 961 S.W.2d 518, 521
(Tex. App.BSan Antonio 1997, no pet.);
Farmers Tex. County Mut. Ins. Co. v. Wilkinson, 601 S.W.2d 520, 522
(Tex. Civ. App.BAustin 1980, writ
ref=d n.r.e.)).  An
insurer=s duty to defend and duty to
indemnify are distinct and separate duties.  Id.
(citing Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819,
821-22 (Tex. 1997)).  An insurer may have a duty to defend, but no
duty to indemnify.  See Farmers Tex. County Mut. Ins. Co. v.
Griffin, 955 S.W.2d 81, 82 (Tex. 1997) (per curiam).  Therefore,
the duty to defend is much broader than the duty to indemnify.
See id.

Whether an insurer owes its
insured a duty to defend is determined by the pleadings in the underlying
lawsuit and the insurance policy, which is otherwise known as the
Aeight corners@ rule.  Scottsdale Ins.
Co. v. Travis, 68 S.W.3d 72, 75 (Tex. App.BDallas 2001, pet. denied)
(citing Nat=l Union Fire Ins. Co. v.
Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex.
1997)).  In accordance with the Aeight corners@ rule, we must examine the
factual allegations in the underlying petition and the terms of the
insurance policy to determine if any portion of the suit states a cause of
action potentially covered by the policy, without regard to the truth or
falsity of such allegations.  GuideOne Elite Ins. Co. v. Fielder
Rd. Baptist Church, 197 S.W.3d 305, 308 (Tex. 2006); Folsom Invs.,
Inc. v. Am. Motorists Ins. Co., 26 S.W.3d 556, 558-59 (Tex.
App.BDallas 2000, no pet.).  If
coverage is found for any portion of the underlying suit, the insurer must
defend the entire suit.  Scottsdale Ins. Co., 68 S.W.3d at 75
(citing St. Paul Ins. Co. v. Tex. Dep=t of Transp., 999 S.W.2d 881, 884 (Tex.
App.BAustin 1999, pet.
denied)).  The insurer does not have a duty to defend if an insured,
in its petition, alleges only facts not covered or excluded by the
policy.  Fid. & Guar. Ins. Underwriters, Inc. v. McManus,
633 S.W.2d 787, 788 (Tex. 1982); Folsom, 26 S.W.3d at 559.  We
view the factual allegations in the petition liberally, resolving any
doubt in favor of the insured.  Scottsdale Ins. Co., 68 S.W.3d
at 75 (citing McCarthy Bros. Co. v. Cont=l Lloyds Ins.
Co., 7 S.W.3d
725, 728 (Tex. App.BAustin 1999, no
pet.)).

The elements of false
imprisonment are:  (1) a willful detention; (2) performed without
consent; and (3) without the authority of law.  See
Randall=s Food Markets, Inc. v.
Johnson, 891
S.W.2d 640, 644 (Tex. 1995); Wal-Mart Stores, Inc. v. Cockrell, 61
S.W.3d 774, 777 (Tex. App.BCorpus Christi 2001, no pet.);
see also Cuellar v. Walgreens Co., No. 13-00-594-CV, 2002 Tex. App.
LEXIS 2293, at **6-7 (Tex. App.BCorpus Christi Mar. 28, 2002, no
pet.).  A willful detention may be accomplished by violence, by
threats, or by any other means restraining a person from moving from one
place to another.  See Randall=s, 891 S.W.2d at 644-45;
see also Cuellar, 2002 Tex. App. LEXIS 2293, at *7.  If the
alleged detention was performed with the authority of law, then no false
imprisonment occurred.  See Cockrell, 61 S.W.3d at 777 (citing
Wal-Mart Stores, Inc. v. Resendez, 962 S.W.2d 539, 540 (Tex.
1998)).  The plaintiff must prove the absence of authority in order
to establish the third element of a false imprisonment cause of action.
Id.  An employer has a common-law privilege to
investigate reasonably credible allegations regarding the dishonesty of
its employees.  Randall=s, 891 S.W.2d at
644.

Where it is alleged that a
detention is effected by a threat, the plaintiff must demonstrate that the
threat was such as would inspire in the threatened person a just fear of
injury to her person, reputation, or property.  Fojtik v. Charter
Med. Corp., 985 S.W.2d 625, 629 (Tex. App.BCorpus Christi 1999, pet.
denied).  Threats to call the police are not usually enough to effect
an unlawful imprisonment.  Id. (citing Morales v. Lee,
668 S.W.2d 867, 869 (Tex. App.BSan Antonio 1984, no writ);
W. Prosser, Torts ' 11 (4th ed. 1971)).
Moreover, a reviewing court may consider such factors as relative age,
size, sex, and the physical demeanor of the participants in determining
whether such threats are enough to overcome the plaintiff=s free will.  See
Fojtik, 985  S.W.2d at 629; see also Cuellar, 2002 Tex.
App. LEXIS 2293, at *8.

In reviewing the false
imprisonment claims contained in the Bollom petition, we must

look solely at the insurance
policies issued to STMC by Maryland and the pleadings in the Bollom
lawsuit.  See Scottsdale Ins. Co., 68 S.W.3d at 75
(citing Nat=l Union Fire Ins.
Co., 939 S.W.2d
at 141).  In reviewing the plaintiff=s pleadings in light of the
policy provisions, we must focus on the facts alleged, not on the legal
theories.  Nat=l Union Fire Ins.
Co., 939 S.W.2d
at 142; Saint Paul Surplus Lines Ins. Co. v. Geo Pipe Co., 25
S.W.3d 900, 903 (Tex. App.BHouston [1st Dist.] 2000, no
pet.) (op. on reh=g).  AIt is not the cause of action
alleged that determines coverage, but the facts giving rise to the
alleged actionable conduct.@  Nat=l Union Fire Ins.
Co., 939 S.W.2d
at 141 (emphasis in original).[11]
If the plaintiff=s petition does not allege facts
within the scope of the policy=s coverage, an insurer is not
legally required to provide a defense.  Cowan, 945 S.W.2d at
821; Nat=l Union Fire Ins.
Co., 939 S.W.2d
at 141; McManus, 633 S.W.2d at 788.  Based upon the
allegations in the Bollom petition, the elements for a claim of
false imprisonment are satisfied.

The petition provides that
Bollom, among others, was willfully detained by William C. Yankowsky,
M.D.,  to engage in unwanted Aclosed door@ hypnosis sessions while on the
job.[12]
Moreover, Dr. Yankowsky=s use of an alyce clamp
prevented Bollom from leaving the room and subsequently terminating the
hypnosis session.  In addition, the use of the alyce clamp left a
permanent scar on Bollom=s right arm.[13]
Bollom alleged that she consented to the hypnosis sessions solely because
she feared Dr. Yankowsky and feared losing her job.[14]
According to the Bollom petition, Dr. Yankowsky routinely
intimidated and belittled Bollom when she refused to participate in these
sessions.  As a result of the bullying and the hypnosis sessions,
Bollom alleged she sustained a deterioration in her mental health.
It is clear that Dr. Yankowsky=s actions engendered
Bollom=s justified fear of injury to
her person, reputation, or property.  See Fojtik, 985 S.W.2d
at 629.

Furthermore, Dr. Yankowsky was
Bollom=s Adirect boss.@  The hierarchical
positioning of the participants and Dr. Yankowsky=s alleged intimidating acts set
out in the petition support a determination that Bollom=s free will was overcome.
See id.; see also Cuellar, 2002 Tex. App. LEXIS 2293, at
*8.  Nothing in the petition reflects that Dr. Yankowsky was
authorized to detain Bollom to investigate dishonesty or for any other
justification authorized by law.  See Randall=s, 891 S.W.2d at 644;
Fojtik, 985 S.W.2d at 629.  We, therefore, find that the
Bollom petition alleges facts giving rise to a false imprisonment
claim.

It is undisputed that claims for
false imprisonment were within the scope of coverage afforded by the
Maryland-issued insurance policies.  Because a claim for false
imprisonment was properly alleged, Maryland was required to provide STMC
with a full defense for the entire Bollom lawsuit.  See
Scottsdale Ins. Co., 68 S.W.3d at 75; St. Paul Ins. Co., 999
S.W.2d at 884.  Therefore, having found Maryland was required to
defend the entire Bollum lawsuit based upon the false imprisonment
claim, we need not address Maryland=s second issue pertaining to
invasion of privacy.  See Tex. R. App. P. 47.1.
Accordingly, we overrule Maryland=s first and second
issues.

IV.
The Fortuity Doctrine

In its third issue, Maryland
contends that the trial court erred in holding that it had a duty to
defend because coverage for the alleged offenses is precluded pursuant to
the fortuity doctrine.  STMC counters by arguing that Maryland has
failed to establish, as a matter of law, that prior to 1986, STMC actually
knew or should have known of an ongoing loss.  As such, STMC argues
that the fortuity doctrine precludes neither coverage nor
Maryland=s duty to defend the underlying
Bollom lawsuit.

Generally, fortuity is an
inherent requirement of all risk insurance policies.  Two Pesos v.
Gulf Ins. Co., 901 S.W.2d 495, 501 (Tex. App.BHouston [14th Dist.] 1995, no
writ); Miles v. Royal Indem. Co., 589 S.W.2d 725, 729 (Tex. Civ.
App.BCorpus Christi 1979, writ ref'd
n.r.e.); Brownsville Fabrics, Inc. v. Gulf Ins. Co., 550 S.W.2d
332, 336‑37 (Tex. Civ. App.BCorpus Christi 1977, writ ref'd
n.r.e.).  As the Fourteenth Court of Appeals has noted, "[t]he
concept of insurance is that the parties, in effect, wager against the
occurrence or non‑occurrence of a specified event; the carrier insures
against a risk, not a certainty."  Two Pesos, 901 S.W.2d at
501 (quoting Bartholomew v. Appalachian Ins. Co., 655 F.2d 27, 29
(1st Cir. 1981)).

The fortuity doctrine
incorporates the "known loss" and "loss in progress" principles.
Id.  These aspects of the fortuity doctrine focus on
the proposition that insurance coverage is precluded where the insured is,
or should be, aware of an ongoing progressive loss or known loss at the
time the policy is purchased.  Id. (citing Inland Waters
Pollution Control, Inc. v. Nat'l Union Fire Ins. Co., 997 F.2d 172,
175‑77 (6th Cir. 1993)); see Certain Underwriters at
Lloyd=s v. KKM Inc., 215 S.W.3d 486, 495 (Tex.
App.BCorpus Christi 2006, no
pet.).  A "known loss" is a loss the insured knew had occurred prior
to making the insurance contract.  See Burch v. Commonwealth Mut.
Ins. Co., 450 S.W.2d 838, 840‑41 (Tex. 1970); Scottsdale Ins.
Co., 68 S.W.3d at 75.  A "loss in progress" occurs when the
insured is, or should be, aware of an ongoing progressive loss at the time
the policy is purchased.  Scottsdale Ins. Co., 68 S.W.3d at
75.  AThe [fortuity] doctrine has its
roots in the prevention of fraud; because insurance policies are designed
to insure against fortuities, fraud occurs when a policy is misused to
insure a certainty.@  Id.  In
reviewing the applicability of the fortuity doctrine, we are bound by the
Aeight corners@ rule.  Warrantech,
210 S.W.3d at 767-68; Burlington Ins. Co. v. Tex. Krishnas, Inc.,
143 S.W.3d 226, 230-31 (Tex. App.BEastland 2004, no pet.); E
& L Chipping Co., 962 S.W.2d at 276.  Therefore, we must
review solely the Bollom petition and the insurance policies issued
to STMC by Maryland.  See Scottsdale Ins. Co., 68
S.W.3d at 75 (citing Nat=l Union Fire Ins.
Co., 939 S.W.2d
at 141).  According to the first amended petition in the
Bollom lawsuit, Dr. Yankowsky began forcing Bollom and others to
participate in the Aclosed door@ hypnosis sessions in
1985.  However, the petition does not conclusively establish that
STMC was aware of Dr. Yankowsky=s alleged wrongful conduct in
1986, when STMC first purchased an insurance policy from Maryland.
It is unclear as to Dr. Yankowsky=s role in purchasing  the
insurance policies from Maryland.  In addition, we are not provided
with a date reflecting when Bollum first began complaining about the
alleged wrongful conduct of Dr. Yankowsky, thus putting STMC on notice of
the alleged wrongful conduct.  Therefore, Maryland cannot
conclusively establish, based solely on the Bollum petition, that
STMC sought to insure a known or ongoing loss as a matter of law.
See Burch, 450 S.W.2d at 840‑41; Scottsdale Ins. Co., 68
S.W.3d at 75; see also Warrantech, 210 S.W.3d at 768 (AApplication of the fortuity
doctrine does not hinge on whether the insured knew a particular act was
wrongful.  Rather, it hinges on whether the insured knew before the
inception of the coverage that an actBknowingly wrongful or
otherwiseBresulted in a loss.@).[15]

In looking at the Aeight corners@ of the insurance policy and the
underlying pleadings, it is apparent that the facts pleaded are within the
scope of the policy period.  See E & L Chipping Co., 962
S.W.2d at 275; see also GuideOne Elite Ins. Co., 197 S.W.3d at 307,
310-11 (concluding that an insurer has a duty to defend even though
alleged sexual misconduct by a church employee occurred from 1992 to 1994
and the insurance policy had an effective date of March 31, 1993).
We, therefore, conclude that the fortuity doctrine does not preclude
STMC=s entitlement to a full defense
from Maryland.  Accordingly, we overrule Maryland=s third issue.

V.
Allocation of Defense Costs

In its response to
Maryland=s motion to allocate defense
costs and on appeal, STMC argues that because Maryland has a duty to
defend the underlying Bollom lawsuit, Maryland must pay for a full
defense, not a pro rata or partial defense.  STMC further argues that
the language of the policies does not provide a basis for a prorated
allocation of defense costs.  Conversely, Maryland asserts that there
is a distinction between the duty to defend and the duty to pay defense
costs, which, in combination with notions of fairness and the insurance
policy language itself, permits the insurance company to pay defense costs
for solely Atime on the risk.@[16]  Maryland contends that
the allocation of defense costs between an insurer and its insured is a
matter of first impression in Texas and that we should follow the
reasoning in  Ins. Co. of N. Am. v. Forty-Eight Insulations,
Inc., 451 F. Supp. 1230, 1243 (E.D. Mich. 1978),
aff=d, 633 F.2d 1212 (6th Cir. 1980),
aff=d on reh=g, 657 F.2d 814 (6th Cir.)
(holding that defense costs must be borne proportionally among the
insurers according to the period of time that they insured against the
risk, thus favoring pro rata liability for defense costs over joint and
several liability for a full defense).

This issue is not a matter of
first impression in Texas.  In fact, the Austin Court of Appeals has
held that Aunder Texas law, an
insurer=s duty to defend its insured on
a claim occurring partially within and partially outside of the policy
period is not reduced pro rata by the insurer=s >time on the risk= or by any other
formula.@  Tex. Prop. & Cas.
Ins. Guar. Ass=n v. Sw. Aggregates,
Inc., 982
S.W.2d 600, 607 (Tex. App.BAustin 1998, no pet.).  The
court noted that Athe insurer=s duty is to provide its insured
with a complete defense . . . not to provide a pro rata
defense.@  Id. (citing CNA
Lloyds of Tex. v. St. Paul Ins. Co., 902 S.W.2d 657, 661 (Tex.
App.BAustin 1995, writ
dism=d by agr.)).

The Sw. Aggregates court
further noted a split in the federal courts regarding the pro rata
allocation of defense costs.  Id.; see Forty-Eight
Insulations, 633 F.2d at 1224-25; Keene Corp. v. Ins. Co. of N.
Am., 667 F.2d 1034, 1048-50 (D.C. Cir. 1981) (holding that once
coverage under an insurance policy is triggered, an insurer is liable up
to the policy limits, subject to Aother insurance@ clauses, and, therefore, each
insurer is fully liable for all defense costs).  The Texas Supreme
Court has adopted the Keene approach regarding the allocation of
defense costs.  Sw. Aggregates, 982 S.W.2d at 605 (citing
Am. Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842, 854-55 (Tex.
1994)).[17]
Therefore, Texas law does not require a pro rata allocation of defense
costs.  See id.

Despite the Texas Supreme
Court=s implicit rejection of the
Forty-Eight Insulations standard, Maryland contends that the interests
of fairness and the factual scenario in the instant case necessitates the
imposition of the Forty-Eight Insulations standard.  In
particular, Maryland argues that STMC should be treated as an insurer for
the time in which it was uninsured, like the appellee, Forty-Eight
Insulations, Inc., was treated in Forty-Eight Insulations.  As
such, Maryland attempts to categorize both STMC and itself as insurers,
thus aiding in the apportionment of defense costs.  However,
Maryland=s argument fails because it is
premised on the reasoning advanced in Forty-Eight Insulations,
which the Texas Supreme Court has declined to follow.  See
Garcia, 876 S.W.2d at 854-55; see also Sw. Aggregates, 982
S.W.2d at 605.

Maryland further contends that it is
only required to pay defense costs Ato which this insurance
applies,@ Ato which this coverage part
applies,@ or Aduring the policy
period.@  Therefore, Maryland
asserts that it is only liable for its prorated share of the defense costs
because some of the claims allegedly arose outside of the coverage
period.  Essentially, Maryland argues that it should only be liable
for its Atime on the risk.@  However, Maryland is
required to provide a full defense to STMC in the event that insurance
policy provisions are triggered, as we have already determined, regardless
of whether the claim occurs partially outside of the policy.  See
Sw. Aggregates, 982 S.W.2d at 607; see also CNA Lloyds, 902
S.W.2d at 661.  In addition, several Texas courts have rejected the
Atime on the risk@ approach advanced by
Maryland.  See Sw. Aggregates, 982 S.W.2d at 607; see also
CNA Lloyds, 902 S.W.2d at 661.  The key inquiry is whether a
claim arose during the policy period, which this Court and the trial court
have confirmed.  See Sw. Aggregates, 982 S.W.2d at 607.
Moreover, we are unable to find, nor has Maryland directed us to, language
in the insurance policies that specifically refers to a pro rata
allocation of the defense costs.  The insurance policies do not
provide textual support for Maryland=s assertion that it should only
be liable for a prorated share of the defense costs.  As such, we
conclude that STMC is entitled to a full defense; therefore, Maryland
should be responsible for all defense costs incurred in defending the
Bollom lawsuit.  Accordingly, STMC=s sole issue in its cross-appeal
is sustained.

VI.
Conclusion

Based on the foregoing, we
affirm the judgment of the trial court as it pertains to
Maryland=s duty to defend.  However,
we reverse the judgment of the trial court as it pertains to the
allocation of defense costs and render judgment for STMC for all
costs expended in defending the Bollom lawsuit.

__________________________

DORI CONTRERAS GARZA,

Justice

Memorandum Opinion delivered and

filed this the 10th day of
January, 2008.

1 South Texas Medical Clinics,
P.A. (ASTMC@) is a multi-specialty clinic
with five satellite locations for patients in Wharton, Matagorda, Fort
Bend, Jackson, Colorado, and Brazoria counties.  This appeal involves
the STMC clinic in Wharton, Texas, which presently employs forty-three
doctors.  The record does not reflect the number of doctors STMC
employed at any given time from 1985 to 1994, the pertinent time frame in
this appeal.

2 Trinity Universal Company
(ATrinity@) insured STMC from November
14, 1993 to November 14, 1994.  The record reflects that Trinity also
refused to defend STMC in the underlying suit.  However, on December
27, 2005, STMC announced a settlement with Trinity and moved to dismiss
all causes of action against Trinity with prejudice.  On January 6,
2006, the trial court granted STMC=s motion to dismiss all
causes of action against Trinity with prejudice.  Accordingly,
Trinity is not a party to this appeal.

3
The
underlying suit was brought by Jeanette Bollom, Nancy Ondrias, Donna
Henderson, former STMC employees, and Jeanette Bollom=s husband, Charles Bollom, a
non-STMC employee, against Dr. William C. Yankowsky, President and Chief
Surgeon at STMC, involving alleged forced Aclosed door@ hypnosis sessions that
transpired for a period of nine years.  The record reflects that STMC
expended its own resources to defend the lawsuit and eventually settled
with the plaintiffs in the Bollom lawsuit for $163,700.

4 The trial court=s order granting
STMC=s motion for partial summary
judgment with respect to coverage for the Bollom
plaintiffs= false imprisonment claim was
incorporated into the trial court=s final
judgment.

5 In its motion to allocate
defense costs, Maryland asserted that the trial court should only award
STMC two-thirds of its costs sustained in defending the underlying suit
based on a reduction of the total defense costs by the amount of the
settlement between STMC and Trinity, considering Maryland only insured
STMC for six of the nine years at issue in the underlying
suit.  The
record contains the following chart, which illustrates the insurance
policies and the corresponding coverage periods at issue on
appeal:

Carrier
Name

Policy
Number

Coverage
Period

Maryland Casualty

TMP
49190955

11/14/1986-11/14/1987

Maryland Casualty

EPA
03640787

11/14/1988-11/14/1989

National
Standard

EPA
07958326

11/14/1990-11/14/1991

Maryland Lloyds

EPA
07958326

11/14/1991-11/14/1992

Maryland Lloyds

EPA
07958326

11/14/1992-11/14/1993

Maryland Lloyds

EPA
07958326

11/14/1993-11/14/1994

6 In its final judgment, the
trial court explicitly referred to its December 20, 2005 order allocating
one-third of the defense costs to STMC and the remaining two-thirds of the
defense costs to Maryland.  The trial court=s final judgment also
specifically referred to the parties= stipulation that STMC
incurred $245,370 in defense costs Ain the underlying
Bollom lawsuit less the Trinity settlement credit.@

7 In its final judgment, the
trial court awarded $283,564.50 in damages to STMC from Maryland, which
was broken down as follows:

A.
$163,580.00 for defense costs incurred by STMC in the underlying Bollom
lawsuit;

B.
$44,984.50 in prejudgment interest on that sum at the annual rate of 5.0%
for 5.5 years;

C.
$75,000.00 in attorneys [sic] fees incurred by STMC in connection with the
prosecution of this suit for duty to defend.

. . . .

IT IS FURTHER ORDERED THAT
the Maryland Casualty Defendants shall pay STMC the following appellate
costs if and only if STMC prevails on appeal:

$15,000 for an appeal to the
Court of Appeals; and

$15,000 for an appeal to the
Texas Supreme Court.

8 In its amended notice of
appeal, Maryland appeals the trial court=s denial of its motion for
summary judgment and its supplemental cross-motion for summary judgment
entered on June 3, 2002, and the trial court=s final judgment entered on
February 8, 2006.  We note that under the final judgment rule, there
is no appeal from a judgment denying a motion for summary judgment.
Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 625 (Tex. 1996)
(citing Novak v. Stevens, 596 S.W.2d 848, 849 (Tex. 1980));
Baylor Coll. of Med. v. Tate, 77 S.W.3d 467, 469 (Tex.
App.BHouston [1st Dist.] 2002, no
pet.).

The trial court, in its final
judgment, notes ASTMC has non-suited with
prejudice its claims against the Maryland Casualty Defendants for breach
of the duty to indemnify.@  The trial court
further notes, in its final judgment, that AThe Court considering the
Stipulation, the Summary Judgment Order, the Allocation Order, and all
pleadings on file, enters this Final Judgment which fully resolves all
claims and causes of action in this suit.@  Therefore, this action
is final and appealable.  See In re Burlington Coat Factory,
167 S.W.3d 827, 830 (Tex. 2005) (holding that when the trial court
resolves some claims by summary disposition, leaving other claims
unresolved, the judgment is final if it unequivocally states it finally
disposes of all claims); Ritzell v. Espeche, 87 S.W.3d 536, 538
(Tex. 2002) (same); Lehmann v. Har-Con Corp., 39 S.W.3d 191, 200
(Tex. 2001) (same).

Because both parties filed
motions for summary judgment, we will determine all questions
presented.  Dow Chem. Co. v. Bright, 89 S.W.3d 602, 605 (Tex.
2002); Novak, 596 S.W.2d at 849 (ABut when . . . both parties
file motions for summary judgment and one such motion is granted, then the
trial court=s judgment becomes final and
appealable, and on appeal the Court of Civil Appeals should determine all
questions presented.@).

9 In its notice of
cross-appeal, STMC takes issue with the trial court=s order to allocate defense
costs entered on December 21, 2005, which is incorporated into the trial
court=s final judgment entered on
February 8, 2006.

[10] The trial court denied
STMC=s motion for summary judgment
as it pertained to its claim for invasion of privacy.  This claim is
appealable because the trial court, in its final judgment, noted that
AThe Court considering the
Stipulation, the Summary Judgment Order, the Allocation Order, and all
pleadings on file, enters this Final Judgment which fully resolves all
claims and causes of action in this suit.@  See In re
Burlington Coat Factory, 167 S.W.3d at 830; Ritzell, 87 S.W.3d
at 538; Lehmann, 39 S.W.3d at 200.  Moreover, the parties do
not dispute this issue.

11 The Bollom petition
does not contain a claim for false imprisonment.  However, we must
determine if the facts alleged in the Bollom petition give rise to
any claim triggering Maryland=s duty to defend under the
corresponding Maryland-issued insurance policies without regard to the
legal theories proposed.  See Nat=l Union Fire Ins. Co. v.
Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 142 (Tex.
1997); Saint Paul Surplus Lines Ins. Co. v. Geo Pipe Co., 25 S.W.3d
900, 903 (Tex. App.BHouston [1st Dist.] 2000, no
pet.) (op. on reh=g).

12
Maryland contends that there are no
factual allegations in the Bollom petition demonstrating that Dr.
Yankowsky willfully detained Bollom or any of the other plaintiffs in the
underlying lawsuit as a matter of law.  However, the use of the alyce
clamp, Dr. Yankowsky=s intimidating acts, and the
fact that the sessions were conducted with the door closed is enough to
demonstrate that Dr. Yankowsky intentionally detained Bollom and the other
plaintiffs in the underlying lawsuit to engage in hypnosis
sessions.  See
Randall=s Food Markets, Inc. v.
Johnson, 891
S.W.2d 640, 644 (Tex. 1995); see also Cuellar v. Walgreens Co., No.
13-00-594-CV, 2002 Tex. App. LEXIS 2293, at *7 (Tex. App.BCorpus Christi Mar. 28, 2002,
no pet.).

13 We are unable to retrieve a
precise definition for the alyce clamp used by Dr. Yankowsky.
However, a clamp is defined as Aany of various instruments or
appliances having parts brought together for holding or compressing
something . . . .@  Merriam-Webster:
Medline Plus Online Medical Dictionary, available at
http://www2.merriam‑webster.com/cgi‑bin/mwmednlm?book=Medical&va=clamp
(last visited Nov. 19, 2007).

14
We only
address the false imprisonment claims pertaining to Jeanette Bollom
because the petition lacks specificity as to the other plaintiffs in the
lawsuit.

15 In support of its fortuity
doctrine argument, Maryland relies heavily on the holdings in Two
Pesos, Inc. v. Gulf Insurance Co., 901 S.W.2d 498, 501-02 (Tex.
App.BHouston [14th Dist.] 1995, no
writ) and Scottsdale Insurance Co. v. Travis, 68 S.W.3d 72,
76-77 (Tex. App.BDallas 2001, pet.
denied).  Both cases are readily distinguishable from the instant
case.

In Two Pesos, the
appellate court held that Taco Cabana=s motion for supplemental
damages Adid not allege an offense
occurring during Gulf=s [the insurance company]
policy period, and that coverage for Two Pesos= continued trade dress
infringement is precluded because the claim constitutes a known loss or
loss in progress.@  See 901 S.W.2d
at 498, 502.  Moreover, the Two Pesos court noted that
Athe risk of liability was no
longer unknown because the injuries resulted when Two Pesos first copied
Taco Cabana=s trade dress.  The risk
of injury from continued infringement was readily apparent, or should have
been.@  Id.
Clearly, the actors in Two Pesos engaged in intentional
behaviorCinfringing on Taco
Cabana=s trade dressCeven after the trial court
issued a judgment against Two Pesos for trade dress infringement.
Moreover, Two Pesos, based on the knowledge that its actions subjected it
to liability (loss), actively sought to insure the known loss.
Id.  Here, the Bollom petition does not conclusively
establish that STMC was aware of intentional conduct giving rise to
liability and actively sought to insure a known loss.

In Scottsdale Insurance
Co., the appellate court applied the fortuity doctrine to preclude
coverage on the basis that all of the allegations alleged in the
underlying petition arose before the inception of the insurance policy,
and even before the named insured was formed as a corporation.  68
S.W.3d at 76-77.  Clearly, there was no possibility of coverage
because none of the allegations in the underlying petition fell within the
coverage period.  Id.  In the instant case, the majority
of the wrongful conduct occurred within the coverage period, and, as
previously stated, the Bollom petition does not conclusively
establish that STMC actively sought to insure a known
loss.

16 ATime on the risk@ has been defined as an
insurer=s Ashare of the total time
period over which injury is claimed.@  See Tex. Prop.
& Cas. Ins. Guar. Ass=n v. Sw. Aggregates,
Inc., 982
S.W.2d 600, 607 (Tex. App.BAustin 1998, no pet.).
In the instant case, Maryland contends that it should pay only two-thirds
of the defense costs because its  Atime on the risk@ is six years of the nine
years of wrongful conduct alleged in the Bollom petition.
See id.

17 By adopting the Keene
approach to allocating defense costs, the Texas Supreme Court implicitly
rejected the approach advanced in Forty-Eight Insulations.
See Am. Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842, 854-55
(Tex. 1994).