*Pursuant to 5TH CIR. R. 47.5, the Court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________________

No. 97-10850

_______________________

HVAW, A Limited Partnership; BILL C. HUNTER,

Plaintiffs-Appellants,

versus

AMERICAN MOTORISTS INSURANCE CO.; DAVID E. LEE,

Defendants-Appellees.

_________________________________________________________________

Appeal from the United States District Court

for the Northern District of Texas

(3:96-CV-1836-D)

_________________________________________________________________

June 17, 1998

Before POLITZ, Chief Judge, REAVLEY, and JONES, Circuit Judges.

EDITH H. JONES, Circuit Judge:*

Hunter, Van Amburgh & Wolf, P.C. (“HVAW”) and Bill C.

Hunter, a lawyer at HVAW, were insured under primary and umbrella

policies issued by American Motorist Insurance Company (“AMICO”).

AMICO declined to defend HVAW and Hunter in adversary bankruptcy

proceedings brought by Malcolm Kelso and Legal Econometrics, Inc.
2

(“LEI”). After settling their dispute with Kelso and LEI, HVAW and

Hunter brought this suit in Texas state court alleging that AMICO

had a duty to defend them against the claims of Kelso and LEI.

AMICO removed the case to federal court, where both parties filed

for judgment as a matter of law on the issue of coverage. The

district court granted AMICO judgment as a matter of law, finding

that it did not have a duty to defend HVAW and Hunter. We affirm.

I. Background

A. Facts

HVAW and Hunter provided legal representation and

services to various individuals and business entities associated

with Grady and Gary Vaughn (“Vaughn entities”). In the late 1980s,

the Vaughn entities were faced with numerous financial and legal

difficulties. In an attempt to resolve these difficulties, the

Vaughn entities entered into various complex financial and

management agreements with LEI and Kelso in order to protect their

money and properties. In short, LEI and Kelso were to provide

“crisis management services” to the Vaughn entities. As part of

this arrangement, LEI and Kelso received ownership interests in and

control over certain Vaughn entities. Disputes soon arose between

the Vaughn entities and LEI and Kelso over both LEI’s and Kelso’s

control of various Vaughn entities and LEI’s and Kelso’s fees. LEI
3

and Kelso eventually declared bankruptcy, allegedly as a result of

the financial difficulties caused by these disputes.

Once in bankruptcy, LEI and Kelso filed two adversary

proceedings against HVAW, Hunter, and other defendants. The first

suit (No. 393-3585) alleged a laundry list of causes-of-action

including conspiracy, fraud, conversion, breach of fiduciary duty,

tortious interference with contract, legal malpractice, and

violations of the Texas Deceptive Trade Practices Act and federal

racketeering law. The second suit (No. 393-3668) alleged that

HVAW, Hunter, and other defendants violated the automatic stay by

seeking to enforce various state court judgments against LEI and

Kelso. It also alleged legal malpractice, breach of fiduciary

duty, fraud, and conspiracy to defraud. The factual basis for

these two adversary proceedings boils down to HVAW’s and Hunter’s

alleged knowing and intimate participation in a complicated

conspiracy involving the Vaughn entities and numerous other

defendants to defraud LEI and Kelso.

AMICO refused to defend HVAW and Hunter in LEI’s and

Kelso’s adversary proceedings on the ground that under the terms of

the two policies at issue the alleged wrongful acts did not

constitute an “occurrence.” Eventually, HVAW and Hunter settled

with LEI and Kelso in both adversary proceedings. HVAW and Hunter

then initiated this lawsuit against AMICO to recover the cost of

their defense in the two adversary proceedings.
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B. Insurance Policies

AMICO issued two types of policies to HVAW and Hunter.

The first type of policy is a commercial general liability (“CGL”)

policy that covered “bodily injury” or “property damage” caused by

an “occurrence.” An “occurrence” is defined as “an accident,

including continuous or repeated exposure to substantially the same

general harmful conditions.”

The second type of policy is a commercial catastrophe

liability (“CAT”) policy that essentially served as an umbrella

policy to the CGL policy. Just like the CGL policy, the CAT policy

provided coverage for certain injuries caused by an “occurrence.”

“Occurrence” is defined the same as in the CGL policy.

II. Analysis

This court reviews a grant of summary judgment de novo.

See American States Ins. Co. v. Bailey, 133 F.3d 363, 369 (5th Cir.

1998). A district court’s interpretation of an insurance contract

is a question of law which this court also reviews de novo. See

id. An insurer bears the burden of proving that exclusions in the

policy in question bar coverage for the plaintiff’s claims. See

id.

In this diversity case, Texas rules of contract

interpretation control. See id. Under Texas law, the
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interpretation of insurance contracts is governed by the same rules

that apply to contracts in general. See id. (citing Forbau v.

Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994)).

In determining an insurer’s duty to defend, Texas courts

utilize the “eight corners rule.” See id. (citing National Union

Fire Ins. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139,

141 (Tex. 1997)). Under this rule, an insurer’s duty to defend is

determined by the language of the insurance policy and a liberal

interpretation of the allegations in the pleadings. See id. “In

reviewing the underlying pleadings, the court must focus on the

factual allegations that show the origin of the damages rather than

on the legal theories alleged.” Id. (quoting National Union Fire

Ins. Co., 939 S.W.2d at 141); see also Adamo v. State Farm Lloyds

Co., 853 S.W.2d 673, 676 (Tex. App.--Houston [14th Dist.] 1993,

writ denied) (“It is not the cause of action alleged that

determines coverage but the facts giving rise to the alleged

actionable conduct.”).

The district court found that the factual allegations

contained in LEI’s and Kelso’s two suits against HVAW and Hunter

did not constitute an “occurrence” under the terms of the CGL and

CAT policies and, therefore, AMICO had no duty to defend. We

agree.
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Under Texas law, a person’s acts are not accidental when

he commits an intentional act that results in injuries that

ordinarily follow from or could be reasonably anticipated from the

intentional act. See id. (citing Trinity Universal Ins. Co. v.

Cowan, 945 S.W.2d 819, 827-28 (Tex. 1997); see also Argonaut

Southwest Ins. Co. v. Maupin, 500 S.W.2d 633, 635 (Tex. 1973)

(stating that when “acts are voluntary and intentional and the

injury is the natural result of the act, the result was not caused

by accident . . . .” (quoting Thomason v. United States Fidelity &

Guar. Co., 248 F.2d 417, 419 (5th Cir. 1957)).

Therefore, in order to determine whether AMICO had a duty

to defend Hunter and HVAW under the terms of its policies, we must

decide whether Kelso and LEI alleged facts in their two adversary

proceedings that could constitute an “accident” under Texas law.

A. Adversary Proceeding No. 393-3585

LEI’s and Kelso’s first complaint is premised on the

factual allegation that HVAW and Hunter knowingly engaged in a

complex conspiracy with the Vaughn entities and other defendants to

defraud LEI and Kelso. The complaint itself states that “Hunter

learned or knew of the Vaughns’ intent to defraud Legal

Econometrics and Kelso and set about to organize and orchestrate an

even more elaborate conspiracy to defraud and otherwise damage
1 The complaint also states that the “Vaughns’ scheme to loot

the corporations was fully known to and aided and abetted by their

counsel, Bruce Bowman and Bill Hunter, as well as Bowman’s and

Hunter’s respective law firms (Vial Hamilton and Hunter Van Amburgh

& Wolf).” (¶ 190).

2 The complaint’s request for relief states that “[e]ach of

the above-named Defendants [including Hunter and HVAW]

intentionally acted in furtherance of the conspiracy to defraud

Legal Econometrics and Kelso and thereby caused Plaintiffs damage.”

(¶ 239).

7

Legal Econometrics and Kelso . . . .” (¶ 138).1 “Hunter was the

mastermind and architect of the evolving conspiracy . . . .” (¶

140). “Each [defendant] knew the object and purpose of the

conspiracy was to defraud Legal Econometrics and Kelso and

wrongfully deprive them of their services and property, each agreed

to so wrong Legal Econometrics and Kelso, and each of them acted in

furtherance of the said conspiracy.”2 (¶ 140). The complaint

repeatedly describes the defendants’ actions as “intentional,

malicious, willful and wanton.” In fact, Kelso’s and LEI’s request

for relief on their claim of legal malpractice (Count XII) is

factually premised on Hunter’s and HVAW’s knowing participation in

the complex conspiracy against Kelso and LEI. (See ¶ 264).

Although Kelso and LEI allege negligence (in the form of legal

malpractice) against Hunter and HVAW, the facts supporting their

allegation are all voluntary and intentional acts. Cf. Farmers

Texas County Mutual Ins. Co. v. Griffin, 955 S.W.2d 81, 83 (Tex.

1997) (“[A]lthough [plaintiff] seeks relief on legal theories of
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negligence and gross negligence, he alleged facts indicating that

the origin of his damages was intentional behavior. He made no

factual contention that could constitute negligent behavior by

[defendant].”). 

Because Kelso’s and LEI’s factual allegations all

constitute intentional and voluntary acts, AMICO has no duty to

defend under the terms of its policies.

B. Adversary Proceeding No. 393-3668

LEI’s and Kelso’s second complaint essentially alleges

that “[t]he violations of the automatic stay were willful, knowing,

voluntary, volitional, and intentional. The violations were

consummated with full and actual knowledge of the pendency of the

automatic stay . . . .” (¶ 59). Kelso’s and LEI’s complaint

repeatedly refers to Hunter’s and HVAW’s actions as both

“deliberate” and “intentional, malicious, willful, and wanton.”

Again, while Kelso’s and LEI’s complaint alleges negligence (in the

form of legal malpractice), the underlying factual claims are based

on knowledge and intent. Because Kelso’s and LEI’s factual

allegations all constitute intentional and voluntary acts, AMICO

has no duty to defend under the terms of its policies.

III. Conclusion 

For the foregoing reasons, AMICO has no duty to defend

Hunter or HVAW. The judgment of the district court is AFFIRMED.