Opinion ID: 57779
Heading Depth: 3
Heading Rank: 1

Heading: the wrongful act took place on or after the

Text: Retroactive Date; 2. prior to the inception date of th[e] policy period no Insured had knowledge of such wrongful act and had no basis to reasonably anticipate a claim that would be covered by this policy. . . .; 3. the claim arising out of the wrongful act is first made against any insured during the policy period; and 4. the claim is reported in writing to [Virginia Surety] no later than 60 days after the end of the policy period or, if applicable, during an extended claims reported period . . . . (Emphasis added.) The third condition to coverage is primarily at issue here. In August 2004, after becoming aware of the LISD demand letter, Virginia Surety denied coverage and withdrew from Wright’s defense. Virginia Surety filed this declaratory-judgment action in May 2005, seeking judgment that, for the LISD litigation, there is no coverage, including no duty to defend or indemnify, under the policy. Wright counter-claimed for, inter alia, a declaration that Virginia Surety owes a defense and indemnity for that litigation. Cross-motions for summary judgment were filed; and, on 9 November 2006, the district court granted judgment for Virginia Surety, denying Wright’s cross-motion. The district court focused on the third condition for coverage, holding: no genuine issue of material fact exists on whether Wright could establish the claim arising out of the wrongful act was first made against him during the policy period. The court, applying Texas agency law, found Manzo was Wright’s agent and, therefore, imputed to Wright her pre-inception-date receipt of the demand letter. 3 No. 06-41723