Opinion ID: 2782821
Heading Depth: 3
Heading Rank: 2

Heading: Burden of Proof on Coverage and Exclusions

Text: Texas law recognizes that “the duty to defend and the duty to indemnify ‘are distinct and separate duties.’” 6 Because Mid-Continent already paid for Hallmark’s defense in the first suit, this suit does not concern the duty to defend but the duty to indemnify. While analysis of the duty to defend has been strictly circumscribed by the eight-corners doctrine, it is well settled that the “facts actually established in the underlying suit control the duty to indemnify.” As with any other contract, breach or compliance with the terms of an insurance policy is determined not by pleadings, but by proof. . . . 5 United Nat. Ins. Co. v. Mundell Terminal Servs., Inc., 740 F.3d 1022, 1027 (5th Cir. 2014) (citations omitted). 6 D.R. Horton-Texas, Ltd. v. Markel Int’l Ins. Co., 300 S.W.3d 740, 743 (Tex. 2009) (hereinafter Horton) (quoting Utica Nat’l Ins. Co. v. Am. Indem. Co., 141 S.W.3d 198, 203 (Tex. 2004)). 5 Case: 14-50649 Document: 00512950594 Page: 6 Date Filed: 02/26/2015 No. 14-50649 consolidated with No. 14-50673 The insurer’s duty to indemnify depends on the facts proven and whether the damages caused by the actions or omissions proven are covered by the terms of the policy. Evidence is usually necessary in the coverage litigation to establish or refute an insurer’s duty to indemnify. 7 The major issue in this case is whether the underlying judgment, which established that Hallmark infringed the copyrights of KFA by constructing homes from KFA’s designs without a license to do so, triggered coverage for an “advertising injury” under the policy terms.