Court Opinion

ID: 4074740
Source: CourtListenerOpinion
Date Created: 2016-09-30 05:20:11.615045+00
Date Added: 2024-06-11T14:33:09.477719
License: Public Domain

ACCEPTED
                                                    03-15-00378-CV
                                                            7516414
                                         THIRD COURT OF APPEALS
                                                    AUSTIN, TEXAS
                                              10/23/2015 1:16:31 PM
                                                  JEFFREY D. KYLE
                                                             CLERK
  No. 03-15-0037 8—CV
                                   FILED IN
                            3rd COURT OF APPEALS
   JAMES HANSEN                  AUSTIN, TEXAS
                            10/23/2015 1:16:31 PM
                                JEFFREY D. KYLE
                                     Clerk

 LONNIE ROACH and
BEMIS, ROACH & REED

APPELLANT’S BRIEF

           Scott R. Kidd
           State Bar No. 11385500
           512-330-1713
           scot’t@kidd1avvaustin.com
           Scott V. Kidd
           State Bar No. 24065556
           512-542-9895
           svk@kidd1awaustin.com
           KIDD LAW FIRM
           819 West   11th Street
           Austin,   TX 78701
           512330-1709    (fax)

Oral Argument Requested
               IDENTITY OF PARTIES AND COUNSEL

APPELLANT
James Hansen

APPELLANT’S COUNSEL
Scott R. Kidd
State Bar No. 11385500
512-330-1713
scott@kidd1awaustin.com
Scott V. Kidd
State Bar No 24065556
512-542-9895
svk@kidd1aWaustin.com
KIDD LAW FIRM
819 West   11th Street
Austin,   TX
           78701
512-330-1709 (fax)

APPELLEES
Lonnie Roach
Bemis, Roach     & Reed
APPELLEES’ COUNSEL
John Shepperd
State Bar No. 18236050
iohn.shepperd@wilsone1ser.com
Wilson, Elser, Moskowitz, Edelman   & Dicker, LLP
909 Fannin Street, Suite 3300
Houston, TX 77010
713-353-2000
713-785-7780 (fax)
                   TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL
TABLE OF CONTENTS                            ii

INDEX OF AUTHORITIES                         iv

CAPTION
STATEMENT OF THE CASE
STATEMENT REGARDING ORAL ARGUMENT
ISSUES PRESENTED
THE RECORD
STATEMENT OF FACTS
SUMMARY OF ARGUMENT                          13

ARGUMENT & AUTHORITIES                       17

   Standard of Review                        17

   The Policy Language                       21

   Rules of Construction                     22

   Interpretation of the Policy   Language   24

   Continuation of the Business In Fact      28

   Continuation of Business Under Texas
        Business Organizations Code          30
    The “Findings of Fact”            35

    The Defense’s Cases               37

    No Subsequent-Act Defense After
         Breach of Contract           38

CONCLUSION                            40

PRAYER                                41

CERTIFICATE OF COMPLIANCE WITH TRAP
    RULE 9.4(i)(3)                    42

CERTIFICATE OF SERVICE                42

                                           iii
                            INDEX OF AUTHORITIES
                                                CASES
Alexander v. Turtur & Associates,                   Inc.,
     146 S.W.3d 113 (Tex. 2004)                                                              17

Andrews       v.   Key, 77 Tex. 35, 13 S.W. 640, 641 (1890)                                  36

Barnett v. Aetna Life Insurance Co.,
     723 S.W.2d 663, 666 (Tex. 1987)                                                         23

Coker    v.   Coker, 650 S.W.2d 391, 393 (Tex. 1983)                                         20

Continental Casualty Co.   Warren,        v.
     254 S.W.2d 762, 763 (Tex. 1953)                                                   23,   28

Cooke County Appraisal District v. Teel,
     129 S.W.8d 724 (Tex. App.—Ft. Worth 2004, no                              pet.)         36

El Chico Corp.        v.   Poole, 732 S.W.2d 306,
     313-314(Tex. 1987)                                                                      18

FFE Transportation Services, Inc.                   v.   Flugham,
     154 S.W.3d 84 (Tex. 2004)                                                               19

Grider   Mike 0’Brien, P. C., 260 S.W.3d 49
         U.
     (Tex. App.—Houston [1S‘ Dist.] 2008, pet.                         den.)           17,   19

Gulf Insurance Company 11. Parker Products,
      498 S.W.2d 676, 679 (Tex. 1973)                                              23,       28

Heritage Resources          12.   Hill,    104 S.W.3d 612
     (Tex.     App.—Austin 1998, no pet.)                                                    20

Insurance Company of North America                        v.   Cash,
     475 S.W.2d 912 (Tex. 1972)                                                    23,       28

                                                                                                  iv
Jackson 1). Urban, Coolidge, Pennington & Scott,
     516 S.W.2d 948, 949 (Tex. Civ. App-
     Houston [lst Dist.]1974, writ refd n.r.e.)                                19

Jackson            v.    Van   Winkle, 660 S.W.2d 807, 810 (Tex. 1983)

Kelly-Coppedge, Inc.     Highlands Ins.
                                   v.                   Co.,
        980 S.W.2d 462, 464 (Fex. 1998)                                        22

Mead v. Johnson     Group,              Inc.,   615 S.W.2d 685,
        689 (Tex. 1981)                                                        39

Milhouse            U.   Weisenthal, 775 S.W.2d 626 (Tex. 1989)                19

Nicol   v. Gonzales, 127 S.W.3d 390, 394
        (Tex. App.—Dal1as 2004, no pet.)                                       20

Paul Revere    Life Insurance Company v. Klock,
        169 So. 2d 493 (Fla. Ct. App. 1964)                                     37

Principal           Mutual Life Insurance Company              v.   Toranto,
        1997 WI. 279751 (N.D. Tex. 1997)                                       37

State   v. The Evangelical Lutheran Good Samaritan
        Society, 981 S.W.2d 509, 511 (Tex. App.—
        Austin 1998, no pet.)                                                  20

Texas Farmers Insurance Company v. Murphy,
     996 S.W.2d 873, 879 (Tex. 1999)                                           22
Walker 11.    Packer, 827 S.W.2d 833 (Tex. 1992)                         20

Western Indemnity Co. v. Murray, 208 S.W. 696,
     698 (Tex. Comm. App. 1919)                                                23

Wilson U. Monarch Life Insurance Company,
     971 F.2d 312 (9th Cir. 1992)                                              37
                   STATUTES AND CODES
TEX. BUS. ORG.   CODE Chapt.    11      30, 31, 32,   33

TEX. BUS. ORG.   CODE Chapt. 301                      30

TEX. BUS. ORG.   CODE Chapt. 302                      30

TEX. BUS. ORG.   CODE §11.001                         31

TEX. BUS. ORG.   CODE §11.051                         31

TEX. BUS. ORG.   CODE §11.052                         32

TEX. BUS. ORG.   CODE §11.101                         33

TEX. BUS. ORG.   CODE §301.003                        31

TEX. BUS. ORG.   CODE §301.004                        31

TEX. BUS. ORG.   CODE §301.007                        30

TEX. BUS. ORG.   CODE §301.008                        30

TEX. BUS. ORG.   CODE §302.013                        33

                                                           vi
                         No. 03-15-0037 8-CV

                          JAMES HANSEN

                      LONNIE ROACH and
                     BEMIS, ROACH & REED

                       APPELLANT’S BRIEF

     Comes now Appellant James Hansen (“Hansen”) and
files this   Appellant’s Brief.

                     STATEMENT OF THE CASE
     This    is   a legal malpractice case     filed   by Hansen against

Lonnie Roach (“Roach”) and the      ﬁrm of Bemis, Roach & Reed (“the
Firm”).   The     legal malpractice claim arises out of the failure of

Roach and the Firm       to timely perfect   an appeal in a prior case in

Which Roach and the Firm represented Hansen              (“the   Underlying
Case”).    The Underlying Case was a        suit   by Hansen against a

disability insurance    company     for recovery   on a    disability office

expense    policy.   In the Underlying Case, the trial court had

granted Hansen a judgment for part of the benefits but had denied

recover for a majority of the benefits payable.       Hansen desired        to

appeal that judgment denying beneﬁts, but Roach and the Firm

did not timely perfect the appeal.

       This present case was ﬁled by Hansen against Roach and the

Firm   for the negligence in not perfecting the appeal.            (CR   3-8).

This case was tried to the court without a jury. (CR        11).   The   trial

court granted a take nothing judgment for Roach and the Firm

and   filed findings of fact   and conclusions   of law.   (CR   11, 15-17).

Hansen duly and timely     perfected this appeal.   (CR    13)

        STATEMENT REGARDING ORAL ARGUMENT
       Oral argument would be of beneﬁt to the court in deciding

the issues in this case.        In order to decide whether Roach’s

admitted negligence in this case proximately caused damage to

Hansen, the court must decide the issues that would have been
presented in the aborted appeal of the Underlying Case.                      That

involves a determination of the effect of certain policy language in

the disability office expense policy, and there are no Texas cases

on point in making that determination.                        Accordingly,   oral

argument    will   assist   in    probing the issues related to the

Underlying Case and the ultimate decision in this appeal.

                       ISSUES PRESENTED
1.   Whether the    failure   by Roach    to timely perfect the       appeal in

the Underlying Case proximately caused loss or            harm to Hansen.
2.   Whether    this Court       would have reversed the           trial court’s

judgment   in the Underlying       Case   if   Roach had timely perfected

the appeal in the Underlying Case.

8.   Did Hansen “end the business” when he surrendered his

medical license or did the business continue for the period of

Winding up as a matter of law.

4.   Did the   trial courts in this case       and   in the   Underlying Case

commit error When the courts held that the coverage               for disability
office   expense terminated when Hansen voluntarily surrendered

his medical license?

5.       Did the   trial courts in this case   and in the Underlying Case

commit error as a matter          of   law when the courts held that the

coverage for disability ofﬁce expense terminated           when Hansen
surrendered his medical license since the court in the Underlying

Case held that the insurance carrier had previously breached the

contract of insurance‘?

6.       In the Underlying Case, did the disability        office   expense

policy provide benefits for office overhead during the period of the

statutory winding up of Hansen’s business?

                                THE RECORD
         The record on appeal     consists of the Clerk’s Record    and the

Reporter’s Record.           In this brief the Clerk’s Record will be

referenced as “CR” and the Reporter’s Record Will be referenced as

“RR.” Since this       is   an appellate legal malpractice case based on

the appellee’s failure to properly perfect the appeal in the
Underlying Case, the court must have before             it   What would have

been the appellate record in that case.

        The Underlying Case was             tried nonjury     on a stipulated

record.   The    plaintiff introduced as     an exhibit in the   trial court in

the present case the stipulations and exhibits from the trial of the

Underlying Case, along with the relevant pleadings, orders, and

filed   documents that would have constituted the appellate record

in the Underlying Case. Those documents, along with this Court’s

memorandum           opinion and judgment dismissing the Underlying

Case    for   Want    of jurisdiction    and the defendant’s admissions      in

this case,    were introduced as Plaintiﬂ’ s Exhibit     1.   In this brief the

documents in Plaintiffs Exhibit              1   will be referenced    by the

appropriate tab in that exhibit (“Tab___”) and the evidence in

that Underlying Case will be referenced as Tab           F#        .

                           STATEMENT OF FACTS
        Hansen       is   a neurosurgeon by education, training, and

experience.     (TAB F     #4, p. 17).    Hansen had developed a thriving

neurosurgical practice in Austin, and practiced in a registered
professional     association,       Austin    Neurosurgical            and     Spine

Institute, P.A. (“Austin Neurosurgical”).            Hansen was the only

member of Austin Neurosurgical.          (Tab   F Jnt EX.   1,   Tab F #3).

       To protect himself and         his family in the event           he became

disabled in      any Way, Hansen purchased several                       disability

insurance policies. (Tab        F Jnt EX     1).   He purchased two            basic

types of p0licies—policies covering the loss of his personal income

and   policies to cover his liability for    ongoing   office    expenses in the

event of his disability. (Tab       F Jnt Ex 1). The policies he purchased
were    all   issued by The Northwestern Mutual Life Insurance

Company (“Northwestern           Mutual”). (Tab    F J nt Ex      1;   Tab F #s   1,

2).

       On June    5,   2010,   Hansen   suffered a disabling injury. While

riding his    mountain    bicycle   on an ofﬁroad path, his head contacted

a tree limb, resulting in a cervical nerve injury. (Tab                F Jnt Ex   1).

That cervical nerve injury essentially destroyed the                    fine   motor

coordination in Hansen’s hands.          Due to that injury, Hansen            could

no longer perform surgery, and he has been rendered totally

disabled from the time of that injury through the present.
         Following that injury, Hansen submitted claims for beneﬁts

to   Northwestern Mutual under his                    disability policies—both the

loss of   income       policies    and the   office   expense    policies.   (Tab B; Tab

F Jnt EX        1).   After the elimination period, Northwestern Mutual

began paying the            disability     income     benefit,    and that    policy       was

not an issue in the Underlying case, nor                         is it   at issue in the

present case. (Tab F Jnt              Ex   1).    However, Northwestern Mutual

denied benefits with regard to the disability                            office     expense

policies.   (Tab B; Tab D; Tab             F #s   1, 2).   There were two disability

office   expense       policies,   each containing the same policy language.

(Tab     F #s   1, 2).   The   trial court in the     Underlying Case treated the

policies as      one for the purposes of that case.                  Hansen        will also

treat those       two    policies as   one for the purposes of this               brief,   and

will refer to         them as the “DOE            Policy.”   The two       DOE      policies

combined provided a beneﬁt up                    to $25,000.00 per        month, with a

maximum         total benefit of $600,000.00. (Tab               F Jnt Ex    1;   Tab F #s

1, 2).

         The    DOE      Policy,   owned by Austin Neurosurgical, provided

that benefits would be payable upon the total disability of the
insured,   who was identified as Hansen. The policy had a provision
for   termination of benefits   if the   insured “ends the operation of the

business” while totally or partially disabled.                 Northwestern

Mutual acknowledged that Hansen’s accident rendered him totally

disabled within the terms of the policy, qualifying             Hansen   for

benefits under the      DOE     Policy.     However, since the accident

rendered Hansen unable        to   perform neurosurgery, Northwestern

Mutual took the      position that   Hansen had “ended the business”

and therefore Hansen’s       rights to beneﬁts        had terminated under

the policy. (Tab D).     In other words, according to Northwestern

Mutual’s paradoxical position, the same accident that qualified

Hansen      for    beneﬁts      terminated      his    right   to   beneﬁts.

Northwestern Mutual denied beneﬁts under the                   DOE   Policy,

never voluntarily paid Hansen any beneﬁts under the             DOE Policy,
and took the      position at the trial of the Underlying Case that

Hansen was not entitled to any beneﬁts.

       Following that denial of benefits, Hansen retained Roach

and the Firm      to pursue recovery of the     DOE     Policy benefits from

Northwestern Mutual. Suit was ﬁled by Roach on Hansen’s behalf
on December 23, 2010. (Tab          B).   Being unable       to   perform surgery,

and there being       significant costs associated with maintaining his

medical license, Hansen voluntarily surrendered his medical

license    on April    8,   2011, While the case against Northwestern

Mutual was pending. (Tab F Jnt Ex             1;   Tab F #   6).

      The Underlying Case was              tried on stipulated facts to the

court without a jury. (Tab         1).    Under the    stipulated evidence in

that case, the insurance coverage          was     established, along with the

“termination of benefits” provision of the            DOE     Policy.    The gross

amount       of coverage     was established under the                DOE    Policy

($600,000.00),       along with the        maximum monthly              benefit of

$25,000.00 being payable in the event of liability on the part of

Northwestern Mutual. The parties stipulated that                   if benefits   were

not terminated under the policy, Hansen’s covered overhead

expenses would exceed the           maximum         benefit of $25,000.00 per

month      for   each month beneﬁts were payable. (Tab F Jnt Ex                    1).

The potential recoverable damages were therefore stipulated                      to be

the full   amount of the     available coverage.
        Northwestern Mutual had steadfastly refused                           to   pay   DOE
Policy benefits from the date of Hansen’s injury based on its

position that        Hansen had “ended              his business” on the date of his

injury.       However,            to    hedge      its    bet,    Northwestern Mutual

attempted      to also      argue an alternative date for termination of the

business at trial——and that was the date Hansen surrendered his

medical license.

        Following         trial   on the merits in the Underlying Case, the

trial court    held for Hansen as to the qualification for benefits at

the time of his injury, and that                  Hansen      did not “end the business”

on the date of his           injury, although            he could not perform surgery

from that date forward. (Tab                 I;   Tab   L).   However, the    trial   judge in

the Underlying Case held that                      Hansen        “closed the business” on

April   8,   2011,   when Hansen             voluntarily surrendered his medical

license.     (Tab    L).     The       trial court       awarded Hansen        DOE      Policy

benefits from the time of injury until the surrender of Hansen’s

medical license. (Tab             I;   Tab   L).    Based on that holding, the           trial

court in the Underlying Case granted judgment to                               Hansen      for

$201,827.96          in     DOE         Policy      beneﬁts,        penalty    interest     of

                                                                                            10
$105,208.70 under §542.060 of the Texas Insurance Code, and

attorney’s fees of $80,000.00 through the trial of that case. (Tab             1).

        The   District Clerk’s ﬁle in the underlying case contains            two

Final Judgments. (Tab H; Tab             I).     The language      of the     two

judgments      is identical,   but one judgment reﬂects a signing date of

October       18, 2013,   and the other reﬂects a signature date                of

October 21, 2013. The October 18 judgment reﬂects that                   it   was
filed   by the clerk on October     25; the October 21    judgment reﬂects

a filing date of October 28. There        is   no explanation in the     file for

the existence of the two judgments.

        Hansen desired         to appeal the denial of the         DOE   Policy

benefits after he surrendered his medical license. In furtherance

of that appeal,     on November      14, 2013,   Roach   filed   a Request for

Findings of Fact and Conclusions of Law on Hansen’s behalf. (Tab

J).     The   trial court did not file   ﬁndings and conclusion within

twenty days of the request, so Roach properly              filed   a Notice of

Past Due Findings of Fact and Conclusions of Law on December                   9,

2013. (Tab K) The trial court then ﬁled Findings of Fact and

                                                                               11
Conclusions of    Law on December          13, 2013.   (Tab L). Roach filed

Hansen’s Notice of Appeal on December            19, 2013.   (Tab M).

       Subsequently this Court noted that the notice of appeal did

not appear to be timely and requested Roach to explain.                  Roach

did not respond to this Court’s inquiry.

       This Court then dismissed the appeal for lack of jurisdiction.

This Court noted that the notice of appeal was due to be ﬁled on or

before    November   20, 2013, but       was not   filed until   December       19,

2013. (Tab N; Tab 0). While a timely ﬁled request for findings of

fact   and conclusions      of   law   will extend the time for filing the

notice of appeal, the request for ﬁndings          and conclusions      filed   by
Roach was not     timely,   and the notice of appeal     filed   by Roach was

therefore late.   Due   to the late ﬁling of the notice of appeal, this

court lacked jurisdiction and dismissed the appeal.                Due   to the

negligent failure of Roach,       Hansen could not present       his appeal to

this Court,   and Hansen then ﬁled          suit against     Roach   to recover

the benefits he would have received through that successful

appeal.

                                                                                12
                      SUMMARY OF ARGUMENT
        The appeal        of the Underlying Suit             was dismissed by          this

Court because Roach negligently missed a jurisdictional appellate

deadline.      Roach and the Firm do not dispute that                this failure       on

Roach’s part was negligence—they have admitted that                              it    was

negligence. (Tab P).            The   issue before this Court       is   whether that

admittedly negligent act proximately caused Hansen harm. There

is   no doubt that   it   did.    The determination          of this proximate cause

issue   is   a legal question, not a factual determination. It requires

the Court to decide         if   Hansen would have been           successful on the

appeal of the Underlying Case               if   the appeal of that case had been

timely and properly perfected by Roach.

        It   was admitted and undisputed             in the Underlying Case that

Hansen had ongoing                office   expenses and costs in excess of

$25,000.00 per month. (Tab F)                     Hansen had an ongoing               lease

obligation that he         had    to pay,    he had debt associated with the

practice that      had     to    be paid, he had records that he had to

maintain, he had personnel to pay, and he had accounts receivable

that he needed to collect. (Tab            F Jnt Ex     1;   Tab F #s    5, 9)   From    a

                                                                                         13
factual standpoint, the “business” continued following Hansen’s

disabling injury because those functions         had   to   be performed—the

debts   had   to be paid   and the accounts had    to be collected.       Simply

because Hansen could no longer perform surgery did not                     mean
that   Hansen “ended the business” when the business had ongoing

debts to pay, records to maintain, and accounts to collect.                  The

undisputed facts in the Underlying Case were that the business

continued in actual    fact.

        Hansen   did not “end the business”      when he surrendered             his

medical license. Northwestern Mutual’s argument was that “the

business”     was Austin Neurosurgical, a professional            association.    A
professional association can only have licensed professionals as

members, and when          it   has no licensed professionals as members,

it   cannot continue to           exist.   Under Northwestern Mutual’s

argument, when Hansen surrendered his medical license on April

8,   2011, Austin Neurosurgical terminated since             it   no longer had

any licensed professionals as members.             Therefore, under that

argument, Hansen “ended the business” at that time since Austin

                                                                                  14
Neurosurgical had no                     member Who was          licensed to practice

medicine and no employees to perform surgery.

        That argument overlooks the                       fact   that “the business”

continued to pay              its   obligations     and   collect its assets,     and   it

ignores the fact that under the Texas Business Organizations

Code the business continued in existence                    for the period of Winding

up, as a matter of law.              The surrender     of Hansen’s medical license

might be an event triggering the winding up of the professional

association, but         it    was        certainly not a complete “end” of the

business.      As a matter          of law the business continued for the period

of   winding up, which                   is   the period necessary to gather and

liquidate the assets           and pay the debts and         liabilities of   the entity.

This    is   exactly   what was happening following Hansen’s surrender

of his medical license.              As a matter      of both    law and undisputed

fact,   Hansen         did not      ::
                                         end the business” when he voluntarily

surrendered his medical license because the business continued

for the period of winding up.                  Hansen was   therefore entitled to the

unpaid       DOE   Policy beneﬁts              and the applicable penalty interest

                                                                                        15
through the date of the original judgment, an amount totaling

$605,723.31.

       An   additional basis that the Underlying Case would have

been reversed on appeal      is   that Northwestern Mutual breached

the contract of insurance   when it failed to pay Hansen the beneﬁts
to   which he was entitled following his    injury. After breaching the

contract,   Northwestern Mutual could not rely upon a subsequent

act   by Hansen as a defense   to its liability   on the contract.

       Accordingly, the trial court in the Underlying Case erred in

holding that Hansen was not entitled to recover the full coverage

of the   DOE   beneﬁts.   If the   appeal of the Underlying Case had

been properly perfected by Roach,      this Court     would have reversed

the trial court’s judgment in that case and would have rendered

judgment that Hansen recover the beneﬁts that had been denied

in the trial court.   Roach’s error in failing to timely perfect the

appeal was therefore the proximate cause of Hansen’s loss of

$605,723.31.

                                                                       16
                       ARGUMENT & AUTHORITIES

                               Standard of Review

       In a legal malpractice suit the plaintiff must show that                        (1)

the attorney    owed a duty to the plaintiff,           (2)   the attorney breached

that duty,      (3)     the breach proximately caused the plaintiffs

injuries,   and       (4)   damages occurred.           Alexander      U.    Turtur    &
Associates, Inc., 146 S.W.3d 113 (Tex. 2004); Grider                           v.   Mike

0’Brien, P. C., 260 S.W.3d 49        (   Tex.   App.—Houston         [lst   Dist] 2008,

pet.   den.).     Defendants admitted that Roach was Hansen’s

attorney in the Underlying Case, so as a matter of law Roach owed

Hansen the duty             to exercise that degree of care, skill,                   and

diligence that    would be exercised by a lawyer of ordinary                  skill   and

knowledge under the same or similar circumstances.                                    The

defendants have acknowledged that Roach breached that duty by

being negligent in failing to timely perfect the appeal in the

Underlying Case.

       The damages          in a legal malpractice case are usually a fact

issue for determination by the fact             ﬁnder   at trial.   However, in the

                                                                                       17
present case those damages are established as a matter of law by

the stipulations and judgment in the Underlying Case.                      It   was

stipulated that there         was $600,000.00    in available coverage     under

the     DOE     Policy      and that the maximum monthly benefit                 of

$25,000.00 would be exceeded for each month benefits were

payable. The judgment awarded $201,827.96 in beneﬁts, leaving

$398,172.04 as unpaid beneﬁts under the policy, to which benefits

Hansen was         entitled under the stipulations in the event the

benefits were not terminated by Hansen’s surrender of his medical

license.      (Tab F; Tab      1).   That sum, plus the applicable penalty

interest, are the      damages       in the present case,   and are established

as a matter of law under the record in the Underlying Case.

        The only remaining element           to establish in the present legal

malpractice case       is   proximate cause. Typically, proximate cause          is

a fact issue in any case based on a claim of negligence. El Chico

Corp.   v.   Poole, 732 S.W.2d 306, 313-314    (Tex. 1987).     However, the

present case     is   an appellate legal malpractice        case.   The causation

issue   is   whether Hansen would have been successful in the appeal

of the Underlying Case to this Court but for the negligence of

                                                                                 18
Roach     in failing to perfect the appeal. See Grider                 v.   Mike     O’Brien,

P. C., 260 S.W.3d at          55;   Jackson      v.   Urban, Coolidge, Pennington           &
Scott,    516 S.W.2d 948, 949 (Tex. Civ. App.——-Houston                             [lst   Dist]

1974, writ ref’d           n.r.e.).     While proximate cause               is   normally a

question of fact in any trial of a negligence action, appellate courts

determine questions of law. Since the proximate cause issue in an

appellate malpractice case               is   whether the party would have been

successful on appeal, the proximate cause question in                            an appellate

malpractice case should logically be a question of law and not a

question of       fact.    The Supreme Court               of Texas faced that issue in

Milhouse     v.   Weisenthal, 775 S.W.2d 626 (Tex. 1989) and held that

in   an appellate          legal malpractice case, proximate cause is a

question of law for the court.

         This court       is   therefore reviewing a legal decision by the trial

court, as   opposed to reviewing a factual determination of the                            trial

court.    Legal conclusions of the                 trial court are   always reviewable

by the courts of appeals, and the appellate court is not obligated to

give     any deference           to the trial court’s legal conclusions.                   FFE
Transportation Services, Inc.                 v.    Fulgham, 154 S.W.8d 84                 (Tex.

                                                                                              19
2004); Nicol          U.    Gonzales, 127 S.W.3d 390, 394 (Tex. App.—Dallas

2004, no          pet.).    This Court reviews the           trial court’s   conclusions of

law    ole   novo.         State   v.   The Evangelical Lutheran Good Samaritan

Society,      981 S.W.2d 509, 511 (Tex. App.—Austin 1998, no                            pet.);

Heritage Resources, Inc.                 v.   Hill,   104 S.W.3d 612 (Tex. App.—Fort

Worth 2003, no               pet.).     An    appellate review of a trial courts legal

conclusions          is    not under an abuse of discretion standard, since a

trial court         has no discretion in determining or applying the law.

Walker       v.   Packer, 827 S.W.2d 833 (Tex. 1992).                The interpretation

of   an unambiguous contract                    is   a question of law. Coker     v.   Coker,

650 S.W.2d 391, 393 (Tex. 1983).                          Therefore, this Court         must

make     a de novo determination of Whether Roach’s negligence was

a proximate cause of loss to Hansen, including a de novo

determination of the meaning of the contract of insurance. The

trial courts’         determinations in that regard by the courts in this

case   and the Underlying Case are not entitled to any                       deference.

                                                                                           20
                            The Policy Language

      The     DOE   Policy provided that “This policy provides a

monthly benefit     for   Covered Overhead Expense when the Insured

is totally   or partially disabled....
                                         77
                                              “Covered Overhead Expense”

Was defined by the policy       as:

              ...the total of   monthly expenses that are normal and
             customary in the continuing operation of the Insured’s
             business as properly reported for federal income tax
              (FIT) purposes...

There was no question in the Underlying Case that Hansen was

totally disabled within the contemplation of the policy.                  The
parties to that case stipulated that he         was   totally disabled for all

of the relevant time period.

     The defense      to   Hansen’s claim for beneﬁts under the         DOE
Policy advanced by Northwestern               Mutual was that the Beneﬁt

Termination provision of the policy applied and ended Hansen’s

right to benefits. That provision is as follows:

             Benefit Termination or Adjustment. If the insured
             ends the operation of the business while totally or
             partially disabled, benefits for Covered Overhead
             Expenses and Waiver of Premium will end.

                                                                           21
The   DOE Policy contained the following definition of “Business” in
Section 16:

              Except as provided in sections 8.3 and 8.9, the word
              “business” means the Insured’s business or the
              Insured’s professional practice at the time disability
              starts.

The court must perform a de novo                    interpretation of those

provisions to determine        if   Hansen would have been       successful in

the appeal of the Underlying Case, had such appeal been properly

perfected.

                             Rules of Construction

        This Court must begin with the rules of construction to

apply in the interpretation of an insurance policy.             An    insurance

policy is a contract,    and the Court interprets insurance contracts

according to the general rules of contract construction.                  Texas

Farmers Insurance Company              U.   Murphy, 996 S.W.2d 873, 879

(Tex.    1999); Kelly-Coppedge, Inc.          v.   Highlands   Ins.    C0,,   980
S.W.2d 462, 464     (Tex. 1998). Ifthe policy language         can be given a

definite or certain legal meaning, the policy is not           ambiguous and

the court construes     it   as a matter of law. Kelly-Coppedge at 464.

                                                                               22
        A policy of insurance is by its nature        a contract of adhesion.

Accordingly, a policy of insurance will be strictly construed

against the insurer and in favor of the insured, and any

reasonable interpretation of a policy provision must be indulged in

favor of the insured and coverage.               Gulf Insurance Company          v.

Parker Products,     Inc.,     498 S.W.2d 676, 679 (Tex. 1973); Western

Indemnity Company         U.   Murray, 208 S.W. 696, 698 (Tex. Comm.

App. 1919).        The   rule favoring interpretation in favor of the

insured and coverage         is   even more applicable       when     interpreting

policy exceptions     and limitations         of coverage.    Barnett    v.   Aetna

Life Insurance Co., 723 S.W.2d 663, 666    (Tex. 1987).      The Court
must adopt the construction            of   an exclusionary clause urged by

the insured as long as that construction                      is   not by itself

unreasonable, even        if      the construction urged by the insurer

appears to be more reasonable or a more accurate reﬂection of the

parties’ intent.    Continental Casualty Co.          U.   Warren, 254 S.W.2d
762, 763 (Tex. 1953); Insurance              Company       of North   America    v.

Cash, 475 S.W.2d 912 (Tex. 1972). Applying these rules to the

facts   of the     Underlying Case demonstrates that there Was

                                                                                 23
coverage for the expenses Hansen incurred after the surrender of

his medical license,         and   this Court     Would have reversed the

judgment       of the trial court in that case if the appeal         had been

properly perfected.

                   Interpretation of the Policy        Language

        The    policy language on    which Northwestern Mutual           relied

was that       “the insured ends the operation of the business While

totally or partially disabled...
                                      7:
                                           This   is   language purporting to

limit    or    terminate beneﬁts payable under the policy, and

therefore, applying the settled rules of construction discussed

above, that provision        must be interpreted         in favor of providing

coverage as long as that construction             is   not itself unreasonable.

The use       of the phrase “the insured ends the operation of the

business” would imply an afﬁrmative act by the insured that not

simply leads to the eventual ending of the business, but actually

ends    it   at that time.   The   limitation or termination of coverage

would not be applicable            until the business         actually ended.

Likewise, the use of the term “business” must be interpreted

                                                                             24
liberally in favor of coverage         and against denial        or forfeiture of

benefits.    The Court simply cannot adopt a narrow interpretation

or application of the terms that           would   limit or forfeit   coverage—

the court    must   interpret the provisions to recognize coverage               if

reasonably possible to do        so.

       The “Insured’s business”        at the time disability started          was

Austin Neurosurgical. The court in the Underlying Case found

that   Hansen   “closed his business on the date he surrendered his

medical license, April      8,    2011.”    Hansen had not been            able to

render neurosurgical medical care since June              5,   2010, the date he

suffered his disabling injury.          The mere relinquishment             of his

medical license essentially changed nothing with regard to his

ability to   render professional services other than to           mean     that he

could no longer even do so legally from that time, even though he

had not and could not provide such             services prior to that time.

But “the Insured’s business” Was Austin Neurosurgical.                         The

policy does not terminate beneﬁts           when    that business     is   “closed”

as found by the trial court, but            when     the insured “ends” the

business. There     is   a difference between       when   a business “closes”

                                                                                 25
and when          it   “ends.”       The applicable            definition in the      Merriam

Webster Dictionary               of the transitive verb “close” is “to              suspend or

stop the operations.”                The applicable            definition of the transitive

verb “close” in the Oxford Dictionary                     is   “cease to be in operation or

accessible to the public.” Austin Neurosurgical                              may have       closed

when      it   suspended the provision of surgical services                     to the public,

but the        DOE Policy only provides for the termination of benefits if
the “insured ends” the business. The                       Merriam Webster Dictionary

definition of the verb “end” is “to bring to                        an end.” The Oxford

Dictionary deﬁnes the verb “end” as “come or bring to a final

point, finish.” In order for              Hansen          to   end the business of Austin

Neurosurgical, he must bring                    it   to   a ﬁnal point—bring           it   to   an

end. However, as long as                 it   must pay         its debts,    owns   assets,   and

has accounts           it is   collecting, it   has not ended. While Hansen                   may
have “closed” Austin Neurosurgical since                                it    suspended the

provision of medical services to the public,                        Hansen      did not “end”

the business because               it   had not been brought            to    a ﬁnal point or

finish,   and that could not occur              until all of its debts         were paid and

                                                                                                 26
its     assets accumulated           and   distributed.         To pay these ongoing

expenses       is   precisely the reason      Hansen purchased this            coverage.

         The    trial court in the         Underlying Case found in                its sole

finding of fact that “Plaintiff closed his business on the date he

surrendered his medical license, April                   8,   2011.” (Tab L). That       is

not the    same as a determination as               to   when    “the insured ends the

operation of the business...” under the policy.                         While the     trial

court’s factual determination               i_n   that regard        may    be entitled to

some deference,         it   simply does not resolve the issue of termination

of coverage.         That    is   a question of law.          A business     can close but

still   have a continuing existence           for certain purposes.

         The term “ends the business”              is   not defined in the policy      and

can be interpreted in more than one way.                       It   could   mean   that the

business ends whenever Hansen no longer performs surgery.                                It

could    mean that the business ends Whenever Hansen stops having
patient contact.         It   could   mean    that the business ends whenever

Hansen has terminated               his last employee. It could             mean that the
business ends          when       the business has collected            all of its   assets

and/or retired        all of its liabilities. It    could      mean that the business

                                                                                         27
ends Whenever Hansen ceases to be a licensed physician.                It   could

mean that the business ends when Austin          Neurosurgical ceases to

be an existing entity.         Any one   of these could be a reasonable

interpretation of that term.         However, a court must resolve this

dispute by adopting the interpretation advanced by the insured,

even    if   the interpretation advanced by the carrier seems a more

reasonable interpretation.         Continental Casualty Co.      v.   Warren,

254 S.W.2d 762, 763           (Tex. 1953); Insurance   Company        of North

America       v.   Cash, 475 S.W.2d 912 (Tex. 1972).        The court must

adopt the broadest interpretation resulting in coverage and

against denial of coverage. Gulf Insurance Co.         v.   Parker Products,

498 S.W.2d 676, 679 (Tex. 1978).               Applying those rules of

interpretation, the trial courts in the Underlying Case           and   in the

present case incorrectly held that Hansen “ended the business” on

April   8,   201 1.

                      Continuation of the Business In Fact

        The evidentiary record from the Underlying Case reﬂects

that   Hansen had not yet ended the business when he surrendered

                                                                              28
his medical license.   As reﬂected by the           joint stipulation in that

case,   Austin Neurosurgical had ongoing expenses and obligations

that exceeded the monthly      maximum benefit for              the entire period

of coverage. (Tab   F Jnt.   Ex.   1).   Austin Neurosurgical had a              five-

year sublease from Spine Center,         Inc.,   commencing on February             1,

2010, and expiring on July 31, 2015.                     (Tab    F   #5).     Austin

Neurosurgical leased 1607 square feet on a “triple net” lease

beginning at the rate of $12.00 per rentable square                  foot,   with the

rental rate escalating over time to $14.00 per rentable square foot.

Austin Neurosurgical also had a $758,313.51 promissory note

payable to Hansen dated        May       19, 2010, calling for              bi-Weekly

payments    of $23,000.00 until paid in          full.    (Tab   F    #9).    Austin

Neurosurgical also had ongoing employee             costs. All of these costs

and expenses continued past the time that Hansen surrendered

his medical license. There were accounts receivable to collect,                  and

the effort to collect those accounts     was ongoing at the time Hansen

surrendered his license.      As a matter          of undisputed fact, the

business of Austin Neurosurgical had not been brought to an end,

a final point, a finish, by the time     Hansen surrendered his license.

                                                                                   29
           Continuation of Business Under Texas Business
                         Organizations Code

        Northwestern Mutual argued at the        trial of   the Underlying

Case     that    the   business   necessarily    ended when          Hansen

surrendered his medical license since a professional association

can only have licensed professionals as members, and Hansen had

been the only member of Austin Neurosurgical. This argument,

however, overlooks the applicable provisions of the Texas Business

Organizations Code.        Professional associations are specifically

governed by Chapters 301 and 302 of the Business Organizations

Code.    A professional association is an entity that must file under
the Business Organizations Code, and therefore the provisions of

Chapter 11 are also applicable     to   it.

        Under §301.008     of the Business Organizations Code,           an

owner     of a    professional association      who   ceases    to   be an

“authorized person” as required by Section 301.007 must promptly

relinquish the person’s ownership interest in the entity.            Section

301.007 provides that a person      may be an owner     of a professional

entity or a governing person of a professional limited liability

                                                                          30
company only      if    the person      is   an “authorized person.”             Section

301.004 provides that a person                is   an “authorized person” with

respect to a professional association              if the   person   is   a “professional

individual,”    which    is   defined by §301.003 to be an individual                who
is   licensed to provide in this state or another jurisdiction the                 same

professional services as        is   rendered by that professional entity.

        Under     these        provisions,         when       Hansen         voluntarily

relinquished his medical license, he ceased to be an authorized

person, requiring        him    to relinquish his            ownership interest in

Austin Neurosurgical. But since Hansen was the only member of

Austin Neurosurgical, that was an event requiring a winding up of

the entity since   it   had no authorized person as an owner. Chapter

11 of the Business Organizations Code covers                   What happens when

an event requiring the Winding up                   of   an entity occurs.        Under

§11.051, Austin Neurosurgical                 was required           to    Wind up    its

business since     it   no longer had any owner Who qualified as an

authorized person.            Section 11.001 deﬁnes “winding up” as the

process of winding up the business and affairs of a domestic entity

                                                                                       31
as a result of the occurrence of an event requiring Winding up.

The Winding up procedures are established in         §11.052.

            (a)   Except as provided by the title of this code
            governing the domestic entity, on the occurrence of an
            event requiring Winding up of a domestic entity, unless
            the event requiring Winding up is revoked under
            Section 11.151 or cancelled under Section 11.152, the
            owner, members, managerial officials, or other persons
            specified in the title of this code governing the domestic
            entity shall, as soon as reasonably practicable, wind up
            the business and affairs of the domestic entity. The
            domestic entity shall:
                  (1)   cease to carry on its business, except to the
                        extent necessary to wind up its business;
                  (2)   if the domestic entity is not a general
                        partnership, send a written notice of the
                        winding up to each known claimant against
                        the domestic entity;
                   (3)   collect   and      property to the extent the
                                         sell its
                         property is not to be distributed in kind to
                         the domestic entity’s owners or members,
                         and
                   (4)   perform any other act to Wind up                its
                       business and affairs.
            (b)   During the Winding up process, the domestic
            entity may prosecute or defend a civil, criminal, or
            administrative action.

Under Chapter       11 of the Business Organizations Code, the

business   is   not “terminated” until the winding up process             is

completed. Section 11.052 clearly provides that the business does

continue to the extent necessary to wind up         its   business, which in

                                                                          32
this instance includes paying its liabilities            and    collecting its

accounts receivable. The business        is   not “terminated” until    it   has

completed the process of winding up and has ﬁled a certificate of

termination under §11.101 of the Business Organizations Code.

Section 802.013 of the Code requires that the certificate of

termination filed in accordance with Chapter 11 must be executed

by an     officer of the professional association        on behalf of the

association.

        When Hansen     Voluntarily relinquished his medical license,

that became an event requiring the winding up of Austin

Neurosurgical because      it   no longer had an authorized person as a

member. At that        point,   Austin Neurosurgical was required to

cease    its   regular course of business (providing neurosurgical

services)      and begin the winding up       process.   Of    course, Austin

Neurosurgical ceased providing neurosurgical services                   when
Hansen      suffered his disabling injury. But Austin Neurosurgical

did not cease to exist or terminate at that time—it continued in

existence until the completion of the winding up process.                As a

matter of law, Hansen did not “end” the business when he

                                                                              33
surrendered his medical license—by statute Austin Neurosurgical

was required to continue          in existence for the period of Winding up.

As part     of the   winding up process, Austin Neurosurgical had                to

pay   its   debts and gather       its assets.   As shown by the evidentiary

record in the Underlying Case, those debts were ongoing in an

amount      for a period in excess of the        maximum      available coverage

under the     DOE    Policy.     As a matter     of law, Austin Neurosurgical

did not “terminate” (end) until the process of winding up                 had been

completed and the          certificate of   termination   filed.   That had not

occurred at the time Hansen voluntarily surrendered his medical

license,    and could not occur until the        last lease   payment was made

in July 2015.        As   a matter of law, the business did not            end but

continued for the statutorily required period of winding up.

Therefore, the trial court in the Underlying Case erred in denying

DOE     Policy beneﬁts after            Hansen relinquished         his    medical

license.     This Court would have reversed the                trial court in   the

Underlying Case           if   Roach had not negligently        failed to timely

perfect the appeal.

                                                                                 34
                              The “Findings of Fact”

       In the present case, the trial court ﬁled findings of fact and

conclusions of law. (CR 15-17). In Finding of Fact No. 3 the court

found as follows:

              3.   The court further ﬁnds that District Judge
              Suzanne Covington did not abuse her discretion in
              finding that “Plaintiff closed his business on the date
              he surrendered his medical license, April 8, 2011,” as
              referenced in the December 13, 2013 Findings of Fact
              of District Judge Suzanne Covington in the Underlying
              Case.

This   is   not properly a finding of        fact,    and     it   is   not relevant

whether or not Judge Covington abused her discretion in finding

as a fact that plaintiff closed his business on that date.                 To begin

with, a determination of Whether the trial court abused its

discretion is a question of law. Jackson        12.   Van   Winkle, 660 S.W.2d
807, 810 (Tex. 1983). Finding of Fact No. 3             Would more properly

be a conclusion of law, not a ﬁnding of               fact.        As noted   above,

questions of law are reviewed de novo by the appellate court, and

no deference       is   accorded the trial court’s determination. The trial

court does not have the discretion to incorrectly apply the law.

Accordingly, this Court must          make a de novo determination             as to

                                                                                  35
Whether the business “ended” on April 8, 2011. Fact Finding No.                      3

in the present case has no bearing              on the review that       this court

must perform.

        The determinative       issue is a question of            law—When        does

Austin Neurosurgical “end” under the policy of insurance? The

facts   surrounding Hansen’s injury,        disability,       and surrender   of his

medical license were undisputed—in                   fact, stipulated.      The   fact

finding in the Underlying Case that             Hansen        “closed” the business

may be    evidentiary of the issue of when the business “ended”, but

closing the business       and ending the business                are, or   can    be,

different things.    The    sole fact     ﬁnding by the          trial court in the

Underlying case      is   therefore immaterial to the ultimate legal

determination.      As an immaterial             fact finding, it        should be

disregarded.   Andrews     v.   Key, 77 Tex. 35, 13 S.W. 640, 641 (1890);

Cooke County Tax Appraisal District             v.   Teel,    129 S.W.3d 724 (Tex.

App.—Ft. Worth 2004, no          pet.).   The   issue    is   when, as a matter of

law, applying the rules of interpretation               and statutory law that

the court   must   apply, did    Hansen “end the business?” Applying

those rules and statutes to the undisputed facts,                  Hansen    did not

                                                                                    36
“end the business”         when he surrendered              his medical license.

Rather the “business” continued                 for that period necessary to

gather   its   assets   and discharge       its liabilities,   both as a matter of

law and as a matter of stipulated fact.

                                The Defense’; Cases

      In the trial court, Roach tried to avoid the conclusion that

the business continued incurring Covered Overhead Expenses by

citing   three     distinguishable         cases—Wilson         v.      Monarch   Life

Insurance Company, 971 F.2d 312               (9th Cir.   1992);     Paul Revere Life

Insurance      Company     v.   Klock, 169 So. 2d 493 (Fla. Ct. App. 1964);

and Principal Mutual            Life Insurance      Company        v.   Toranto, 1997
WL 279751 (N.D. Tex 1997).                In those cases, the insured was

denied benefits under           office   overhead expense policies speciﬁc to

those cases. However, in each of those cases, the denial                   was based

                                                           @
on the      fact that the insured           had   sold his practice         and was

attempting to claim beneﬁts for expenses                             the sale of the

practice.      Not surprisingly, the courts in those cases found that

expenses incurred after the insured sold the practice Were not

                                                                                   37
covered by the policies. However, those results were based on the

fact that the insureds sold their           practices—a fact missing in the

present case.     Hansen     did not sell his practice—he did exactly

what the Business Organizations Code requires and went through

the winding up process by collecting and disposing of the assets of

the business and paying the liabilities of the business. In none of

the cases cited by Roach          i.n   the court below did the insured go

through a statutory winding up, and none of those cases even

address that issue.       Those cases are simply inapplicable           to the

case   now before the    Court.

         No Subsequent-Act Defense After Breach of Contract
       The   fact that   Hansen         voluntarily surrendered his medical

license in the face of Northwestern Mutual’s wrongful denial of

benefits could not be a defense for Northwestern              Mutual    in the

Underlying Case.         When Hansen was           injured, the   DOE   Policy

benefits were due beginning at that time.             The   trial court in the

Underlying Case found that Hansen was entitled              to those benefits

and that Northwestern Mutual breached the contact when                      it

                                                                            38
denied his claim.       After   it    breached the contract, Northwestern

Mutual could no longer             insist that    Hansen comply with the

contract.   When one party to a contract commits               a material breach

of the contract, the other party is excused from                        any further

obligation to perform.       Mead       v.   Johnson Goup,      Inc.,   615 S.W.2d
685, 689 (Tex. 1981).      What Northwestern Mutual was                  essentially

arguing was that Hansen had to maintain his medical license

during the entire period of coverage in order to receive the                       DOE
Policy benefits, even though           Hansen was       physically incapable of

performing surgery.        But Hansen had          to   pay the ongoing            office

overhead expenses without the benefits that Northwestern

Mutual had promised and contracted                to provide to         him   to   meet

those    same       obligations.         After    breaching        the        contract,

Northwestern Mutual could not rely on Hansen’s post-breach

conduct as a “fall-back” defense               when     its   complete denial of

liability failed.    The   trial court in the     Underlying Case erred in

relying upon Hansen’s voluntary surrender of his medical license

as a defense        when   that conduct occurred after Northwestern

Mutual had breached the              contract.   This Court would not have

                                                                                      39
affirmed the denial of          DOE   Policy benefits to        Hansen on that

basis.

                                CONCLUSION
         This Court would have reversed the judgment in the

Underlying Case       if   Roach and the Firm had properly perfected the

appeal in that case.           As a matter      of   law and stipulated      facts,

Hansen did not “end the business”          of Austin Neurosurgical           when
he     surrendered      his    medical license.           By    statute    Austin

Neurosurgical continued for the required period of winding up,

and the stipulations          in the Underlying Case establish that the

winding up process actually did occur following Hansen’s

surrender of this medical license. Both factually and legally, the

professional association continued in existence to collect its assets

and discharge      its liabilities.

       After Northwestern Mutual          had    fully   breached the contract

by refusing   to   pay any beneﬁts, Hansen was under no obligation

to   comply with any of the terms of the contract.             If   maintenance of

his medical license        was required   for   Hansen     to receive the    DOE

                                                                                40
Policy benefits, Northwestern Mutual’s breach of the contract

relieved   him   of that obligation.

      Accordingly,     if this   Court had been able to hear and decide

the appeal of the Underlying Case, this Court would have reversed

the trial court and rendered judgment for          Hansen      for the full

amount     of the   unpaid beneﬁts plus penalty    interest.    Therefore,

the trial court in the present case erred in holding that Roach’s

admitted negligence in failing to timely perfect the appeal was not

a proximate cause of Hansen’s loss of the              amount      of that

judgment.

                                   PRAYER
      Wherefore,       Hansen prays that the        court   reverse     the

judgment     of the trial court    and render judgment   for   Hansen   for

the full    amount     of his    damages, which would constitute the

amount     of the   unpaid benefits under the   DOE Policy plus penalty
interest from the date of Hansen’s injury until the entry of the

trial court’s    judgment in the Underlying Case, plus prejudgment

                                                                         41
interest   on that sum in this   case,   and for such other relief to which

he   may show himself entitled.
                                         KIDD LAW FIRM
                                         819 West      11”‘ Street
                                         Austin,   TX
                                                    78701
                                         512-330-1709 (fax)

                                         /s/Scott R.Kidd
                                         Scott R. Kidd
                                         State Bar No. 11385500
                                         512-330-1713
                                         scott@kiddlawaustin.com
                                         Scott V. Kidd
                                         State Bar No. 24065556
                                         512-542-9895
                                         svk@kidd1awaustin.com

             Certificate of   Compliance with TRAP          9.4(i)(3)

     This brief contains a total of 6863 words excluding the parts
exempted under TRAP 9.4(i)(1), as verified by Microsoft Word for
Mac. This brief is therefore in compliance with TRAP 9.4(i)(2)(B).

                                               /s/Scott R.   Kidd

                          Certiﬁcate of Service

        A copy of this brief has been served on John Shepperd,
                                                             909
Fannin Street, Suite 3300, Houston, TX 77010 in accordance With
the Texas Rules of Appellate Procedure this 19th day of October,
2015.

                                               /s/Scott R.   Kidd

                                                                        4-2
                        APPENDIX
A.   Final   Iudgment

B.   Findings of Fact and Conclusions of Law

C.   TEX. BUS. ORG.     CODE §11.052
                                                          DC                BK15169 PG1588                   “'95    l"    The Diilrlct Court
                                                                                                              of Travis County,           Tan;
                                                                                                                     JUN        1  2 2015
                                                                                                                                                    %"
                                                                                                             Al                 ,3 L0
                                                                                                                                              M_
                                                    cAUsE No. D-1-GN-14-001213                               Veiva   L.   P   ca. District   cum
       JAMES HANSEN                                                  §                  IN THE DISTRICT           COURT
                                                                     §
                                      -
                                                                     §
                 Plaintiff,                                          §
                                                                     §                 98th JUDICIAL        DISTRICT
       V.                                                            §
                                                                     §
       LONNIE ROACH, AND LAW                                         §
       LAW OFFICES OF BEMIS, ROACH                                   §
       & REED                                                        §
                                                                     §
                Defendants.                                          §                 TRAVIS COUNTY, TEXAS
                                                               FINAL JUDGMENT
                On May 27, 2015, the Court held the ﬁnal trial in the above entitled and numbered cause.
       Plaintiff appeared in person             and through his attorney, Scott Russell Kidd, and announced ready.

       Defendants appeared through their attorney, John R. Shepperd, and announced ready.                                           The
       parties did not request a jury             and    all   questions of fact and law were submitted to the Court for

       detennination.        The      parties further stipulated to the record               and exhibits   for   trial.       Having
       considered the pleadings, evidence presented, argument of counsel, and applicable law, the Court

       concludes that judgment should be granted for Defendants.

            Accordingly,      it is   ORDERED, ADJUDGED AND DECREED                             that Plaintiff,   James Hansen,

       take nothing     by    this suit.        It is   further   ORDERED, ADIUDGED, AND DECREED                              that this

     judgment disposes of all issues and                   parties   and   is   an appealable ﬁnal judgment. All relief not

       expressly granted herein           is   denied.

            SIGNED this       12th day of June 2015.

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0040                                                                                                                                      @    11
                                                                                                 Filed in The District Court
                                                                                                  of Travis courtly, T9Xﬁ5

                                                                                                      JUN       gt: E2015   3“
                                           CAUSE No. 13.1 _GN_144101213                          At             5'

                                                                                                       L Pm’ D SW‘          M  -

         JAMES HANSEN                                    §              IN THE DISTRICT COURT
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                   Plaintiff,                            §
                                                         §              98th JUDICIAL         DISTRICT
 ‘

         V.                                              §
 1

                                                         §
         LONNIE ROACH, AND LAW                           §
         LAW OFFICES OF BEMIS, ROACH                     §
         & REED
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                                                         §
 :

                                                         §
                   Defendants.                           §              TRAVIS COUNTY, TEXAS
                                FINDINGS OF FACT AND CONCLUSIONS OF LAW
                   On May 27, 2015, the Court held the ﬁnal trial in the above entitled and numbered cause.
         Plaintiff appeared in   person and through his attorney, Scott Russell Kidd, and announced ready.

         Defendants appeared through their attorney, John R. Shepperd, and announced ready.

                   The parties did not request a jury and all questions of fact and law were submitted to the

         Court for determination. The parties further stipulated to the record and exhibits for        trial.    The

         parties did not present   any additional testimony or evidence    at trial.   The   sole question before

         this   Court was whether Defendants’ failure to timely perfect the appeal of the in the underlying

         case,   Cause No. D-1-GN-10-004459 in the 200"‘      Judicial District Court, styled    James Hansen,

         M.D.     v.   The Northwestern Mumal_ Life Insurance Company              (the   “Underlying      Case”l),

         proximately caused loss or harm to Plaintiff.

                   In response to a request from Plaintiﬂ‘, the Count issues the following ﬁndings of fact

         conclusions of law:

                                                                                                                     \

                                                                                                      Page   1   of 3
         FINDINGS OF FACT AND CONCLUSIONS OF LAW
                                            FINDINGS OF FACT
1.   The Court adopts        the parties’ Joint Stipulation of Facts and all documents attached to the

     Appendix Supporting         Joint Stipulation   of Facts, ﬁled on June        10,   2011 in the Underlyitig
                                                                                                                   1

     Case.

     The parties have       stipulated to the failure   of Defendants      to timely perfect   an appeal   in in

     Underlying Case.

     The Court further ﬁnds that District Judge Suzanne Covington did not abuse her discretion

     ﬁnding    that “Plaintiff closed his business       on the date he surrendered         his medical license,

     April 8, 201 1," as referenced in the       December        13,   2013 Findings of Fact of District Judge

     Suzanne Covington in the Underlying Case.

                                         CONCLUSIONS or LAW                                                            1

1.   The following provisions of           the insurance policy between Northwestern Mutual Life

     Insurance    Company and Plaintiff are applicable:

        SECTION        1.   GENERAL TERMS AND DEFINITIONS.
        This policy provides a monthly beneﬁt for Covered Overhead Expenses                      when the
        Insured is totally or partially disabled.

                                                        ##1##

        1.6    BUSINESS
        Except as provided in Sections 8.3 and                  8.9, the   word “business” means the
        Insured’s business or the Insured’s professional practice at the time the disability
        starts.
                                                        *:**

         1.7   COVERED OVERHEAD EXPENSE
        Covered Overhead Expense is the total of monthly expenses that are normal and
        customary in the continuing operation of the Insured’s business, as properly
        reported for federal income tax (F II‘) purposes, with some exceptions as described
        below.

                                                                                                      Page 2 of 3
FINDINGS OF FACT AND CONCLUSIONS OF LAW
                                                  *=|=$%

         3.2   MONTHLY BENEFIT FOR DISABILITY
               Beneﬁt Termination or Adjustment        If the insured ends the operation of the
               business while totally or partially disabled, beneﬁts for Covered Overhead
               Expenses and Waiver of Premium will end.                                               I

2.   Plaintiffs entitlement to    monthly beneﬁts ended on April     8,   201 l, the date he closed

     business.
                                                                                                      i

                                                                                                      A

3.   Collection of accounts receivable did not constitute the “continuing operation of the

     lnsured’s business" Within the plain meaning of the applicable provisions of the insurancla
                                                                                                      I

     policy between Northwestem Mutual Life Insurance        Company and Plaintiff.
4.   A   timely ﬁled appeal would not have changed the outcome in the Underlying Case.

     Accordingly, Defendants’ failure to timey appeal did not proximately cause loss or harm to

     Plaintiff.

     SIGNED this 23rd day of June 2015.

                                                           PRESIDING                                  ?

                                                                                           Page 3 of 3
FINDINGS OF FACT AND CONCLUSIONS OF LAW
§ 11.052.   Winding Up Procedures — WestlawNext                                                                                                                                         10/19/15. 3524 PM

Westtawluext”
 § 11.052. Winding Up Procedures                                                                                                                                  NOTES OF DECISIONS (5)
 Vernon's Texas Statutes and Codes Annotated              Business Organizations Code             Eﬁedive:          sepremben, 2013 (Appmx. 2 pages)

                  Vernon's Texas statutes and                   codes ztnnotated
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                       BusinessO1'ganiz.at1onsOode(RefS 8: Annos)                                                                                                 Banmmcy
                         Title 1. General Provisions (Refs & Annos)
                                 Chapter 11. Winding up and Termination of Domestic Entity
                                     Subchapter B, Winding up of Domestic Entity

                                                                 Effective:     September 1, 2013

                                           V.T.C.A.,           Business Organizaﬁons Code § 11.052

                                                     § 11.052.           Winding Up Procedures

                                                                              Currentncss

                (a) Except as provided by the title of this code governing the domestic entity. on the
                occurrence of an event requiring winding up of a domestic entity, unless the event requiring
                winding up is revoked under Section 11.151 or canceled under Section 11.152, the owners,
                members, managerial ofﬁcials, or other persons speciﬁed in the title of this code governing
                the domestic entity shall, as soon as reasonably practicable, wind up the business and
                affairs of the domestic entity. The domestic entity shall:

                   (1)cease to carry on             its   business. except to the extent necessary to wind up                               its

                   business;

                   (2)   if   the domestic entity         is   not a general partnership, send a written notice of the winding
                   up    to   each known claimant against the domestic                           entity;

                   (3) collect     and   sell its   property to the extent the property                        is       not to be distributed      in   kind to
                   the domestic entity's owners or                   members; and

                   (4)   perform any other act required to wind up                         its   business and               affairs.

                (la)   During the winding up process, the domestic entity                            may prosecute or defend                   a   civil,

                criminal, or administrative action.

                Credits
                Ads 2003, 78th Leg.,           ch. 182,         §   1, eff.   Jan.   1,   2006.   Amended by Acts 2013. 83rd                        Leg., ch.
                9 (5.3 347), §       3, eff.   Sept. 1, 2013.

                Editors‘         Notes
                                                                     CROSS REFERENCES
                Certain procedures for approval, nonproﬁt corporations, see V.T.CA,                                              Business
                Organizations Code § 22.302.
                Certain procedures relating to winding up, for-proﬁt corporations, see V.T.CA.. Business
                Organizations Code § 21.502.
                Powers of person conducting wind up. see V.T.C,A,, Business organizations Code§
                153.503.

                                                                    LIBRARY REFERENCES
                                                                        2012 Main Volume

                                                                        2012 Main Volume

                Corporations and Business Organizations as-8089 to 3091 3120 to 3140, 3660.                         ,

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