Arch Insurance Co v United States Youth Soccer Association Inc (2014) H&FLR 2014-14
Fifth District Court of Appeals of Texas
12 May 2014
Coram: Bridges, Fillmore and Lewis JJ
Catchwords: Texas – soccer – sports clubs – insurance – breach of contract – discrimination – duty to defend
Facts: The United States Youth Soccer Association (respondent) was a corporation and a member of the United States Soccer Federation. In 2009 the National Association of Competitive Soccer Clubs and some of its member clubs filed a grievance complaint with the US Soccer Federation alleging a number of breaches of Federation by-laws by (among others) the respondent. These breaches included alleged discrimination.
At the relevant time, the respondent was insured by Arch Insurance Co (appellant). The insurance policy included an exclusion exempting the appellant from liability for loss caused by a claim for breach of a contract or agreement. The exclusion did not apply, however, so far as the respondent would have been liable for that loss absent the contract or agreement. The appellant declined on the basis of the exclusion to defend the respondent. The respondent sued for breach of contract, claiming the $365,620.24 legal fees it incurred in defending the grievance proceedings. Both parties sought summary judgment, which was granted in favour of the respondent. The appellant appealed.
Held: Allowing the appeal, that in assessing whether a claim is within the coverage of an insurance policy, the court must consider the factual allegations showing the origin of the damages, and not the legal theories alleged. The factual allegations – including those with respect to discrimination – raised by the grievance against the respondent arose from the alleged breach of US Soccer Federation by-laws and regulations, and were within the exclusion.
Huffhines v State Farm Lloyds, 167 SW.3d 493 (Tex. App. 14th Dist 2005), followed.
The Court’s judgment is available here.