Lake Park-CS 950426 TML
! N~I-E R t ,0 ~. I_ RN .M E.%-EA L RISK
April 26, 1995
MAY 1- 1995
PERSONNEL
Mr, ¥ivyon V. Bowman
Assistant City Manager/Fund Coordinator
lc..
City of Coppell
P.O. Box 478
Coppell, Texas 75019
Re: Style Lowell K. Anderson v. The City of Coppell, et al.
Cause # 95-2550-L
TML Claim # 9500025207
Dear Mr. Bowman:
We are writing.you in your capacity as Fund Coordinator for the City of Coppell. As you are
aware, thi.~ claim was forwarded to flag TML Intergovernmental Risk Pool for handling in
accordance with the terms of the lmerlocal Agreement. We have determined that some of the
allegations are within the scope of the Errors and Oral,ions Liability Coverage effective
October 1, 1994, and have therefore retained Mr. Ronald Clark with the law firm of Wolfe,
Clark & H~enderson, L.L.P. to file an answer on behalf of the City and defend its interests.
The Risk Pool's obligation to provide a defense is determined by comparing the allegations in
the Plaintiff's Original Petition with the terms of coverage contained in the Liability Coverage
Document. ff any of the allegations are potentially within ~ scope of coverage, the Risk
Pool will provide a defense. Sometimes a lawsuit will contain many different allegations,
some of which are covered, and others which are not covered. In those instances, the Risk
Pool will provide a defense against all allegations, but will reserve the right to deny coverage
for any damages awarded in connection with the allegations which are not covered.
We are writing to advise you that the Petition contains allegations that are not covered. The
fact that the Risk Pool has provided a defense does not necessarily mean that it will ultimately
pay the damages, if any, asserted against you.
The Plaintiff alleges he purchased property which is within 400 feet of a sewer lift station. He
alleges that those involved in the development and sale of the property did not disclose that
information at the time of their purchase. He alleges that the City was negligent in approving
a plat for the development of the property. AH defendants are sued under various theories of
negligence, fraud, D.T.P.A. violations, breach of contract and civil conspiracy. In addition,
the Plaintiff is seeking damages against the City of Coppell and the CMO'I) No. 1 under a
theory of inverse condemnation pursuant to Article 1 Section 17 of the Te~l~t~D '1'O
TEXAS MUNICIPAL LEAGUE · 211 F_.~.$T SEVF. NTH STREET. 3RD FLOOR · ^USTC, TEXAS 78701 · (512) 320-1325 ° (800) 537-6655
RESERVATION OF RIGIITS
Mr. Vivvon V. Bowman
April 26. 1995
Pa2e 2
The Plaintiff alleges that those acts constitute a taking of their property requiring conq~cnsation
under Article 1. Section 17 of the Texas Constitution. This provision ,~tatcs as follows:
§ 17. Taking, damaging or destroying property for public nsc; special
privileges and immunities: control of privileges and franchises
Sec. 17. No person's property shall be taken, damaged or
destroyed lbr or applied to public use without adequate compensation being
made, unless by the consent of such person: and. when taken, except l'br the use
of the State, such compensation shall be first made, or secured by a deposit of
money; and no irrevocable or uncontrollable grant of special privileges or
immunities, shall be made; but all privileges and franchises granted by the
Legislature, or created under its authority shall be subject to the control thereof.
(emphasis added)
Tex. Const. art. I, {} 17
We draw your attention to the following provisions which states:
PART VII ERRORS AND OMMISSIONS LIABILITY COVERAGE
VII. EXCLUSIONS
B. 3. Brought about or contributed to by the dishonesty or
fraudulent acts of the Covered Party; however,
notwithstanding the foregoing, the Member or Covered
Party shall be protected under the terms of this Agreement
as to any claims upon which suit is brought against them
by reason of any alleged dishonesty or fraudulent acts on
the part of them, unless a judgment or other final
adjudication thereof adverse to them ashall establish that
acts of active and deliberate dishonesty or fraud
committed by them with actual dishonest or fraudulent
purpose and intent were material to the cause of action so
adjudicated.
PART VIII EXCLUSIONS APPLICABLE TO ALL COVERAGES
Unless otherwise provided in the Agreement Declarations, under specific
coverages or by endorsement, the self-insurance provided in this Agreement
does not apply to or provide coverage for the following:
T. Claims or suits based upon the operation of the principles of
eminent domain, including condemnation proceedings or inverse
condemnation by whatever name called, whether such liability
accrues directly against the Member or by virtue of any
TML
RESERVATION OF RIGttTS
Mr. Vivvon V. Bowman
April 26. 1995
Page 3
agreenlcnt cntcrcd into bx' or on behalf of the Member.
~ emphasis added !
M. Any claim or suit for or based upon contractual penalties or
retainages, breach of contract, cost estimate overruns on any
contract or project or failing to maintain adequate insurance
protection.
For purposes of this exclusion, the term "contract" shall include
express contracts, implied in fact contracts, and implied in law
contracts.
In the event the Plaintiff should prevail in this suit, the Risk Pool reserves the right to deny
coverage for any monetary award within the scope of any exclusions referenced above.
In view of the coverage questions involved in this case and the fact that the Risk Pool is
defending the City under a reservation of rights, the City may wish to consult an attorney of
its choice, at its expense, for advice regarding the Risk Pool's obligations to it as a Covered
Party and the Risk Pool's handling of this suit. If the City retains an attorney for that purpose,
please have him or her contact Mr. Clark for whatever information they might desire. Since
Mr. Clark has been engaged by the Risk Pool to represent the City in this matter, he is not
involved on the issue of coverage. If we do not hear otherwise, we will assume that the
defense we are providing and the conditions we have outlined are acceptable to the City and
will continue to defend under those terms. Please feel free to call if you have any questions
concerning coverage.
Sincerely,
Richard Evans
Staff Attorney
RE/It
roride2cop
cc: Mr. Peter G. Smith, City Attorney, City of Coppell
Mr. Ronald Clark, Wolf, Clark & Henderson, L.L.P.
CERTIFIED MAIL, RETURN RECEIPT REQUESTED NO. P 118 360 297