     Case: 14-50878       Document: 00513117769         Page: 1     Date Filed: 07/16/2015




         IN THE UNITED STATES COURT OF APPEALS
                  FOR THE FIFTH CIRCUIT


                                       No. 14-50878                       United States Court of Appeals
                                                                                   Fifth Circuit

                                                                                 FILED
NETSPEND CORP.,                                                              July 16, 2015
                                                                            Lyle W. Cayce
               Plaintiff - Appellant                                             Clerk

v.

AXIS INSURANCE COMPANY and AXIS SURPLUS INSURANCE
COMPANY,

               Defendants - Appellees




                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 1:13-CV-456


Before JONES, SMITH, and COSTA, Circuit Judges.
PER CURIAM:*
       In 2012, NetSpend Corporation (NetSpend) was sued in Texas state
court. NetSpend did not initially request a defense of that suit pursuant to a
professional liability insurance policy with AXIS Insurance Company and
AXIS Surplus Insurance Company (collectively, AXIS). Only after a second
amended petition was filed in the lawsuit did NetSpend request that Axis fund
the defense.     AXIS denied the request on the ground that the claim was


       * Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
    Case: 14-50878    Document: 00513117769      Page: 2   Date Filed: 07/16/2015



                                 No. 14-50878
untimely because it was not reported during the policy period (or extended
reporting period) when the state court suit was first filed.
      NetSpend subsequently sued AXIS in state court, while proceeding to
defend the underlying litigation at its own expense. NetSpend alleged breach
of contract, breach of the duty of good faith and fair dealing, and violations of
the Texas Insurance Code. AXIS removed to federal court, and the parties filed
cross-motions for summary judgment. The district court granted summary
judgment in favor of AXIS, holding that the original petition in the underlying
litigation constituted a covered “claim” within the meaning of the policy and
that NetSpend thus was required to report that claim during the first policy
period in order to secure coverage.
      The sole question on appeal is whether the original petition filed in the
state court case constituted a “Claim arising out of a Wrongful Act” that
triggered NetSpend’s obligation to seek defense costs from its insurer.
      We have carefully reviewed that operative petition and incorporated
attachments. We have also considered the parties’ briefs and the applicable
legal authorities and heard oral argument from both sides. The judgment is
AFFIRMED essentially for the reasons given by the district court.




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