REVISED July 21, 2011

            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT
                                                       United States Court of Appeals
                                                                Fifth Circuit

                                                            FILED
                                                           June 30, 2011
                                 No. 10-50267
                                                          Lyle W. Cayce
                                                               Clerk
EVANSTON INSURANCE CO.

                                     Plaintiff-Appellant/Cross-Appellee
v.

LEGACY OF LIFE, INC.

                                     Defendant-Appellee/Cross-Appellant



                  Appeal from the United States District Court
                       for the Western District of Texas


Before GARWOOD, ELROD, and SOUTHWICK, Circuit Judges.
PER CURIAM:
     This Texas law diversity case involves important and determinative
questions of Texas law as to which there is no controlling Texas Supreme Court
precedent. Accordingly, we certify those unresolved questions to the Supreme
Court of Texas.
     CERTIFICATION FROM THE UNITED STATES COURT OF
     APPEALS FOR THE FIFTH CIRCUIT TO THE SUPREME
     COURT OF TEXAS, PURSUANT TO THE TEXAS
     CONSTITUTION ART. 5, § 3-C AND TEXAS RULE OF
     APPELLATE PROCEDURE 58.1.
                                  No. 10-50267

      TO THE SUPREME COURT OF TEXAS AND THE
      HONORABLE JUDGES THEREOF:
I. Style of the Case: Parties and Counsel
      The style of the case is Evanston Insurance Company, Plaintiff-
Appellant/Cross-Appellee     v.   Legacy     of   Life,   Incorporated,   Defendant-
Appellee/Cross-Appellant, Case No. 10-50267, in the United States Court of
Appeals for the Fifth Circuit, on appeal from the judgment of the United States
District Court for the Western District of Texas, San Antonio Division. Federal
jurisdiction is based on diversity of citizenship.
      The names of all the parties to the case, each of whom is represented by
counsel, and the respective names, addresses and telephone numbers of their
counsel, are as follows: Evanston Insurance Company, plaintiff and counter-
defendant in the district court, appellee and cross-appellant in this court,
represented by Marc J. Wojciechowski of Wojciechowski & Associates, P.C.,
17447 Kuykendahl Road, Suite 200, Spring, Texas 77379, Tel. 281-999-7774; and
Legacy of Life, Incorporated, defendant and counter-claimant in the district
court, appellant and cross-appellee in this court, represented by John C. Cave
of Gunn, Lee & Cave, P.C., 300 Convent, Suite 1080, San Antonio, TX 78205,
Tel. 210-886-9883.
II. Statement of the Case
      This case involves the construction and application of a combined
professional and general liability insurance policy issued by appellant Evanston
Insurance Company (Evanston) to appellee-cross-appellant Legacy of Life,
Incorporated (Legacy) for the term October 4, 2006, to October 4, 2007. Legacy
requested a defense from Evanston under the policy for a civil lawsuit styled


                                         2
                                   No. 10-50267

Debra Alvarez on Behalf of Alicia Garza v. Legacy of Life, Inc., et al., Cause No.
C-1810-08-1, District Court, 398th Judicial District, Hidalgo County, Texas. In
that underlying lawsuit, plaintiff Debra Alvarez alleged that in December 2006
while her mother, Alicia Garza, was terminally ill, she consented to Legacy’s
harvesting some of her mother’s organs and tissues (including corneas, skin,
bone, and arterial tissue) after her mother’s death. Ms. Alvarez alleges that she
consented to the harvesting because Legacy, a non-profit corporation,
represented to her that the harvested tissues would be distributed on a nonprofit
basis, and that, contrary to these representations, Legacy instead transferred
the tissues to a for-profit company, which sold the tissues to hospitals at a profit.
It is alleged that Legacy and the for-profit company “are closely related entities,”
with the same individual serving as the chief Operating Officer of each, the same
individual serving as the Quality Assurance Director of each and the address of
each entity being “almost identical.”        It is further alleged that the “close
relationship between Legacy . . . and the” for-profit entity “leads to the belief
that the two entities are engaged in unconscionable business practices aimed at
profiting from the vulnerability [of] family members who have recently lost a
loved one.” Ms. Alvarez’s amended petition against Legacy alleges breach of
contract, quantum meruit, civil conspiracy, conversion, fraud, fraudulent
misrepresentation, fraudulent inducement, aiding and abetting fraud, civil theft,
intentional infliction of emotional distress, and deceptive trade practices. The
amended petition also seeks recovery of “the reasonable value of the benefits of
the tissue and bones provided.” It alleges that Legacy caused plaintiff “to suffer
severe emotional distress” for which damages are sought. It seeks to recover
“Compensatory damages,” “Emotional distress damages,” “Restitution damages,”
and “Punitive or exemplary damages,” as well as attorney’s fees. There is no

                                         3
                                    No. 10-50267

allegation that plaintiff suffered any physical injury.
      Evanston denied Legacy’s request for a defense in the underlying lawsuit,
and filed this suit in the district court below on May 11, 2009, seeking a
declaratory judgment that it had no duty to defend Legacy.             Evanston
maintained that the conduct alleged was outside the scope of the insurance
policy’s coverage. The policy provides insurance for both professional liability
and general liability as follows:
      “1. Professional Liability and Claims Made Clause: To pay on
      behalf of the Insured all sums in excess of the deductible amount
      stated in the Declarations which the Insured shall become legally
      obligated to pay as Damages as a result of CLAIMS FIRST MADE
      AGAINST THE INSURED DURING THE POLICY PERIOD for
      Personal Injury arising out any act, error, or omission in
      professional services rendered or that should have been rendered by
      the Insured or by any person for whose acts, errors, or omissions the
      Insured is legally responsible, and arising out of the conduct of the
      Insured’s profession as described in the Declarations provided
      always that such act, error or omission happens subsequent to the
      Retroactive Date as stated in the Declarations.

      2. General Liability and Claims Made Clause: To pay on behalf of
      the Insured all sums in excess of the deductible amount stated in
      the Declaration which the Insured shall become legally obligated to
      pay as Damages as a result of CLAIMS FIRST MADE AGAINST
      THE INSURED DURING THE POLICY PERIOD for Personal
      Injury or Property Damage to which this insurance applies caused
      by an Occurrence provided:
      (a) the Occurrence takes place subsequent to the Retroactive Date
      as stated in the Declarations; and
      (b) solely in respect to Products Hazard or Completed Operations
      Hazard, as defined herein, such Personal Injury or Property
      Damage arises out of only these operations, goods or products
      specified in the Declarations.”
The policy’s “Definitions” section defines “Personal Injury” to mean “bodily

                                         4
                                  No. 10-50267

injury, sickness, or disease including death resulting therefrom sustained by any
person....” The policy defines “Property Damage” as “physical injury to or
destruction of tangible property, including consequential loss of use thereof, or
loss of use of tangible property which has not been physically injured or
destroyed provided such loss of use is caused by an Occurrence.”
      The policy’s defense clause states that Evanston “shall defend any Claim
or suit against the Insured seeking Damages to which this insurance applies,
even if any of the allegations of the suit are groundless, false or fraudulent.” The
following direct quotations from Ms. Alvarez’s complaint in the underlying
lawsuit were identified by the parties as the relevant ones for determining
whether that complaint sought damages to which the insurance applies, namely,
damages for personal injury or property damage.
       1. “Legacy of Life contracted with Ms. Alvarez on December 14,
       2006. Ms. Alvarez consented in the donation of her mother, Ms.
       Garza’s, (1) Cornea/eyes; (2) Saphenous veins/Femoral veins and
       arteries; (3) Skin; (4) Bone and associated tissues within [] the arm;
       (5) Bone and associated tissues within the lower and upper leg,
       including the hip; and (6) Ribs/cartilage.”
       2. “The Estate of Alicia Garza is the rightful and legal owner of her
       remains.”
       3. “Although the remains of Alicia Garza are the sole and exclusive
       property of the Estate of Alicia Garza, Defendants have effectively
       taken the remains including tissue and bones without consent or
       license from the Estate of Alicia Garza.”
       4. “[Legacy] took Alicia Garza’s remains including tissue and bones
       with the intent to deprive the Estate of Alicia Garza of its rightful
       ownership of the remains of Alicia Garza including tissue and
       bones and to capitalize on the potential commercial value of the
       remains including tissue and bones, which embodies the Estate of
       Alicia Garza’s property.”
       5. “Plaintiffs seek the reasonable value of the benefits of the tissue
       and bones provided to Defendants.”

                                         5
                                   No. 10-50267

      6. “Defendants’ actions in causing Plaintiffs to suffer severe
      emotional distress proximately caused damages for which Plaintiffs
      should be compensated.”
      In response to Evanston’s declaratory judgment complaint, Legacy filed
counterclaims for (1) a declaratory judgment that Evanston did have a duty to
defend in the underlying lawsuit; (2) breach of contract; (3) deceptive insurance
practices; and (4) violation of the Texas Insurance Code for prompt payment of
claims. Legacy moved for partial summary judgment that Evanston: (1) has a
duty to defend the underlying lawsuit; (2) breached its insurance contract with
Legacy and must pay Legacy its defense costs for the underlying lawsuit; (3)
violated the Texas Insurance Code provision for Prompt Payment of Claims and
must pay Legacy an 18% penalty on its defense costs; and (4) must pay Legacy
its attorneys’ fees for this action. Evanston responded to Legacy’s motion for
partial summary judgment and filed a cross-motion for summary judgment that
it had no duty to defend Legacy.
      The district court issued judgment on January 15, 2010, granting Legacy’s
motion for partial summary judgment on the duty to defend issue, denying
Evanston’s motion for summary judgment, and entering declaratory judgment
finding a duty to defend. Specifically, the district court determined that the
policy’s definition of “personal injury” was broad enough to cover extreme mental
anguish and emotional distress. The district court further determined that the
underlying lawsuit alleged “property damage” as covered by the policy for loss
of use of the tissues and organs, because it believed that a Texas court could
potentially find the deceased’s tissues and organs were property. The district
court noted, in particular, that “[g]iven the increasingly common practice of
organ transplants and the widespread promotion of organ donation through


                                        6
                                       No. 10-50267

public service announcements and otherwise, more explicit holdings [clarifying
the property- or quasi-property- status of organs under Texas law] may be just
around the corner.”
       The January 15 judgment only addressed the duty to defend and did not
address the other relief sought by Legacy in its summary judgment motion.
Legacy filed a Motion to Amend or Alter the Judgment on February 12, 2010,
requesting an amended judgment granting all relief sought by Legacy in its
partial summary judgment motion.1 The motion also asked the court not to
enter final judgment in the case in order to preserve the deceptive insurance
practices claim for trial because it was not part of Legacy’s Motion for Partial
Summary Judgment.2 On March 11, 2010, the district court entered an Order
Granting Motion to Amend the Judgment, and on the same day issued an
Amended Judgment, which ordered Evanston to pay for all costs of the suit, but
dismissed Legacy’s remaining counterclaims for failure to state claims upon
which relief can be granted. The district court justified this outcome by stating
that “some would say that the Court stretched the concept of policy coverage to
its outer limit” and because Evanston was simply exercising a legal right to file
a declaratory judgment action and ask the court whether it had a duty to defend
Legacy on this “exceedingly close” question.



       1
          According to the Certificate of Conference attached to this motion, the result of a
conference with opposing counsel was that, while the opposing counsel disagreed with the
district court’s determination on duty to defend, “opposing counsel agreed that the Court’s
Judgment was not a final judgment and that summary judgment should be granted in
Defendant’s favor on the breach of contract and the violation of the Texas Insurance Code
for failure to make prompt payment of claims.”
       2
         Legacy makes no assertions or complaints regarding the deceptive insurance
practices claim on this appeal. We accordingly regard this claim as abandoned.

                                              7
                                   No. 10-50267

      The judgment also did not address Legacy’s request of an order requiring
Evanston to pay Legacy’s attorneys’ fees in the underlying lawsuit. Therefore,
Legacy filed a Motion for Attorney Fees and Expenses, for fees in both the
instant and underlying suits. The district court denied the request.
      Evanston appeals the district court’s grant of summary judgment to
Legacy, denial of its summary judgment motion, and entry of declaratory
judgment that it had a duty to defend Legacy.           Legacy cross-appeals the
dismissal of its counterclaims, denial of summary judgment on those
counterclaims, and denial of attorneys’ fees.
III. Legal Issues
      Evanston’s appeal asserts that the district court erred in finding that
Evanston owed Legacy a duty to defend in the underlying lawsuit, contending
that the underlying claim did not assert either “personal injury” or “property
damage” as required to trigger the duty to defend under the insurance policy.
      We also are aware of the settled Texas law that if an insurance policy
provision is susceptible of more than one reasonable construction, the reasonable
construction most favorable to the insured is adopted, but if there is only one
reasonable construction of a policy provision then it is the court’s duty to give the
words used their plain meaning even though this denies coverage. See Fiess v.
State Farm Lloyds, 

, 746 (Tex. 2006); Puckett v. U.S. Fire Ins.
Co., 

, 938 (Tex. 1984).
      As an initial matter, the parties dispute the proper application of the
“eight corners” rule, which is the method applied by Texas law to determine
whether a liability insurance company has a duty to defend under an insurance
policy. See GuideOne Elite Insurance v. Fielder Road Baptist Church, 197


                                         8
                                  No. 10-50267

S.W.3d 305, 308 (Tex. 2006). The eight corners rule requires that the “four
corners” of the complaint must allege facts that could possibly assert a claim
within the scope of coverage in the “four corners” of the insurance policy. See
Lincoln Gen. Ins. Co. v. Reyna, 

, 350 (5th Cir. 2005). Texas law
instructs that “[t]he eight corners rule is to be applied liberally in favor of the
insured, with any doubts resolved in favor of the insured. If any allegation in
the complaint is even potentially covered by the policy then the insurer has a
duty to defend its insured.” Primrose Operating Co. v. Nat’l Am. Ins. Co., 

, 552 (5th Cir. 2004) (internal citations omitted) (emphasis in original).
If the petition potentially includes even one covered claim under the policy, the
insurer must defend the entire lawsuit. See Zurich Am. Ins. Co. v. Nokia, Inc.

, 491 (Tex. 2008). The insured bears the initial burden to
establish that a claim is potentially within the scope of the insurance coverage.
See Harken Exploration Co. v. Sphere Drake Ins. PLC, 

, 471 (5th
Cir. 2001). The eight corners rule focuses on the facts alleged in the complaint,
rather than the legal theories, and considers these alleged facts (but not the legal
theories) “without reference to their truth or falsity.” See Willbros RPI, Inc. v.
Cont’l Cas. Co., 

, 309 (5th Cir. 2010).
      Because the duty to defend is triggered as long as the underlying claims
are even potentially covered, Legacy argues that we may simply rely on the
references to personal injury and property damage in the underlying complaint,
and that we need not definitively address whether the factual allegations
actually amount to “personal injury” or “property damage.” Under Texas case
law, however, those characterizations in the complaint amount to legal
conclusions, rather than factual allegations. See Nat’l Union Fire Ins. Co. of


                                         9
                                   No. 10-50267

Pittsburgh, Pa. v. Merchs. Fast Motor Lines, Inc., 

, 141 (Tex.
1997) (emphasizing that the eight corners rule focuses on “factual allegations
that show the origin of the damages,” not “legal theories” or causes of action);
Admiral Ins. Co. v. Ford, 

, 425 (5th Cir. 2010) (“We need not accept
[underlying plaintff]’s legal characterization, only its factual allegations. Indeed,
whether or not [insured]’s alleged operations were professional in nature is the
very question we must answer.”). Such labels, then, do not relieve us of the need
to construe the insurance contract in light of the complaint’s allegations.
Therefore, unless, as a matter of law, Ms. Alvarez’s mental anguish is potentially
within the scope of the contract’s coverage for “personal injury,” or the misuse
of the organs and tissues is potentially within the scope of the contract’s
coverage for “property damage,” there will be no duty to defend. Conversely,
because the duty to defend is triggered for the entire underlying lawsuit if even
one potentially covered claim is asserted in the underlying suit, if either of the
above allegations is potentially within the scope of coverage, Evanston has a
duty to defend the entire underlying lawsuit. See 

.
      (1) Personal Injury
      Evanston argues on appeal that the extreme mental anguish alleged by
Ms. Alvarez in the underlying complaint does not constitute a “personal injury”
as defined in the insurance policy, and that Evanston therefore had no duty to
defend Legacy based on this clause.           The insurance policy’s coverage for
“personal injury” defines that term to mean “bodily injury, sickness, or disease
including death resulting therefrom sustained by any person.”
       Evanston relies on the Texas Supreme Court’s unanimous opinion in
Trinity Universal Insurance Company v. Cowan, which held that an insurance


                                         10
                                   No. 10-50267

contract defining “bodily injury” as “bodily harm, sickness, or disease” did not
include “purely emotional injuries...and unambiguously requires an injury to the
physical structure of the human body.” 

, 823-24 (Tex 1997).
Legacy counters that Trinity is not controlling here because that case dealt with
the definition of an entirely different term– “bodily injury”– which arguably is
generally recognized as being less broad than the term “personal injury.”
        The proper interpretation of “personal injury” under the instant insurance
policy is not clear under existing Texas law. On the one hand, the Texas
Supreme Court in Trinity found that the “natural reading” of that definition–
“bodily harm, sickness, or disease”– was to read “bodily” to modify all parts of
the definition. Because this case deals with a nearly identical definition– “bodily
injury, sickness and disease”– it seems reasonable that the Texas Supreme
Court’s natural reading of the Trinity definition would apply here as well; under
this reading, Ms. Alvarez’s mental anguish would not, on its own, constitute
“personal injury.” See 

(citing E-Z Loader v. Travelers,

(Wash. 1986) (definition of “personal injury” in one policy and
“bodily injury” in another, in each case excluded purely emotional injury from
discrimination)). Such a reading would not necessarily exclude coverage for
mental anguish resulting from bodily injury. See Knapp v. Eagle Property, 

, 1284-85 (7th Cir. 1995) (cited with approval in 

).
        However, while the definitions at issue in this case and in Trinity are
nearly identical, the term being defined is not. It is reasonably possible that the
Texas Supreme Court in Trinity found it natural to read “bodily” to modify each
term of the definition because the very term being defined was “bodily harm.”


                                        11
                                   No. 10-50267

In this case, on the other hand, the term “personal injury” was selected, so it
may be less natural to read “bodily” to modify each term of the definition.
Indeed, a reading of “personal injury” that encompasses more than simply
physical harm seems to conform to the traditional notion under Texas law that
personal injury, as opposed to bodily injury, includes claims for emotional
distress. See, e.g. Golden Eagle Archery, Inc. v. Jackson, 

, 763
(Tex. 2003) (“When someone suffers personal injuries, the damages...include
compensation for,” among other things, “mental anguish....”). However, so far
as we are aware the term “personal injury” has not been addressed by Texas
appellate courts in the liability insurance coverage context.
      Furthermore, “bodily injury,” the defined term from Trinity, was made a
component of the definition of “personal injury” in the instant policy.
Substituting Trinity’s definition of “bodily injury”– of which the parties were
presumably aware–for that component of the definition of “personal injury” in
this case, it then becomes: “bodily harm, bodily sickness, bodily disease, sickness,
or disease.” Reading “bodily” to modify the final “sickness or disease” in this
definition would render these terms surplusage, since they would then duplicate
the definition of “bodily injury.” Therefore, the “sickness or disease” in the policy
here might be read to include mental and emotional maladies. However, such
an interpretation may place too much weight on the selection of the term “bodily
injury” rather than “bodily harm” as a component of the definition of “personal
injury.” See Travelers v. Holloway, 

, 115 (5th Cir. 1994) (applying
Texas law and addressing policy in which “bodily injury” is circularly defined as
“bodily injury, sickness, or disease”).
      The question of whether the policy provisions covering “personal injury”


                                          12
                                      No. 10-50267

includes the mental anguish, unconnected to (and not resulting in) any physical
malady, suffered by Ms. Alvarez, is a question of Texas law, determinative of the
present suit: If this question is answered in the affirmative, then Evanston
owed Legacy a duty to defend the entire underlying suit, regardless of the
resolution of the “property damage” issue. As to this question of law there does
not appear to be any controlling Texas Supreme Court precedent.
       (2) Property Damage
       Evanston also argues on appeal that the injuries alleged by Ms. Alvarez
pertaining to the misuse of her deceased mother’s bodily organs and tissues did
not constitute “property damage” as defined in the insurance policy, and that
Evanston therefore had no duty to defend Legacy based on this clause. The
insurance policy covers “property damage,” defined therein as "physical injury
to or destruction of tangible property, including consequential loss of use thereof,
or loss of use of tangible property which has not been physically injured or
destroyed.” Evanston’s argument contends that this provision does not apply
because a deceased human’s body parts are not “tangible property.”
       Existing Texas case law has declined to extend full property rights in the
bodies of decedents. In Burnette v. Surratt, a Texas Court of Appeals opinion
having the same force as an opinion of the Texas Supreme Court due to the
refusal of a writ of error,3 the court held that there is no property in a dead
man’s body, in the usually recognized sense of the word. 

, 1042


       3
         Beginning on March 16, 1927, the notation “writ refused” indicates that the Texas
Supreme Court found that the principles of law declared in the opinion of the court of
appeals were correctly determined, and a decision in which the Texas Supreme Court
refuses a writ of error is as binding as a decision of the Supreme Court itself. See TEX. R.
APP. P. 56.1(c); United States v. Johnson, 

, 1064 (5th Cir. 1998); Britton v.
Seale, 

, 603 n.2 (5th Cir. 1996).

                                             13
                                   No. 10-50267

(Tex. Civ. App.-Dallas 1934, writ ref’d). Nevertheless, that court also held that
a dead man’s body “may be considered as a sort of quasi property, in which
certain persons have rights therein, and have duties to perform.” 

courts had previously reached similar conclusions. See Foster v. Foster,

, 218 (Tex. Civ. App.-Texarkana 1920, no writ) (finding no property
right in the body of a deceased, but finding a privilege to control the place and
manner of burial); Gray v. State, 

, 641 (Tex. Crim. App. 1908)
(finding no traditional property right in a dead body, but noting existence of
certain rights including “the right to the possession of the body in the same
condition in which death leaves it.”).
      The correct application of this Texas precedent to the facts before us is
unclear for two reasons. First, if Ms. Alvarez does possess some quasi property
right in her mother’s body and parts thereof, as Burnette indicates, it is unclear
whether such a quasi property right would be sufficient to trigger Evanston’s
duty to defend Legacy under an insurance contract protecting against liability
for loss of or damage to “tangible property.” Evanston argues that quasi-
property is a legal fiction created by courts to allow some control over disposition
of remains, and that quasi property is by definition not property, and certainly
not tangible property. While all parties concede that the organs and tissues are
“tangible” in the sense that they can be touched and handled, Evanston
nevertheless argues that the use of the modifier “tangible” in the insurance
contract shows that the contract did not intend to encompass vague notions of
quasi property. However, it is unclear what work the modifier “tangible” does
in this context, since quasi property rights can exist in tangible objects, see, e.g.

(quasi property right in body of decedent). While


                                         14
                                  No. 10-50267

quasi property status may convey some of the rights generally associated with
property, for example the right to dispose of the organs and tissues, it is unclear
whether, as a matter of law, this insurance policy’s “property damage” provision
is triggered only by damage to objects for which the full bundle of property rights
is available.
      Second, it is unclear whether the Texas Supreme Court intended its
refusal of property rights in dead human bodies to apply with equal force to body
parts and organs in an organ donation context. This is particularly unclear since
the Texas cases addressing the property status of dead bodies date from the pre-
World War II era, long before advances in organ transplants and medical
research began to challenge the common law view of refusing property rights in
bodily organs, tissues, and cells. Some recent developments in Texas law may
suggest that body organs, tissues, and cells do have some attributes of property.
One Texas Court of Appeals case recently seemed to presume that an embryo is
at least in some sense an item of property, in holding that individuals may
validly enter into contracts about the future handling of the embryos. See
Roman v. Roman, 

, 49-50 (Tex. App.-Houston [1st Dist.] 2006; pet.
denied). Also, the Texas Anatomical Gift Act, TEX. HEALTH & SAFETY CODE ANN.
§ 692A.009(a), grants next of kin the right to make “an anatomical gift of a
decedent’s body or part for the purpose of transplantation, therapy, research, or
education.” However, these developments may be more indicative of a growing
consensus that quasi property rights, rather than full property rights, exist in
body parts. As already discussed, it is unclear whether the existence of quasi
property rights would be sufficient to trigger coverage in this insurance policy.


      Outside of Texas, the question of whether body parts should be considered

                                        15
                                  No. 10-50267

property has been addressed most squarely by the California Supreme Court in
Moore v. Regents of the University of California, 

(Cal. 1990).
Overturning the state court of appeals, the California Supreme Court held that
cells in a research line should be considered objects “sui generis” and should not
be “abandon[ed] to the general law of personal property.” 

However,
in addition to Moore’s lack of precedential value in Texas, it is unclear whether
the concerns voiced by the California Supreme Court about disturbing the
progress of medical research would be implicated in this duty to defend case. See

Furthermore, while the plaintiff in Moore had no expectation of
retaining his cells once they were removed from his body, Ms. Alvarez did have
some expectation of being able to control the disposition of her mother’s bodily
organs in this case. See 

Other out-of-state cases have also addressed
the property status of body parts, with varying results. See, e.g. Fuller v. Marx,

, 719 (8th Cir. 1984) (stating that while there is a quasi-property
right in a dead body under Arkansas law, “[w]e know of no Arkansas cases which
extend this quasi-property right to all of the body’s organs,” but declining to rule
on whether such an extension would be proper); Wint v. Alabama Eye & Tissue
Bank, 

(Ala.1996) (deciding no conversion of decedent’s eyes on
grounds of lack of substantial evidence, but seeming to accept that eyes could be
considered property for purposes of conversion claim).
      In sum, current Texas law seems clear that full property rights do not
exist in the body of a decedent. See 

. However, it is
unclear whether this holding extends to the direct question presented here–
whether alleged loss of use of human tissues, organs, bones, and body parts falls
within an insurance policy’s definition of loss of use of “tangible property”– given


                                        16
                                  No. 10-50267

the Burnette court’s acknowledgment of certain quasi property rights and the
long passage of time and developments in organ research and transplantation
since that opinion was issued. The question of whether the policy provisions
covering “property damage” includes Ms. Alvarez’s alleged deprivation of her
mother’s body parts is a question of Texas law, determinative of the present suit:
If this question is answered in the affirmative, then Evanston owed Legacy a
duty to defend the entire underlying suit, regardless of the resolution of the
“personal injury” issue.
      (3) Cross-Appeals
      The questions for which we are seeking certification from the Texas
Supreme Court– whether Evanston had a duty to defend Legacy based on either
the “personal injury” or “property damage” clauses of the insurance policy– are
also dispositive in the resolution of Legacy’s cross claims. Here, we dispose of all
other questions pertaining to the resolution of these claims. While we address
each of Legacy’s six asserted errors in turn, we also note that Evanston has
conceded that if a duty to defend is found, Legacy is entitled, as a matter of law,
to all other relief sought, with the exception of certain fees incurred in the
declaratory judgment counterclaim.
      Legacy first argues that the district court erred by denying Legacy a
judgment that Evanston breached the insurance contract. If Evanston had a
duty to defend, we agree that by breaching this duty, Evanston by definition
breached the insurance contract. See, e.g. Federated Mut. Ins. Co. v. Grapevine
Excavation Inc., 

(5th Cir. 1999) (finding breach of contract due to
failure to defend insured in underlying lawsuit); Trammell Crow Residential Co.
v. Virginia Sur. Co., 

, 856 (N.D. Tex. 2008) (“The court holds


                                        17
                                 No. 10-50267

above that [insurer] had a duty to defend. [The insured] has therefore
established beyond peradventure that, because [the insurer] refused to provide
a defense, [the insurer] breached the Policy.”).
      Legacy’s second point of error asserts that the district court erred by
denying Legacy a judgment that Evanston violated the Texas Insurance Code
for Violation of Prompt Payment of Claims. If Evanston had a duty to defend,
we agree that Evanston violated the Texas Insurance Code for Prompt Payment
of Claims because it delayed payment of the claim by more than sixty days. See
TEX. INS. CODE ANN. §§ 542.051-061. The Texas Supreme Court, on certification
from the Fifth Circuit Court of Appeals, has clearly stated that the Chapter 542
rules dealing with the delayed payment of claims apply to an insurer’s breach
of the duty to defend. See Lamar Homes, Inc. v. Mid-Continent Cas. Co., 

, 5 (Tex. 2007); see also Lamar Homes, Inc. v. Mid Continent Cas. Co.,

, 436 (5th Cir. 2007). The good faith of Evanston in believing it did
not have a duty to defend, and the closeness of the legal question implicated
here, are irrelevant to liability under Chapter 542. See Higginbotham v. State
Farm Mut. Auto. Ins. Co., 

, 461 (5th Cir. 1997) (stressing that
insurance companies take a risk when deciding to reject a claim).
      Legacy’s third point of error asserts that the district court erred by
denying Legacy’s request for a judgment ordering Evanston to pay Legacy’s
attorneys’ fees and costs in the underlying lawsuit. If Evanston had a duty to
defend, we agree that the district court abused its discretion in not awarding
attorneys’ fees to Legacy for the underlying lawsuit. See Southwestern Bell
Telephone Co. v. City of El Paso, 

, 550 (5th Cir. 2003) (review for
abuse of discretion). Attorneys’ fees would be available under the federal


                                       18
                                   No. 10-50267

Declaratory Judgment Act, because “controlling state substantive law permits
such recovery.” AG Acceptance Corp. v. Veigel, 

, 701 (5th Cir. 2009).
Texas law recognizes that attorneys’ fees and expenses incurred by an insured
in an underlying lawsuit are damages produced by the insurer’s breach of its
duty to defend. See, e.g., United States Cas. Co. v. Schlein, 

, 175
(5th Cir. 1964) (finding that expenses “are the direct result of the impermissible
abandonment of the Insurer’s duty to defend and are therefore recoverable as a
part of the Assured’s damages”). Attorneys’ fees would also be available based
upon Texas contract law or the violation of Prompt Payment of Claims. Because
Evanston did not challenge the reasonableness or necessity of the sum alleged
by Legacy in its March 16, 2010 Motion for Attorney Fees and Expenses (totaling
$56,598.69), and because the uncontroverted evidence is “clear, direct and
positive, and free from contradiction, inaccuracies and circumstances tending to
cast suspicion thereon,” Ragsdale v. Progressive Voters League, 

,
882 (Tex. 1990), Legacy would be entitled to recover these costs incurred in the
underlying suit.
      Legacy’s fourth point of error asserts that the district court erred in failing
to assess eighteen percent interest on the claim for costs of the underlying
lawsuit, pursuant to the Prompt Payment of Claims Act. As discussed above, if
there were a duty to defend, Evanston violated Texas Insurance Code Chapter
542 by delaying payment of the claim. Chapter 542 makes it clear that, as a
result of its violation, Evanston must pay eighteen percent interest on the
$56,598.69 of attorneys’ fees and costs incurred in the underlying lawsuit. TEX.
INS. CODE § 542.060(a).
      Legacy’s fifth point of error argues that the district court erred in denying
Legacy a judgment requiring Evanston to pay Legacy’s attorneys’ fees and costs

                                         19
                                  No. 10-50267

in the present lawsuit. We agree that, if a duty to defend is found, Evanston
must pay Legacy’s attorneys’ fees for the present lawsuit. See TEX. INS. CODE §
542.060(a) (“If an insurer that is liable for a claim under an insurance policy is
not in compliance with this subchapter, the insurer is liable to pay the holder of
the policy...reasonable attorney’s fees.”)    However, because Evanston has
challenged the reasonableness of some of the fees asserted by Legacy for the
present declaratory suit, in the event that the Texas Supreme Court finds that
Evanston had a duty to defend, we would remand to the district court for
determination of the proper sum.
      Legacy’s sixth and final point of error argues that the district court erred
in dismissing, sua sponte, Legacy’s counterclaims for breach of contract and
violation of Texas Insurance Code for Prompt Payment of Claims. As discussed
above, if Evanston had a duty to defend, then Legacy has not only successfully
stated a claim for breach of contract and violation of Chapter 542 of the Texas
Insurance Code, but is actually entitled to summary judgment on these claims.
      In summary, if the Texas Supreme Court determines that Evanston did
have a duty to defend based on either the “personal injury” or “property damage”
provisions of the insurance policy, then we will: (1) reinstate Legacy’s
counterclaims for breach of contract and violation of the Texas Insurance Code
for Prompt Payment of Claims; (2) render judgment that Evanston breached its
contract wiht Legacy; (3) render judgment that Evanston violated the Texas
Insurance Code for Prompt Payment of Claims; (4) render judgment that
Evanston must pay Legacy $56,598.69 as damages for Legacy’s defense of the
Underlying Lawsuit; (5) render judgment that Evanston must pay eighteen
percent interest (to date of judgment) on the $56,598.69 pursuant to the Texas
Insurance Code for Prompt Payment of Claims; and (6) remand to the district

                                       20
                                       No. 10-50267

court for determination of reasonable attorneys’ fees to be paid to Legacy in
respect to litigating the present lawsuit and appeal. Conversely, if the Texas
Supreme Court determines that Evanston did not have a duty to defend, none
of the foregoing relief will be awarded Legacy.4
IV. Questions Certified
       We accordingly hereby certify the following two determinative questions
of law to the Supreme Court of Texas. We note that either of these questions
could be determinative of the outcome of this appeal, but that if one question is
answered in the affirmative, the other will no longer be determinative of the
instant appeal.
       1. Does the insurance policy provision for coverage of “personal injury,”
defined therein as “bodily injury, sickness, or disease including death resulting
therefrom sustained by any person,” include coverage for mental anguish,
unrelated to physical damage to or disease of the plaintiff’s body?
       2. Does the insurance policy provision for coverage of “property damage,”
defined therein as “physical injury to or destruction of tangible property,
including consequential loss of use thereof, or loss of use of tangible property
which has not been physically injured or destroyed,” include coverage for the
underlying plaintiff’s loss of use of her deceased mother’s tissues, organs, bones,



       4
         We observe that at oral argument before this court on January 31, 2011, counsel for
Legacy for the first time advised this court that the underlying lawsuit had been settled in
the “Fall” of 2010, pursuant to a “confidential agreement,” and that the underlying suit had
been dismissed and was no longer pending. No further information regarding the
settlement (or the parties hereto, at least if there were any other than Legacy and the
plaintiff in the underlying suit) has been furnished. We note that at no time during this
appeal have any of the parties raised any issue about Evanston’s duty to indemnify as
distinct from (or in addition to) its duty to defend. When the briefs in this appeal were filed
the underlying suit was still pending and no judgment had been entered therein.

                                              21
                                  No. 10-50267

and body parts?
      We disclaim any intention or desire that the Supreme Court of Texas
confine its reply to the precise form or scope of the questions certified.




                                        22