This section contains the nature of the case and procedural background.

Johnson (D1) a third-party defendant sold a fidelity bond to Max True (P) insuring P for some losses arising out of employee dishonesty. The bond was purchased from United States Fidelity (D). In the summer of 1991, P discovered that employees in his Dallas office had formed a corporation called LCR, Inc. and that they were diverting P’s business to it. P filed suit against LCR in October 1991. That next June, P wrote D1 and notified him of the losses from employee dishonesty and claimed coverage under the policy with D. D denied coverage on August 16, 1993 asserting that P had not complied with the policy’s notice and proof of loss requirements and that losses of intellectual property, such as the diversion of job opportunities and lost profits, were not covered by the policy. P sued D contending that the coverage existed either under the express terms of the policy or that he was insured under reasonable expectations. D then filed a third-party petition against D1 and his agency claiming indemnity if P prevailed. D and D1 both filed motions for summary judgment on December 2, 1994. The court found no precedent to resolve the questions of law and certified two questions to the state Supreme Court.

The legal issues presented in this case will be displayed here.

The court's holding and decision will be displayed here.

Legal analysis from Dean's Law Dictionary will be displayed here.