law-eight-corners-rule | insurance coverage disputes | interpretation of insurance policy | duty to
defend
duty to indemnify
EIGHT CORNERS RULE
Under the eight-corners rule, the duty to defend is determined by the claims alleged in the
petition and the coverage provided in the policy. See Nat’l Union Fire Ins. Co. of Pittsburgh, PA,
v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997); Heyden Newport Chem.
Corp. v. S. Gen. Ins. Co., 387 S.W.2d 22, 26 (Tex. 1965). “If a petition does not allege facts
within the scope of coverage, an insurer is not legally required to defend a suit against its
insured.”[Nat’l Union, 939 S.W.2d at 141].
Pine Oak Builders, Inc. v. Great American Lloyds Ins. Co., No. 06-0867 (Tex. 2009)(Willett)
Although this Court has never expressly recognized an exception to the eight-corners rule, other
courts have. Generally, these courts have drawn a very narrow exception, permitting the use of
extrinsic evidence only when relevant to an independent and discrete coverage issue, not
touching on the merits of the underlying third-party claim.[21] Id. at 308 (footnotes omitted).
Without recognizing an exception to the eight-corners rule, we held that any such exception
would not extend to evidence that was relevant to both insurance coverage and the factual merits
of the case as alleged by the third-party plaintiff.[22] We further reasoned that the extrinsic
evidence here concerning Evans’ employment directly contradicts the plaintiff’s allegations that
the Church employed Evans during the relevant coverage period, an allegation material, at least
in part, to the merits of the third-party claim. Under the eight-corners rule, the allegation’s truth
was not a matter for debate in a declaratory judgment action between insurer and insured.[23] Id.
at 310. Our analysis in GuideOne Elite did not consider whether an exception to the eight-
corners rule might exist where the parties to the underlying suit collude to make false allegations
that would invoke the insurer’s duty to defend, because the record did not indicate collusion. Id.
at 311.