Saturday, November 15, 2014
The 8-corners Rule
The eight corners rule (insurance litigation)
The rule takes its name from the fact that only two documents are ordinarily relevant to the determination of the duty to defend: the policy and the pleadings of the third party claimant. GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305, 308 (Tex. 2006). Under that rule, we determine whether a liability insurer has a duty to defend by comparing the allegations within the four corners of the claimant's pleadings to the language within the four corners of the insurance policy. Nat'l Union Fire Ins. Co. v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997). If the claimant's factual allegations potentially support a covered claim, the insurer must defend its insured. GuideOne Elite Ins. Co., 197 S.W.3d at 310. We give the allegations in the petition a liberal interpretation in favor of the insured. Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 643 (Tex. 2005); Gehan Homes, Ltd. v. Employers Mut. Cas. Co., 146 S.W.3d 833, 838 (Tex. App.-Dallas 2004, pet. denied). If the pleading "does not state facts sufficient to clearly bring the case within or without the coverage, the general rule is that the insurer is obligated to defend if there is, potentially, a case under the [pleading] within the coverage of the policy." Merchs. Fast Motor Lines, 939 S.W.2d at 141. In other words, if there is doubt as to whether the claimant has pleaded a cause of action within coverage, the doubt is resolved in favor of the insured, and the insurer must defend. Id.
SOURCE: DALLAS COURT OF APPEALS - No. 05-07-01255-CV - 12/4/2008