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.