Case Notes


Texas Supreme Court Recognizes Eight-Corners Exception for “Collusive Fraud”

May 3rd, 2020 By David L. Plaut

For the first time, the Texas Supreme Court has recognized an exception to the eight-corners rule and allowed the consideration of “extrinsic evidence” when assessing a carrier’s duty to defend its insured under a liability policy.  In Cause No. 18-0837, Loya Insurance Company v. Osbaldo Hurtado Avalos et al. (Tex. May 1, 2020), the Texas Supreme Court adopted “an exception to the eight-corners rule” finding a trial court “may consider extrinsic evidence regarding whether the insured and a third party
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Show Me the Money? Not So Fast!

April 26th, 2020 By Sheila Tan

In a personal injury case, tort claimants typically submit medical bills showing treatment received for injuries. Settlements paid out of insurance policy benefits are often meant to cover such expenses. After settling, plaintiffs’ attorneys routinely negotiate a reduction of the submitted bills directly with the medical providers, leading to a bigger share of the recovery for their clients.What happens when a carrier pays a hospital’s bill directly? Such direct payments generally reflect a reduction in the original billed amount. We’ve
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Is Eight Enough, Part 3: Texas Supreme Court Rejects District Judge’s Exception to the “Eight Corners Rule”

April 19th, 2020 By Jeffrey C. Glass

We recently wrote about a question, certified to the Texas Supreme Court by the Fifth Circuit Court of Appeals, regarding the continuing validity of the “eight corners” rule.  The U.S. District Court decision under review was one of a series of decisions authored by Judge John McBryde finding that because the eight corners rule originally derived from policy language requiring the carrier to defend claims even “if the allegations of the suit are groundless, false or fraudulent,” policies without such
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Time is on Whose Side? Time-on-the-risk allocation applied over insurer objections.

April 12th, 2020 By Jeffrey C. Glass

In Great Am. Lloyds Ins. Co. v. Vines-Herrin Custom Homes, L.L.C., 05-18-00337-CV, 2020 WL 104622 (Tex. App.—Dallas Jan. 9, 2020, no pet. h.), the Dallas Court held indemnity coverage can be allocated among multiple liability insurers based on each carrier’s time on the risk. The decision does not cite and appears to depart from prior decisions that favor targeted tender and allocation according to subrogation and “other insurance” clauses. See, e.g., CNA Lloyds of Texas v. St. Paul Ins. Co.,
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It’s A Round-Up, Y’all!

March 29th, 2020 By Lauren Burgess

Ed. Note: At Hanna & Plaut we encourage attorney involvement in practice organizations like the Texas Association of Defense Counsel. We’re also not ashamed to take advantage of the good work they do as part of their responsibilities. Today, we are pleased to present a case round-up that Lauren Burgess prepared as part of her role as a Director-at-Large for TADC. Alcala v. Republic Lloyds, No. 13-18-00026-CV, 2020 WL 830840 (Tex. App.–Corpus Christi Feb. 20, 2020) Holding: Timely payment of
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Is Eight Enough, Part 2 – Texas Supreme Court Justices Signal Skepticism of Extrinsic Evidence Exception

February 9th, 2020 By Eric S. Peabody

On January 8, 2020, the Texas Supreme Court heard argument on a certified question from the U.S. Court of Appeals for the Fifth Circuit in State Farm Lloyds v. Richards, 784 Fed. App’x 247 (5th Cir. 2019), certified question accepted (Sept. 13, 2019), which asks: Is extrinsic evidence permissible—and the strict eight-corners rule inapplicable—in determining the duty to defend if the policy does not require defense of groundless, false or fraudulent allegations? Jeff Glass previously blogged about this certified question here.
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A Judicially Created Catch 22? The Settlement Without Consent Clause

February 3rd, 2020 By Karla Huertas

The uninsured/underinsured (UM/UIM)  coverage portion of Texas automobile insurance policies contains a “settlement without consent” provision which requires an insurer to obtain the consent of its insured before settling any claim. This condition exists to protect the interests of insurance carriers in recovering from a responsible party money paid to the insured in connection with an accident. Recently, in Davis v. State Farm Lloyds, Inc., 2019 WL 5884405 (Tex. App.—Dallas Nov. 12, 2019, no pet. h.), the Fifth Court of
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Chapter 542A and the Importance of the Presuit Notice Letter

December 1st, 2019 By Lauren Burgess

Chapter 542A of the Texas Insurance Code applies to wind and hail claims filed on or after September 1, 2017, as a response to concerns raised regarding the handling of insurance claims arising out hailstorms and other forces of nature. The goal of Chapter 542A was to “mitigate the growing trend of abusive severe weather event lawsuits” and to address the growing number of weather-related lawsuits against property insurers, which “is motivated by profit, not actual damages to real property,
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The Western District Takes a Wrong Turn on the UM/UIM Highway

October 18th, 2019 By David L. Plaut

A new federal UM/UIM “bad faith” decision out of the San Antonio Division of the Western District of Texas – Civil Action No. SA-19-CV-00180-FB-ESC, Trejo v. Allstate Fire and Casualty Ins. – involves claims against an insurance adjuster and allegations of improper joinder remand.  The magistrate’s report in Trejo found an Insurance Code cause of action against the adjuster under Chapter 541 despite the Texas Supreme Court’s decision in Brainard v. Trinity Universal Ins. Co., 216 S.W.3d. 809 (Tex. 2006).
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Is Eight Enough? The Texas Supreme Court may answer that question when it tackles the eight-corners rule.

September 24th, 2019 By Jeffrey C. Glass

The Fifth Circuit Court of Appeals recently certified to the Texas Supreme Court, and the latter accepted, a question that could end up undermining the “eight corners” rule.  State Farm Lloyds v. Richards, 18-10721, 2019 WL 4267354, at *3 (5th Cir. Sept. 9, 2019), certified question accepted (Sept. 13, 2019) Jayden Meals was killed in an all-terrain vehicle accident while under the temporary care of his grandparents, the Richards. Jayden’s mother sued the Richards in state court alleging they were
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