Coverage

Century Surety Company v. Club Adventure Learning Center, LLC, puts to rest the argument that artful pleading is an exception to Texas’s well-established eight-corners rule. 2023 WL 3575647 (W.D. Tex. May 22, 2023). In Century Surety, Aguero filed negligence claims in Texas state court against Club Adventure, and three of their employees, in connection with allegations that a Club Adventure employee “violently grabbed” Aguero’s child’s leg and “dragged him across the carpeted floor…causing injuries.” Id. at 1. Century issued Club Adventure a general liability insurance policy containing an endorsement which reduced coverage
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The Texas Construction Anti-Indemnity Act (“AIA”) generally voids provisions in construction contracts, entered into after January 1, 2012, that impose indemnity obligations and obligations to secure additional insured coverage for the additional insured/indemnitee’s own negligence or fault. Tex. Ins. Code §§ 151.102, 151.104. (Texts of these provisions is quoted below).  We provided a brief primer on the AIA in this post from Eric Peabody on July 26, 2020. A recent decision by the Texas Supreme Court begins to define the scope
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The Texas Supreme Court recently ruled that the “eight corners” rule, under which the duty to defend is assessed, permits consideration of evidence extrinsic to the allegations of the pleadings. Monroe Guar. Ins. Co. v. BITCO Gen. Ins. Corp., 2022 WL 413940 (Tex. Feb. 11, 2022).  The Court held that extrinsic evidence may be considered under some circumstances where there is a “gap in pleadings” – where a petition is silent – on a coverage question that does not overlap
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Making the call on the duty to defend a case in which the pleadings are silent on a key coverage question – such as the date damage occurred – is problematic for courts, carriers, coverage attorneys, and policyholders alike. The eight corners requirement, limiting the defense assessment to the live petition, generally precludes the use of extrinsic evidence to fill in such gaps in the pleadings. This leaves parties and courts guessing, leading to inconsistent results. Compare Great American Lloyds
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In Canal Indemnity Company v. CalJet II, 4:2019cv02945  (opinion available on PACER), a Texas federal judge recently held pollution exclusions did not bar coverage for a suit involving a truck driver who allegedly died from cancer caused by exposure to the carcinogen benzene in gasoline, a cargo the driver loaded and unloaded. Although Texas courts have previously held that pollution exclusions are not limited to typical cases of environmental pollution, U.S. District Judge Alfred H. Bennett of the Southern District
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On September 4, 2020, the United States Court of Appeals for the Fifth Circuit upheld a district court’s decision that AIG Specialty Insurance Company (“ASIC”) was not liable for more than $12 million dollars in legal expenses incurred by Waste Management, Inc. (“Waste”) for defending criminal charges that were brought against the company for environmental contamination, agreeing with the lower court that there was no duty to defend the criminal case under the insurer’s pollution liability policy.  See Waste Management
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