Paint me like one of your…pleadings? Artful pleading remains an effective loophole to evade coverage exclusions.

February 19th, 2024 By Jessica Bigbie

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 – Some Guidance from the Texas Supreme Court

April 11th, 2022 By Jeffrey C. Glass

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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Eight (Corners) May Not Be Enough After All

March 8th, 2022 By Jeffrey C. Glass

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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Fifth Circuit Certifies Eight Corners Exception to Texas Supreme Court

May 16th, 2021 By Jeffrey C. Glass

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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Talking about Covid-19 and the car wash: Agent was improperly joined and virus exclusion applied to bar business interruption coverage.

January 31st, 2021 By Sheila Tan

The joinder of an insurance adjuster or agent as a defendant, in a case against an insurance carrier, is a commonly used strategy to defeat diversity. Many attorneys for insurance practitioners have found that challenging joinders of insurance agents and adjusters can be an exercise in futility given the broad reach of the Texas Insurance Code. But a district court in the Western District of Texas recently affirmed the importance of challenging a plaintiff’s failure to allege specific, affirmative misrepresentations
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Federal court holds pollution exclusion does not apply to injuries caused by direct, personal exposures

October 11th, 2020 By Jeffrey C. Glass

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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Fifth Circuit Affirms No Duty To Defend Against Criminal Charges Under Pollution Liability Policy

September 27th, 2020 By Erin Holmes

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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COVID-19 Case Note: Government mandated shutdown did not cause direct physical loss required to trigger business interruption coverage.

September 13th, 2020 By Sheila Tan

For many businesses in Texas that have been shut-down or restricted by state and local government orders due to the ongoing Covid-19 pandemic, one of the most pressing questions raised is: is there business interruption coverage? And for at least some barber shops in Bexar County, the Western District has answered with a definitive no. In Diesel Barbershop et al. v. State Farm Lloyds, No. 5-20-CV-461-DAE, Plaintiffs run barbershop businesses that were classified as “non-essential businesses” and forced to cease
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Covid Webcast Alert

September 8th, 2020 By Catherine Hanna

Hanna & Plaut partner Catherine Hanna recently recorded a webcast for the State Bar of Texas with renowned Texas policyholder attorneys Vince Morgan and William Chriss and fellow carrier attorney Stephen Melendi to discuss coverage issues arising from the Covid19 pandemic. The webcast premiers today – Tuesday, September 8, 2020. Come for the coverage overview. Stay for the discussion of Covid cockroaches!

More (Or Less?) on Indemnity: A Brief Primer on Texas Construction Anti-Indemnity Act

July 26th, 2020 By Eric S. Peabody

The Texas Construction Anti-Indemnity Act, codified in Subchapter C of Chapter 151 of the Texas Insurance Code, renders void certain construction indemnity agreements that purport to indemnify the indemnitee for its own fault, even if that fault is shared or contributory. While most states now have some type of anti-indemnity statute, Texas is one of only a handful of states whose statutes void related additional-insured procurement and policy provisions as well. The Act applies to any “construction contract” for a
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