Houston, Texas (March 23, 2020) - On March 20,
2020, the Texas Supreme Court issued its greatly anticipated
decision in Richards v. State Farm Lloyds, the case
that examined whether an exception to the eight-corners rule
existed. As most insurance practitioners expected, the answer was a
resounding “No.”
In Texas, the eight-corners rule traditionally has governed the
determination of an insurer’s duty to defend – meaning
that the duty is determined solely by the allegations in the
petition and the policy language. Generally, extrinsic evidence is
not permitted. This rule was first applied in 1956 and remains a
vital tenet of Texas insurance law.
Richards v. State Farm Lloyds
In the Richards case, a 10-year-old child
was killed when his all-terrain vehicle (ATV) overturned. At the
time of the accident, he was under the care of his grandparents,
Janet and Melvin Richards. The child's mother filed suit
against the Richards in state court, alleging that they
