In the Texas Supreme Court’s recent opinion of Monroe Gaur. Ins. Co. v. BITCO Gen. Ins. Co., Texas’ longstanding “eight-corners” rule was modified to permit the admission of extrinsic evidence under narrowly defined circumstances. See __ S.W.3d __, 2022 WL 413940 at *8. Predictably, the net effect of this opinion on Texas’ litigation landscape has already been the topic of much speculation. Regardless of one’s interpretation, it is beyond dispute that the Court’s creation of a route explicitly permitting the use of extrinsic evidence in duty to defend cases, even albeit in limited circumstances, will logically encourage insurance companies to challenge coverage even if the duty to defend has been facially met. It is fair to argue that such a motion would not be successful, however, one should be aware of the new tool that has been acquired by insurance companies who may attempt to, legitimately or not, foreclose coverage.

In Monroe, Justice Huddle, writing for the majority, articulated the following test: A party may seek to admit extrinsic evidence in a dispute concerning the insuring party’s duty to defend “if the underlying petition could trigger the duty to defend, and [upon] application of the eight-corners rule, due to a gap in the plaintiff’s pleading, is not determinative of coverage,” the extrinsic is admissible if:

  1. The evidence goes solely to an issue of coverage and does not overlap with the merits of liability;
  2. The evidence does not contradict facts alleged in the pleading, and
  3. The evidence conclusively establishes the coverage fact to be proved.

Id. (emphasis added). Though the Court clearly identified the elements to be met, the contours of the categories themselves are vague and open to argument. Indeed, the liquid structure of the test may have been deliberate to avoid the need to update the eight-corners rule as the substance of the rule is given life in trenches, developed by the daily battles in trial courts. As with all changes in the common law, time will unveil how efficacious Monroe will prove.

Nevertheless, what can be certain is that as insurance disputes become more complicated, it is important that you seek experienced attorneys who have considerable knowledge on how to navigate changes in the law. At Abraham Watkins, our team of trial lawyers stand ready to help you, your family, or someone you know to seek justice regardless of the opposition, or the laws that may appear to protect them. If you or someone you know has been injured in a motor vehicle collision, a workplace incident, or some other accident, please contact the office of Ben Agosto III at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner, by letter at 800 Commerce Street, Houston, Texas 77002, by phone at (713) 222-7211; toll-free at 1-800-594-4884; or by email at [email protected].