In analyzing the most recent Texas Supreme Court term with Law360, Bracewell’s Vince Morgan called the “eight corners” decision in BITCO General Insurance Co. v. Monroe Guaranty Insurance Co. one of the more important rulings from the term.
After more than 20 years of uncertainty on the issue of what to do about coverage when the petition is silent, Morgan said, the court’s ruling in this case finally provided clarity.
“It will lead to more asking the courts to weigh in on this,” Morgan said of the short-term impact the ruling will have on litigation. “I think the more precedent points that come out, the more the law will get solidified.”
In certain instances, judges can look beyond the “eight corners” of the insurance policy and pleadings in a complaint to determine whether there’s a duty to defend, the Texas Supreme Court ruled in February. The court unanimously held in the dispute between BITCO General Insurance and Monroe Guaranty Insurance that judges can consider extrinsic evidence when deciding if there’s a duty to defend – so long as that evidence doesn’t involve the merits of liability, doesn’t contradict the pleadings in an underlying suit against the policyholder and clearly establishes whether there is coverage.
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