State Farm Lloyds v. Janet Richards

Summary

The Fifth Circuit certified a question to the Texas Supreme Court regarding whether a policy-language exception to the eight-corners rule exists under Texas law. The case involves a homeowner's insurance policy where the insurer relied on extrinsic evidence to prove policy exclusions (motor-vehicle and insured exclusions) in an ATV-accident death case, but the policy did not contain the standard "groundless, false or fraudulent" language. The district court had held that the eight-corners rule did not apply and allowed extrinsic evidence, but the Fifth Circuit declined to make an Erie guess and instead certified the question, noting no controlling Texas Supreme Court precedent on the issue.

Questions Presented

1. Whether, under Texas law, a policy-language exception to the eight-corners rule permits consideration of extrinsic evidence to determine the insurer's duty to defend when the policy does not contain language requiring the insurer to defend even if the allegations are groundless, false, or fraudulent.

Disposition

other