Texas Supreme Court Considers Fraud Exception To Duty To Defend

Dallas, Texas (February 19, 2020) - On February 26, 2020, the Texas Supreme Court will hear an insurer's argument that it should create an exception to Texas' "eight corners rule" in Loya Insurance Company v. Osbaldo Hurtado Avalos et al. The rule provides that when deciding whether an insurer owes the policyholder a defense, the court's analysis is restricted to the terms of the subject policy and the factual allegations contained in the petition. The petitioner, Loya Insurance Company (Loya), argues that the "'eight corners rule' never meant to prohibit consideration of extrinsic evidence of fraud when the evidence of fraud is undisputed and the fact that...