During the last Survey period, the Texas Supreme Court issued USAA Texas Lloyds Co. v. Menchaca, which was a significant opinion addressing extra-contractual claims against insurers under Chapter 541 of the Texas Insurance Code. The supreme court set forth five rules applicable to claims brought under Chapter 541.2. During this Survey period, several opinions were issued by Texas appellate and federal courts applying the Menchaca rules. Below the authors discuss several examples showing how courts have applied these rules. Also of significance are several cases involving application of the “eight-corners” rule in determining the duty to defend, and whether or to what extent exceptions to the eight-corners rule should apply.
J. Price Collins, et al., Insurance Law, 5 SMU Ann. Tex. Surv. 181 (2019).