642 S.W.3d 466
Tex.2022Background:
- Pharr–San Juan–Alamo ISD (the School District) held an automobile‑liability policy from the Texas Political Subdivisions Property/Casualty Joint Self Insurance Fund (Insurance Fund) defining “auto” as a land motor vehicle “designed for travel on public roads” and excluding certain “mobile equipment” designed principally for off‑road use.
- Lorena Flores sued the School District after her daughter Alexis was allegedly thrown from a “golf cart” driven by a school employee; the petition alleged negligent operation of a “golf cart” but gave no technical vehicle details.
- Discovery showed the vehicle was an older, electric, non‑street‑legal golf‑course style cart (modified with a rear wooden platform) used on campus sidewalks, parking areas, internal roads, and athletic fields.
- The trial court found the School District liable in the underlying suit and entered judgment for $100,000; the trial court also granted summary judgment requiring the Insurance Fund to defend and indemnify the School District.
- The court of appeals reversed, holding material fact issues existed about whether the cart was a covered “auto”; the Supreme Court of Texas affirmed the court of appeals’ reversal but on different grounds, concluding the insurer had no duty to defend or indemnify.
Issues:
| Issue | Plaintiff's Argument (School Dist.) | Defendant's Argument (Insurance Fund) | Held |
|---|---|---|---|
| Duty to defend: whether pleading that plaintiff was thrown from a “golf cart” invokes insurer’s duty to defend under the policy’s “auto” coverage | Petition alleged a “golf cart,” a term that could encompass road‑capable vehicles; thus coverage is potentially implicated and duty to defend arises under eight‑corners | “Golf cart” commonly means a golf‑course vehicle not designed for public roads; allegation does not trigger coverage for a vehicle “designed for travel on public roads” | Under eight‑corners, “golf cart” has ordinary meaning as a golf‑course vehicle not designed for public roads; no duty to defend; extrinsic evidence not considered because no pleading gap |
| Whether extrinsic evidence may be considered to show the vehicle was road‑capable (Northfield/Monroe exceptions) | Extrinsic evidence should not displace eight‑corners; or if allowed, it proves some modern golf carts are road‑capable and creates a fact issue | Court may adopt Northfield/Monroe approach and consider extrinsic evidence that conclusively proves the vehicle was designed for public roads | Court recognized a narrow Monroe exception but held it does not apply here because the petition’s use of “golf cart” left no gap and extrinsic evidence would contradict the pleading |
| Duty to indemnify: whether summary‑judgment evidence shows the vehicle was a covered “auto” (designed for travel on public roads) | Evidence of use on campus roadways and factual disputes create a genuine issue; exclusion burdens on insurer | Evidence conclusively shows the cart was a typical, non‑street‑legal golf‑course cart, not designed for public roads, so no indemnity duty | Summary‑judgment evidence established the cart was not designed for travel on public roads; insurer had no duty to indemnify (trial court erred) |
Key Cases Cited
- Heyden Newport Chem. Corp. v. S. Gen. Ins. Co., 387 S.W.2d 22 (Tex. 1965) (establishes the eight‑corners/complaint‑allegation rule for duty to defend)
- Loya Ins. Co. v. Avalos, 610 S.W.3d 878 (Tex. 2020) (recognizes a narrow collusion exception permitting extrinsic evidence when insured colludes with claimant)
- Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523 (5th Cir. 2004) (describes circumstances where courts may consider extrinsic evidence on a fundamental coverage issue)
- GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305 (Tex. 2006) (insurer’s duty to defend is invoked by allegations that potentially support coverage)
- Gilbert Tex. Const., L.P. v. Underwriters at Lloyd’s London, 327 S.W.3d 118 (Tex. 2010) (distinguishes duty to defend from duty to indemnify; different standards govern each)
- Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819 (Tex. 1997) (explains duties to defend and indemnify are distinct and resolved separately)
- D.R. Horton‑Tex., Ltd. v. Markel Intern. Ins. Co., 300 S.W.3d 740 (Tex. 2009) (insurer may have duty to indemnify even if no duty to defend, and vice versa)
- RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113 (Tex. 2015) (apply ordinary‑meaning/dictionary approach to undefined contract terms)