Liberty Mutual v. North Tarrant

A winter pileup, dozens of lawsuits, an insurer that defended under reservation and then asked a court to let it stop, and a court that answered without ever deciding what the policy’s exclusions meant, because the petitions never reached them.

The rule

Texas decides an insurer’s duty to defend by looking at eight corners, the four of the policy and the four of the lawsuit, with a narrow exception for outside facts that go only to coverage, which was not at issue here. The court stated the rule in its own earlier words quoting the Texas Supreme Court: “In Texas, ‘[t]he eight-corners rule provides that when an insured is sued by a third party, the liability insurer is to determine its duty to defend solely from [the] terms of the policy and the pleadings of the third-party claimant.’” And the test, in the Fifth Circuit’s own formulation: “If the four corners of a petition allege facts stating a cause of action which potentially falls within the four corners of the policy’s scope of coverage, the insurer has a duty to defend.” The order of proof is in a footnote, where the court, quoting its own earlier decision, took the companies at their word that “the insured has the burden first to prove that their loss falls within the terms of the contract,” and found nothing in the petitions that cleared that first step (Liberty Mutual v. North Tarrant, slip op. at 2 to 4 and n.4).

The facts

“A 130-vehicle pileup in February 2021 on I-35W in Fort Worth, Texas, generated dozens of lawsuits against several parties,” among them three construction companies that had rebuilt a stretch of that highway, which the opinion calls Segment 3A, between 2013 and 2018. Their insurer’s policy obligated it “to provide coverage to Defendants for certain bodily injury arising out of their 2013 to 2018 construction work on a segment of I-35W.” The insurer “initially agreed to defend Defendants, subject to a full reservation of rights,” and then sued in federal court for a declaration “to establish that it owed no duty to defend.” The district court read the policy “to cover only injuries arising out of the rebuilding, constructing, and expanding of the relevant segment of I-35W,” found that the pileup suits “did not allege any facts regarding Defendants’ acts or omissions during construction,” and gave the insurer summary judgment. On appeal the companies argued the policy was broader than that; the court noted that “[m]uch of the dispute” “centers around how to read the insurance policy and its various exclusions and amendments, some of which are clunky and poorly drafted” (slip op. at 1 to 3).

What the pileup petitions said is the whole case. They named a group of “Roadway Defendants,” the construction companies among them, and alleged that those parties failed to “operate and maintain” the segment; the allegations, the court wrote, focus on the failure to “properly prepare for oncoming winter weather,” “deploy all the resources necessary to accomplish that,” or “constantly monitor the roadways.” The crash happened “on February 11, 2021, years after Defendants completed their work on Segment 3A” (slip op. at 4).

The holding

Affirmed, and by a short road. The court declined to construe the policy at all: “the Court need not wade into the contractual dispute to resolve this case, since Defendants cannot prevail even under their own interpretation of the policy.” “Assuming for a moment that the Defendants’ interpretation is correct, we must assess whether, under the eight-corners rule, any of the petitions implicate this interpretation of the insurance agreement. They do not.” “Read in context, none of the claims in these petitions alleges bodily injury arising out of Defendants’ work.” “At most, these petitions allege that the companies responsible for day-to-day maintenance and operations breached their duties,” and “Because these Defendants had no role in that day-to-day maintenance, and because their work had been completed years prior to the accident, the petitions’ allegations fall outside even Defendants’ interpretation of the contract.” The companies themselves had conceded the point in the policy’s terms: “[b]y definition, ongoing-maintenance-and-operations allegations are not within the ‘products-completed operations hazard.’” To the argument that the injuries happened on a road the companies built, the court answered with the Texas Supreme Court’s words for a place that is only a place: the segment “was ‘merely the situs of an incident that could have occurred anywhere,’” and “‘the causal connection to the’ Defendants’ work is ‘too remote to invoke coverage.’” A ten-year extension in the policy did not help, because that coverage “only applies to bodily injury within the ‘products-completed operations hazard,’” that is, to injury arising out of the companies’ work. The court added that it “also need not decide if the district court’s precise holding on the scope of the exclusionary language was correct.” “On these grounds, we AFFIRM the district court’s grant of summary judgment” (slip op. at 3 to 5 and nn.3 to 5). The opinion speaks only to the duty to defend.

Why it matters

This is an insurance case between an insurer and its insureds, and the people who were hurt in the pileup are not parties to it. It matters to them anyway, for four reasons. First, in most injury cases the defendant’s liability insurance is the recovery, and the duty to defend is the insurer’s first commitment to a case: an insurer that owes a defense is at the table, and an insurer that owes none is gone. Second, that question is answered from the petition. The eight-corners rule does not, in the ordinary case, let the insurer look past the pleading to what the evidence might show, which protects the insured when the petition is well drawn and abandons it when the petition is not. Here the petitions accused the builders of what the maintenance companies did, and the builders’ own policy, on the builders’ own reading, covered injury arising out of their construction work. The district court’s finding is the sentence to remember: the suits “did not allege any facts regarding Defendants’ acts or omissions during construction.” Third, the lesson for the lawyer who files the case is to plead each defendant’s own conduct, where the facts support it, and not a group’s. If the theory against a builder is something about how the road was built, the petition has to say so in facts; if the only theory is the weather and the maintenance, the builder’s insurer will read that and leave, unless the petition is amended to allege it, and the jury may still put a percentage of the responsibility on that company (Comparative Fault), a percentage that then has to be collected from the company itself. That is why the records come before the pleading: the construction contract, who held the maintenance duty, what was built and what was changed, which is the work Notice and Spoliation describe. Fourth, the opinion is unpublished and decides no new rule of Texas law; it applies the Texas Supreme Court’s eight-corners rule and its situs rule, both of which it quotes, and it is a clean illustration of how a coverage fight is won and lost on the plaintiff’s own words.

One caution. Nothing here says the construction companies were or were not at fault for anything, and the opinion does not say so either; it says only that the petitions, as written, did not allege injury arising out of their work. The pileup suits themselves were not before the court.

Liberty Mutual Fire Insurance Co. v. North Tarrant Infrastructure, L.L.C., No. 25-10725 (5th Cir. Oct. 27, 2026) (per curiam; Smith and Higginson, JJ., a quorum under 28 U.S.C. § 46(d); unpublished under Fifth Circuit Rule 47.5), from the Northern District of Texas, No. 4:23-CV-1043. Every quotation above is from the slip opinion at the pages given. The construction companies are named in the caption and referred to here by role; the plaintiffs in the underlying suits, which the opinion cites by name and county, are referred to here only by role. The Texas decisions the court quotes for the eight-corners rule and the situs rule are cited in the opinion and not read here. The fault statute: Tex. Civ. Prac. & Rem. Code § 33.003 (subsection (a)). This is general information, not legal advice.