ORDER – PAGE 1

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

HERMITAGE INS. CO., §

§

Plaintiff, §

§

v. § Civil Action No. 3:05-CV-0785-N

§

TIMES SQUARE DALLAS, LTD., §

§

Defendant. §

ORDER

Before the Court are the parties’ cross-motions for summary judgment [25, 36]. This

case presents difficult and subtle issues regarding the duty to defend under a contract of

insurance. The underlying state court plaintiff initially pled himself out of coverage by

alleging conduct falling squarely within the assault exclusion in the insurance policy. He has

attempted to plead back into coverage through the simple expedient of excising any reference

in his pleading to how the injuries at issue took place. The Court must now consider the

circumstance in which the underlying facts apparently preclude the duty to defend and

coverage, but the pleadings in the underlying lawsuit are now silent on any facts from which

the applicability of the assault exclusion could be determined. 

The Court holds that this case falls into the narrow exception permitting extrinsic

evidence on the issue of coverage only, and that Plaintiff Hermitage Insurance Company

(“Hermitage”) can therefore invoke the assault exclusion in the insurance policy through

extrinsic evidence. Because the summary judgment record before the Court does not

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ORDER – PAGE 2

establish one way or the other whether the injuries in the underlying state court action were

the result of an assault, the Court denies both motions for summary judgment.

I. FACTUAL BACKGROUND

This insurance coverage dispute relates to an underlying state court lawsuit between

Matthew Popkin and Times Square Dallas, Ltd. (“TSD”), styled “Matthew Popkin v. Times

Square Dallas, Ltd,. et al.,” No. 05-2578, in the 134th Judicial District Court in Dallas

County, Texas (the “Popkin Lawsuit”). According to the Popkin Lawsuit, in 2004, TSD

operated a nightclub called Times Square. Around September 3, 2004, Popkin visited Times

Square. The bouncers removed him from the club. In Popkin’s Original Petition, he alleged

that “[a]fter he was physically removed from the building, he was thrown on his head on the

concrete resulted [sic] in a subdural hematoma . . . .” On July 20, 2005 (eight days after

Hermitage filed its first motion for summary judgment in this case), Popkin filed his First

Amended Original Petition in the Popkin Lawsuit. According to Popkin’s First Amended

Original Petition, “[a]fter he was removed from the building, he suffered a subdural

hematoma, which resulted in a lengthy stay in the ICU at Medical City Dallas, as well as

other damages.” Popkin further alleges that after he suffered the subdural hematoma, TSD

“refused to call for medical attention, allowing [Popkin] to lay [sic] on the concrete outside.”

Popkin seeks the same damages from TSD for all of his various claims of negligence,

including: “failing to adequately evaluate candidates for its staff positions; employing unfit

persons; failing to adequately supervise its employees; failing to adequately train its

employees; failing to adequately staff its premises and failing to provide safe premises and

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ORDER – PAGE 3

a safe environment for invitees.” Popkin also claims TSD is vicariously liable for the

(unspecified) negligence of its bouncers and negligently failed to render aid to Popkin.

Hermitage and TSD entered into a contract of insurance applicable during the

pertinent times (the “Policy”). The Policy was written on the 2000 ISO Commercial General

Liability Coverage Form, CG 00 01 10 01. The insuring agreement provides in pertinent

part:

We will pay those sums that the insured becomes legally obligated to pay as

damages because of “bodily injury” or “property damage” to which this

insurance applies. We will have the right and duty to defend the insured

against any “suit” seeking those damages. However, we will have no duty to

defend the insured against any “ suit” seeking damages for “bodily injury” or

“property damages” to which this insurance does not apply.

The Policy also contained an exclusion for assault and/or battery (the “Assault Exclusion”),

as follows:

Assault and/or battery shall not be deemed an accident under the above

mentioned policy. The Company shall not be obligated to pay on behalf of or

defend the insured for any claim alleging an assault and/or battery no matter

how the assault and/or battery is alleged to have occurred.

It is understood and agreed that this insurance does not apply to “bodily

injury” or “property damage” arising or alleged to arise out of:

A) An assault and/or battery caused by or at the instigation or direction of:

1. the insured, his agent or employee;

2. any patron of the insured; or

3. any other person; . . .

(emphasis in original)

Hermitage originally moved for summary judgment on the basis that Popkin’s original

petition established the applicability of the Assault Exclusion. While that motion was

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ORDER – PAGE 4

pending, Popkin amended his petition in the Popkin Lawsuit, and the Court denied

Hermitage’s motion without prejudice. Hermitage now reurges its motion for summary

judgment in light of Popkin’s First Amended Original Petition, and TSD urges its crossmotion for summary judgment.

II. EXTRINSIC EVIDENCE IS PERMISSIBLE

A. Texas Law Provides a Narrow Exception for Extrinsic Evidence 

The Court must first determine whether it can consider extrinsic evidence in deciding

whether Hermitage must defend TSD in the Popkin Lawsuit. Two recent cases, one from the

Texas Supreme Court and one from the Fifth Circuit, show that this case is within the narrow

exception to the “eight corners” rule that permits consideration of extrinsic evidence

applicable solely to coverage. The eight corners rule generally provides that the duty to

defend is determined only by comparing the pleadings from the underlying lawsuit (four

corners) to the insurance policy (four more corners) to see if any of the claims asserted

against the insured fall within the scope of coverage, regardless of the truth or falsity of the

asserted claims. See, e.g., Heyden Newport Chem. Corp. v. S. Gen. Ins. Co., 387 S.W.2d 22,

24 (Tex. 1973). In GuideOne Elite Ins. Co. v. Fielder Road Baptist Church, 197 S.W.2d 305

(Tex. 2006), the Texas Supreme Court decided not to create an exception to the eight corners

rule for extrinsic evidence that is “mixed,” i.e., that is relevant both to coverage and to the

merits of the underlying case. Id. at 310-11. In so holding, the court cited with approval a

Fifth Circuit case predicting that if the Texas Supreme Court ever adopted any exception, it

would be narrow and limited to “coverage only” extrinsic evidence. Id. at 308-09 (quoting

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Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523, 531 (5th Cir. 2004)). Thus,

although the Texas Supreme Court did not expressly hold that Texas law has such a narrow

exception for extrinsic evidence, it is persuasive authority that the Court would find one if

the question were squarely presented.

In Liberty Mut. Ins. Co. v. Graham, 473 F.3d 596 (5th Cir. 2006), the Fifth Circuit

considered whether the trial court had properly considered extrinsic evidence in light of

GuideOne. The issue was whether the defendant in the underlying state court lawsuit was

a permissive user of a vehicle involved in an accident. The federal district court admitted

extrinsic evidence on this issue to determine coverage. The Court of Appeals reversed,

holding that such admission was error after GuideOne (which came out after the district

court’s decision). In so doing, the Court referred to “the limited exception to the eight

corners rule applied by some Texas appellate courts and approved in the GuideOne

decision’s dicta.” Id. at 602. The Court explained that Int’l Serv. Ins. Co. v. Boll, 392

S.W.2d 158 (Tex. Civ. App. – Houston 1965, writ ref’d n.r.e.) “and other Texas intermediate

court decisions allowing extrinsic evidence to establish a lack of coverage are distinguishable

because they involved explicit policy coverage exclusion clauses, the applicability of which

could not be established under the allegations of the complaint but rather required reference

to unrelated but readily ascertainable facts.” Id. at 603 (footnote omitted).

The Court concludes from GuideOne and Liberty Mut. v. Graham that, under Texas

law, there is an exception to the eight corners rule “when it is initially impossible to discern

whether coverage is potentially implicated and when the extrinsic evidence goes solely to

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1

Accord Ellen S. Pryor, Mapping the Changing Boundaries of the Duty to Defend in

Texas, 31 TEX.TECH L.REV. 869, 891 (2000); see also Randall L. Smith & Fred A. Simpson,

Extrinsic Facts and the Eight Corners Rule Under Texas Law – The World Is Not as Flat as

Some Would Have You Believe, 46 S. TEX. L. REV. 463 (2004) (arguing for more relaxed

application of eight corners rule) [hereinafter cited as Smith & Simpson].

ORDER – PAGE 6

a fundamental issue of coverage which does not overlap with the merits of or engage the

truth or falsity of any facts alleged in the underlying case.” Northfield, 363 F.3d at 531

(emphasis in original).1

B. The Extrinsic Evidence Exception Applies Here

Having determined that Texas law provides for a limited exception, the Court must

now determine whether the exception applies here. First the Court must determine whether

it is initially impossible to discern whether coverage is potentially implicated. Restated, can

the Court here decide the duty to defend question without resort to extrinsic evidence? Next

the Court must determine whether the extrinsic evidence relates to coverage only, or whether

it is mixed with the merits.

1. The Duty to Defend Cannot Be Resolved Without Consideration of Extrinsic

Evidence. – Hermitage argues essentially that Popkin’s amended petition fails to state a

claim against TSD and that, therefore, it has no duty to defend. Hermitage Brief at 6

(“Obviously if it is patently clear that the nightclub could not be liable to the patron, then the

insurer cannot be liable to the nightclub.”). Hermitage confuses the contractual duty to

indemnify with the contractual duty to defend. While it may be true that if Popkin cannot

recover from TSD, Hermitage would have no obligation to indemnify TSD, it does not

necessarily follow that Hermitage has no duty to defend. See GuideOne, 197 S.W.3d at 310

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2

Of course, the fact that Popkin’s amended petition facially implicates coverage does

not answer the question either, precisely because it does not address the Assault Exclusion.

ORDER – PAGE 7

(factual allegations control duty to defend, while actual facts established at trial of underlying

case control duty to indemnify). Put differently, if Hermitage were correct, it would have a

duty to defend only liable insureds. Instead, under the eight corners rule, Hermitage must

defend “[i]f 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.” Liberty Mut. v.

Graham, 473 F.3d at 600.

Here Popkin’s amended petition facially implicates coverage. It alleges negligent acts

by TSD and its employees that caused bodily injury to Popkin. Thus, Hermitage cannot

negate the duty to defend and coverage without resort to extrinsic evidence.

Conversely, TSD cannot establish that no matter what extrinsic evidence might show,

Hermitage owes it a defense.2

 TSD argues that, regardless of the Assault Exclusion,

Popkin’s failure to render aid claim would be covered and thus trigger a duty to defend,

citing Western Heritage Ins. Co. v. Estate of Dean, 55 F. Supp. 2d 646 (E.D. Tex. 1998). In

Western Heritage, a bar patron became intoxicated and got into a fight, in which he was

severely beaten in the head. He fell to the ground. The bar employees, rather than calling

for medical aid, left the patron on the floor to “sleep it off.” Almost an hour later, another

patron saw the injured patron and demanded that emergency help be summoned. By the time

paramedics arrived, the injured patron had died. See id. at 647. Under those circumstances,

the Western Heritage court found that the failure to render aid claim stated a cause of action

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3

Because Western Heritage is factually distinguishable from this case, the Court need

not decide whether it would follow Western Heritage if it had to decide that question. At

present, no other reported decision has followed, or even cited to, Western Heritage. Suffice

it to say that in distinguishing Western Heritage, this Court is not endorsing it.

ORDER – PAGE 8

independent of the assault, with separate damages, and thus triggered a duty to defend. See

id. at 650 (quoting RESTATEMENT (SECOND) OF TORTS § 314, illus. 5; “As a result [of failure

to render aid], A’s illness is aggravated in a manner which reasonably prompt medical

attention would have avoided.”); id. at 651 (“While the Court finds the other claims in the

underlying suit would not exist ‘but for’ the excluded perils, the failure to render aid cause

of action is separate and independent.”). TSD argues that, following Western Heritage,

Popkin’s failure to render aid claim triggers a duty to defend, even if the negligence claims

are excluded by the Assault Exclusion.

But Western Heritage is distinguishable on its facts. As recited above, Popkin does

not allege any distinct harm or aggravation of his injuries because of the failure to render aid.

It is well-established that in determining whether a claim is covered, the courts look to the

facts at issue, rather than the legal theory pled by the underlying plaintiff. See, e.g., id. at

648. Here the facts alleged do not state a separate and independent claim for failure to render

aid, with separate damages. Accordingly, Western Heritage does not give rise to a duty to

defend.3

 

TSD also relies on King v. Dallas Fire Ins. Co., 85 S.W.3d 185 (Tex. 2002). In King,

the Texas Supreme Court held that an intentional act by an employee can still be a covered

occurrence from the perspective of the employer. TSD argues that, by analogy from King,

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ORDER – PAGE 9

conduct that may be an excluded assault from the perspective of the employee committing

the assault, may still be a covered occurrence from the perspective of the employer. 

King’s holding is inapplicable here for many reasons. Most significantly, the analysis

there turned in part on “standpoint of the insured” language in the intentional acts exclusion

that is not at issue in this case. See id. at 188-89. Thus acts that might be intentional (and

excluded) from the standpoint of an employee could still be accidental (and covered) from

the standpoint of the employer. To the contrary here, the Assault Exclusion explicitly

provides that it applies even if an employee commits the assault. See supra p.3 (Assault

Exclusion applies to assault by “the insured, his agent or employee,” “any patron,” or “any

other person”) (emphasis added). Moreover, King dealt with the definition of occurrence,

not an exclusion. The court observed this distinction several times in its opinion, noting that

narrow readings of occurrence proposed by the carrier would make exclusions in the policy

surplusage. See, e.g., id. at 189. Finally, King implicitly acknowledged that under its

holding, an event that might be an occurrence from the perspective of the employer could

still be excluded by the Assault Exclusion. See id. at 193 (“under Dallas Fire’s construction,

there would be no need for exclusions covering assault and battery . . .”). Accordingly, King

does not require a holding here that the Assault Exclusion applies only to the duty to defend

the employee(s) who committed the assault.

Thus, TSD cannot establish the existence of a duty to defend independent of any

consideration of extrinsic evidence, and the first requirement of the exception is met.

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4

Having determined that extrinsic evidence on the Assault Exclusion is permissible

even under the eight corners rule, the Court need not confront a much more difficult, and

significant, question: Does the change from older policy language regarding the duty to

defend, such as that in Heyden, to contemporary policy language, such as that here, also

changed the eight corners rule? While the eight corners rule may seem to Texas coverage

lawyers to be of provenance comparable to that of the Ten Commandments, that in fact is not

the case. The eight corners rule is simply a judicial gloss on particular contractual language

giving rise to the duty to defend. It is not heretical to suggest that a significant change in the

contractual language might also effect change in the judicial interpretation of that language.

At least one court and one article have so argued. See B. Hall Contracting, Inc. v. Evanston

Ins. Co., 447 F. Supp. 2d 634 (N.D. Tex. 2006) (appeal pending); Smith & Simpson, supra,

at 481-85. This Court will not unnecessarily venture into that thicket.

ORDER – PAGE 10

2. Extrinsic Evidence of the Assault Exclusion Is Independent of the Merits of

Popkins’ Claims. – Resolution of this question is easier, given Popkin’s deliberate excision

of any reference to an assault from his amended petition. According to Popkin’s amended

petition, how he ended up on the ground with a subdural hematoma is irrelevant. Thus,

extrinsic evidence on that issue does not bear on the merits of Popkin’s claims. Likewise,

because nothing in Popkin’s amended petition addresses how he was injured, extrinsic

evidence on that issue would not “engage the truth or falsity of any facts alleged in the

underlying case.” Northfield, 363 F.3d at 531.

Accordingly, both factors of the limited exception are met here, and extrinsic evidence

regarding whether Popkin’s injuries were caused by conduct that fell within the Assault

Exclusion of the policy is permissible to consider in determining whether Hermitage has a

duty to defend TSD.4

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ORDER – PAGE 11

III. FACT ISSUES PRECLUDE SUMMARY JUDGMENT

Unfortunately, having determined that the Court can consider extrinsic evidence in

determining the applicability of the Assault Exclusion, the Court must deny both motions for

summary judgment. There is no record before the Court that establishes affirmatively one

way or the other whether Popkin’s injuries were the result of an assault. The record does

include Popkin’s original petition, but that pleading has now been superseded by his

amended petition. Compare Sosa v. Central Power & Light Co., 909 S.W.2d 893, 895 (Tex.

1995) (“Contrary to statements in live pleadings, those contained in superseded pleadings are

not conclusive and indisputable judicial admissions.”) with MBank Brenham, N.A. v.

Barrera, 721 S.W.2d 840, 842 (Tex. 1986) (superseded pleading may “be introduced into

evidence as any other admission” and considered as evidence). Thus, while Popkin’s original

petition may be some evidence that an assault took place, it does not conclusively establish

that for summary judgment purposes.

CONCLUSION

The Court wishes it were able to dispose of this case on the parties’ cross-motions for

summary judgment, but on this record that is not possible. Accordingly, the Court denies

both motions for summary judgment. It may be, however, that the parties can present

additional summary judgment proof that would resolve this issue without the need for a trial.

The Court, therefore, grants the parties leave to file an additional motion for summary

judgment directed to extrinsic evidence within forty-five (45) days of the date of this Order,

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ORDER – PAGE 12

if either or both sides believe this the question is amenable to summary disposition. If no

such motion is filed within that time, the Court will by separate order set this matter for trial.

Signed March 9, 2007.

_________________________________

David C. Godbey

United States District Judge

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