Opinion ID: 4380332
Heading Depth: 3
Heading Rank: 1

Heading: “Eight Corners” Analysis

Text: An insurer has a duty to defend whenever the policy potentially covers at least one claim in the underlying litigation. See GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305, 310 (Tex. 2006) (“A plaintiff’s factual allegations that potentially support a covered claim [are] all that is needed to invoke the insurer’s duty to defend.”). We analyze the duty to defend under the “eight corners” rule: “courts look to the facts alleged within the four corners of the pleadings, measure them against the language within the four corners of the insurance policy, and determine if the facts alleged present a matter that could potentially be covered by the insurance policy.” Ewing Const. Co., Inc. v. Amerisure Ins. Co., 420 S.W.3d 30, 33 (Tex. 2014). We “focus on the factual allegations that show the origin of the damages rather than on the legal theories alleged.” Nat’l Union Fire Ins. Co. v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997). Any doubt about whether “allegations . . . state a cause of action within the coverage” is “resolved in the insured’s favor.” Id. 7 Case: 18-50108 Document: 00514884981 Page: 8 Date Filed: 03/22/2019 No. 18-50108 The D&O Provision covers “those sums that the insured becomes legally obligated to pay as damages because of ‘wrongful acts’” the insured commits. It defines “wrongful acts” as “any negligent acts, errors, omissions, or breach of duty directly related to the operations of your church.” The D&O Provision does not define “operations.” Relying on Webster’s Third New International Dictionary, the district court interpreted the term to mean “the whole process of planning for and operating a business or other organized unit.” The district court concluded that State Farm did not have a duty to defend Brown because his alleged actions in leading the recall campaign were not “directly related to the operations of” WOL Church. 5 We disagree. Cook alleged that Brown was liable for violating Election Code provisions that govern corporations, not individuals, based on his status as a director of WOL Church. Cook essentially claimed that Brown caused the Church to violate the Election Code. He thus alleged that Brown’s activities were directly related to the Church’s operations. Looking only to Cook’s operative petition and the D&O Provision, see Ewing, 420 S.W.3d at 33, we conclude that Cook’s allegations triggered State Farm’s duty to defend. The district court held that Brown’s actions were not directly related to Church “operations” under the D&O Provision. Pastor Brown swore his actions in this case “were in furtherance of a ministry of the Church.” Word of Life Church of El Paso v. State Farm Lloyds, No. 17-cv-00049, 2018 WL 297617, at  (W.D. Tex. Jan. 4, 2018). But the district court concluded that because 5 At oral argument, State Farm also argued that the incidents in question were not committed “solely in the conduct of [Brown’s] management responsibilities for the church” as required by the Policy. In his brief, Brown argued that he acted in a management capacity, and State Farm cited nothing to the contrary. Indeed, State Farm did not raise any separate argument about “management” in its summary judgment motion below or in its brief to this court, and the district court did not mention it, so we decline to address it. See City of Alexandria v. Brown, 740 F.3d 339, 350 (5th Cir. 2014) (“Summary judgment may be affirmed on any basis raised below and supported by the record.” (emphasis added)). 8 Case: 18-50108 Document: 00514884981 Page: 9 Date Filed: 03/22/2019 No. 18-50108 Brown acted “to help restore the rights of the voters” and because political activities like the recall campaign were not “typical of the operations of a religious organization.” But the D&O Provision gives no indication that Church “operations” do not encompass voting rights work or other activities outside the realm of traditional church ministries. This case turns on whether the church’s conduct was covered by its insurance policy. And that policy covered actions related to “the operations of your church,” not a typical church. The District Court’s perception of what is “typical” is not binding on the Word of Life (“your”) church in fulfilling its own mission. We thus decline to adopt the district court’s interpretation of the term.