Richards v. State Farm Lloyds

Jayden Meals died in an all-terrain vehicle (ATV) accident while under the supervision of his paternal grandparents, Janet and Melvin Richards (plaintiffs), at or near the Richards’ property. Jayden’s mother, Amanda Meals, filed suit against Janet and Melvin Richards on the basis of negligent failure to supervise and instruct Jayden in the use of the ATV. Janet and Melvin had homeowner’s insurance with State Farm Lloyds (State Farm) (defendant). Janet and Melvin thus asked State Farm to provide a defense and indemnify the Richards. State Farm agreed, albeit under a reservation of rights. State Farm then filed this suit against Janet and Melvin (as well as Amanda Meals), seeking a declaration that State Farm had no duty to defend or indemnify Janet and Levin. State Farm then moved for summary judgment, arguing that the claims were outside the scope of the policy, first as the policy applies to motor vehicles while off an insured location, and second, the insured exclusion applied, as Jayden’s grandparents were Jayden’s managing conservators at the time of the accident. In response, Janet and Melvin argued that under the “eight-corners” rule, the court must only consider the policy and complaint with regard to whether insurance applied. State Farm then argued that the policy did not require State Farm to defend its insured against allegations that were groundless, false, or fraudulent (or more specifically, that the policy did not include a statement requiring State Farm to defend such types of claims) and that the eight corners rule did not apply in the absence of such a statement. The case was certified to the supreme court for ruling on that specific certified question.