Insurer not liable for TB exposure on tour bus, Texas high court rules
AUSTIN – Catching tuberculosis from a bus driver doesn't qualify as an accident under the bus company's insurance policy, the Supreme Court of Texas decided.
All nine Justices held that Lancer Insurance doesn't have to indemnify a jury verdict awarding more than $5 million against Garcia Holiday Tours.
"The bus did not generate the tuberculosis or make it more virulent," Justice David Medina wrote on July 1.
He wrote that the injury resulted from causes other than the use of the vehicle.
"Exposure to the disease might have occurred in any number of other enclosed, air conditioned locations, such as a classroom, theater or restaurant," Medina wrote.
Garcia Holiday Tours provided a bus and a driver to carry the Alice High School band to Six Flags Fiesta Texas.
Court papers state the young musicians noticed that the driver coughed all the way.
After the bus returned to Alice, a doctor diagnosed the driver with tuberculosis and admitted him to a hospital.
Several passengers tested positive for a latent form of the disease.
Medina wrote that about 10 percent of infected persons develop an active and contagious form of the disease.
Passengers sued the driver and Garcia Holiday Tours in Jim Wells County district court.
The bus company notified Lancer, which refused to defend the suit. The company defended itself at trial and lost.
The company then sued Lancer, seeking indemnification under the policy.
The passengers intervened for the same purpose. They moved for summary judgment and District Richard Terrell granted it.
Fourth District appellate judges in San Antonio complicated the case by reversing Terrell and directing him to determine where the passengers contracted the disease.
Lancer, eager to simplify the case, appealed to the Supreme Court.
Neither side found a similar reported case.
Medina wrote, "The issue is one of first impression in this state and perhaps the country."
In the nearest case the Justices could find, a boy climbing through the back window of a pickup truck accidentally triggered a shotgun.
In that case, the Justices held that the vehicle must not merely contribute to cause a condition that produced an injury, but must itself produce the injury.
Medina wrote, "To be a producing cause of harm, the use must have been a substantial factor in bringing about the injury, which would not otherwise have occurred.
"And when the vehicle merely furnishes a place for the accident or injury to occur, it is not a substantial factor, and the causal link is insufficient to invoke coverage."
He wrote that courts have generally held that an auto policy doesn't cover injuries resulting from an assault in a vehicle and that passengers had no right to move for summary judgment against Lancer.
"The duty to defend is owed to insureds, not to third party judgment creditors of the insureds," he wrote.
The decision pleased 1,000 companies in the Property Casualty Insurers Association, which supported Lancer as friend of the court.
Thomas Bishop, Alexander Beard, Barham Lewis and Carolyn Russell represented Lancer.
Joseph Ritch and Stephen Chapman represented company owner Louis Garcia.
Jason Hoelscher, William George, Earnest Wotring, Craig Sico and David Towler represented passengers.