A bus driver transporting school band members from Alice on a field trip to Six Flags Fiesta in San Antonio was persistently coughing. It was determined that he had tuberculosis. Subsequently, several of the students were diagnosed with tuberculosis. They then brought a suit against the bus company.
Lancer Insurance had issued a business auto policy covering the bus company. Under the policy, it had the duty to provide a lawyer to defend the bus company if the company was sued, and then to pay a judgment up to policy limits, for covered claims. The insurance company refused to defend the bus company, saying that the claim was not covered. Thereafter, a substantial judgment was entered in favor of the students against the company.
The Supreme Court agreed with the insurance company, in the opinion entitled Lancer Insurance Company v. Garcia Holiday Tours, ___ S.W.3d ___ (Tex. 2011). The Court ruled that the term in the policy providing coverage for injuries “resulting from” the use of the vehicle did not include this situation, even though the students breathed air inside the bus where the driver had been coughing. Thus, the bus company was left with no insurance, and the students could only recover their damages from the sale of any assets of the company that a sheriff could seize.