Liberty Baptist Church owned several buses that were used in its church and school activities. The Church was insured by a Commercial General Liability policy written by State Farm Mutual Insurance Company when a serious injury occurred to a teen member of the Church.

Liberty held a contest just for fun. The contest pitted several teams of church members (adults and children) against each other. Each team would race to see who would be the first to pull a bus across the finish line. During the contest, Taylor, a teen, fell down and a wheel of the bus his team was pulling rolled over him. The accident caused permanent injury and Taylor’s family sued Liberty for damages. State Farm filed for a declaratory judgment. It argued that, since the loss involved the use of a vehicle, their CGL excludes coverage. The trial court granted State Farm’s request and Liberty appealed the decision.

Upon appeal, Liberty re-asserted that, while each bus in the contest was occupied by a driver, the bus transmissions were in neutral, so the bus use was essentially as a weight being moved; it was not being used as a vehicle. Note that the facts of the case indicated that the driver did know that a person fell while pulling the bus, but that the wheel injured the teen before he could apply the bus’s brakes. Liberty argued that, for the policy exclusion to apply, the bus would have to be used in its traditional manner such as for transportation, or while being loaded or unloaded.

The insurer countered that absence of a running engine was irrelevant, the loss occurred during a contest involving vehicles being used in accordance with their nature. In other words, the buses were used as vehicles, capable of movement upon their wheels and their ability to be steered along the course of the contest. The higher court agreed that the bus-pull contest constituted use of a vehicle. It affirmed the lower court’s decision in favor of the insurer.

Kermalynn Franz et al., Defendants’Appellants, v. State Farm Fire Casualty Company, Plaintiff-Appellee. IndCtApp. No. 45A03-012-CV39. Filed August 27, 2001. Affirmed. CCH Fire and Casualty Cases Paragraph 7412