State Farm's corporate headquarters. Photo by C.J. Hanevy/Shutterstock.com

In a case stemming from a 2014 accident in which a vehicle ran into a Lee County school bus, an appeals court sided with State Farm Mutual Automobile Insurance Co. in a dispute about paying medical costs of two injured bus passengers.

A three-judge panel of the Second District Court of Appeal said the Lee County School Board and its insurer, Safety National Casualty Corp., are responsible for reimbursing State Farm, which shelled out $10,000 for each passenger's care under the state's personal-injury protection, or PIP, insurance system.

The injured passengers were insured under a State Farm policy that provided PIP coverage. That led State Farm to file a lawsuit in 2016 seeking reimbursement for the medical costs.

But the school board and Safety National fought the lawsuit, with the school board arguing, in part, that it should not be required to pay because of the state's sovereign immunity laws, which help shield government agencies from liability. Safety National said it did not provide PIP coverage for the bus.

A Lee County circuit judge in 2017, however, ruled in favor of State Farm, and the appeals court agreed Friday. The appeals court pointed to part of the PIP law that includes school buses as “commercial motor vehicles,” which it said makes school-bus owners subject to reimbursing medical expenses.

“State Farm paid PIP benefits to two of its own insureds who were injured while passengers on a school bus owned by the School Board, and pursuant to [a section of state law], it has a statutory right to reimbursement from the School Board as the owner of that commercial motor vehicle and from Safety National as the School Board's insurer,” said the 10-page opinion, written by Judge Daniel Sleet and joined by Judges Darryl Casanueva and Morris Silberman.

Court documents said the accident occurred when a vehicle hit the rear end of a school bus stopped at a traffic light. Friday's ruling did not identify the injured passengers covered under the State Farm policy. But documents filed in Lee County circuit court identified them as Ashley Louis and Dina Louis and said they were minors.

PIP coverage is part of the state's long-standing no-fault insurance system and is designed to pay for accident-related medical expenses up to $10,000. In arguing that it should be shielded from having to reimburse State Farm, the school board cited a 1997 change in state law that exempted school buses from a requirement to carry PIP coverage.

“As clearly stated, the intent of the changes to the no-fault law were to reduce the financial impact of school bus accidents on county school boards, while creating an avenue for parents to receive the full measure of the benefits they paid premiums for to insurers like State Farm,” the board said in a document filed in Lee County circuit court.

Jim Saunders reports for the News Service of Florida.