Appeals Court Upholds Sovereign Immunity, Dismisses PIP Reimbursement Suit Against School Board

An insurance carrier sought reimbursement for PIP benefits paid following a school bus accident, arguing that legislative statutes waiving sovereign immunity applied to the case. The school board moved to dismiss, citing immunity. The Appeals Court reversed the lower court’s ruling, emphasizing that sovereign immunity is the general rule and the legislature’s waiver must be specific. Finding no specific waiver, the court upheld the school board’s immunity and dismissed the suit.

State Farm attempted to obtain reimbursement for personal injury protection (PIP) benefits paid to its insured relative to a school bus accident. State Farm argued that legislative statutes waiving sovereign immunity applied to waiver of the protection in a loss transfer action. The school board moved to dismiss, arguing that it was immune from the suit. 

The Appeals Court overturned a lower court’s decision granting State Farm’s application and directing dismissal of the suit. The Appeals Court found that, since sovereign immunity is the general rule, the waiver by the legislature needed to be specific. Since waiver of this type of immunity was not specifically articulated, the Appeals Court upheld the immunity and dismissed the suit in favor of the school board. 

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