Washington Case Law Update: Court Holds That PIP Benefits Do Not Extend to School Bus Collision

Washington Case Law Update: Court Holds That PIP Benefits Do Not Extend to School Bus Collision
From the desk of Kyle D. Riley: Insurers are required to provide personal injury protection (“PIP”) benefits if the insured sustains an injury in an accident that is within the scope of the insurance policy.  But where the policy covers bodily injuries sustained and caused by an automobile accident, will the insured be entitled to benefits for injuries sustained in a collision between two school buses? Read on to find out.
Claims Pointer: In this case arising out of injuries suffered during a collision between two school buses, the Washington Court of Appeals looked to the insurance policy and Washington statute, both of which defined an “automobile” as a motor vehicle designed to carry 10 passengers or less.  Because school buses are designed to carry more than 10 passengers, the court held that the insurer was not required to provide PIP benefits.  This case serves as an illustration of how courts review insurance policies and a reminder of the importance of a clearly written insurance policy with definitions.
Koren v. State Farm Fire & Cas. Co., No. 34723-1-III, Washington Court of Appeals Div. III (January 9, 2018)
Svetlana Koren’s (“Plaintiff”) minor son was injured in a collision between two school buses.  Following the accident, Plaintiff contacted her insurer, State Farm and Fire Casualty Company (“State Farm”), and filed a PIP claim on behalf of her son.  The insurance policy between Plaintiff and State Farm provided PIP benefits for “bodily injury sustained by [the] insured and caused by an automobile accident.” (emphasis added).  The policy defined an “automobile” as a “motor vehicle registered or designed for carrying ten passengers or less.” The term “automobile accident” was not defined.  State Farm denied the claim, because both school buses involved in the accident were designed to carry more than 10 passengers, and thus, did not fall under the definition of “automobile.”  Plaintiff filed suit, and State Farm responded by asking the trial court to grant summary judgment.  The trial court sided with State Farm, granted summary judgment, and dismissed the claim.  Plaintiff appealed.
On appeal, Plaintiff argued the trial court should not have dismissed her claim on summary judgment because the plain terms of the policy did not resolve whether the school bus collision was an “automobile accident.”  Plaintiff pointed out that the insurance policy defined “automobile,” but not “automobile accident.”  According to Plaintiff, “automobile accident” is a term of art, and has “a special meaning and extends coverage to all motor vehicle collisions.
In support of her argument, Plaintiff cited to the Washington Court of Appeals’ previous decision in Farmers Insurance Company of Washington v. Grelis, 43 Wn. App. 475 (1986).  In that case, while the insured was sitting in his van, he was physically assaulted.  Although “automobile accident” was not defined, there was no dispute that under the plain terms of the PIP policy, the van was an “automobile” and his injuries were sustained from an “accident.” Nonetheless, Farmers declined to extend PIP benefits under the policy.  The court agreed with Farmers because an “automobile accident” is a specific kind of accident.  The court held that an “automobile accident” did not extend to an accident where the only connection to the automobile was the location.  Instead, the accident itself “must somehow be causally related to the operation of an automobile.”
Plaintiff also cited to the Washington Supreme Court’s decision in Tyrrell v. Farmers Insurance Company of Washington, 140 Wn.2d 129 (2000).  In that case, the insured was injured when stepping down from his truck.  Farmers declined to extend PIP benefits coverage for a “motor vehicle accident.”  The policy defined that terms “motor vehicle” and “accident,” but not “motor vehicle accident.”  Nevertheless, the Court agreed with Farmers, holding that injuries sustained when stepping down from a truck were not injuries sustained in a “motor vehicle accident.”  The Court explained that a “sensible and popular understanding” of the term “motor vehicle accident” requires that the motor vehicle was being operated as a motor vehicle.
The Washington Court of Appeals found that neither Tyrrell nor Grelis supported Plaintiff’s argument.  According to the court, neither decision implied that an “automobile accident” or a “motor vehicle accident” should be interpreted in a way that is contrary to the insurance policy definition.  Both decisions focused on what it meant to be in an “accident,” and both held that the word “accident” as used in the insurance policy “limited the scope of an accident that could form the basis for recovery.”                                                   
Pursuant to Grelis and Tyrrell, the fact that the modifier “automobile” was attached to the word “accident” led the court to conclude that the son’s injuries did not fall within the PIP policy.  Under the PIP policy, it would not be enough for the son’s injuries to be sustained in an accident, instead, the accident must have been “causally connected to an automobile.”  While the son’s injuries may have been the result of a “motor vehicle accident,” they were not the result of an “automobile accident.”
Lastly, the court explained that its holding would not violate public policy.  Washington’s PIP statute contemplates that PIP coverage is extended for “automobiles,” which are statutorily defined as passenger cars designed for carrying 10 passengers or less. RCW 48.22.005(1); RCW 46.04.382.  In fact, under Washington law, insurance companies are not required to offer PIP coverage for large capacity vehicles, like school buses.  As a result, the court held that the son’s injuries did not fall within the scope of Plaintiff’s PIP policy.
View full opinion at: https://www.courts.wa.gov/opinions/pdf/347231_pub.pdf
Case updates are intended to inform our clients and others about legal matters of current interest. They are not intended as legal advice. Readers should not act upon the information contained in this article without seeking professional counsel.
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