Frankenmuth Mutual Insurance Company v Wal-Mart Associates’ Health and Welfare Plan; (US Dist. Ct. E.D.-Written, 1/30/2002, RB #2314)


United States District Court, Eastern District of Michigan; Docket No. 01-CV-72347-DT; Written
Honorable Denise Page Hood
Official Michigan Reporter Citation: Not Applicable, Link to Opinion courthouse graphic

Coordination with ERISA Plans [3109a]

Employee Retirement Income Security Act

In this written opinion, Judge Denise Page Hood resolved a priority dispute between a coordinated no-fault insurer and a coordinated ERISA health plan. Applying the rule of the Sixth Circuit in Auto-Owners Insurance Company v Thorn Apple Valley, Inc., 31 F3d 371 (6th Cir, 1994), the court found that the language in the ERISA plan, when read as a whole, clearly and unambiguously subordinated the ERISA health plan to any no-fault automobile insurance coverages. In doing so, the ERISA health plan successfully “expressly disavowed” its applicability to auto accidents where no-fault coverage is available. In holding that the ERISA plan unambiguously made itself secondary to coordinated auto no-fault coverages, Judge Hood held that the various sections of the plan dealing with coordination of benefits, reimbursement and order of benefit determination must be read in their entirety in order to properly glean the intent of the plan. When this approach is taken, it is clear that, read as a whole, the plan specifically provides that auto no-fault coverage is primary. Judge Hood rejected the defendant’s argument that simply because the section of the plan entitled “Order of Benefit Determination” did not specifically state that no-fault was primary, an ambiguity was created. In rejecting this argument, Judge Hood stated, “Reading the COB clause as a whole, rather than only one portion, the COB provision itself states that the Plan is secondary to excess insurance.... This interpretation of the Plan language gives all of the Plan language, including the COB provision, full effect, not just one portion of the COB provision, as required by the Sixth Circuit.”