Michigan Court of Appeals; Docket # 342912; Unpublished
Judges Cavanagh, Beckering, and Gadola; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Interpretation of Insurance Contracts
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s order denying State Farm Mutual Automobile Insurance Company’s motion for summary disposition in the plaintiff’s first-party action to recover no-fault PIP benefits, but that the trial court was incorrect to hold that State Farm was liable for all of the plaintiff’s medical expenses. The plaintiff, Dorothy Kirkland, had both a coordinated insurance policy with State Farm—designating her health insurer as the primary payer of any medical expenses associated with the subject motor vehicle collision—and health insurance through a federal Mail Handlers Benefit Plan (“MHBP”). The MHBP plan had a reimbursement and subrogation section, however, providing that the MHBP would be entitled to reimbursement from Kirkland’s automobile insurer for any amounts it paid on Kirkland’s behalf. The Court of Appeals held that the trial court incorrectly concluded that the MHBP’s reimbursement section pre-empted State Farm’s coordination-of-benefits provision, and that State Farm was solely and primarily responsible for all Kirkland’s medical expenses. Rather, the MHBP would still be the primary payor for Kirkland’s medical expenses, but would also be entitled to a reimbursement from State Farm for any amounts it would pay.
At the time of the subject motor vehicle collision, Dorothy Kirkland had a coordinated automobile insurance policy which designated her health insurer as the primary payer of Kirkland’s medical expenses. Kirkland had medical insurance through an MHBP plan by virtue of her former employment with the postal service. The MHBP plan contained a reimbursement and subrogation section entitling it to reimbursement for any amounts paid by any monetary recovery from any other insurance plans. After the subject motor vehicle collision, Kirkland filed a first-party action to recover no-fault PIP benefits against State Farm. State Farm moved for summary disposition, arguing that the coordination-of-benefits provision in Kirkland’s policy required Kirkland and her medical providers to seek payment from the MHBP. The trial court ultimately denied State Farm’s motion, holding that the MHBP policy’s reimbursement and subrogation language preempts State Farm’s coordination-of-benfits provision.
The Court of Appeals affirmed the trial court’s denial of State Farm’s motion for summary disposition, but only insofar as the motion requested that State Farm be relieved of any obligation to pay Dorothy’s medical expenses. The Court explained that the provision at issue in the MHBP policy was only a reimbursement provision—thus, the MHBP would still be the primary payor of medical expenses, but would also be entitled to reimbursement from State Farm.
Thus, and contrary to the trial court’s ruling, the MHBP contemplates a scenario where the insured has a no-fault policy, yet the MHBP would be the primary payor. When it comes to the initial payment of medical expenses, there is no conflict between the MHBP and Dorothy’s no-fault policy with State Farm. The provision of the MHBP policy at issue is a reimbursement provision. Ultimately, the MHBP can only be reimbursed for claims that it had paid. Thus, unless a claim has been paid by the MHBP, there is no potential conflict between federal law and State Farm’s policy.
