United States District Court, Eastern District of Michigan; Case #13-cv-12751
Hon. Judith E. Levy
Official Michigan Reporter Citation: Not Applicable; Opinion Not Available 
STATUTORY INDEXING:
$500,000 Cap for Certain Nonresident Claims [§3163(4)]
TOPICAL INDEXING:
Employee Retirement Income Security Act (ERISA – 29 USC §1001, et seq.)
CASE SUMMARY:
In this written Opinion concerning whether an Illinois insurer was obligated to pay its insured PIP benefits for a motorcycle accident that occurred in Michigan, Federal Judge Judith E. Levy held the insurer was responsible for paying benefits because: 1) the “roll-on benefits” required by MCL 500.3163 were primary to the insured’s other coverage; 2) the insured did not receive coverage for the “same loss” from his other insurers; and 3) contrary to the insurer’s argument, §3163 was not pre-empted by the insured’s Employee Retirement Income Security Act (ERISA) health plan.
Plaintiff was an Illinois resident and participated in defendant Navistar Inc.’s health plan, an ERISA plan. Plaintiff was also covered by an Illinois policy issued by defendant Geico. Plaintiff was injured in a motorcycle accident in Michigan. The Navistar plan paid more than $6,000 in medical expenses. The operator of the vehicle that struck plaintiff was uninsured, so plaintiff filed an uninsured motorist claim with his motorcycle insurer, Progressive, and settled that claim for $20,000. Plaintiff filed this suit against defendants Navistar and Geico to resolve which was responsible for his medical expenses, so he could determine how to handle the settlement he had obtained with Progressive. Navistar moved for summary judgment, claiming it was entitled to an equitable lien or constructive trust over plaintiff’s settlement proceeds. Geico also filed a motion for summary judgment, alleging plaintiff was not entitled to benefits because he was an Illinois resident at the time of the accident and his policy did not provide for any medical coverage. Plaintiff asserted he was entitled to coverage.
Judge Levy denied Geico’s motion for summary judgment and, in so doing, she examined the “roll-on” benefits provision of the No-Fault Act, which requires out-of-state insurers to provide PIP benefits, so out-of-state drivers are treated the same as Michigan drivers if they are involved in an accident in Michigan.
Regarding Geico’s argument that plaintiff was covered by the Navistar plan and so no roll-on benefits were triggered, Judge Levy disagreed and said:
“The fact that someone in plaintiff’s shoes might also seek to recover from an ERISA plan is only tangentially related to the provision at issue. Indeed, [MCL 500.3163(4)] creates no obligations for and has no impact on ERISA plans. The law merely prevents PIP coverage from ‘rolling over’ if those losses were already covered by some other source.”
According to Judge Levy, §3163(4) was not pre-empted by ERISA and §3163(4) fell within the “tenuous, remote, and peripheral” exception. Therefore, plaintiff’s entitlement to roll-on PIP coverage from the Illinois insurer was not impacted by his ERISA plan’s prior payment of medical benefits, the judge said.
As for Geico’s claim that Navistar’s benefit payment prevented it from having to cover plaintiff under §3163, Judge Levy explained that §3163 is “essentially” a coordination of benefits provision, requiring nonresidents to coordinate their health, disability, and auto insurance plans to determine who will pay for a personal injury loss. The judge said:
“Geico argues, incorrectly, that §500.3163 does not follow the line of priority created by the Michigan No Fault Insurance Act. Michigan courts have held, on the contrary, that nonresidents seeking benefits under §3163 follow the order of priority established by §§ 3114 and 3115. … Under Geico’s theory, out-of-state auto-insurers could always avoid payment of PIP benefits if the insured had some other means of recovery. … This approach undermines the priority system the Michigan legislature intended to create as well as its intent to put out-of-state drivers in the same position as Michigan drivers.”
Judge Levy further ruled that plaintiff’s $20,000 settlement did not constitute “benefits covering the same loss” under §3163(4):
“Accordingly, as Geico’s roll-on benefits are primary to Navistar’s coverage and plaintiff has not received any ‘benefit covering the same loss,’ the Michigan No Fault Insurance Act requires requires Geico to pay plaintiff/Navistar $6,447.64.”
In conclusion, Judge Levy denied Geico’s motion for summary judgment and granted plaintiff’s request for declaratory relief. The judge also granted summary judgment for Navistar and dismissed it from the case.
