United States District Court for the Western District of Michigan; Docket No. l:99-CV-538;
Honorable David W. McKeague; Unpublished
Official Federal Reporter Citation: Not Applicable; Link to Opinion
In this coordination of benefits dispute between a self-funded ERISA plan and no-fault insurer, Judge McKeague held that the coordination of benefits clauses in the two (2) policies were in "direct conflict," and under the applicable federal rules of preemption, the ERISA plan's coordination of benefits clause is given effect, and the no-fault insurer, Allstate, is determined to be primarily liable for the no-fault benefits arising from an automobile accident.
In his ruling, Judge McKeague rejected Allstate's argument that the coordination of benefits clause contained in the ERISA plan was trulyI and did not expressly disavow coordination with Michigan no-fault policies.
The language in the plan provided:
"This plan will pay for eligible expenses in connection with motor vehicle-related accidents/injuries only after all other available benefits have been exhausted including any benefits available from any automobile insurance policy."
Allstate argued that this plan language indicated only that an insured must first exhaust any coverage it has under an automobile no-fault policy before the plan will extend benefits. Allstate argued that this language did not "expressly subordinate" the plan benefits to Michigan no-fault policies.
Judge McKeague disagreed with this analysis, and found the language to be clear and unambiguous. While the plain language of the provision suggests that it may function as an "excess clause," it may also be reasonably characterized as a coordination of benefits clause due to the function it serves. Further, Judge McKeague pointed out that "in an earlier opinion on similar language this court has concluded that no meaningful distinction can be drawn between an excess clause and a coordination of benefits clause. See, Citizens Insurance Company of America v Northstar Print Group, Inc. and Northstar Print Group, Inc. Health Plan, No. 2.97-CV-144 (W.D. Mich, Feb 24,1998)."