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Walbro Corporation v Amerisure Companies; (6th Cir.-PUB, 1/16/1998; RB #2028)

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United States Court of Appeals, Sixth Circuit Court; Docket Nos. 96-2109 and 96-2192; Published  
Judges Kennedy, Jones, and Clay; Unanimous; Opinion by Judge Kennedy  
Official Federal Reporter Citation:  133 F 3d 961; Link to Opinion alt  


STATUTORY INDEXING: 
Determination of Domicile [§3114(1)] 
Separated and Divorced Spouses [§3114(1)]  
Equal Priority Situations [§3114(6)]  
Recoupment Between Equal Priority Insurers [§3115(2)]  
ERISA Liens Regarding Auto Tort Claims [§3116]

TOPICAL INDEXING:  
Employee Retirement Income Security Act (ERISA – 29 USC Section 1001, et seq.)   


CASE SUMMARY:   
In this unanimous published Opinion by Judge Kennedy, the United States Court of Appeals held that a minor child in the joint legal and physical custody of his divorced parents could be a resident of both parents for purposes of determining priority of no-fault insurance benefits coverage.

In this case, the minor child was injured in a motor vehicle accident on July 18,1993. Prior to his injury, his parents had divorced and entered into a judgment of divorce providing for joint legal and physical custody of the minor child. The parents, in fact, shared custody of their son on a flexible basis without a rigid schedule. Testimony established that the child spent alternating weeks with his mother and father. Both parents maintained a room with toys, clothes and toiletries for their child in their separate homes. As of the time of the accident, the child was covered under the child's father's coordinated no-fault automobile coverage, under his mother's coordinated no-fault automobile insurance, and under his mother's husband's ERISA health plan. The child's medical expenses were submitted to his mother's no-fault insurer, Amerisure, which instructed the mother to submit those claims first to the ERISA health plan provided by Walbro Corporation. The plan paid the benefits subject to its right to be reimbursed.

A non-economic damage claim was pursued and recovery obtained on behalf of the minor child for his non-economic damages arising from the negligence of the other party to the accident. Walbro then filed a lien against that recovery seeking reimbursement from that recovery.

In addressing the priority issue under §3114(1) of the No-Fault Act concerning which of the two no-fault insurers was obligated to provide coverage under the circumstances of this case, the U.S. Court of Appeals held that the facts presented a novel question under Michigan law as to whether a child of divorced parents may be domiciled in both of his or her parents' households for insurance purposes, if the evidence shows that the child actually resided in both of their separate households. The court noted that in Workman v Detroit Automobile Inter-Insurance Exchange. 404 Mich 477 (1979) (Item No. 143), the terms domicile and residence are legally synonymous in Michigan. The court went on to rule that nothing in Michigan's No-Fault Act requires a determination that a child who appears to reside equally with both of his or her divorced parents is domiciled only with the parent who has physical custody at the time of the accident. A number of cases from other jurisdictions have held that a child of divorced parents could be a resident of two separate households for purposes of insurance coverage. The court found support for its conclusion in the policy that Michigan's no-fault insurance act is a remedial statute that is to be construed liberally in favor of persons intended to be benefitted by the statute. In this case, the child was clearly domiciled in both of his parents' homes and, as such, he was covered under both his father's policy and his stepfather's policy of no-fault insurance. The court also concluded that both insurers were of equal priority as set forth in §3114 and under §3115(2), and were obligated to equally share the responsibility for the child's medical expenses that the ERISA plan had advanced.

In light of its conclusion, the court held that Walbro was entitled to recover its advanced payments from the two no-fault insurers, and there was no need for it to seek reimbursement from the non-economic damage claim of the minor child.

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