United States District Court, Western District of Michigan; Docket No. 5:94-CV-151;
Honorable Benjamin F. Gibson; Published
Official Federal Reporter Citation: 953 F Supp177; Link to Opinion
In this written Opinion, Judge Gibson resolved a dispute between an ERISA plan (plaintiff) and a coordinated no-fault insurer (defendant). Both plans covered an insured who sustained medical expenses as a result of injuries sustained in the automobile accident. Both plans contained coordination of benefits provisions. Judge Gibson held that under the rule stated in Auto Owners Insurance Company v Thorn Apple Valley, 31 Fed 3d 371 (CA 6,1994) [Item No. 1730], the coordination of benefits provision of an ERISA plan must be given full effect over a conflicting coordination of benefits clause contained in a no-fault automobile policy. However, the Thorn Apple Valley case clearly provided that ERISA preemption does not necessarily mean that the ERISA plan prevails. Rather, any conflicts between the coordination of benefits provisions of both policies should be resolved under federal common law. Judge Gibson then examined the actual language of the ERISA plan and the no-fault policy and found that the ERISA plan did not clearly state that the ERISA coverage was subordinated to other available no-fault coverages. On the other hand, the no-fault plan did clearly state that it was subordinated to any other applicable insurance. Had the ERISA plan clearly and unambiguously rendered itself secondary to no-fault coverage, such language would have effectively elevated the no-fault carrier into the primary pay position. However, because of the failure of the plan to clearly indicate such an intent, the court held that the ERISA plan was primary and the no-fault plan secondary. In this regard, Judge Gibson held:
"It is clear that the plan documentation did not expressly disavow or subordinate its coverage to the no-fault insurance. Whereas, it is equally clear that the no-fault policy did subordinate its coverage to the plan's coverage. If the plan had subordinated its coverage to the no-fault insurance, the plan would have prevailed under Thorn Apple Valley. However, it simply did not. Consequently, the plan's coverage is primary and the no-fault coverage is secondary."