United States District Court, Western District; Docket No. G88-98-CA1;
Judge Richard A. Enslen; Unpublished
Official Federal Reporter Citation: Not Applicable; Link to Opinion
Coordination with Other Health and Accident Medical Insurance [§3109a]
Coordination with ERISA Plans [§3109a]
One-Year Notice Rule Limitation [§3145(1)]
Applicability of Limitations Period to Claims by Insurers Against Other Insurers [§3145]
Employee Retirement Income Security Act (ERISA – 29 USC Section 1001, et seq.)
No-Fault Insurer Claims for Reimbursement
Revised Judicature Act – Miscellaneous Provisions
In this written Opinion, Judge Enslen denied summary judgment to Transamerica, a no-fault coordinated benefit insurer, on its claim that the Iron Workers employee benefit plan was obligated to pay its members auto accident related medical expenses and that, as a result, Transamerica has only secondary payment obligation under its no-fault COB clause.
Before reaching the merits of the issue, Judge Enslen first addressed the question of which statute of limitations applied to a claim for personal injury protection-type benefits brought against an employee benefit plan by the injured person's no-fault insurance company. The Iron Workers Fund claimed that the one-year statute of limitations contained in §3145(1) applied, and barred most of Transamerica's claim. Transamerica argued that the proper limitation period was the general contract statute of limitations contained in MCLA 600.5807. In reliance primarily upon the decisions in Adams v Auto-Club (Item No. 950) and Madden v Trucks (Item No. 1129), Judge Enslen held that where the action is not an action to enforce the terms of the no-fault policy, but rather is an action to enforce payment under another type of policy, the general six year statute of limitations applies. Judge Enslen found no adverse affect by this ruling on the legislative intent to require prompt payment of the insured's claim, and held that the Act, by its terms, applies only to no-fault insurance policies. Where, as here, the insurance policy sought to be enforced is some other sort of policy, the No-Fault Act has no application.
Addressing the question of the obligation of the Iron Workers' ERISA-type fund to say these benefits, however, Judge Enslen felt constrained to deny Transamerica's motion for summary judgment. Judge Enslen held that the provisions of the No-Fault Act, §3109a, are not preempted by ERISA, pursuant to the decision of the U.S. Sixth Circuit in Northern Group Services v Auto-Owners (Item No. 1090). Judge Enslen also agreed with the contention that where two insurance policies contain conflicting coordination of benefits clauses, the no-fault insurer's clause takes precedence under the Federal Kemper decision, leaving the health insurer primarily liable.
However, Judge Enslen found that the Iron Workers Fund contained a valid "escape clause" which provided that there would be no liability for auto accident injury claims. Judge Enslen found that the Fund's exclusionary clause was valid because it did not depend upon the existence of other insurance. It was simply a flat-out exclusion of coverage for any auto accident injury regardless of the type and extent of other insurance coverages available to the victim. Therefore, the clause was not per se invalid as arbitrary, discriminatory or capricious. Judge Enslen distinguished the case of Northeast Department ILGWU HEALTH and Welfare Fund v Teamsters Local Union No. 229 Welfare Fund, 764 F2d 147 (CA 3,1985), which invalidated an escape clause which denied coverage for charges incurred in connection with automobile accidents. In the Northeast case, the escape clause was found arbitrary and capricious because it denied coverage to plan members where there existed other coverage. Here, Transamerica had not demonstrated that the total exclusion of coverage for automobile accidents was arbitrary and capricious, and therefore, Transamerica's motion for summary judgment was denied.