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Auto Owners Insurance Company v Corduroy Rubber Company, ON REMAND; (COA-UNP, 4/21/1989; RB #1256)


Michigan Court of Appeals; Docket No114550; Unpublished  
Judges Hood, Maher, and Beasley; Unanimous; Per Curiam    
Official Michigan Reporter Citation:  Not Applicable; Link to Opinion alt    

Coordination with Other Health and Accident Medical Insurance [§3109a]  
Coordination with ERISA Plans [§3109a]

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

In this unanimous per curiam Opinion, the Court of Appeals reconsidered its earlier decision in Auto Owners v Corduroy Rubber (Item No. 1064), in light of the Supreme Court remand (Item No. 1237). This case considered the effect of the case of Teper v Park West Galleries, Inc, 431 Mich 202 (1988) on a claim that the provisions of ERISA precluded application of Michigan's no-fault coordination of benefits law.

At issue was whether the injured party's no-fault insurer could look to a self-funded health benefit plan provided by the injured parties' employer to assume primary responsibility for medical expenses incurred in a car accident. The employer's health plan specifically excluded benefits for injuries received in accidents involving a car for which a no-fault insurance policy was in effect.

In its earlier opinion, the Court of Appeals had affirmed the trial court's dismissal of Auto Owners' claim by finding that the claim was precluded under ERISA, relying on State Farm Mutual v CA Muer, 154 Mich App 330 (1986). On remand, and after considering the Teper, supra, decision, the court stated that if Teper were its only consideration, the no-fault law would be preempted by ERISA in its effort to impose responsibility for medical expense

payments upon the injured party's employer's health plan. This is so because the no-fault law "relates to" an employee benefit plan by altering the terms of the plan and requiring a benefit that the employer otherwise was under no obligation to provide. However, the ERISA law also contains provisions which allow for the application of state insurance laws even if they "relate to" the ERISA plan. Under the provisions of 29 USC 1144(b)(2)(A), the Ravings clause would allow enforcement of the no-fault policy as a state law regulating insurance. Therefore, the court concluded that Michigan's no-fault coordination of benefits law was not preempted by ERISA, even though it "related to" an ERISA benefit plan as defined in the Teper, supra, case. Further, the court held that in reliance upon the decision in Northern Group Services, Inc v Auto Owners Insurance, 833 F2d 85 (CA 6,1987), Michigan's no-fault coordination of benefits law is not preempted by ERISA simply because an uninsured ERISA plan is involved.

Therefore the Court of Appeals reversed its earlier decision and remanded the case to the trial court.

Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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