Court Opinion

ID: 2969305
Source: CourtListenerOpinion
Date Created: 2015-09-22 15:46:25.706067+00
Date Added: 2024-06-11T11:43:21.986287
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
8      Great-West Life v. Allstate Ins. Co.       No. 99-1068                      Pursuant to Sixth Circuit Rule 206
                                                                           ELECTRONIC CITATION: 2000 FED App. 0045P (6th Cir.)
                                                                                       File Name: 00a0045p.06
what dependency means in its description of “Dependent
Survivors” under its plan:
    3. “Dependent Survivors” means:                                UNITED STATES COURT OF APPEALS
        a. the surviving spouse of the deceased injured
             person...                                                               FOR THE SIXTH CIRCUIT
        b. a child of the deceased injured person...                                   _________________
        The child is dependent only while:

                                                                                                ;
          i. under 18 years of age;

                                                                                                 
          ii. mentally or physically incapacitated from             GREAT-WEST LIFE &
                                                                                                 
               earning; or                                          ANNUITY INSURANCE
                                                                                                 
          iii. engaged in full-time, formal program of              COMPANY,
                                                                                                 
               academic or vocational education or training.                                                    No. 99-1068
                                                                              Plaintiff-Appellee,
                                                                                                 
Based on Allstate’s own definition, Matthew does not qualify                                      >
as a “Dependent” under the Allstate policy. Thus, the district               v.                  
court did not err in categorizing Matthew as “a person other                                     
than a Dependent” under the Great-West plan. As a                                                
                                                                                                 
                                                                    ALLSTATE INSURANCE
consequence of that categorization, the district court was
                                                                           Defendant-Appellant. 
correct in subordinating Great-West’s plan to Allstate’s in this    COMPANY,
case.                                                                                            
                                                                                                1
                              IV.
  Accordingly, we AFFIRM the district court’s grant of                     Appeal from the United States District Court
summary judgment in favor of Great-West.                              for the Western District of Michigan at Grand Rapids.
                                                                         No. 98-00325—Gordon J. Quist, District Judge.
                                                                                     Argued: November 5, 1999
                                                                                 Decided and Filed: February 7, 2000
                                                                    Before: MARTIN, Chief Judge; DAUGHTREY, Circuit
                                                                              Judge; KATZ, District Judge.*

                                                                       *
                                                                        The Honorable David A. Katz, United States District Judge for the
                                                                   Northern District of Ohio, sitting by designation.

                                                                                                     1
2       Great-West Life v. Allstate Ins. Co.         No. 99-1068       No. 99-1068         Great-West Life v. Allstate Ins. Co.      7

                      _________________                                  •   who has not reached age 21; and
                                                                         •   who is not married; and
                           COUNSEL                                       •   who is chiefly dependent upon you for support; and
                                                                         •   for whom you are entitled to an income tax exemption.
ARGUED: Daniel S. Saylor, GARAN, LUCOW, MILLER,
SEWARD, COOPER & BECKER, Detroit, Michigan, for                        In addition, the age limitation does not apply to children who
Appellant. James P. Murphy, BERRY, MOORMAN, KING,                      are full-time students or who are incapable of supporting
COOK & HUDSON, Detroit, Michigan, for Appellee.                        themselves due to mental retardation or a physical disability.
ON BRIEF: Daniel S. Saylor, GARAN, LUCOW, MILLER,
SEWARD, COOPER & BECKER, Detroit, Michigan, John                         In interpreting ERISA contract provisions, we have noted
P. Seyfried, GARAN, LUCOW, MILLER, SEWARD,                             that such interpretations are made “according to their plain
COOPER & BECKER, Port Huron, Michigan, for Appellant.                  meaning, in an ordinary and popular sense.” Perez v. Aetna
James P. Murphy, BERRY, MOORMAN, KING, COOK &                          Life Ins. Co., 150 F.3d 550, 556 (6th Cir. 1998) (en banc).
HUDSON, Detroit, Michigan, for Appellee.                               We, therefore, apply a plain meaning analysis to construction
                                                                       of the provision. Matthew clearly falls under the designation
                      _________________                                of Dependent as contemplated in Great-West’s integration of
                                                                       benefits clause. He is 20 years old, not married, and chiefly
                          OPINION                                      dependent on his parents for support. Thus, in regard to
                      _________________                                dependents such as Matthew, the Great-West plan intended to
                                                                       subordinate its coverage to a no-fault insurer such as Allstate.
  DAVID A. KATZ, District Judge. In this dispute over
which plan has priority over payment of medical expenses                  Allstate does not contest the district court’s finding that
arising from an automobile accident, Allstate Insurance                Matthew qualifies as a Dependent of his father under the
Company (“Allstate”) appeals the district court’s grant of             Great-West plan. Where Allstate disagrees, however, is with
summary judgment in favor of Great-West Life & Annuity                 the district court’s interpretation of the term “resident
Insurance Company (“Great-West”). For the reasons stated               relative”, described in the Allstate coordination of benefits
below, we affirm the district court’s decision.                        clause, as distinguishable from the term “Dependent” in the
                                                                       Great-West plan. Allstate argues that the term “resident
                                 I.                                    relative” in the Allstate plan is not distinguishable from the
                                                                       term “Dependent” in the Great-West plan, and therefore
  On February 25, 1996, Matthew Gerig was seriously                    Matthew qualifies as a “Dependent” under Great-West’s
injured in a single vehicle automobile accident and incurred           definition of that term. Thus, according to Allstate, Matthew
extensive medical expenses. At the time of the accident,               should not be treated by the court as “a person other than as
Matthew was 20 years old and residing with his parents,                a Dependent” under the Great-West integration of benefits
Doyle and Linda Gerig. Matthew    was covered by a policy of           clause. We disagree.
no-fault automobile insurance1 issued to his parents by
Allstate. In addition, Matthew was covered under an                      The term “resident relative” under the Allstate plan does
                                                                       not mean the same thing as the term “Dependent” under the
                                                                       Great-West plan. In fact, Allstate’s Definitions under Part III
    1                                                                  Personal Protection Benefits Coverage VA, detail exactly
     The policy was issued pursuant to Michigan’s No-Fault Insurance
Act, Mich. Comp. Laws § 500.3101 et seq.
6     Great-West Life v. Allstate Ins. Co.         No. 99-1068      No. 99-1068         Great-West Life v. Allstate Ins. Co.        3

                               II.                                  ERISA-qualified employee benefit plan administered by
                                                                    Great-West, by virtue of his father’s employment with the
  On an appeal from summary judgment, we review the                 Prince Corporation.
district court’s judgment de novo. Smith v. Ameritech, 129
F.3d 857, 863 (6th Cir. 1997).                                        Both policies contain a coordination of benefits (“COB”)
                                                                    clause. The policy under Great-West provides in pertinent
                              III.                                  part:
   This appeal presents a question of federal common law that         INTEGRATION OF BENEFITS (IOB)
stems from a dispute between two insurers, one of which
qualifies as an employee welfare benefit plan under the               The IOB provision is used when a person has health
Employment Retirement Income Security Act of 1974                     coverage for the same expenses under two or more of the
(“ERISA”). At issue is the extent to which conflicting                plans listed below. Should this type of duplication occur,
coordination of benefits clauses affect the relative liability of     the benefits under this Plan will be directly reduced by
the parties.                                                          the amounts payable for the same expenses provided by
                                                                      the other plans so that the total benefits from all plans
   The federal common law rule applicable to resolve priority         will not exceed the amount payable under this Plan.
of coverage disputes between a self-funded ERISA-qualified
employee benefit plan and a traditional insurance policy              The benefits provided by the plans listed below are
dictates that a conflict between the two carriers will be             considered in determining duplication of coverage:
resolved in favor of the ERISA plan. Auto Owners Insurance            • This Plan;
Co. v. Thorn Apple Valley, Inc., 31 F.3d 371, 374 (6th Cir.
1994), cert. den., 513 U.S. 1184, 115 S. Ct. 1177, 130 L.Ed.2d         • Any other group insurance or prepayment plan...
1129 (1995). In such a situation involving conflicting
coordination of benefits provisions, the terms of the ERISA           • Any individual automobile “no-fault” insurance plan.
plan, including its COB clause, must be given full effect. Id.
However, this consideration does not necessarily mean that            ORDER OF BENEFIT DETERMINATION
the ERISA plan must prevail. Auto Club Ins. Ass’n v. Health
and Welfare Plans, Inc., 961 F.2d 588, 593 (6th Cir. 1992).           Certain rules are used to determine which of the plans
There still exists here the issue of which of two apparently          will pay benefits first. This is done by using the first of
valid insurance policies, containing what would appear to be          the following rules which applies:
irreconcilable “other insurance” clauses, is liable for payment
of the insured’s medical expenses.                                    • A plan with no IOB or Co-ordination of Benefits
                                                                        (COB) provision will determine its benefits before a
  In this particular case, the coordination of benefits                 plan with an IOB or COB provision.
provisions in the Great-West plan and the Allstate no-fault
policy may conflict to some degree, but are not irreconcilable.       • A plan that covers a person other than as a Dependent
Under the Great-West plan, “[a] plan that covers a person               will determine its benefits before a plan that covers
other than as a Dependent will determine its benefits before            such person as a Dependent.
a plan that covers such a person as a Dependent.”
Great-West defines the term Dependent as a child:
4      Great-West Life v. Allstate Ins. Co.        No. 99-1068    No. 99-1068            Great-West Life v. Allstate Ins. Co.             5

    • When a claim is made for a Dependent child who is             If Allowable Expenses are identified as excess on the
      covered by more than one plan: . . .                          declarations page, the injured person must seek
                                                                    treatment afforded for, or payable by his other coverage
    • A plan that covers a person as:                               before we will be liable for any excess not paid for by
         - a laid-off Employee; or                                  such other coverage. You have a duty to mitigate your
         - a Retired Employee; or                                   damages.
         - a Dependent of such Employee;
      will determine its benefits after the plan that does not      Following submission of the claim to the employee benefit
      cover such person as:                                       plan, Great-West administered payments of nearly $500,000
         - a laid-off Employee; or                                for the medical expenses related to Matthew’s accident.
         - a Retired Employee; or                                 Great-West then sued Allstate for recovery of those
         - a Dependent of such Employee.                          expenditures on the basis of its contention that Allstate is first
      If one of the plans does not have this rule, and if, as a   in priority for payment of Matthew’s medical expenses
      result, the plans do not agree on the order of benefits,    pursuant to its integration of benefits provision. Both parties
      this rule will not apply.                                   submitted motions for summary judgment.
    • If none of the above rules establishes the order of           On December 8, 1998, after the parties waived oral
      payment, a plan which the person has been covered for       argument, the district court issued an order granting Great-
      the longer time will determine its benefits before a        West’s motion for summary judgment and denying Allstate’s
      plan covering that person for a shorter time.               motion for summary judgment. The court determined that the
                                                                  rule pertaining to the “Order of Benefit Determination” of
  Under the Allstate policy, the COB clause provides as           Great-West’s integration of benefits provision – stating that
follows:                                                          “a plan that covers a person other than as a Dependent will
                                                                  determine its benefits before a plan that covers such a person
    Coordination of Benefits                                      as a Dependent”– resolved the priority dispute in favor of
    1. If Allowable Expenses are identified as excess on the      Great-West. The Allstate plan, in other words, covered
    declarations page, Allowable Expenses benefits will be        Matthew as a “resident relative,” while the Great-West plan
    reduced by any amount paid or payable under the               covered him  as a Dependent, thus making Allstate’s coverage
    provisions of any:                                            primary.2
    a) individual, blanket or group accident disability or
    hospitalization insurance.                                      Allstate filed a timely notice of appeal to this Court on
    b) medical or surgical reimbursement plan.                    January 7, 1999.
    c) automobile no-fault benefits or medical expense
    benefits, or premises insurance affording medical
                                                                      2
    expense benefits.                                                  The district court, in granting declaratory relief in favor of Great-
                                                                  West, stated:
    This reduction applies only to amounts that are                        Defendant Allstate Insurance Company’s obligation to pay
    duplication of payment for the same items of loss or             benefits to or on behalf of Matthew Gerig in connection with
                                                                     Mr. Gerig’s injuries incurred in his February 26, 1996
    expense. This reduction applies only to you or a                 automobile accident is primary to Plaintiff Great-West Life &
    resident relative.                                               Annuity Insurance Company’s obligation to pay the same
                                                                     benefits.