CHRISTINA GEORGE, Plaintiff-Appellant, v ALLSTATE INSURANCE CO., Defendant-Appellee, and AZIZUR ULLAH, Defendant, and SHAJEDA SHARMIN, Defendant/Cross-Plaintiff, and UBER TECHNOLOGIES, INC., Defendant/Cross-Defendant
No. 341876
STATE OF MICHIGAN COURT OF APPEALS
August 13, 2019
FOR PUBLICATION
Wayne Circuit Court LC No. 16-004953-NF
If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports.
Before: LETICA, P.J., and M. J. KELLY and BOONSTRA, JJ.
Plaintiff-appellant, Christina George, appeals by delayed leave granted1 the trial court order granting defendant-appellee, Allstate Insurance Co, partial summary disposition under
I. BASIC FACTS
George was injured in a motor-vehicle crash, but she did not have a policy of no-fault insurance available to her in her household. Accordingly, she filed a claim for no-fault personal protection insurance (PIP) benefits through the assigned claims plan, which assigned her claim to Allstate. George also had health insurance and wage disability insurance under a self-funded plan organized under the Employee Retirement Income Security Act (ERISA),
NON-DUPLICATION OF BENEFITS
If you and your spouse or domestic partner both work, your family may be covered by more than one group health plan. The Plan coordinates its payments with the payments you may receive from other group insurance plans under which you or your dependents are covered. The following types of plans are coordinated with your Plan coverage:
* * *
- Motor vehicle insurance (your own or any other responsible party‘s) . . . .
HOW TO DETERMINE WHICH PLAN IS PRIMARY
In general, the Plan will be considered primary for:
- Employees . . . .
* * *
The Other Plan is Automatically Primary
Any other plan will be primary if it:
- Does not have a coordination of benefits or non-duplication of benefits provision;
- Is a program required or provided by law; or
- Is a motor vehicle insurance policy. (In certain states, the motor vehicle insurance policy allows you to designate your group plan as primary. If this applies to you, you must submit written proof to Aetna
that you have designated this Plan as primary.)[2]
Thus, benefits under the ERISA Plan are primary, but under certain circumstances the Plan expressly disavows primary coverage in favor of other insurance benefits, including benefits claimed under a program required or provided by law. As the assigned-claims insurer, Allstate is required to provide George with no-fault benefits pursuant to a program, i.e., the Michigan Assigned Claims Plan (MACP), and the program is required by law, see
Yet, “benefits through the assigned claims carrier are coordinated under
(2) Except as otherwise provided in this subsection, personal protection insurance benefits, including benefits arising from accidents occurring before March 29, 1985, payable through the assigned claims plan shall be reduced to the extent that benefits covering the same loss are available from other sources, regardless of the nature or number of benefit sources available and regardless of the nature or form of the benefits, to a person claiming personal protection insurance benefits through the assigned claims plan. This subsection only applies if the personal protection insurance benefits are payable through the assigned claims plan because no personal protection insurance is applicable to the injury, no personal protection insurance applicable to the injury can be identified, or the only identifiable personal protection insurance applicable to the injury is, because of financial inability of 1 or more insurers to fulfill their obligations, inadequate to
provide benefits up to the maximum prescribed. As used in this subsection, “sources” and “benefit sources” do not include the program for medical assistance for the medically indigent under the social welfare act, 1939 PA 280,
MCL 400.1 to 400.119b , or insurance under the health insurance for the aged act, title XVIII of the social security act,42 USC 1395 to 1395kkk-1 . [emphasis added.]
Therefore, under
After George filed her complaint against Allstate asserting that it was primarily responsible for payment of her first-party PIP benefits, Allstate moved for partial summary disposition. Allstate asserted that because the ERISA plan was a benefit source that covered the same loss, it was entitled to a set-off under
II. FEDERAL PREEMPTION
A. PRESERVATION
Allstate asserts that George‘s arguments on appeal as they relate to the language of the ERISA plan are unpreserved. An issue is preserved for appeal if it was raised, addressed, and decided by the trial court. Polkton Charter Twp v Pellegrini, 265 Mich App 88, 95; 693 NW2d 170 (2005). Based on our review of the lower court proceedings, it is clear that George‘s primary argument was that because her health insurance was through a self-funded ERISA plan, the set-off provision in
Yet, to the extent that George‘s argument is reliant on the language in the ERISA plan, it is clear that those aspects of her argument were raised and supported for the first time on reconsideration. As a general rule an issue is not preserved if it is raised for the first time in a motion for reconsideration in the trial court. Vushaj v Farm Bureau Gen Ins Co of Mich, 284 Mich App 513, 519; 773 NW2d 758 (2009). Still, as the ERISA plan was attached to a lower court filing, it is part of the record and we may consider it on appeal. See
the failure to consider the issue would result in manifest injustice, if consideration is necessary for a proper determination of the case, or if the issue involves a question of law and the facts necessary for its resolution have been presented.” Smith v Foerster-Bolser Constr, Inc, 269 Mich App 424, 427; 711 NW2d 421 (2006). Because the facts necessary for resolution of the issue were presented below and are undisputed on appeal, and because the issue involves a question of law that was actually decided by the trial court in response to the primary argument raised by the parties, we will consider all aspects of George‘s argument on appeal.
George argues that the trial court erred by granting partial summary disposition in Allstate‘s favor. We review de novo a trial court‘s decision on a motion for summary disposition. Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285 Mich App 362, 369; 775 NW2d 618 (2009). Under
C. ANALYSIS
“When determining whether federal law preempts a state statute, this Court must look to congressional intent.” American Med Security, Inc v Allstate Ins Co, 235 Mich App 301, 305; 597 NW2d 244 (1999). The United States Supreme Court has explained that “[p]reemption may be either express or implied, and is compelled whether Congress’ command is explicitly stated in the statute‘s language or implicitly contained in its structure and purpose.” FMC Corp v Holliday, 498 US 52, 56-57; 111 S Ct 403; 112 L Ed 2d 356 (1990) (quotation marks and citation omitted). The ERISA explicitly addresses the issue of preemption in three separate clauses:
The preemption clause itself,
29 USC 1144(a) , is extremely broad and provides that the provisions of the ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” That clause is tempered by29 USC 1144(b)(2)(A) , commonly known as the “saving clause,” which “returns to the States the power to enforce those state laws that ‘regulate insurance.’ ” FMC Corp, supra at 58. Further,29 USC 1144(b)(2)(B) sets out the “deemer” clause under which employee benefit plans themselves may not be deemed insurance companies for purposes of state laws “purporting to regulate” insurance companies or insurance contracts. [American Med Security, Inc, 235 Mich App at 305.]
Our Supreme Court has previously addressed whether
Our Supreme Court, however, determined that under principles of federal preemption, ”
In Alessi [v Raybestos-Manhattan, Inc, 451 US 504; 101 S Ct 1895; 68 L Ed 2d 402 (1981)], the United States Supreme Court held that state law was preempted to the extent that it attempted to control the terms of an ERISA pension plan. In Shaw [v Delta Air Lines, Inc, 463 US 85; 103 S Ct 2890; 77 L Ed 2d 490 (1983)], the Court interpreted the preemption clause to prevent state regulation of welfare benefits in multibenefit ERISA plans, while noting the danger of the administrative difficulty that would result from piecemeal state legislation. Next, the Court defined the saving clause to preserve state law mandating certain minimum benefits in an ERISA plan as long as the state law regulates insurance law rather than an ERISA plan directly. Metropolitan Life [Ins Co v Massachusetts, 471 US 724; 105 S Ct 2380; 85 L Ed 2d 728 (1985)]. Although the Court majority in Fort Halifax [Packing Co, Inc v Coyne, 482 US 1; 107 S Ct 2211; 96 L Ed 2d 1 (1987)], concluded that a one-time severance payment required by state law did not relate to an ERISA plan so that it was preempted, the majority did reiterate the ERISA purpose of avoiding variable state regulation that would pose administrative burdens to plan administrators. Finally, the Court concluded in FMC Corp that states could not regulate the contractual terms of ERISA benefits plans in cases of self-funded plans. ERISA plans, however, are subject to indirect regulation in a case in which a state regulates an insurance carrier that has contracted with the plans to provide coverage for claims made on the plans. [Id. at 386.]
The Auto Club Court then explained:
[T]he COB clause in an ERISA policy must be given its clear meaning without the creation of any artificial conflict based upon
MCL 500.3109a . Therefore, because both plans provide that no-fault insurance is primary where the potential for duplication of benefits occurs, we hold that the ERISA plans’ terms control. The no-fault insurer, ACIA, is primarily liable for the benefits at issue. Although the Michigan statute purports to regulate insurance and not ERISA plans, we conclude that it has a direct effect on the administration of the plans in thesecases because it would virtually write a primacy of coverage clause into the plans. This is the type of state regulation that would lead to administrative burdens that the historical progression of federal cases recounted earlier forbids. [Id. at 387 (emphasis added).]
The ERISA plan in Auto Club was self-funded.4 In American Med, this Court
In FMC Corp, the [United States Supreme] Court stated:
We read the deemer clause to exempt self-funded ERISA plans from state laws that “regulat[e] insurance” within the meaning of the saving clause. By forbidding States to deem employee benefit plans “to be an insurance company or other insurer . . . or to be engaged in the business of insurance,” the deemer clause relieves plans from state laws “purporting to regulate insurance.” As a result, self-funded ERISA plans are exempt from state regulation insofar as that regulation “relate[s] to” the plans. . . . State laws that directly regulate insurance are “saved” but do not reach self-funded employee benefit plans because the plans may not be deemed to be insurance companies, other insurers, or engaged in the business of insurance for purposes of such state laws. On the other hand, employee benefit plans that are insured are subject to indirect state insurance regulation. An insurance company that insures a plan remains an insurer for purposes of state laws “purporting to regulate insurance” after application of the deemer clause. The insurance company is therefore not relieved from state insurance regulation. The ERISA plan is consequently bound by state insurance regulations insofar as they apply to the plan‘s insurer. [Id. at 61 (emphasis added).]
The Supreme Court distinguished between insured and uninsured plans, “leaving the former open to indirect regulation while the latter are not.” Id. at 62, citing
Metropolitan Life Ins Co v Massachusetts, 471 US 724, 747; 105 S Ct 2380; 85 L Ed 2d 728 (1985). It emphasized that “if a plan is insured, a State may regulate it indirectly through regulation of its insurer and its insurer‘s insurance contracts.” FMC Corp, supra at 64. See also Lincoln Mut Casualty Co v Lectron Products, Inc, Employee Health Benefit Plan, 970 F2d 206, 210 (CA 6, 1992).
Section 3109a is not preempted under the circumstances of this case. The employee benefit plan at issue was not a self-funded plan, and plaintiff‘s insurer, United Wisconsin, was subject to Michigan insurance law and regulation, specifically § 3109a, even where that statute indirectly affects the plan. Our ruling does not allow our state law to control an ERISA plan, but simply recognizes that state law can regulate the insurer of an ERISA plan even if that regulation may indirectly affect the plan, which is the case here. [Id. at 305-307.]
Consequently, in order to preempt a state law on a coordination-of-benefits issue, an ERISA plan must be self-funded, American Med, 235 Mich App at 306-307, and contain an unambiguous coordination of benefits clause, Auto Club, 443 Mich at 389.
On appeal, Allstate seeks to avoid application of Auto Club by noting that, in
Reversed and remanded for further proceedings. We do not retain jurisdiction. George may tax costs as the prevailing party.
/s/ Anica Letica
/s/ Michael J. Kelly
/s/ Mark T. Boonstra