Great -West Life & Annuity Insurance Company v. Allstate Insurance Company

8 Great-West Life v. Allstate Ins. Co. No. 99-1068
what dependency means in its description of “Dependent
Survivors” under its plan:
3. “Dependent Survivors” means:
a. the surviving spouse of the deceased injured
person...
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
earning; or
iii. engaged in full-time, formal program of
academic or vocational education or training.
Based on Allstate’s own definition, Matthew does not qualify
as a “Dependent” under the Allstate policy. Thus, the district
court did not err in categorizing Matthew as “a person other
than a Dependent” under the Great-West plan. As a
consequence of that categorization, the district court was
correct in subordinating Great-West’s plan to Allstate’s in this
case.
IV.
Accordingly, we AFFIRM the district court’s grant of
summary judgment in favor of Great-West.
*The Honorable David A. Katz, United States District Judge for the
Northern District of Ohio, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0045P (6th Cir.)
File Name: 00a0045p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
GREAT -W EST LIFE &
ANNUITY INSURANCE
C OMPANY ,
Plaintiff-Appellee,
v.
ALLSTATE INSURANCE
C OMPANY ,
Defendant-Appellant.
;>

1
No. 99-1068
Appeal from the United States District Court
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.*

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2 Great-West Life v. Allstate Ins. Co. No. 99-1068
1The policy was issued pursuant to Michigan’s No-Fault Insurance
Act, Mich. Comp. Laws § 500.3101 et seq.
_________________
COUNSEL
ARGUED: Daniel S. Saylor, GARAN, LUCOW, MILLER,
SEWARD, COOPER & BECKER, Detroit, Michigan, for
Appellant. James P. Murphy, BERRY, MOORMAN, KING,
COOK & HUDSON, Detroit, Michigan, for Appellee.
ON BRIEF: Daniel S. Saylor, GARAN, LUCOW, MILLER,
SEWARD, COOPER & BECKER, Detroit, Michigan, John
P. Seyfried, GARAN, LUCOW, MILLER, SEWARD,
COOPER & BECKER, Port Huron, Michigan, for Appellant.
James P. Murphy, BERRY, MOORMAN, KING, COOK &
HUDSON, Detroit, Michigan, for Appellee.
_________________
OPINION
_________________
DAVID A. KATZ, District Judge. In this dispute over
which plan has priority over payment of medical expenses
arising from an automobile accident, Allstate Insurance
Company (“Allstate”) appeals the district court’s grant of
summary judgment in favor of Great-West Life & Annuity
Insurance Company (“Great-West”). For the reasons stated
below, we affirm the district court’s decision.
I.
On February 25, 1996, Matthew Gerig was seriously
injured in a single vehicle automobile accident and incurred
extensive medical expenses. At the time of the accident,
Matthew was 20 years old and residing with his parents,
Doyle and Linda Gerig. Matthew was covered by a policy of
no-fault automobile insurance1 issued to his parents by
Allstate. In addition, Matthew was covered under an
No. 99-1068 Great-West Life v. Allstate Ins. Co. 7
• who has not reached age 21; and
• who is not married; and
• who is chiefly dependent upon you for support; and
• for whom you are entitled to an income tax exemption.
In addition, the age limitation does not apply to children who
are full-time students or who are incapable of supporting
themselves due to mental retardation or a physical disability.
In interpreting ERISA contract provisions, we have noted
that such interpretations are made “according to their plain
meaning, in an ordinary and popular sense.” Perez v. Aetna
Life Ins. Co., 150 F.3d 550, 556 (6th Cir. 1998) (en banc).
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
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.
Allstate does not contest the district court’s finding that
Matthew qualifies as a Dependent of his father under the
Great-West plan. Where Allstate disagrees, however, is with
the district court’s interpretation of the term “resident
relative”, described in the Allstate coordination of benefits
clause, as distinguishable from the term “Dependent” in the
Great-West plan. Allstate argues that the term “resident
relative” in the Allstate plan is not distinguishable from the
term “Dependent” in the Great-West plan, and therefore
Matthew qualifies as a “Dependent” under Great-West’s
definition of that term. Thus, according to Allstate, Matthew
should not be treated by the court as “a person other than as
a Dependent” under the Great-West integration of benefits
clause. We disagree.
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
Personal Protection Benefits Coverage VA, detail exactly

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

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4 Great-West Life v. Allstate Ins. Co. No. 99-1068
• When a claim is made for a Dependent child who is
covered by more than one plan: . . .
• A plan that covers a person as:
- a laid-off Employee; or
- a Retired Employee; or
- a Dependent of such Employee;
will determine its benefits after the plan that does not
cover such person as:
- a laid-off Employee; or
- a Retired Employee; or
- a Dependent of such Employee.
If one of the plans does not have this rule, and if, as a
result, the plans do not agree on the order of benefits,
this rule will not apply.
• If none of the above rules establishes the order of
payment, a plan which the person has been covered for
the longer time will determine its benefits before a
plan covering that person for a shorter time.
Under the Allstate policy, the COB clause provides as
follows:
Coordination of Benefits
1. If Allowable Expenses are identified as excess on the
declarations page, Allowable Expenses benefits will be
reduced by any amount paid or payable under the
provisions of any:
a) individual, blanket or group accident disability or
hospitalization insurance.
b) medical or surgical reimbursement plan.
c) automobile no-fault benefits or medical expense
benefits, or premises insurance affording medical
expense benefits.
This reduction applies only to amounts that are
duplication of payment for the same items of loss or
expense. This reduction applies only to you or a
resident relative.
No. 99-1068 Great-West Life v. Allstate Ins. Co. 5
2The district court, in granting declaratory relief in favor of Great-
West, stated:
Defendant Allstate Insurance Company’s obligation to pay
benefits to or on behalf of Matthew Gerig in connection with
Mr. Gerig’s injuries incurred in his February 26, 1996
automobile accident is primary to Plaintiff Great-West Life &
Annuity Insurance Company’s obligation to pay the same
benefits.
If Allowable Expenses are identified as excess on the
declarations page, the injured person must seek
treatment afforded for, or payable by his other coverage
before we will be liable for any excess not paid for by
such other coverage. You have a duty to mitigate your
damages.
Following submission of the claim to the employee benefit
plan, Great-West administered payments of nearly $500,000
for the medical expenses related to Matthew’s accident.
Great-West then sued Allstate for recovery of those
expenditures on the basis of its contention that Allstate is first
in priority for payment of Matthew’s medical expenses
pursuant to its integration of benefits provision. Both parties
submitted motions for summary judgment.
On December 8, 1998, after the parties waived oral
argument, the district court issued an order granting Great-
West’s motion for summary judgment and denying Allstate’s
motion for summary judgment. The court determined that the
rule pertaining to the “Order of Benefit Determination” of
Great-West’s integration of benefits provision – stating that
“a plan that covers a person other than as a Dependent will
determine its benefits before a plan that covers such a person
as a Dependent”– resolved the priority dispute in favor of
Great-West. The Allstate plan, in other words, covered
Matthew as a “resident relative,” while the Great-West plan
covered him as a Dependent, thus making Allstate’s coverage
primary.2
Allstate filed a timely notice of appeal to this Court on
January 7, 1999.

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