FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DAVID WONG, in his capacity as 

Trustee of the Anaplex Corporation 

Employee Stock Ownership Plan,

Plaintiff-Appellant, 

v.

DANETTE K. FLYNN-KERPER, as 

Executor of the Estate of Bernard M. 

Kerper; DOES, 1-20, inclusive,

Defendants-Appellees.

No. 19-56289

D.C. No.

2:18-cv-04468-

SJO-AFM

OPINION

Appeal from the United States District Court

for the Central District of California

S. James Otero, District Judge, Presiding

Argued and Submitted January 14, 2021

Pasadena, California

Filed June 7, 2021

Before: Michelle T. Friedland and Mark J. Bennett, Circuit 

Judges, and Frederic Block,* District Judge.

Opinion by Judge Bennett

* The Honorable Frederic Block, United States District Judge for the 

Eastern District of New York, sitting by designation.
2 WONG V. FLYNN-KERPER

SUMMARY**

ERISA

The panel reversed the district court’s dismissal, on the 

ground of equitable estoppel, of an ERISA action in which 

David Wong, Trustee of the Anaplex Corporation Employee 

Stock Ownership Plan, sought equitable and declaratory 

relief against Danette K. Flynn-Kerper, the holder of a 

promissory note from Anaplex.

Bernard Kerper, former trustee of the ESOP and late 

husband of Flynn-Kerper, acquired the promissory note in 

exchange for shares of Anaplex stock he sold to the ESOP. 

Alleging that the ESOP had paid greater than “adequate 

consideration” for the shares, Wong sought an adjustment to 

the purchase price and a declaration that the ESOP had 

overpaid. Flynn-Kerper moved to dismiss, arguing that 

Wong was equitably estopped from asserting his claims 

against her, based on an agreement between them that she 

alleged settled a prior lawsuit in which she had alleged 

Anaplex’s failure to repay promissory notes, including a 

note that Anaplex issued in connection with the challenged 

stock sale. The district court granted the motion to dismiss, 

concluding that ERISA did not bar promissory or equitable 

estoppel because Flynn-Kerper was not making a claim 

pursuant to the ERISA agreement, but instead was seeking 

to rebuff Wong’s claim for reformation of the promissory 

note.

** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.
WONG V. FLYNN-KERPER 3

Reviewing under a summary judgment standard, the 

panel held that Flynn-Kerper could not equitably estop 

Wong, the ERISA Trustee, because doing so would 

contradict the clear terms of the ESOP. The panel held that, 

in addition to satisfying the traditional equitable estoppel 

requirements, a party bringing a federal equitable estoppel 

claim in the ERISA context must also allege: 

(1) extraordinary circumstances; (2) that the provisions of 

the plan at issue were ambiguous such that reasonable 

persons could disagree as to their meaning or effect; and 

(3) that the representations made about the plan were an 

interpretation of the plan, not an amendment or modification 

of the plan. The panel held that a party cannot maintain a 

federal equitable estoppel claim against a trust fund where 

recovery on the claim would contradict written plan 

provisions. Here, if Wong were correct that the Anaplex 

shares were overvalued during an appraisal, applying 

equitable estoppel would require Wong to pay Flynn-Kerper 

greater than the fair market value of the shares on the date of 

purchase. This would contravene Section 6(d) of the ESOP, 

which required that the shares be purchased at fair market 

value on the date of purchase. Joining the Fourth Circuit, the 

panel held that the defensive use of equitable estoppel is 

barred when estopping the plaintiff would contradict an 

ERISA plan’s express terms. The panel therefore reversed 

the district court’s judgment and remanded.

COUNSEL

Marc S. Schechter (argued) and Corey F. Schechter, 

Butterfield Schechter LLP, San Diego, California, for 

Plaintiff-Appellant.
4 WONG V. FLYNN-KERPER

Shannon C. Papazis (argued) and Lauren E. Martin, 

Ferruzzo & Ferruzzo, LLP, Newport Beach, California, for 

Defendant-Appellee.

OPINION

BENNETT, Circuit Judge:

In this ERISA case, Defendant Danette Flynn-Kerper 

succeeded in equitably estopping ERISA Trustee Plaintiff 

David Wong in his suit seeking equitable and declaratory 

relief, even though her equitable estoppel claim contradicted 

the written provisions of the ERISA plan. But “a party 

cannot maintain a federal equitable estoppel claim against a 

trust fund where recovery on the claim would contradict 

written [ERISA] plan provisions,” Greany v. W. Farm 

Bureau Life Ins., 973 F.2d 812, 821 (9th Cir. 1992), or where 

it “would, as a practical matter, result in an amendment or 

modification of a plan,” Gabriel v. Alaska Elec. Pension 

Fund, 773 F.3d 945, 956 (9th Cir. 2014).

Flynn-Kerper tries to reframe the issue as whether a 

defendant can equitably estop a plaintiff contrary to the 

terms of an ERISA plan. This is a distinction without a 

difference. “The actuarial soundness of pension funds is, 

absent extraordinary circumstances, too important to permit 

trustees to obligate the fund to pay pensions to persons not 

entitled to them under the express terms of the pension plan,” 

id. (citation omitted), whether those “persons” be plaintiffs 

or defendants. Flynn-Kerper cannot equitably estop the 

ERISA Trustee from affirmatively enforcing the terms of the 

ERISA plan. For this and other reasons, we reverse.
WONG V. FLYNN-KERPER 5

I. FACTS

Wong, in his capacity as Trustee of the Anaplex 

Corporation Employee Stock Ownership Plan (ESOP), is 

suing Flynn-Kerper, in her individual capacity as the present 

holder of a $1,000,654.20 promissory note from Anaplex.

Bernard Kerper, the former trustee of the ESOP and the 

late husband of Flynn-Kerper, originally acquired that 

promissory note in April 2015, in exchange for shares of 

Anaplex stock he sold to the ESOP. Kerper—negotiating 

the purchase price for both himself and the ESOP—based 

the purchase price for this conflicted transaction on a 

valuation conducted by independent appraiser Brian Turner. 

Turner determined the fair market value of the Anaplex 

shares, in seeming compliance with the ESOP’s 

requirements. In particular, consistent with the ERISA 

requirements for transactions between an ERISA trust and 

its trustee,1 Section 6(d) of the ESOP provides:

Purchases of Company Stock by the Trust 

will be made at a price which . . . does not 

exceed the fair market value of such 

Company Stock . . . . [I]f the purchase of 

Company Stock is from a “disqualified 

1 Section 406(a)(1)(A) of ERISA defines the “sale . . . of any 

property between the plan and a party in interest” as a prohibited 

transaction. 29 U.S.C. § 1106(a)(1)(A). Yet § 408(b)(17)(A) makes an 

exception for such a transaction where “the plan receives no less, nor 

pays no more, than adequate consideration.” Id. § 1108(b)(17)(A). And 

§ 408(e)(1) makes an exception for the “acquisition . . . by a plan of 

[company shares] . . . if such acquisition . . . is for adequate 

consideration.” Id. § 1108(e)(1). Section 3(18) defines “adequate 

consideration” as “the fair market value of the asset as determined in 

good faith by the trustee or named fiduciary pursuant to the terms of the 

plan.” Id. § 1002(18).
6 WONG V. FLYNN-KERPER

person” as defined in Code Section 

4975(e)(2), the fair market value shall be 

determined as of the date of purchase.2

To ensure a proper determination of fair market value, the 

ESOP also provides that “[t]he determination of fair market 

value . . . shall be made by an independent appraiser.”

Although Kerper seemed to follow these requirements 

by hiring Turner to conduct an independent valuation of the 

shares, Wong alleges that the ESOP paid more than fair 

market value for Kerper’s shares. First, Wong claims that 

Turner was unaware of an omission in Anaplex’s accounting 

records caused by Kerper. Kerper had written checks to 

himself—or instructed employees to issue checks to or make 

payments for him—out of Anaplex’s general checking 

account. This resulted in Kerper owing Anaplex more than 

$1,000,000, a debt that was carried on Anaplex’s books as 

an asset. Wong alleges that at the time Anaplex hired Turner 

to value the shares, Kerper knew that even though the debt 

was carried on the books as a real asset of Anaplex, the debt 

was in default and would be uncollectible by the time of the 

April 2015 transaction. Wong also alleges that Kerper knew 

that no one had informed Turner of that fact. Thus, 

according to Wong, Kerper knew that Turner’s appraisal 

necessarily overvalued the company by more than 

$1,000,000, the difference between a debt that was fully 

collectible and one that was in default and uncollectible.

Wong contends that when Kerper died, four months after the 

2 The parties do not dispute that Kerper was a “disqualified person” 

and therefore fair market value should have been determined as of the 

date of purchase.
WONG V. FLYNN-KERPER 7

April 2015 sale, the uncollectible amount he owed Anaplex 

was $1,085,876.29 plus interest.

Second, Wong alleges that Kerper failed to disclose to 

Turner that Anaplex was being investigated by the U.S. 

Environmental Protection Agency (EPA) and was thus 

incurring hundreds of thousands of dollars in legal fees and 

facing hundreds of thousands of additional dollars in 

potential fines and penalties at the time of the valuation, 

further contributing to Turner’s overvaluing the shares.

Wong alleges that without this information, Turner’s 

valuation was “materially flawed” and resulted in a purchase 

price in excess of the fair market value—contrary to the 

ESOP’s terms. In his declaration, attached to Wong’s 

opposition to the motion to dismiss, Turner stated that when 

he prepared the valuation, he did not know that the loans—

which he treated as assets of Anaplex—were in default and 

would become legally uncollectible prior to the April 2015 

sale. He also stated he did not know of the EPA 

investigation. He explained that both pieces of information

would have been material to his valuation and would have

resulted in a valuation reflecting a reduced value of the 

shares, which were probably “worth significantly less than 

the $93.87 purchase price used by Mr. Kerper.”

Wong thus brought this action in May 2018. He sought 

equitable relief pursuant to 29 U.S.C. § 1132(a)(3)—ERISA 

§ 502(a)(3)—because the ESOP had paid greater than 

“adequate consideration” for the shares. Wong sought an 

adjustment to the purchase price and a declaration that the 

ESOP had overpaid.

Flynn-Kerper moved to dismiss for failure to state a 

claim. She argued that Wong was equitably estopped from 

asserting his claims against her, based on an agreement 
8 WONG V. FLYNN-KERPER

between them that she alleged settled a prior lawsuit. FlynnKerper had sued Anaplex in state court in 2016, alleging 

Anaplex’s failure to repay various promissory notes, 

including the April 2015 note that Anaplex issued in 

connection with the challenged stock sale. Wong and 

Anaplex then entered into a Note Repayment Agreement 

(NRA) with Flynn-Kerper, (1) establishing a new repayment 

schedule for the April 2015 promissory note and 

(2) requiring Flynn-Kerper to dismiss her first four causes of 

action (but not her claim for overdue payments on the April 

2015 note). In October 2017, Flynn-Kerper dismissed all her 

claims. Though the NRA does not specify whether the 

required dismissals were to be with or without prejudice, 

Flynn-Kerper dismissed without prejudice, including the 

claim for overdue payments on the April 2015 note.

Flynn-Kerper and Wong do not agree on four facts 

relating to the NRA. First, regarding Wong’s intent in 

entering the NRA, Flynn-Kerper argues that Wong entered 

the agreement to “confirm” the amount owed and the 

ESOP’s obligation to pay it. Wong argues that the “NRA 

did nothing more than acknowledge the original obligation 

of the ESOP under the Promissory Note” and “in no way . . . 

‘confirmed[]’ . . . that the Purchase Price represented no 

more than adequate consideration for the Shares as of the 

Transaction date.”

Second, regarding Wong’s knowledge when entering the 

agreement, Flynn-Kerper argues that “Wong was on notice 

of the unenforceability of the debt given the State Action was 

actively litigating the propriety and enforceability of that 

alleged debt,” and that the “same can be said of Wong’s 

knowledge of the EPA investigation, fines, and litigations.” 

Wong responds that it was his “honest belief . . . at the time 

he entered into the NRA that the Debt would be recovered,”
WONG V. FLYNN-KERPER 9

and that “although [he] was aware of the existence of the 

EPA investigation” prior to entering the NRA, he was 

unaware of Kerper’s failure to report that investigation to 

Turner, the pertinent fact for purposes of this litigation, until 

later.

Third, regarding Flynn-Kerper’s knowledge when 

entering the agreement, Flynn-Kerper asserts (though not in 

a declaration) that she “never would have signed the NRA if 

she were aware [Wong] intended not to pay her yet continue 

to litigate the value of the Note owed to her.” Wong counters 

that it “was known to [Flynn-Kerper] at the time she 

dismissed the State Case . . . that the ESOP would most 

likely be bringing a federal claim challenging the Purchase 

Price of the Shares,” citing language in the NRA that he 

believes “expressly retained . . . the right to later bring 

claims.”3

Finally, regarding Flynn-Kerper’s reliance on the NRA 

in dismissing her claims in the state action, she argues she 

did so “[a]s a result of and in reliance upon the NRA and 

negotiations.” Wong responds that “it cannot reasonably be 

argued that [Flynn-Kerper] reasonably and foreseeably 

relied on, or was enticed by, the NRA when she voluntarily 

chose to dismiss claims in the State Case.” He bases this 

assertion on (1) Flynn-Kerper’s five-month delay between 

entering the NRA and filing the request for dismissal 

3 Wong points to language in the NRA stating that “[t]he Parties 

hereby acknowledge and agree that [the NRA] does not fully settle all 

outstanding claims existing between the Executor, the ESOP, and 

Anaplex Corporation.” He also points to language stating that 

“payments shall continue to be made to [Flynn-Kerper] until further . . . 

order of the Court” and that “[n]o modification, amendment or waiver of 

any of the [NRA] provisions . . . shall be binding . . . unless . . . ordered 

by the Court.”
10 WONG V. FLYNN-KERPER

(despite that the NRA required her to dismiss the first four 

causes of action in five days); (2) the fact that the NRA did 

not require her to dismiss the cause of action involving the 

April 2015 note; (3) the fact that Flynn-Kerper dismissed all 

the claims without prejudice in the state action, including the 

cause of action involving the April 2015 note;4 and (4) her 

willingness to dismiss the case even after receiving an email 

from Wong’s counsel one day prior stating, “the amount due 

on the note is not being warrantied that it is not subject to 

change to the extent the [ESOP] over-paid.”5

Other than the argument that Flynn-Kerper did not rely 

on the NRA in dismissing her claims, Wong raised these 

factual disputes in his opposition to the motion to dismiss, 

which he supported with his declaration, as well as 

declarations from Turner and the president of Anaplex. 

Wong also requested that the district court take judicial 

notice of the state court decision finding Kerper’s debt to 

Anaplex legally uncollectible after the parties entered the 

NRA.

The district court granted Flynn-Kerper’s motion to 

dismiss without leave to amend, acknowledging the factual 

disagreements between Wong and Flynn-Kerper but finding 

4 At argument, we asked Flynn-Kerper’s counsel whether the NRA 

required dismissal with or without prejudice. However, she was unable 

to answer, even though it is obvious that whether the NRA’s dismissal 

clause required permanent or temporary dismissal of claims is relevant 

to whether the NRA settled the ESOP’s note repayment obligations.

5 Furthermore, the evidence of Flynn-Kerper’s knowledge that 

Wong might later bring a lawsuit relating to the April 2015 promissory 

note is also relevant to whether she relied on the NRA when she 

dismissed her claims in the state action.
WONG V. FLYNN-KERPER 11

Wong’s arguments “unconvincing.”6 The district court thus 

concluded:

[T]here is no question that [Wong] made a 

clear and unambiguous promise to pay 

[Flynn-Kerper the outstanding balance on the 

April 28, 2015 note, plus interest. FlynnKerper] reasonably and foreseeably relied on 

this promise when she voluntarily dismissed 

her various claims in state court. Permitting 

[Wong] to now renege on this agreement and 

reform the promissory note would punish 

[Flynn-Kerper] for her reliance on [Wong’s] 

representation. This is an impermissible 

outcome.

Wong then filed a motion for reconsideration, raising 

many of the same arguments as in his opposition to the 

motion to dismiss, along with several new ones: (1) that a 

trust may not be equitably estopped if doing so contradicts 

written ERISA plan provisions; and (2) that Flynn-Kerper 

did not rely on the NRA in dismissing all of her state court 

claims (for the reasons already discussed).

The district court addressed each of these arguments on 

the merits, including those raised for the first time in the 

motion for reconsideration, and it denied the motion. 

Regarding the issue of ERISA preemption, the district court 

adopted Flynn-Kerper’s position that ERISA “does not bar 

6 The district court left almost all of Wong’s arguments unaddressed, 

including that the NRA did “not fully settle all outstanding claims 

existing between” him and Flynn-Kerper, and that the NRA did not 

require Flynn-Kerper to dismiss the claim pertaining to the April 2015 

promissory note.
12 WONG V. FLYNN-KERPER

promissory or equitable estoppel in this context,” where 

“Defendant is not making a claim pursuant to the [ERISA] 

agreement, but is instead seeking to rebuff Plaintiff’s own 

claim for reformation of a promissory note.” According to 

the district court, “estoppel [has] no effect whatsoever on the 

plan’s written provisions” in such a scenario.

Wong now appeals to this court, where we review the 

Rule 12(b)(6) dismissal de novo. Ariz. Students’ Ass’n v. 

Ariz. Bd. of Regents, 824 F.3d 858, 864 (9th Cir. 2016).

II. DISCUSSION

When “matters outside the pleadings are presented to and 

not excluded by the court” on a Rule 12(b)(6) motion, “the 

motion must be treated as one for summary judgment under

Rule 56.” Fed. R. Civ. P. 12(d). Thus, because both parties 

submitted exhibits, and because Wong submitted 

declarations, we look at the findings of the district court 

under a summary judgment standard. Under that standard, a 

district court may dismiss a case only if there is “no genuine 

dispute as to any material fact,” Fed. R. Civ. P. 56(a), 

viewing the evidence “in the light most favorable to the 

opposing party,” Adickes v. S.H. Kress & Co., 398 U.S. 144, 

157 (1970).

Equitable estoppel applies if the party to be estopped 

knew the facts and intended for his conduct to be acted on, 

and if the party asserting estoppel was ignorant of the true 

facts and relied on the other party’s conduct to her injury. 

Ellenburg v. Brockway, Inc., 763 F.2d 1091, 1096 (9th Cir. 

1985), abrogated on other grounds as recognized by 

Watkins v. Westinghouse Hanford Co., 12 F.3d 1517 (9th 

Cir. 1993). Thus, applying equitable estoppel to Wong’s 

claim would raise questions about Wong’s knowledge and 

intent when entering the NRA, and Flynn-Kerper’s 
WONG V. FLYNN-KERPER 13

knowledge when entering the NRA and reliance on the NRA 

in dismissing her claims in the state action. All of these are 

factual issues. See Simmons v. United States, 805 F.2d 1363, 

1368 (9th Cir. 1986) (knowledge is an issue of fact); Nat’l 

Union Fire Ins. v. Argonaut Ins., 701 F.2d 95, 97 (9th Cir. 

1983) (contractual intent is an issue of fact); Atkins, Kroll 

(Guam), Ltd. v. Cabrera, 295 F.2d 21, 23 (9th Cir. 1961) 

(reliance is an issue of fact). And all are subject to genuine 

dispute. Under the appropriate Rule 56 standard, then, even 

assuming estoppel principles were available in the ERISA 

context presented here, the district court could not equitably 

estop Wong’s claims at this stage of the proceedings merely 

because it found Wong’s position “unconvincing.”7

7 The same holds true for Flynn-Kerper’s arguments that we can 

affirm on grounds not addressed by the district court. For example, 

Flynn-Kerper argues that we can dismiss this case under the doctrine of 

judicial estoppel, which bars inconsistent positions by the same party in 

different court proceedings. But the parties have a factual disagreement 

about whether the NRA reflects a prior inconsistent position on Wong’s 

part. See New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (naming 

clear inconsistency in a party’s earlier and later positions before a court 

as one of “several factors typically inform[ing] the decision whether to 

apply [judicial estoppel] in a particular case”). This factual dispute 

cannot be resolved at this stage of the proceedings.

Flynn-Kerper also argues that Wong should be barred from seeking 

equitable relief because he has “unclean hands” and acted in “bad faith,” 

characterizing Wong’s lawsuit as “nothing more than the ESOP’s 

devious attempt to completely avoid its contractual obligation to pay for 

stock that it purchased from [Kerper].” But whether Wong has “unclean 

hands” or acted in bad faith turns on his intent in entering the NRA, as 

well as his knowledge before doing so. See Fuddruckers, Inc. v. Doc’s 

B.R. Others, Inc., 826 F.2d 837, 847 (9th Cir. 1987) (“To prevail [on a 

defense of unclean hands], the defendant must demonstrate that the 

plaintiff’s conduct is inequitable . . . .”).
14 WONG V. FLYNN-KERPER

But more fundamentally, the district court also erred in 

its ERISA analysis. Flynn-Kerper cannot equitably estop 

Wong, the ERISA Trustee, because doing so would 

contradict the clear terms of the ESOP. “[F]ederal equitable 

estoppel principles can, in certain circumstances, apply to 

some claims arising under ERISA.”8 Greany, 973 F.2d at 

821 (emphasis added). However, in addition to satisfying 

the traditional equitable estoppel requirements, a party 

bringing a federal equitable estoppel claim in the ERISA 

context must also allege: “(1) extraordinary circumstances; 

(2) that the provisions of the plan at issue were ambiguous 

such that reasonable persons could disagree as to their 

meaning or effect; and (3) that the representations made 

about the plan were an interpretation of the plan, not an 

Finally, Flynn-Kerper argues that Wong’s claims are barred by the 

statute of limitations, which she believes expired on April 28, 2018, at 

the latest. But again, whether the statute of limitations has run on 

Wong’s claim likely turns, at least in part, on when Wong acquired the 

knowledge that Turner’s valuation was too low and whether Kerper 

concealed information, which are both disputed facts. See 29 U.S.C. 

§ 1113 (“No action may be commenced under this subchapter . . . after 

. . . three years after the earliest date on which the plaintiff had actual 

knowledge of the breach or violation; except that in the case of . . . 

concealment, such action may be commenced not later than six years 

after the date of discovery of such breach or violation.”).

8 In contrast, promissory estoppel never applies in the ERISA 

context. See DeVoll v. Burdick Painting, Inc., 35 F.3d 408, 412 (9th Cir. 

1994). Wong contends that the district court committed reversible legal 

error by applying promissory estoppel, rather than equitable estoppel. It 

is unclear from the district court’s decision whether it intended to apply 

equitable estoppel but used the wrong terminology, or whether it 

intended to apply the related doctrine of promissory estoppel, which 

would have been an error. We assume, therefore, that the reference to 

promissory estoppel was a mistake in terminology. But for the reasons 

explained below, applying equitable estoppel in this context was 

likewise error.
WONG V. FLYNN-KERPER 15

amendment or modification of the plan.” Gabriel, 773 F.3d 

at 957 (quotation marks and citation omitted). “[A] party 

cannot maintain a federal equitable estoppel claim against a 

trust fund where recovery on the claim would contradict 

written plan provisions.” Greany, 973 F.2d at 821.

The policy concerns motivating these requirements are 

straightforward. “The actuarial soundness of pension funds 

is, absent extraordinary circumstances, too important to 

permit trustees to obligate the fund to pay pensions to 

persons not entitled to them under the express terms of the 

pension plan.” Gabriel, 773 F.3d at 956 (citation omitted). 

“If the effective terms of the plan may be altered by 

transactions between officers of the plan and individual plan 

participants . . . , the rights and legitimate expectations of 

third parties to retirement income may be prejudiced.” 

Bloemker v. Laborers’ Loc. 265 Pension Fund, 605 F.3d 

436, 440 (6th Cir. 2010) (citation omitted). Even if the use 

of equitable principles might foster the fair treatment of one 

litigant, we will not use those principles to modify the plan 

and thereby unfairly treat the other plan participants. Cf. 

Kramer v. Toyota Motor Corp., 705 F.3d 1122, 1133 (9th 

Cir. 2013) (“The ‘linchpin’ for equitable estoppel is 

fairness.”).

Here, allowing Flynn-Kerper to assert her equitable 

estoppel claim against Wong would contradict the clear 

terms of the ESOP. If Wong is correct that Turner 

overvalued the Anaplex shares during his appraisal, applying 

equitable estoppel would require Wong to pay Flynn-Kerper 

greater than the fair market value of the shares on their date 

of purchase. This would contravene Section 6(d) of the 

ESOP, which requires that the shares be purchased at fair 

market value on the date of purchase.
16 WONG V. FLYNN-KERPER

Flynn-Kerper contends that the “defense of estoppel is 

never addressed by the body of case law Wong cites to.” She 

tries to distinguish her use of equitable estoppel against 

Wong by emphasizing that she is using it as “a shield to 

protect against a claim asserted by the ESOP,” rather than 

“an offensive tool to extract benefits from the plan.” While 

our circuit has yet to decide whether a defense of equitable 

estoppel is barred in an ERISA case brought by the ERISA 

plan, the same reasons for prohibiting equitable estoppel 

apply to both the affirmative use and the “defensive” use. 

Regardless of whether it is a plaintiff or a defendant who 

seeks to estop a trustee from enforcing an ESOP’s terms, 

such estoppel would come at the expense of plan 

participants, who have relied on the plan terms and who are 

not responsible for the conduct that gave rise to the claimed 

estoppel.9 See Bloemker, 605 F.3d at 440.

Furthermore, were it relevant, the distinction FlynnKerper draws between the use of equitable estoppel as an 

“offensive tool” and equitable estoppel as a “shield” would 

be inapplicable here. Wong is acting preemptively in 

advance of Flynn-Kerper’s attempt to collect on the note. If 

Wong had done nothing and refused to pay on the note, 

Flynn-Kerper would have had to sue again to collect. Wong 

would have interposed the ESOP terms as a defense, and 

Flynn-Kerper would have argued that Wong was equitably 

estopped. That Wong acted first does not change the 

analysis. A party, whether a plaintiff or a defendant, cannot 

9 “[E]stoppel requires reasonable or justifiable reliance by the party 

asserting the estoppel.” Sprague v. Gen. Motors Corp., 133 F.3d 388, 

404 (6th Cir. 1998) (en banc). A “party’s reliance can seldom, if ever, 

be reasonable or justifiable if it is inconsistent with the clear and 

unambiguous terms of plan documents available to or furnished to the 

party.” Id.
WONG V. FLYNN-KERPER 17

use equitable estoppel to contradict the express terms of an 

ERISA plan in litigation with the plan.10

In so holding, we join the Fourth Circuit, which bars the 

defensive use of equitable estoppel when estopping the 

plaintiff would contradict an ERISA plan’s express terms. 

See Ret. Comm. of DAK Ams. LLC v. Brewer, 867 F.3d 471, 

485 (4th Cir. 2017). And we defer to “ERISA’s focus on 

what a plan provides,” consistent with Supreme Court 

precedent. US Airways, Inc. v. McCutchen, 569 U.S. 88, 100 

(2013) (declining to apply “equitable defenses alleging 

unjust enrichment,” id. at 95, when doing so would 

contradict “the plan’s clear terms,” id. at 98, and noting that 

this holding “fits lock and key with ERISA’s focus on what 

a plan provides,” id. at 100). Equitable estoppel has no place 

10 Flynn-Kerper cites two cases for the proposition that ERISA plans 

should not bar equitable claims by third parties. See The Meadows v. 

Emps. Health Ins., 47 F.3d 1006, 1009 (9th Cir. 1995); Cath. Healthcare 

West-Bay Area v. Seafarers Health & Benefits Plan, 321 F. App’x 563, 

564 (9th Cir. 2008). But Flynn-Kerper is not a “third party” here. As 

discussed above, her husband was the former trustee of the ESOP and 

allegedly withheld information that would have materially affected the 

valuation of his shares. “The key to distinguishing between what ERISA 

preempts and what it does not lies . . . in recognizing that the statute 

comprehensively regulates certain relationships: for instance, the 

relationship between plan and plan member, between plan and employer, 

between employer and employee . . . , and between plan and trustee.” 

Gen. Am. Life Ins. v. Castonguay, 984 F.2d 1518, 1521 (9th Cir. 1993)

(second emphasis added). Thus, ERISA supersedes laws and equitable 

principles that would otherwise interfere with a trustee’s relationship to 

the trust, given that “ERISA already regulates the trust-trustee 

relationship.” Id. at 1522. That Flynn-Kerper is a successor in interest

to a prior trustee—her late husband—who is alleged to have improperly 

benefited from an overvaluation of the shares, rather than the original 

trustee, does not alter the conclusion that she is a non–third party whose 

relationship to the ESOP is governed by the ESOP’s terms.
18 WONG V. FLYNN-KERPER

at any stage in this litigation, and the district court erred in 

dismissing the case based on it.11

REVERSED AND REMANDED.12

11 Flynn-Kerper does not argue that Wong waived this issue by 

failing to raise it until his motion for reconsideration. Flynn-Kerper thus 

waived the defense of waiver. See Gallardo v. United States, 755 F.3d 

860, 865 (9th Cir. 2014) (“Because the [appellee] failed to argue waiver 

in its answering brief, its waiver argument is itself waived.”). Even were 

that not the case, “we may exercise discretion to consider a waived issue 

in certain cases, one such case being when the issue presented is a pure 

question of law.” Self-Realization Fellowship Church v. Ananda Church 

of Self-Realization, 59 F.3d 902, 912 (9th Cir. 1995). Because ERISA 

preemption is a question of law, we may exercise our discretion to 

consider the issue on appeal—especially given that the district court had 

the opportunity to consider and did address the issue on its merits in the 

order denying the motion for reconsideration. See PFS Distrib. Co. v. 

Raduechel, 574 F.3d 580, 598 (8th Cir. 2009).

12 Wong also challenges the district court’s denial of his motion for 

leave to amend. In light of our reversal of the dismissal of Wong’s 

complaint, we need not decide whether the district court abused its 

discretion by denying Wong’s motion. But we note that district courts 

should apply Rule 15(a) liberally, particularly when no answer has been 

filed, as was the case here. See Schreiber Distrib. Co. v. Serv-Well 

Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986) (“[L]eave to amend 

should be granted unless the court determines that the allegation of other 

facts consistent with the challenged pleading could not possibly cure the 

deficiency.”).