*

The Honorable Arthur J. Tarnow, United States District Judge for the Eastern District of

Michigan, sitting by designation.

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 09a0399p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

THE LONGABERGER COMPANY, as

Administrator of the Longaberger Family of

Companies Group Medical Plan,

 Plaintiff-Appellee,

v.

JEFFREY A. KOLT,

Defendant-Appellant.

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No. 08-4432

Appeal from the United States District Court

for the Northern District of Ohio at Cleveland.

No. 05-00197—Lesley Brooks Wells, District Judge.

Argued: October 14, 2009

Decided and Filed: November 16, 2009 

Before: BATCHELDER, Chief Judge; GRIFFIN, Circuit Judge; TARNOW,

District Judge.*

_________________

COUNSEL

ARGUED: George H. Carr, GALLAGHER SHARP, Cleveland, Ohio, for Appellant.

Daran Paul Kiefer, KREINER & PETERS CO. L.P.A., Cleveland, Ohio, for Appellee.

ON BRIEF: George H. Carr, Timothy John Fitzgerald, GALLAGHER SHARP,

Cleveland, Ohio, for Appellant. Daran Paul Kiefer, KREINER & PETERS CO. L.P.A.,

Cleveland, Ohio, for Appellee.

_________________

OPINION

_________________

GRIFFIN, Circuit Judge. Defendant Jeffrey A. Kolt appeals the district court’s

denial of his motion for summary judgment and its grant of summary judgment for

1
No. 08-4432 The Longaberger Co. v. Kolt Page 2

1

Although Samuel Billiter was a defendant below, he did not appeal the district court’s decision.

2

The record contains a March 25, 2004, letter addressed to Kolt from Longaberger, which

indicates, pursuant to Kolt’s request, that Longaberger has provided him with a copy of the Summary Plan

Description of the Longaberger Plan. The record also contains a March 5, 2004, letter from Kolt to Health

Design Plus, Longaberger’s claims administrator, indicating Kolt’s willingness to “protect [its] rights” to

recovery. 

plaintiff The Longaberger Company (“Longaberger”), an Employee Retirement Income

Security Act (“ERISA”) governed, self-funded employee welfare benefit plan, which

sought to enforce the terms of the Plan’s reimbursement provisions against attorney Kolt

and his client Samuel Billiter.1 Kolt argues that Longaberger’s claims for monetary

relief were barred by ERISA and principles of judicial estoppel, and were premised on

an invalid lien which was subordinate to Kolt’s lien. We disagree and affirm. In doing

so, we hold that the district court correctly granted Longaberger equitable restitution as

authorized by § 502(a)(3) of ERISA. 

I. 

On June 15, 2003, Samuel Billiter was involved in an automobile accident in

which he was seriously injured. Longaberger’s self-funded plan covered Samuel Billiter

(as the dependent child of Longaberger employee Theresa Billiter), paying his medical

bills in the sum of $113,668.31. 

Kolt, an Ohio attorney, represented Samuel and Theresa Billiter in civil tort

actions against the negligent drivers involved in the June 15, 2003, accident. In July

2004, Kolt reached settlements with the insurance companies of the two negligent

drivers, receiving $35,000 from one carrier and $100,000 from the other carrier. Kolt

deposited the $135,000 from the two separate settlements into his Interest on Lawyer’s

Trust Account (“IOLTA”). He also sent an August 4, 2004, letter to Longaberger

notifying it of the settlements, and stating: “Mr. Billiter would like to try to amicabl[y]

satisfy his subrogation obligation to you . . . .”2

 

On December 8 and 9, 2004, Kolt disbursed the majority of the settlement funds

from his IOLTA. Kolt kept $45,000 for himself as an attorney fee, disbursed $1,750 to

attorney Jerry Alan Goodwin as compensation for his representation of Samuel Billiter
No. 08-4432 The Longaberger Co. v. Kolt Page 3

in potential criminal proceedings, disbursed $86,082.18 to Samuel Billiter, and disbursed

$1,000 to attorney Elliot Barrat in consideration for his representation of Samuel Billiter

in bankruptcy proceedings. Accordingly, only $1,000 remained in the IOLTA. 

The Longaberger Company Health Plan is governed by ERISA and self-funded

by Longaberger employees who contribute to the Plan through payroll deductions. At

the time of the June 15, 2003, automobile accident, the Plan’s provisions provided

Longaberger with “RIGHTS OF REIMBURSEMENT AND SUBROGATION[.]”

The Plan’s subrogation and reimbursement terms provided: 

The Plan does not cover: 

(1) Expenses for which another party may be responsible

as a result of liability for causing or contributing to the

injury or illness of you or your Dependent(s); or 

(2) Expenses to the extent they are covered under the

terms of any automobile medical, automobile no fault,

uninsured or underinsured motorist, workers’

compensation, government insurance, other than

Medicaid, or similar type of insurance or coverage when

insurance coverage provides benefits on behalf of you or

your Dependent(s). 

If you or your Dependent(s) incur health care expenses as described in

(1) and (2) above, the Plan shall automatically have a first priority lien

upon the proceeds of any recovery by you or your Dependent(s) from

such party to the extent of any benefits provided to you or your

Dependent(s) by the Plan. You or your Dependent(s) or their

representative shall execute such documents as may be required to secure

the Plan’s rights. The Plan has the right to recover from you or your

Dependent(s) the lesser of: 

• The amount actually paid by the Plan; or 

• An amount actually you or your Dependent(s)

received from the third party at the time that the

third party’s liability is determined and satisfied;

whether by full or partial settlement, judgment,

arbitration or otherwise. 

When the Plan pays benefits to or on behalf of you or your Dependent(s),

the Plan shall be subrogated, unless otherwise prohibited by law, to your

and your Dependents’ claims, causes of action or rights to recovery or
No. 08-4432 The Longaberger Co. v. Kolt Page 4

3

Longaberger subsequently filed a first amended complaint on February 21, 2005, and a second

amended complaint on November 6, 2006. 

rights against any person who might be liable or found legally liable by

a court of competent jurisdiction for the injury that necessitated the

hospitalization, medical or the surgical treatment for which Plan benefits

were paid. Such subrogation rights shall extend only to the recovery by

the Employer of the benefits it has paid for such hospitalization,

treatment or other medical care. 

The Plan shall have a first priority claim against any proceeds paid by or

on behalf of a liable third party and shall be entitled to reimbursement or

subrogation regardless of whether you or your Dependent(s) have been

made whole. The Plan’s rights shall not be subject to reduction under

any common fund or similar claims or theories. However, the Employer

or its authorized representative may agree to a reduction from amounts

recovered to pay reasonable and necessary expenditures, including

attorney’s fees, incurred in obtaining the recovery of Plan benefits. This

may occur when, in the judgment of Plan Administrator, it would be in

the best interests of the Plan to agree to such terms. These rights of

reimbursement and subrogation are reserved whether the liability of a

third party arises in tort, contract or otherwise. Regardless of how

proceeds are designated, the Plan’s rights shall attach to any full or

partial judgment, settlement or other recovery. 

In the event that benefits are to be paid by the Plan for expenses resulting

from an injury for which a third party is liable, you or your Dependent(s),

as appropriate, shall execute a Subrogation/Right of Reimbursement

Agreement, in a form prescribed by the Plan. In addition, you and your

Dependent(s) shall cooperate fully in the enforcement of the Plan’s

rights, and shall take all actions necessary to enable the Plan to secure

such rights and in no way prejudice or diminish such rights without the

Plan’s written consent. You or your Dependent(s) shall inform the Plan

of any settlement offers, and shall take no action in settlement or

otherwise that would diminish the Plan’s subrogation rights against the

third party or diminish the Plan’s reimbursement rights. 

(Alterations in line spacing added.) 

On February 4, 2005, Longaberger filed a complaint commencing suit against

Kolt and Samuel Billiter alleging causes of action for constructive trust, equitable lien,

and unjust enrichment.3

 Longaberger also sought a temporary restraining order and

preliminary injunction to prevent Kolt from disbursing, commingling, or transferring

settlement funds that were in Kolt’s IOLTA. The district court granted a “limited
No. 08-4432 The Longaberger Co. v. Kolt Page 5

temporary restraining order” preventing Kolt and Samuel Billiter from disbursing any

further funds and requiring the preservation of “the identifiable settlement funds paid on

claims arising out of the June 15, 2003 automobile accident involving Samuel Billiter.”

Following a February 9, 2005, evidentiary hearing on Longaberger’s motion for

preliminary injunction, the district court also enjoined Kolt from dissipating the $1,000

he was still holding in his IOLTA. 

On February 21, 2005, Longaberger amended its complaint to name Kolt as a

defendant in his capacities as an individual and as a Trustee, and Theresa Billiter as a

defendant. The amended complaint alleged claims against all named defendants for

constructive trust, equitable lien, unjust enrichment, an accounting, equitable estoppel,

and conversion, and against Kolt only for tortious interference with contract and breach

of constructive trust. Thereafter, Kolt filed an April 4, 2005, motion to dismiss the

amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that

“an attorney retained by an ERISA plan beneficiary who receives settlement funds from

a third party does not have any duty under ERISA to account to the ERISA plan for the

proceeds received and cannot be held liable.” The district court issued a June 29, 2006,

decision in which it dismissed a number of Longaberger’s claims, but allowed the

ERISA claims for constructive trust, equitable lien, and unjust enrichment to proceed.

On November 6, 2006, Longaberger filed its second amended complaint, adding

The Longaberger Family of Companies Group Health Plan as an additional plaintiff and

dropping Theresa Billiter as a named defendant. In addition, Longaberger “clarified its

position seeking ‘equitable lien by agreement’ in light of the” Supreme Court’s 2006

holding in Sereboff v. Mid Atl. Med. Servs., 547 U.S. 356 (2006), which altered the

controlling law in the present case. 

In June 2007, the parties filed cross motions for summary judgment. On

September 3, 2008, the district court granted Longaberger’s motion for summary

judgment and denied Kolt’s summary judgment motion. Specifically, the district held

that: 
No. 08-4432 The Longaberger Co. v. Kolt Page 6

Longaberger automatically acquired a valid lien on the tort recovery fund

when the funds became identifiable. In addition, Longaberger seeks

equitable rather than legal restitution because the Plan specifies a

particular amount and a particular fund from which restitution should be

paid. 

Accordingly, the district court ruled in favor of Longaberger and against Kolt in the

amount of $37,889.44 and against Samuel Billiter in the amount of $75,778.87. 

Kolt timely appealed; Samuel Billiter did not appeal. 

II. 

Kolt argues that the district court erred by awarding Longaberger equitable

restitution against him. He maintains that because the majority of the settlement funds

in his IOLTA had already been disbursed before Longaberger initiated its suit,

Longaberger was pursuing a claim for money damages rather than equitable relief

against him, and such claims are outside the scope of ERISA’s permissible remedies.

We review de novo the district court’s grant of summary judgment. Williamson v. Aetna

Life Ins. Co., 481 F.3d 369, 374 (6th Cir. 2007). Summary judgment “should be

rendered if the pleadings, the discovery and disclosure materials on file, and any

affidavits show that there is no genuine issue as to any material fact and that the movant

is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(c). The moving party

bears the burden of proving the absence of genuine issues of material fact and its

entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-

23 (1986). 

The “mere existence of some alleged factual dispute between the parties will not

defeat an otherwise properly supported motion for summary judgment; the requirement

is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 247-48 (1986). Thus, only disputed material facts, those “that might affect the

outcome of the suit under the governing law[,]” will defeat summary judgment. Id. at

248. Once the movant has met its burden, the nonmoving party “must present significant

probative evidence” to demonstrate that “there is [more than] some metaphysical doubt

as to the material facts.” Moore v. Philip Morris Cos., Inc., 8 F.3d 335, 340 (6th Cir.
No. 08-4432 The Longaberger Co. v. Kolt Page 7

1993). When determining whether the nonmovant has met this burden, we must view

the evidence in the light most favorable to the nonmoving party. Smith Wholesale Co.,

Inc. v. R.J. Reynolds Tobacco Co., 477 F.3d 854, 861 (6th Cir. 2007). 

Section 502(a)(3) of ERISA allows a civil action to be brought “by a participant,

beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision

of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable

relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or

the terms of the plan[.]” 29 U.S.C. § 1132(a)(3). “[O]ther appropriate equitable relief”

is limited to relief that was “typically available in equity (such as injunction, mandamus,

and restitution, but not compensatory damages).” Mertens v. Hewitt Assocs., 508 U.S.

248, 256 (1993). “[F]or restitution to lie in equity, the action generally must seek not

to impose personal liability on the defendant, but to restore to the plaintiff particular

funds or property in the defendant’s possession.” Great-West Life & Annuity Ins. Co.

v. Knudson, 534 U.S. 204, 214 (2002) (footnote omitted). 

In Sereboff, the Supreme Court discussed the validity of equitable liens created

by provisions similar to those in this case and held that ERISA plans can enforce

complete reimbursement of their equitable liens. Marlene Sereboff and her husband,

Joel, were injured in a car accident in California. 547 U.S. at 360. Through Marlene’s

employer, the Sereboffs received health insurance benefits related to the car accident,

which were administered by Mid Atlantic Medical Services, Inc. (“Mid Atlantic”),

pursuant to ERISA. Id. The plan’s “‘Act of Third Parties’” provision provided that if

the Sereboffs received benefits for an injury or illness and later recovered damages

related to a tort claim against a third party for that injury or illness, the Sereboffs, as

beneficiaries, would reimburse Mid Atlantic for the benefits they received. Id. at 359.

The Sereboffs sued several third parties seeking damages for their injuries, and

eventually settled their claims for $750,000, but they did not reimburse Mid Atlantic.

Id. at 360. 

Mid Atlantic sued to enforce its lien under § 502(a)(3) of ERISA, arguing that

it was entitled to reimbursement as a matter of equity. Id. In finding for Mid Atlantic,
No. 08-4432 The Longaberger Co. v. Kolt Page 8

4

In its decision, the Supreme Court expressly abrogated our holding in Qualchoice, Inc. v.

Rowland, 367 F.3d 638 (6th Cir. 2004). Sereboff, 547 U.S. at 361 n.1. 

the Sereboff Court relied on Justice Holmes’ reasoning in Barnes v. Alexander, 232 U.S.

117 (1914), in which an attorney promised other attorneys one-third of a contingent fee

for their assistance in a case. Sereboff, 547 U.S. at 363. In Barnes, Justice Holmes

stated for the Court: 

“the familiar rul[e] of equity that a contract to convey a specific object

even before it is acquired will make the contractor a trustee as soon as he

gets a title to the thing.” On the basis of this rule, he concluded that [the

lead attorney’s] undertaking “create[d] a lien” upon the portion of the

monetary recovery due [to the lead attorney] from the client, which the

[assisting attorneys] could “follow . . . into the hands of . . . [the lead

attorney],” “as soon as [the fund] was identified[.]” 

Id. at 363-64 (quoting Barnes, 232 U.S. at 121, 123) (first, third, and seventh alterations

in original) (internal citations omitted). The Sereboff Court found that the terms of Mid

Atlantic’s plan created a lien similar to the one in Barnes because the plan’s terms

“specifically identified a particular fund, distinct from the Sereboffs’ general assets –

[a]ll recoveries from a third party . . . – and a particular share of that fund to which Mid

Atlantic was entitled – that portion of the total recovery which is due [Mid Atlantic] for

benefits paid.” Id. at 364 (alterations in original) (internal citations and quotations marks

omitted). Accordingly, the Supreme Court held that Mid Atlantic could pursue an action

for appropriate equitable relief,4

 and because the lien by agreement attached when the

fund was identified, Mid Atlantic was free to “follow a portion of the recovery into the

[Sereboffs’] hands[.]” Id. (quoting Barnes, 232 U.S. at 123) (first alteration in original)

(internal quotation marks omitted). 

Kolt argues that “[b]ecause of Longaberger’s delay and inaction, there is no

longer any specifically identifiable fund in Kolt’s possession on which Longaberger’s

lien can be imposed.” Yet, an equitable lien by agreement does not require tracing or

maintenance of a fund in order for equity to allow repayment. In Sereboff, the Supreme

Court stated: 
No. 08-4432 The Longaberger Co. v. Kolt Page 9

5

Longaberger’s reimbursement provision is indistinguishable from the reimbursement provision

the Supreme Court enforced in Sereboff, where there also was an equitable lien by agreement between the

plan and the beneficiary. In Sereboff, the plan contained an “‘Act of Third Parties’” provision, which

“require[d] a beneficiary who ‘receives benefits’ under the plan for such injuries to ‘reimburse [Mid

Atlantic]’ for those benefits from ‘[a]ll recoveries from a third party (whether by lawsuit, settlement, or

otherwise).’” Sereboff, 547 U.S. at 359. 

Barnes confirms that no tracing requirement of the sort asserted by the

Sereboffs applies to equitable liens by agreement or assignment: The

plaintiffs in Barnes could not identify an asset they originally possessed,

which was improperly acquired and converted into property the

defendant held, yet that did not preclude them from securing an equitable

lien. 

Id. at 365. The Court also noted that “the fund over which a lien is asserted need not be

in existence when the contract containing the lien provision is executed.” Id. at 366.

“What is required, however, is that the agreement specifically identify a particular fund

– distinct from the defendant’s general assets – and a particular share of that fund to

which the plan was entitled.” Gilchrest v. Unum Life Ins. Co. of Am., 255 F. App’x 38,

45 (6th Cir. 2007) (unpublished) (citing Sereboff, 547 U.S. at 364). See also Gutta v.

Standard Select Trust Ins. Plans, 530 F.3d 614, 621 (7th Cir. 2008) (allowing a claim

under “29 U.S.C. § 1132(a)(3) even if the benefits it paid [the beneficiary] are not

specifically traceable to [the beneficiary’s] current assets because of commingling or

dissipation.”); Bombardier Aerospace Employee Welfare Benefits Plan v. Ferrer, Poirot

& Wansbrough, 354 F.3d 348, 350, 362 (5th Cir. 2003) (allowing an ERISA plan to

recover the settlement proceeds that the plan beneficiary’s law firm had deposited into

its trust account). But cf. Knudson, 534 U.S. at 214 (2002) (defendant never had

collected a “tort” recovery because it was held by a California trustee, not by defendant).

Here, the Plan contains clear and unambiguous reimbursement provisions,

indicating that its “rights of reimbursement and subrogation are reserved whether the

liability of a third party arises in tort, contract or otherwise. . . . [and] attach to any full

or partial judgment, settlement or other recovery.”5

 Moreover, the explicit terms of the

Plan state that it “shall automatically have a first priority lien upon the proceeds of any

recovery by you or your Dependent(s) from such party to the extent of any benefits

provided to you or your Dependent(s) by the Plan.” The Plan language thus identifies
No. 08-4432 The Longaberger Co. v. Kolt Page 10

6

In his reply brief, Kolt acknowledges he testified that he was aware of Longaberger’s claim, but

he argues that “he [did not] admit that Longaberger’s lien was valid, or that it had ‘first priority’ over any

other claim[.]” 

a fund distinct from the beneficiary’s general assets – “the proceeds of any recovery by

you or your Dependents(s)” from a third party, and identifies a particular share of that

fund to which the Plan is entitled – “the extent of any benefits provided to you or your

Dependent(s) by the Plan.” Accordingly, Longaberger’s equitable lien attached to the

settlement fund when it was identified and received in July 2004. Indeed, Kolt conceded

at the district court’s February 9, 2005, hearing that he “probably” was aware at the time

he wrote his August 4, 2004, letter to Longaberger, stating that “Mr. Billiter would like

to try to amicabl[y] satisfy his subrogation obligation to [Longaberger],” that the Plan

contained language that indicates the Plan has a first priority lien and first priority claim

over funds recovered from third parties.6

 

Kolt argues, however, that Sereboff and Gilchrest do not apply to him because

he was neither a Plan fiduciary nor a beneficiary of the Plan. In Ward v. Wal-Mart

Stores Inc., 194 F.3d 1315, 1999 WL 801532, at *5 (6th Cir. Sept. 30, 1999)

(unpublished table decision), this court upheld a district court’s decision to award

reimbursement to an ERISA plan, but reversed the district court’s decision to deduct a

pro rata share of attorney fees from the amount of the reimbursement. The Ward panel

also stated that “[t]he Plan may then file suit against the attorneys to recover the

remaining one-third of the amount it is due.” Id. at *4. Longaberger contends that Ward

is “established precedent” that “allows an ERISA plan to seek reimbursement from an

attorney for taking a fee on funds which belong to an ERISA plan.” Kolt counters that

this single sentence in the Ward opinion is dicta and has no precedential effect. See

Johnson v. City of Cincinnati, 310 F.3d 484, 493 (6th Cir. 2002); Stockler v. Garratt,

893 F.2d 856, 859 n.2 (6th Cir. 1990). Moreover, because Ward is an unpublished

decision, it is not precedentially binding on this panel, but may be considered for its

persuasive value. Thompson v. N. Am. Stainless, LP, 567 F.3d 804, 809 n.2 (6th Cir.

2009) (en banc) (citing United States v. Sanford, 476 F.3d 391, 396 (6th Cir. 2007)). 
No. 08-4432 The Longaberger Co. v. Kolt Page 11

7

Harris Trust involved litigation between an ERISA plan and a “party in interest,” which

“encompass[es] those entities that a fiduciary might be inclined to favor at the expense of the plan’s

beneficiaries.” Harris Trust, 530 U.S. at 242. Nothing in the record suggests Kolt was likely to be favored

by Longaberger, and thus we assume Kolt is not a “party in interest” for purposes of this litigation. The

reasoning in Harris Trust, however, supports a finding that Kolt is a proper party defendant. See

Bombardier, 354 F.3d at 353-54 (stating “the Supreme Court’s reasoning in Harris Trust influences us to

conclude today that § 502(a)(3) authorizes a cause of action against a non-fiduciary, non-‘party in interest’

attorney-at-law when he holds disputed settlement funds on behalf of a plan-participant client who is a

traditional ERISA party. As Harris Trust makes clear, an entity need not be acting under a duty imposed

by one of ERISA’s substantive provisions to be subject to liability under § 502(a)(3).”). 

In Mertens, the Supreme Court ruled that damages, or legal remedies, were not

recoverable under § 502 of ERISA, which allows only for equitable relief. 508 U.S. at

255-58, n.8; see also Varity Corp. v. Howe, 516 U.S. 489, 509 (1996). Thus, the issue

that the Ward panel did not address is whether an ERISA plan’s suit to recover plan

funds from a beneficiary’s attorney, who is neither a fiduciary nor beneficiary himself

of the plan, is within the scope of “appropriate equitable relief” allowed by § 502(a)(3).

If such a suit is not equitable in nature, the district court must be reversed. 

To be sure, § 502(a)(3) limits the universe of potential plaintiffs who may bring

a civil action for equitable relief to a “participant, beneficiary, or fiduciary” of an ERISA

plan. The Act, however, does not contain a similar provision limiting the class of

defendants in a § 502(a)(3) action. The Supreme Court recognized this in Harris Trust

& Sav. Bank v. Salomon Smith Barney, Inc., 530 U.S. 238, 246 (2000) in which it noted

that “§ 502(a)(3) admits of no limit (aside from the ‘appropriate equitable relief’ caveat

. . . ) on the universe of possible defendants.”7

 Indeed, while other provisions of ERISA

expressly identify the individuals or entities subject to suit, “§ 502(a)(3) makes no

mention at all of which parties may be proper defendants[.]” Id. Accordingly, there is

no statutory barrier that prevents Kolt from being a defendant in a suit brought pursuant

to § 502(a)(3) of ERISA, provided that the relief sought lies in equity. 

Here, Longaberger asserted an action for equitable in rem relief under § 502(a)(3)

in which it sought to recover its assets through use of a constructive trust and

reimbursement lien. Longaberger properly identified a specific fund (i.e., that portion

of the settlement funds equaling the amount Longaberger paid to cover Samuel Billiter’s

medical expenses) that was in the possession and legal control of Kolt, but belonged in
No. 08-4432 The Longaberger Co. v. Kolt Page 12

8

Our conclusion is consistent with rulings made in our sister circuits, including the Seventh

Circuit, where the court in Wal-Mart Stores, Inc. Assocs.’ Health & Welfare Plan v. Wells, 213 F.3d 398,

401 (7th Cir. 2000) held that a plan’s § 502(a)(3) action for a constructive trust over settlement funds

presumed to be held in escrow by the beneficiary’s attorney “nestle[d] comfortably” within “ERISA’s

concept of equity.” See also Bombardier, 354 F.3d at 358 n.43 (holding plan’s suit against law firm for

constructive trust was a suit for “appropriate equitable relief”); Great-West Life & Annuity Ins. Co. v.

Bullock, 202 F. Supp. 2d 461, 465 (E.D.N.C. 2002) (indicating that “the Court would find a cause of action

lies [under section 502(a)(3)] where there are allegations of attorney wrongdoing or his intentional effort

to ‘enable’ plan participants to avoid plan provisions.”); Greenwood Mills, Inc. v. Burris, 130 F. Supp. 2d

949, 960 (M.D. Tenn. 2001) (holding that “[a] lawyer who is fully aware of his client’s obligation under

an ERISA plan to honor the subrogation interest of his employer may be held liable under [section

502(a)(3) of ERISA].”). 

good conscience to the Plan. The fact that Kolt chose to disregard Longaberger’s first

priority lien and commingle the settlement funds does not defeat Longaberger’s claim

for equitable relief, because under Sereboff, Longaberger was free to follow a portion

of the settlement funds into Kolt’s hands. We therefore hold that the Plan sought and

was awarded “appropriate equitable relief” from Kolt.8 

III.

In its motion for injunctive relief, Longaberger stated that “if Kolt disburses or

otherwise commingles or uses the settlement funds which he holds in constructive trust

for the benefit of the Plan, the Plan will forever lose the ability to recover its property.”

Moreover, Longaberger represented that it was “not seeking to enforce its contractual

right to reimbursement from Billiter. Instead, Longaberger, on behalf of the Plan,

[sought] title to or a security interest in a particular, identifiable account: namely, the

settlement funds in Kolt’s IOLTA account.” Longaberger argued that it would be

irreparably harmed if an injunction were not granted because “[i]f the money leaves the

[IOLTA], Longaberger [would] be left without recourse and [would] be unable to

enforce the terms of the Plan.” Apparently persuaded by Longaberger’s arguments, the

district court granted a preliminary injunction on February 16, 2005, which required Kolt

to maintain any remaining settlement funds in his IOLTA during the pendency of this

litigation. 

On May 15, 2006, the Supreme Court issued its decision in Sereboff which held

that funds no longer had to be traceable or maintained in order for relief to qualify as

equitable under ERISA. Because of Sereboff, Longaberger filed a second amended
No. 08-4432 The Longaberger Co. v. Kolt Page 13

complaint on November 6, 2006, which “clarified its position seeking ‘equitable lien by

agreement’ in light of the 2006 Supreme Court decision and ruling.” Longaberger also

argued in its summary judgment briefing that “repayment” of funds that have already

been disbursed from Kolt’s IOLTA was an available remedy under ERISA. 

Kolt argues on appeal that Longaberger’s claims for monetary relief should be

barred by the doctrine of judicial estoppel because arguments Longaberger made in its

initial pleadings, and on which the district court relied in issuing a preliminary

injunction, were in conflict with those arguments Longaberger later presented in its

motion for summary judgment. “Judicial estoppel is an equitable doctrine that preserves

the integrity of the courts by preventing a party from abusing the judicial process

through cynical gamesmanship, achieving success on one position, then arguing the

opposite to suit an exigency of the moment.” Teledyne Indus., Inc. v. NLRB, 911 F.2d

1214, 1217-18 (6th Cir. 1990); see also New Hampshire v. Maine, 532 U.S. 742, 750

(2001). “The doctrine of judicial estoppel bars a party from (1) asserting a position that

is contrary to one that the party has asserted under oath in a prior proceeding, where (2)

the prior court adopted the contrary position ‘either as a preliminary matter or as part of

a final disposition.’” Browning v. Levy, 283 F.3d 761, 775 (6th Cir. 2002) (quoting

Teledyne, 911 F.2d at 1218). The doctrine of judicial estoppel, however, “is applied

with caution to avoid impinging on the truth-seeking function of the court because the

doctrine precludes a contradictory position without examining the truth of either

statement.” Teledyne, 911 F.2d at 1218 (footnote omitted). Moreover, a court should

consider whether a party has gained an unfair advantage from the court’s adoption of its

earlier inconsistent statement. New Hampshire, 532 U.S. at 751. 

The issue of judicial estoppel combined with a change in law appears to be an

issue of first impression in our circuit. In such cases, “this Court routinely looks to our

sister circuits for guidance[.]” United States v. Houston, 529 F.3d 743, 762 n.3 (6th Cir.

2008) (Clay, J., dissenting). Several of our sister circuits have held that judicial estoppel

is inappropriate when a party is merely changing its position in response to a change in

the law. See Jarrard v. CDI Telecomms., Inc., 408 F.3d 905, 915 (7th Cir. 2005)
No. 08-4432 The Longaberger Co. v. Kolt Page 14

(“Judicial estoppel should not be used to work an injustice, particularly when the

defendants’ change in position resulted from circumstances outside their control –

namely, a change in controlling state law.”) (internal citation omitted); Folio v. City of

Clarksburg, 134 F.3d 1211, 1218 (4th Cir. 1998) (judicial estoppel not invoked where

second position was based upon a change in the law); United States v. Vastola, 989 F.2d

1318, 1324 (3d Cir. 1993) (same); Maui Land & Pineapple Co. v. Occidental Chem.

Corp., 24 F. Supp. 2d 1083, 1086 (D. Haw. 1998) (explaining that the application of

judicial estoppel “is inappropriate when a party is merely changing its position in

response to a change in the law.”) (citing Arizona v. Shamrock Foods Co., 729 F.2d

1208, 1215 (9th Cir. 1984)) (finding no judicial estoppel when a party altered its theory

of recovery in response to a change in law); Seneca Nation of Indians v. New York, 26

F. Supp. 2d 555, 565-66 (W.D.N.Y. 1998), aff’d, 178 F.3d 95 (2d Cir. 1999). Moreover,

other courts have found that judicial estoppel bars changes in factual positions and does

not extend to inconsistent opinions or legal positions. Okland Oil Co. v. Conoco Inc.,

144 F.3d 1308, 1325 (10th Cir. 1998), appeal after remand, 149 F.3d 1191 (10th Cir.

1998) (unpublished table decision); Ottema v. State ex rel. Wyoming Worker’s Comp.

Div., 968 P.2d 41, 45-46 (Wyo. 1998). 

In the present case, there is no evidence of the gamesmanship that the doctrine

of judicial estoppel was intended to prevent. Longaberger’s arguments, though facially

inconsistent, were not an attempt to abuse the judicial process through cynical

gamesmanship. Rather, Longaberger altered its theory of recovery in response to the

change in the law brought by Sereboff. In light of this change in law, Longaberger’s

motives are not suspicious because, for the reasons stated above, Longaberger could not

have argued its prior position without running afoul of controlling Supreme Court case

law. Cf. New Hampshire, 532 U.S. at 755 (recognizing that judicial estoppel might not

be applicable if inconsistent positions result from change in public policy, statutory

provisions, or facts) (citations omitted). We therefore adopt the position of our sister

circuits and hold that judicial estoppel is not applicable where a party argues an

inconsistent position based on a change in controlling law. Accordingly, Kolt’s judicial

estoppel argument fails. 
No. 08-4432 The Longaberger Co. v. Kolt Page 15

IV.

Next, Kolt asserts the “rights of reimbursement and subrogation” provision

contained in the Longaberger Plan is not self-executing and, thus, did not create an

automatic lien on Samuel Billiter’s tort recovery. Moreover, Kolt argues that

Longaberger’s lien is subordinate to his lien pursuant to Ohio law. In support of his

position, Kolt points to the following Plan language: “[i]n the event that benefits are to

be paid by the Plan for expenses resulting from an injury for which a third party is liable,

you or your Dependent(s), as appropriate, shall execute a Subrogation/Right of

Reimbursement Agreement, in a form prescribed by the Plan.” Furthermore, Kolt

references the following sentence found in the Plan: “[y]ou or your Dependent(s) or

their representative shall execute such documents as may be required to secure the Plan’s

rights.” 

Kolt, however, presents these phrases without proper context. The Plan’s plain

language unambiguously states that it “automatically [has] a first priority lien upon the

proceeds of any recovery by you or your Dependant(s) from such party to the extent of

any benefits provided[.]” Longaberger’s Plan does not require a signed reimbursement

agreement as a prerequisite before providing the Plan with rights of reimbursement and

subrogation. Rather, such documents shall be executed only “as appropriate” and “as

may be required to secure the Plan’s rights[.]” 

In Health Cost Controls v. Isbell, 139 F.3d 1070, 1072 (6th Cir. 1997), we

explained, “the plain language of an ERISA plan should be given its literal and natural

meaning.” Here, the Plan’s terms provide for automatic rights of reimbursement and

subrogation, and only require beneficiaries to execute additional documents as necessary

to secure the Plan’s rights. Nothing in the record suggests that Longaberger needed

these additional documents in the present case. Accordingly, the district court ruled

correctly that Longaberger’s Plan was self-executing and that the Plan language provides

for an automatic and valid lien on the settlement funds to the extent of the benefits

Samuel Billiter received from the Plan. 
No. 08-4432 The Longaberger Co. v. Kolt Page 16

V.

Finally, Kolt argues, pursuant to Ohio law, that he has an attorney charging lien,

which takes priority over Longaberger’s lien. Kolt claims his lien “attached in June and

July 2003, when his clients signed retainer agreements with him.” According to Kolt,

“Longaberger’s lien didn’t attach until August 2003 at the earliest, when it began paying

[Samuel] Billiter’s expenses, and in July 2004 at the latest, when Kolt received the

settlement funds from the tortfeasors who injured [Samuel].” Regardless of whether

Longaberger’s lien attached in August 2003 or July 2004, Kolt argues that his lien

should be given first priority because Ohio liens are prioritized by time and his lien

attached at an earlier date. 

“A primary purpose of ERISA is to ensure the integrity and primacy of the

written plans.” Isbell, 139 F.3d at 1072. ERISA broadly preempts “any and all State

laws insofar as they may now or hereafter relate to any employee benefit plan[.]” 29

U.S.C. § 1144(a). See also Auto Owners Ins. Co. v. Thorn Apple Valley, Inc., 31 F.3d

371, 374 (6th Cir. 1994). Indeed, “virtually all state law claims relating to an employee

benefit plan are preempted by ERISA.” Cromwell v. Equicor-Equitable HCA Corp., 944

F.2d 1272, 1276 (6th Cir. 1991). Therefore, “only those state laws and state law claims

whose effect on employee benefit plans is merely tenuous, remote or peripheral are not

preempted.” Id. 

Longaberger’s Plan provides that “[t]he Plan shall have a first priority claim

against any proceeds . . . . [and that] [t]he Plan’s rights shall not be subject to reduction

under any common fund or similar claims or theories.” In Ward, we interpreted a similar

plan provision as follows: 

A fair interpretation of this language is that full reimbursement is

required without a deduction for attorneys’ fees expended to obtain a

settlement. The language of the Plan does not limit or restrict its right to

full reimbursement in any manner. Of course, it would have been

preferable for the Plan to state specifically that it does not permit a

deduction in reimbursement amounts for attorneys’ fees expended to

obtain a settlement; nonetheless, when a plan is clear and unambiguous,
No. 08-4432 The Longaberger Co. v. Kolt Page 17

we cannot apply a common-law rule of interpretation but, inste[a]d, must

give the plain language of a plan its natural meaning. 

1999 WL 801532, at *4 (citation omitted). The same result was reached in Isbell, where

we reviewed a similar provision and interpreted it to “expressly require[] full

reimbursement of the Plan for medical benefits when a beneficiary recovers sufficient

damages from a third party tortfeasor. . . . Thus, Isbell [did] not have an affirmative

contractual right under the Plan to a set-off for legal costs attributable to recovering the

amount of the medical benefits.” 139 F.3d at 1072. We also noted that “Isbell ha[d] not

identified to this Court that application of a set-off under a[n] equitable common fund

doctrine would advance any explicit statutory purpose of ERISA. Rather, we [found]

that it would undermine the express terms of the Plan that require full reimbursement for

medical benefits.” Id. 

Here, the Longaberger Plan required full reimbursement of benefits paid when

a Plan participant received a judgment or settlement. The district court was correct to

not deduct attorney fees from the amount of reimbursement due to Longaberger. Thus,

we conclude that Kolt is obligated to reimburse the Plan from the funds he received from

liable third parties. Kolt’s decision to commingle these funds and not maintain them

intact does not prevent enforcement of Longaberger’s equitable lien by agreement under

the terms of its ERISA plan. 

VI.

For these reasons, we affirm the judgment of the district court.