### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No. 19

- 2589
C ENTRAL S TATES , S OUTHEAST AND S OUTHWEST A REAS H EALTH
AND W ELFARE F UND and C HARLES A. W HOBREY , Trustee , Plaintiffs

- Appellees ,

v.

S HELBY L. H AYNES ; N. G ERALD D I C UCCIO ; and B UTLER , C INCIONE & D I C UCCIO , Defendants

- Appellants

.

____________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 17 C 6275

— Virginia M. Kendall , Judge

.

____________________
A RGUED M AY 22, 2020

— D ECIDED J ULY 20, 2020

____________________

Before B AUER , E ASTERBROOK , and W OOD , Circuit Judges

. E ASTERBROOK , Circuit Judge

. Doctors removed Shelby Haynes’s gallbladder in 2013. She was injured in the process and required additional surgery that led to more than $300,000 in medical expenses. Her father’s medical

- benefits plan (the Fund) paid these because Haynes was a “covered d ependent”. The plan includes typical subrogation and re-2 No. 19

- 2589

payment clauses: on recovering anything from third parties, a covered person must reimburse the Fund. In 2017 Haynes segled a tort suit against the hospital, and oth ers, for $1.5 million. But she and her lawyers refused to repay the Fund, which brought this action to enforce the plan’s terms under §502(a)(3) of the Employee Retirement Income Security Act of 1974 (ERISA) , 29 U.S.C. §1132(a)(3)

. Haynes concedes that the Fund paid her medical bills but in sists that she never agreed to reimburse it . She did not sign

a promise to follow the plan’s rules and was not a participant (as opposed to a beneficiary). The district judge disagreed with her and granted summary judgment to the Fund for the full amount o f its outlay . 397 F. Supp. 3d 1149 (N.D. Ill. 2019). Along the way, the district court enjoined Haynes, Haynes’s malpractice lawyer, and the lawyer’s firm from dissipating the proceeds of the seglement . The Fund named each of them as a defendant to avoid ambiguity about who possessed the money. See Great

- West Life & Annuity Insurance Co. v. Knudson , 534 U.S. 204, 214 (2002).Section 502(a)(3) allows fiduciaries to bring actions to obtain “equitable relief ... to enforce any provisions of this title or the te rms of the plan” . Defendants do not contest the judge’s finding that the money at issue is traceable to theseglement, and they do not deny their possession and control of the proceeds. Indeed, in awarding interest and agorneys’ fees and costs to the Fun d, the district court found that Haynes’s malpractice lawyer and his firm hold the principal in constructive trust. Hence the nature of the remedy sought

— enforcement of a right to identifiable assets

— is equitable. See, e.g., Sereboff v. Mid Atlantic Medica l Services, Inc. ,No. 19

- 2589 3

547 U.S. 356, 362 (2006) (discussing restitution in premerger courts of equity). But “equitable relief” under §502(a)(3) requires more than asking for an equitable remedy; the claim must be equitable as well. Montanile v. Board of Trustee s of the National Elevator Industry Health Benefit Plan , 136 S. Ct. 651, 657

– 58 (2016). An action to enforce “the modern

- day equivalent of an equitable lien by agreement” is one such basis. US Airways, Inc. v. McCutchen , 569 U.S. 88, 98 (2013) (cleaned up). That’s because a person who agrees to convey a specificthing “even before it is acquired” becomes a trustee on receiving title. Sereboff , 547 U.S. at 363

– 64; Barnes v. Alexander , 232 U.S. 117, 121 (1914). No one doubts that the Fund is a “fi duciary” or that it seeks to “enforce ... the terms of the plan”. Yet Haynes argues that s he never agreed to anything. And her lack of assent removes the action from §502(a)(3)’s ambit, she insists. See 29 U.S.C. § 1132(e)(1), (f); 28 U.S.C. §1331. We beg to differ. The terms of the plan furnish beneficiaries with rights and obligations. For ex ample, §§ 12.01 to 16.04 describe medical, dental, vision, and life

- insurance benefits, and §11.06 makes these payable “to, or for the benefit of,” those covered by the plan. Section 11.14 conditions payments on the Fund’s subrogation and reimbursement rights, which extend to anycovered person. Haynes is a beneficiary under the plan because her father

— who worked under a Teamster s’ Union collective bargaining agreement

— si gned and delivered a writing electing coverage for himself and his family. See Plan §3.02 (qualifying as a “covered dependent”); Plan §§ 1.09, 1.16

– 19, 1.22, 1.26

– 28, 1.50 (defin ing terms); 397 F. Supp. 3d at 1153.4 No. 19

- 2589

Section 11.11 of the plan explains that “ [t]he Fund is a self

- funded employee benefit plan governed by” ERISA. That statute says that it applies to plans such as this

. See 29 U.S.C. §1003(a). And it recognizes Haynes as a beneficiary because her father designated her as one under the plan’s
terms . 29 U.S.C. §1002 (8). The Justices have repeatedly held that fiduciaries may bring actions against beneficiaries under §502(a)(3). See, e.g. , Sereboff , 547 U.S. at 359, 369 (permiging a plan administrator to proceed against a covered employee and her bene ficiary husband). See also Harris Trust & Savings Bank v. Salomon Smith Barney Inc. , 530 U.S. 238, 246 (2000)(“But §502(a)(3) admits of no limit ... on the universe of possible defendants.”). That’s all the Fund needs to prevail. Haynes wants to replace the statutory terms, and those of the plan, with principles of contract law. Doubtless ordinary
cont ract rules should be used to fle sh out provisions on which ERISA or a plan are silent or ambiguous . See, e.g., M&G Polymers USA, LLC v

. TackeQ , 574 U.S. 427 ( 2015). But neither the plan nor the statute is in need of supplementation. The district judge found that Haynes was a benefi ciary under an ERISA plan. 397 F. Supp. 3d at 1156

– 58. The p lan itself depends on the assent of an employer (its sponsor) and

a fidu ciary (the Fund) that manages its operation. Employees(called participants) get the benefits without a separate contract , although some optional features (such as covering dependents ) are contractual in nature

. A participant’s family member is a kind of third

- party beneficiary, whose rights under the plan do not depend on personal assent . Such a person may reject an unwanted benefit by disclaiming it

. Restatement (Second) of Contracts §306 & cmts. a

– b (1981). See

a lso Olson v. Etheridge , 177 Ill. 2d 396, 404 (1997). But HaynesNo. 19

- 2589 5

doesn’t argue that she disclaimed the plan’s financial aid and paid the bills herself. Having accepted the plan’s benefit s , Haynes must accept the obligations too. That’s what the plan says, a nd ordinary principles of contract law are in accord. See Restatement (Second) of Contracts §309(4) & cmt. c. See also Olson , 177 Ill. 2d at 404

– 05; Liu v. Mund , 686 F.3d 418, 421 (7th Cir. 2012); Holbrook v. PiQ , 643 F.2d 1261, 1273 & n.24 (7th Cir. 1981 ). An equitable lien by agreement “serves to carry out a contract’s provisions.” McCutchen , 569 U.S. at 98. In this case that means the plan’s subrogation and reimbursement clauses. The Fund did not need to require beneficiaries to execute those provisions separately. See Preze v. PipefiQers Welfare Fund , 5 F.3d 272 (7th Cir. 1993) (recognizing a limited exception). And the provisions confer rights to specified ass ets. 397 F. Supp. 3d at 1152

– 55

. Haynes asks us to ignore all of this because the surgeries
t ook place three months after her eighteenth birthday , and the Fund did not ask for her consent as an adult. Her agorney suggested that the insurance industry might benefit from more paperwork and an “algorithm” for obtaining the assent of former minors. B ut, as should be clear by this point, Haynes’s transition to adulthood is irrelevant. If she had been an adult throughout (as, say, a participant’s spouse) she would have been required to reimburse the plan. So too if she had been a minor throughout. Why

s hould it mager if she makes the transition to adulthood after her father elects to bring her within the plan’s coverage? If fiduciaries can reach the recovery of a participating employee’s spouse, how is Haynes any different? See, e.g., Sereboff , 547 U.S. at 359 (discussing the reimbursement of6 No. 19

- 2589

beneficiaries’ medical expenses). Section 3.30(e) of the plan continues a child’s status as a “covered de pendent” through age 26 , and Hay n es doesn’t argue that other provisions terminated that status . Neither the Ac t nor any rule of contract law alters this

. Minors can treat some promises as voidable, but adults (which Haynes was at the time of her surgeries)
cannot. See Restatement (Second) of Contracts §14 & cmt. a . We doubt that 17 year olds would be happy to learn that, unless they sign some papers on their next birthdays, they lose medical coverage under ERISA plans

. The absence of a beneficiary’s signed writing

— at age 13 or 18 or 48

— doesn’t invalidate any of the plan’s terms

. Haynes contend s that counsel should be able to keep a share of the seglement under equitable principles. But §11.14(j) of the plan expressly forbids this approach, and “if a contract abrogates the common

- fund doctrine, the insurer is not unjustly enriched by claiming t he benefit of its bargain.” McCutchen , 5 69 U.S. at 100. Haynes also maintains that she shouldn’t be bound by this provision because a su mmary plan description does not explain that the plan displaces the common

- fund doctrine

. Yet the Fund makes the plan av ailable online, mails print ed copies on request, and sent the relevant provisions to her lawyer before the malpractice seglement. The point of asummary plan description is to summarize; some terms necessarily are omiged. At all events, if the plan and t he summary plan description conflict , the plan controls

. CIGNA Corp. v. Amara , 563 U.S. 421, 438 (2011)

. Finally, Haynes’s complaint about the district court’s decision to exclude an expert’s report, 2018 U.S. Dist. L EXIS 234265 (N.D. Ill. Oct. 24, 2018), is beside the point; this caseNo. 19

- 2589 7

has been resolved on legal grounds that are unaffected by any expert’s conclusions, admissible or not. Neither the plan, the Act, nor the common law excuse s Haynes from her obligat ion to reimburse the Fund . Her status as a beneficiary

— whether minor or adult

— doesn’t deprive a fiduciary of the ability to obtain appropriate equitable relief under §502(a)(3) of the Act.
A FFIRMED