Qualchoice, Inc. v. Robin Rowland

*The Honorable D avid W . McKeague, United States District Judge
for the Western District of Michigan, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0134P (6th Cir.)
File Name: 04a0134p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
QUALCHOICE, INC.,
Plaintiff-Appellant,
v.
ROBIN ROWLAND,
Defendant-Appellee.
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No. 02-3614
Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 01-02605—Kathleen McDonald O’Malley, District
Judge.
Argued: December 3, 2003
Decided and Filed: May 11, 2004
Before: MARTIN and MOORE, Circuit Judges;
McKEAGUE, District Judge.*
2 QualChoice, Inc. v. Rowland No. 02-3614
_________________
COUNSEL
ARGUED: Daran P. Kiefer, KREINER & PETERS CO.,
Cleveland, Ohio, for Appellant. Donald Cybulski, LOWE,
EKLUND, WAKEFIELD & MULVIHILL, Cleveland, Ohio,
for Appellee. ON BRIEF: Daran P. Kiefer, Ted M. Traut,
KREINER & PETERS CO., Cleveland, Ohio, for Appellant.
Donald Cybulski, LOWE, EKLUND, WAKEFIELD &
MULVIHILL, Cleveland, Ohio, for Appellee.
_________________
OPINION
_________________
KAREN NELSON MOORE, Circuit Judge. Plaintiff-
Appellant QualChoice, Inc. (“QualChoice”), a fiduciary and
administrator of an employee benefits plan governed by the
Employee Retirement Income Security Act of 1974
(“ERISA”), appeals from the district court’s dismissal, for
lack of subject matter jurisdiction, of its action to obtain
reimbursement under the terms of that plan from Defendant-
Appellee Robin Rowland (“Rowland”), a plan participant.
QualChoice raises three claims of error on appeal. First,
QualChoice argues that the district court had jurisdiction
pursuant to 28 U.S.C. § 1331, as federal common law
provides federal question jurisdiction for ERISA
reimbursement actions. Second, QualChoice argues that the
district court had jurisdiction pursuant to 29 U.S.C.
§ 1132(e)(1), as QualChoice prayed for equitable relief within
the meaning of 29 U.S.C. § 1132(a)(3). Third, QualChoice
argues that the district court erred in granting Rowland’s
motion to dismiss for lack of subject matter jurisdiction
before allowing QualChoice sufficient time to gather
evidence.

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No. 02-3614 QualChoice, Inc. v. Rowland 3
For the following reasons, we AFFIRM the district court’s
dismissal for lack of subject matter jurisdiction.
I. BACKGROUND
On November 16, 2001, QualChoice filed a complaint
against Rowland alleging that QualChoice was a plan
administrator and fiduciary for an employee benefit plan
governed by ERISA, and that Rowland was a participant in
that plan. QualChoice further alleged that it had advanced
$80,763.58 to Rowland under the plan to cover medical
expenses arising from an accident, that Rowland had settled
a claim with the third-party tortfeasor, and that under the
terms of the plan Rowland was obligated to reimburse
QualChoice from the money she received in that settlement.
QualChoice prayed for specific performance of the
reimbursement provision of the plan and restitution of the
money it had advanced under the plan. On January 11, 2002,
Rowland filed a Rule 12(b)(1) motion to dismiss
QualChoice’s complaint for lack of subject matter jurisdiction
because QualChoice sought only legal remedies for which
ERISA does not provide federal question subject matter
jurisdiction. On January 21, 2001, QualChoice filed a motion
for leave to file an amended complaint that requested
equitable relief in order to avoid dismissal for lack of federal
question subject matter jurisdiction.
On February 27, 2002, the district court held a case
management conference during which it granted
QualChoice’s motion for leave to file an amended complaint,
but specified that Rowland’s motion to dismiss for lack of
subject matter jurisdiction would apply to the amended
complaint. On February 28, 2002, QualChoice filed an
amended complaint that made many of the same factual
allegations as its original complaint but newly alleged that it
had advanced $101,440.54 to Rowland and prayed for
equitable restitution, imposition of a constructive trust or
equitable lien, an order declaring that QualChoice “has a right
to the equitable remedy of subrogation to obtain
4 QualChoice, Inc. v. Rowland No. 02-3614
reimbursement . . .[and] any other equitable relief.” Joint
Appendix (“J.A.”) at 11-12 (First Am. Compl. ¶¶ 10, 13, 14).
The amended complaint claimed that federal jurisdiction was
proper under 29 U.S.C. § 1132(e) and 28 U.S.C. § 1331. On
April 29, 2002, the district court entered an order explaining
its obligation to ascertain whether federal question subject
matter jurisdiction existed and its power to conduct an
evidentiary investigation in furtherance of that goal, and
requesting that the parties supply the following “information
to the Court as soon as possible.” J.A. at 65-67 (District Ct.
Order, 4/29/02) (emphasis added).
• The time and nature of defendant Rowland’s accident,
as referred to in ¶ 8 of the amended complaint.
• The details of how Rowland received a “fund in
settlement of her claims from the above accident,” id.
at ¶ 11 (e.g., whom she sued, what the settlement
amount was, and when and to whom settlement
amounts were or will be paid).
• Where the monies making up the “fund in settlement”
are now.
J.A. at 66-67. (District Ct. Order). One day later, on
April 30, 2002, Rowland filed an affidavit sworn by Attorney
Claudia R. Eklund (“Attorney Eklund”) in response to the
district court’s order.
Attorney Eklund’s affidavit provided the following
information. On the evening of November 23, 1994, when a
Wheeling & Lake Erie Railroad (“W & LE”) “train was
crossing an unguarded, unlit track,” Rowland drove her car
into one of the railcars. J.A. at 68 (Eklund Aff. ¶¶ 2, 3).
Rowland was severely injured in the accident and required
several hospitalizations, surgical procedures, and eventually
a below-the-knee amputation. Rowland incurred medical
bills totaling $203,000 as a result of the accident.
Attorney Eklund represented Robin and Robert Rowland in
their lawsuit against W & LE for personal injuries and

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No. 02-3614 QualChoice, Inc. v. Rowland 5
damages arising out of the collision. W & LE “was an
uninsured entity and verified by counsel to be an entity
functioning on the verge of bankruptcy.” J.A. at 69 (Aff. ¶ 5).
“[A] settlement was proposed under which [W & LE] agreed
to pay a total of $147,668.00 over the course of forty-four
(44) months.” J.A. at 69 (Aff. ¶ 6). W & LE agreed to pay an
additional $37,500 over the same forty-four months,
contingent upon W & LE “obtaining certain concessions from
the Surface Transportation Board at a hearing to be held in
June, 1998.” J.A. at 69 (Aff. ¶ 7). According to Attorney
Eklund, QualChoice agreed to waive any subrogated interest
it may have had in the proposed settlement agreement. On
December 3, 1997, W & LE and Rowland consummated the
settlement agreement. The Surface Transportation Board,
however, did not grant the concessions upon which the
contingent payment of $37,500 was based; therefore, that
amount did not become payable.
On December 3, 1997, upon signing the agreement,
W & LE paid a lump sum of $25,000 to Rowland. On May 1,
1998, W & LE paid an additional lump sum of $8,000 to
Rowland. “[C]ommencing with June 1, 1998, monthly
payments of $2,322.00 for the next 44 months were paid by
[W & LE], the last of which was received on January 1,
2002.” J.A. at 69-70 (Aff. ¶ 12). “From the initial payments,
the sum of $13,168 was” used to pay litigation expenses. J.A.
at 69 (Aff. ¶ 11). From each monthly check, an amount was
deducted to pay the $27,308 attorney fee balance. “Robin and
Robert Rowland received a net recovery of $107,192.” J.A.
at 69 (Aff. ¶ 11).
According to Attorney Eklund, “at this time [April 30,
2002], no ‘settlement fund’ exists, as the money has been
disbursed over the last 44 months on a monthly basis.” J.A.
at 70 (Aff. ¶ 13).
On April 30, 2002, which was the day after the district
court requested that the parties supply additional information
and the same day that Rowland filed Attorney Eklund’s
6 QualChoice, Inc. v. Rowland No. 02-3614
affidavit, the district court entered an order granting
Rowland’s motion to dismiss for lack of subject matter
jurisdiction. QualChoice timely appealed the district court’s
order dismissing this action for lack of subject matter
jurisdiction.
II. ANALYSIS
A. Standard of Review
We review de novo “a district court’s decision to grant a
motion to dismiss for lack of subject matter jurisdiction.”
Nichols v. Muskingum College, 318 F.3d 674, 677 (6th Cir.
2003). Although Rowland makes both facial and factual
challenges to QualChoice’s assertion of federal question
subject matter jurisdiction, we only reach the facial challenge,
and thus we must view the facts in the light most favorable to
QualChoice, the non-moving party. See Ohio Nat’l Life Ins.
Co. v. United States, 922 F.2d 320, 325-26 (6th Cir. 1990).
B. 28 U.S.C. § 1331
QualChoice argues that the district court had federal
question subject matter jurisdiction pursuant to 28 U.S.C.
§ 1331 because QualChoice sought reimbursement under the
terms of an ERISA plan, which we have held may be obtained
under federal common law. To support this argument,
QualChoice relies upon Walbro Corp. v. Amerisure Cos., 133
F.3d 961, 965-66 (6th Cir. 1998), in which we held that a plan
fiduciary’s action for reimbursement is cognizable under
federal common law doctrines building on the enforcement
provisions of ERISA, and thus falls within the district court’s
federal question jurisdiction.
Subsequent to our decision in Walbro, however, the
Supreme Court decided Great-West Life & Annuity Insurance
Co. v. Knudson, 534 U.S. 204, 209 (2002), in which the Court
reemphasized its view “that ERISA is a ‘comprehensive and
reticulated statute,’ the product of a decade of congressional

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No. 02-3614 QualChoice, Inc. v. Rowland 7
study of the Nation’s private employee benefit system.”
(citations omitted). The Court further stated that, because of
the comprehensive nature of the statute, it has “been
especially ‘reluctant to tamper with [the] enforcement
scheme’ embodied in the statute by extending remedies not
specifically authorized by its text.” Id. (quoting
Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134,
147 (1985)). Obeying the Court’s direction in Knudson, we
explicitly held in Community Health Plan of Ohio v. Mosser,
347 F.3d 619, 624 (6th Cir. 2003), that federal question
jurisdiction does not exist under 28 U.S.C. § 1331 in an
action by a plan fiduciary seeking civil enforcement of the
terms of an ERISA plan that does not implicate any ERISA
provision. In Mosser, we held that 29 U.S.C. § 1132(e)(1) did
not provide federal question subject matter jurisdiction over
the plan fiduciary’s action because the relief sought was not
equitable within the meaning of 29 U.S.C. § 1132(a)(3). Id.
at 623-24. We further held that no other ERISA provision
permitted the action; therefore, “federal question jurisdiction
does not exist under 28 U.S.C. § 1331 [because] ERISA does
not authorize the suit.” Id. at 624. Thus in Mosser, we
abandoned our position in Walbro and held explicitly that
there is no federal question subject matter jurisdiction in an
action by a plan fiduciary seeking civil enforcement of the
terms of an ERISA plan, unless ERISA specifically
authorizes the suit. Therefore, QualChoice’s action to enforce
the reimbursement provision is not cognizable under federal
common law, and QualChoice cannot rely upon federal
common law to supply jurisdiction over its claim pursuant to
28 U.S.C. § 1331.
C. 29 U.S.C. § 1132
QualChoice alternatively argues that the district court had
subject matter jurisdiction pursuant to 29 U.S.C. § 1132(e)(1)
because QualChoice sought equitable remedies within the
meaning of 29 U.S.C. § 1132(a)(3). In its amended
complaint, QualChoice prayed for restitution, imposition of
a constructive trust or equitable lien, “subrogation to obtain
8 QualChoice, Inc. v. Rowland No. 02-3614
1QualChoice argues that Attorney Eklund’s affidavit confirms that
Rowland “took possession of [a] settlement ‘fund’ in the amount of
$107,192.00.” Appellant’s Br. at 24.
reimbursement,” or any other equitable relief that the district
court deemed proper. J.A. at 12. QualChoice argues that the
settlement money that Rowland recovered from W & LE
rightfully belongs to QualChoice; therefore, equity requires
imposition of a constructive trust or an equitable lien to
prevent unjust enrichment. QualChoice acknowledges that in
Knudson, the Supreme Court held that if a plan fiduciary
seeks restitution from a plan beneficiary, who recovered from
another, and the plan beneficiary does not possess the
recovered funds, then the action is merely a legal action under
the terms of the contract. QualChoice argues, however, that
the instant action is distinguishable from Knudson because the
evidence demonstrates that Rowland possesses the recovered
funds.1 QualChoice further argues that the Supreme Court
expressly limited its holding in Knudson to situations where
the plan participant or beneficiary did not possess the
recovered funds, thereby indicating that the result would have
been different if the plan participant or beneficiary did
possess the recovered funds. The district court rejected this
argument, noting that regardless of Rowland’s possession of
an identifiable fund, QualChoice is still seeking damages for
breach of contract, and concluding in any case that the
beneficiary in Knudson did actually possess the fund, as the
beneficiary’s settlement recovery there was placed in a
Special Needs Trust and a client trust account.
ERISA contains a section specifying the proper procedures
for civil enforcement of the statute. Section 1132(e)(1)
provides, “Except for actions under subsection (a)(1)(B) of
this section, the district courts of the United States shall have
exclusive jurisdiction of civil actions under this subchapter
brought by the Secretary or by a participant, beneficiary,
fiduciary, or any person referred to in section 1021(f)(1) of
this title.” Thus, except for actions by a participant or

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No. 02-3614 QualChoice, Inc. v. Rowland 9
beneficiary to recover benefits under the terms of a plan, and
another exception not relevant here, § 1132(e)(1) supplies
exclusive federal subject matter jurisdiction for the civil
enforcement procedures authorized by § 1132.
Title 29 U.S.C. § 1132(a)(3) is the civil enforcement
mechanism available to plan fiduciaries. Section 1132(a)
provides:
A civil action may be brought —
. . .
(3) 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.
The Supreme Court has emphasized that § 1132(a)(3) does
not authorize all relief that a court of equity might award;
rather it only authorizes those remedies traditionally awarded
by courts of equity. The Court has also made clear that
regardless of how plaintiffs label their claims to relief, courts
must determine whether the relief sought is truly equitable.
See Knudson, 534 U.S. at 209-10; Mertens v. Hewitt Assocs.,
508 U.S. 248, 256-57 (1993).
The district court predicated its dismissal for lack of subject
matter jurisdiction upon its conclusion that the instant case is
indistinguishable from Knudson. In Knudson, the Supreme
Court held that a plan fiduciary’s action for specific
performance and restitution under the plan’s reimbursement
provision was not authorized by § 1132(a)(3). Knudson, 534
U.S. at 210-11. After the plan beneficiary in Knudson was
injured in a car accident, the plan fiduciary advanced money
to cover the cost of medical expenses. Id. at 207. The plan
beneficiary then received money from a settlement with the
10 QualChoice, Inc. v. Rowland No. 02-3614
tortfeasor. Id. The plan fiduciary brought an action against
the plan beneficiary seeking reimbursement under the terms
of the plan and prayed for various equitable remedies. Id. at
208. The Supreme Court held that the plan fiduciary was not
entitled to an injunction against “respondents’ failure to
reimburse the Plan” or specific performance of the “past due
monetary obligation” because such remedies are not typically
available in equity. Id. at 210-11. In rejecting the plan
fiduciary’s claim for restitution, the Supreme Court
distinguished between legal and equitable restitution. Id. at
212-13. The Supreme Court stated:
In cases in which the plaintiff “could not assert title or
right to possession of particular property but in which
nevertheless he might be able to show just grounds for
recovering money to pay for some benefit the defendant
had received from him,” the plaintiff had a right to
restitution at law through an action derived from the
common-law writ of assumpsit. In such cases, the
plaintiff’s claim was considered legal because he sought
“to obtain a judgment imposing a merely personal
liability upon the defendant to pay a sum of money.”
Such claims were viewed essentially as actions at law for
breach of contract (whether the contract was actual or
implied).
In contrast, a plaintiff could seek restitution in equity,
ordinarily in the form of a constructive trust or an
equitable lien, where money or property identified as
belonging in good conscience to the plaintiff could
clearly be traced to particular funds or property in the
defendant’s possession. A court of equity could then
order a defendant to transfer title (in the case of the
constructive trust) or to give a security interest (in the
case of the equitable lien) to a plaintiff who was, in the
eyes of equity, the true owner. But where “the property
[sought to be recovered] or its proceeds have been
dissipated so that no product remains, [the plaintiff’s]
claim is only that of a general creditor,” and the plaintiff

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No. 02-3614 QualChoice, Inc. v. Rowland 11
“cannot enforce a constructive trust of or an equitable
lien upon the property of the [defendant].”
Id. at 213-14 (citations omitted) (alterations in original). In
holding that the plan fiduciary in Knudson was not entitled to
equitable restitution, the majority wrote that “petitioners seek,
in essence, to impose personal liability on respondents for a
contractual obligation to pay money — relief that was not
typically available in equity. ‘A claim for money due and
owing under a contract is quintessentially an action at law.’”
Id. at 210 (quotation omitted). Yet, the majority opinion also
emphasized that the plan fiduciary in Knudson was not
entitled to equitable restitution because
the proceeds from the settlement of respondents’ tort
action — are not in respondents’ possession [; rather] . . .
the disbursements from the settlement were paid by two
checks, one made payable to the Special Needs Trust and
the other to respondents’ attorney. . . . The basis for
petitioners’ claim is not that respondents hold particular
funds that, in good conscience, belong to petitioners, but
that petitioners are contractually entitled to some funds
for benefits that they conferred.
Id. at 214.
Subsequent to Knudson, we held that a claim seeking
restitution, or imposition of a constructive trust or equitable
lien, is a legal claim if the plan participant or beneficiary does
not possess an identifiable fund, regardless of whether the
plan participant or beneficiary possesses money recovered
from another entity. Mosser, 347 F.3d at 624. QualChoice
attempts to distinguish this case from both Knudson and
Mosser by claiming that it has alleged that Rowland possesses
an identifiable fund, and further that Attorney Eklund’s
affidavit proves that Rowland possesses the settlement
money. Therefore, we must decide whether district courts
have jurisdiction over claims seeking restitution, or
imposition of a constructive trust or an equitable lien, if the
12 QualChoice, Inc. v. Rowland No. 02-3614
participant or beneficiary recovered money from another
entity, and possesses that recovery in an identifiable fund.
Of the circuits that have been faced with this same issue,
two have concluded that a reimbursement action by an ERISA
fiduciary is equitable if the participant or beneficiary has
recovered from another entity and possesses that recovery in
an identifiable fund, but legal if the participant or beneficiary
does not possess that recovery in an identifiable fund. See,
e.g., Bombardier Aerospace Employee Welfare Benefits Plan
v. Ferrer, Poirot and Wansbrough, 354 F.3d 348 (5th Cir.
2003); Admin. Comm. of the Wal-Mart Stores, Inc. Assocs.’
Health and Welfare Plan v. Varco, 338 F.3d 680 (7th Cir.
2003), petition for cert. filed, 72 U.S.L.W. 3452 (Dec. 23,
2003) (No. 03-959).
Several of these circuit cases focus largely upon the
language throughout Knudson emphasizing that the plan
beneficiary did not possess the settlement money, and the
admonishment near the end of Knudson stating that the
majority was not foreclosing the possibility that a plan
fiduciary might be able to bring an equitable action against
the Special Needs Trust or the client trust account. See, e.g.,
Varco, 338 F.3d at 687-88 (concluding that the action sought
equitable relief because the plan participant possessed an
identifiable fund); Primax Recoveries, Inc. v. Sevilla, 324
F.3d 544, 547-48 (7th Cir. 2003) (concluding that the action
sought legal relief because the plan participant possessed only
an uncashed check from an insurer and the money remained
with the insurer; therefore, the participant did not possess an
identifiable fund); Bauhaus USA, Inc. v. Copeland, 292 F.3d
439, 445 (5th Cir. 2002) (concluding that the action sought
legal relief because the settlement money had been paid into
the registry of the Mississippi Chancery Court; therefore, the
beneficiary did not possess an identifiable fund).
Additionally, in a malpractice suit by ERISA trustees against
an actuary hired to evaluate a plan, the Second Circuit took a
similar position regarding the distinction between equitable
and legal relief. Gerosa v. Savasta & Co., 329 F.3d 317, 321-

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No. 02-3614 QualChoice, Inc. v. Rowland 13
2No tably, in both Prima x Reco veries and Bauhaus, the plan
participant or beneficiary never possessed the settlement money, much
less maintained it in an identifiable fund. See Primax Recoveries, Inc. v.
Sevilla, 324 F .3d 5 44, 5 48 (7th Cir. 200 3); Bauhaus US A, Inc. v.
Copeland, 292 F.3d 43 9, 445 (5th Cir. 2002).
22 (2d Cir. 2003), cert. denied, 124 S. Ct. 435 (Oct. 20,
2003), and cert. denied, 124 S. Ct. 929 (Dec. 8, 2003).2 The
Gerosa court concluded that the trustees sought legal relief
because they sued for damages for the actuary’s misconduct,
rather than to recover a specific fund from the actuary. Id.
We find the analysis in these opinions to be unavailing on this
issue because the majority in Knudson left open the question
of whether the plan participant’s or beneficiary’s possession
of an identifiable fund would have allowed the fiduciary to
seek equitable relief, and because this analysis ignores the
Knudson majority’s repeated emphasis that a breach of
contract claim seeking money damages is a legal action.
Recently, however, the Fifth Circuit issued an opinion
providing a more thorough analysis supporting its view of the
distinction between legal and equitable relief. Bombardier,
354 F.3d 348. Extrapolating from Knudson, Bombardier
creates the following three-part test for determining whether
an action by a plan fiduciary seeks equitable relief: “Does the
Plan seek to recover funds (1) that are specifically
identifiable, (2) that belong in good conscience to the Plan,
and (3) that are within the possession and control of the
defendant beneficiary?” Id. at 356. The first prong of this
test asks whether the plan fiduciary “sought to recover funds
[that they had paid out previously as benefits] from a
specifically identifiable corpus of money.” Id. The second
prong of the test asks whether “the plan’s terms contained an
express, unambiguous reimbursement provision which made
the disputed funds ‘belong in good conscience to the plan.’”
Id. The third prong of the test asks whether the plan
participant or beneficiary had actual or constructive
possession or control over the funds. Id. According to the
14 QualChoice, Inc. v. Rowland No. 02-3614
3Recently in Ho nolu lu Joint Apprenticeship and Training Committee
of United Ass’n Local Union No. 675 v. Foster, 332 F.3d 123 4, 12 37 (9th
Cir. 2003), the Ninth Circu it characterized Knudson as holding that the
distinction betwe en legal and equitab le restitution turns upon the existence
of an identifiable fund. Foster, however, involved a very different
scenario than that involved in Westaff (USA) Inc. v. Arce, 298 F.3d 1164
(9th Cir. 2002 ), cert. denied, 537 U.S. 111 1 (2003 ), and in this case, in
that the ER ISA administrator sought to recoup money that it had spent
training the defendant apprentice after the apprentice broke the parties’
contract by working for a non-union employer without repaying the cost
of training. Id. at 123 6. W e do not view Foster as an indication that the
Ninth Circuit has retreated from its holding in Westaff.
Fifth Circuit, the plan beneficiary in Knudson did not have
actual or constructive possession over the funds because the
settlement money “had been placed in a Special Needs Trust,
as mandated by California law,” but the plan participant in
Bombardier did have possession because the funds were
“held in a bank account in the name of the participant’s
attorneys,” which gave him constructive control, as the
attorneys were his agents. Id. Finding that the plan fiduciary
in Bombardier met all of the requirements of the three-part
test, the Fifth Circuit concluded that the fiduciary sought to
recoup the amount it had paid to the participant in benefits,
rather than to impose personal liability on the participant, and
therefore, that the fiduciary sought equitable relief. Id. at 358.
The Ninth Circuit has taken the opposite view and held that
an action by an ERISA fiduciary to enforce a plan
reimbursement provision is legal, regardless of whether the
plan participant possesses an identifiable fund. Westaff (USA)
Inc. v. Arce, 298 F.3d 1164, 1167 (9th Cir. 2002), cert.
denied, 537 U.S. 1111 (2003).3 In Westaff, the plan fiduciary
brought an action “seeking a declaratory judgment that the
funds in escrow belonged to it and seeking specific
performance of [the participant’s] obligation to reimburse
[it].” Id. at 1166. Noting that the Supreme Court has
instructed courts to look at “the ‘substance of the remedy
sought . . . rather than the label placed on that remedy,’” the
Ninth Circuit concluded that the plan fiduciary in Westaff

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No. 02-3614 QualChoice, Inc. v. Rowland 15
sought “to enforce a contractual obligation for the payment of
money, a classic action at law and not an equitable claim.”
Id. In Westaff, the Ninth Circuit expressly took the position
that the participant’s possession of an identifiable fund did
not alter the nature of the action. Id.
The Third and Fourth Circuits have also applied Knudson
to determine whether the relief the plaintiff sought was legal
or equitable, but have done so only in unpublished opinions
involving obscure factual scenarios. See Sackman v. Teaneck
Nursing Ctr., No. 02-1083, 2003 WL 23173649 (3d Cir.
Dec. 4, 2003); Local 109 Ret. Fund v. First Union Nat’l Bank,
No. 02-1216, 2003 WL 152851 (4th Cir. Jan 23, 2003).
While these cases do not answer the exact question we face,
they do reflect an adherence to Knudson’s admonition to look
beyond the label the plaintiff puts on the relief sought.
Since Knudson was decided, we have dismissed for lack of
subject matter jurisdiction several actions brought by plan
fiduciaries seeking reimbursement. See, e.g., Mosser, 347
F.3d 619; Caffey v. Unum Life Ins. Co., 302 F.3d 576 (6th
Cir. 2002); Cmty. Ins. Co. v. Morgan, Nos. 99-6669, 00-5002,
2002 WL 31870325 (6th Cir. Dec. 20, 2002); Unicare Life &
Health Ins. Co. v. Saiter, No. 00-3856, 2002 WL 1301574
(June 10, 2002); Sheet Metal Local # 24 v. Newman, No. 01-
3085, 2002 WL 1033739 (May 21, 2002). In each of these
cases, we simply held that the plan fiduciary sought legal
relief for breach of contract. None of them, however,
forecloses jurisdiction over the ostensibly equitable relief
QualChoice seeks.
In Mosser, the plan had paid for the participant’s medical
expenses arising out of an accident with a negligent police
officer. Mosser, 347 F.3d at 621. After the participant
recovered from the city through a settlement, he did not
reimburse the plan for the money it had paid out pursuant to
the terms of the plan. The plan fiduciary then sued the
participant, bringing a breach of contract claim “requesting
specific performance and restitution” for medical payments
16 QualChoice, Inc. v. Rowland No. 02-3614
made by the plan. Id. at 622. When dismissing the plan
fiduciary’s action, we noted that the plan fiduciary
did not, in its complaint, allege that it had given certain
funds to [the participant], trace those funds to the
settlement funds from [the tortfeasor], allege that [the
participant] was unjustly enriched by retaining the
settlement funds, and seek the return of the settlement
funds in [the participant’s possession]. Rather, [the
fiduciary] sought “restitution from [the participant] for
all covered services.”
Id. at 624. Although we did not emphasize it our opinion,
there was a significant factual difference between Mosser and
Knudson. In Knudson, the plan beneficiary never possessed
the money she recovered in her settlement with the tortfeasor,
as it had been paid directly into a Special Needs Trust and a
client trust account. Knudson, 534 U.S. at 234. In Mosser,
however, the plan participant apparently possessed the money
she recovered from the city. Mosser, 347 F.3d at 622-23.
In Saiter, a case very similar to Mosser, the plan paid
$164,000 in medical expenses after the participant was
injured in a car accident by a negligent driver. Saiter, 2002
WL 1301574, at *1. The participant then recovered $100,000
from the tortfeasor. The plan fiduciary sued the participant,
the tortfeasor, and the tortfeasor’s insurance carrier, seeking
reimbursement from the participant and asserting subrogation
rights against the tortfeasor and the tortfeasor’s insurance
carrier. When dismissing the fiduciary’s action, we stated
that such actions “are not authorized claims under ERISA
because they seek to enforce plan provisions through legal
remedies.” Id. at *2.
In Morgan, a factually complex case, the plan paid
$116,000 in medical expenses after the participant was
injured in a car accident by a negligent driver. Morgan, 2002
WL 31870325, at *1. The participant had a $50,000
underinsured motorist policy with Liberty Mutual and the

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No. 02-3614 QualChoice, Inc. v. Rowland 17
tortfeasor had a $100,000 liability policy with State Farm.
Because the participant incurred more than $100,000 in
medical expenses, Liberty Mutual paid the participant
$50,000 on his underinsured motorist claim and in order to
protect its subrogation rights, advanced him $100,000 on the
State Farm policy. Id. at *2. The participant then entered
into a settlement agreement with State Farm, Liberty, and the
tortfeasor in which the participant was to recover $7,500 in
cash and a $30,000 note with 6% secured interest. Before the
participant received any settlement money, the plan fiduciary
sued the participant, seeking to enforce the plan’s
reimbursement provision. When dismissing the fiduciary’s
action, we broadly stated, “The claim of [the plan fiduciary]
against . . . the plan participant, for reimbursement under the
terms of the plan is squarely precluded by Knudson.” Id. We
did not specify whether our holding was limited to situations
such as that present in Morgan, where the settlement had not
yet been paid to the participant. Id.
After thorough review, we believe that no clear or binding
answer emerges to the question before us: whether a claim
maintained by a fiduciary against a participant or beneficiary,
who has recovered money from another and possesses that
recovery in an identifiable fund, is an equitable claim under
29 U.S.C. § 1132(a)(3). We therefore must determine
ourselves how to answer that question, left open by Knudson.
To do so, we look to Dobbs on Remedies, relied upon by the
Court in Knudson. Professor Dobbs defines restitution as “a
return or restoration of what the defendant has gained in a
transaction.” 1 Dan B. Dobbs, Law of Remedies 551 (2d
ed.1993) [hereinafter Dobbs]. The purpose of restitution “is
to prevent the defendant’s unjust enrichment by recapturing
the gains the defendant secured in a transaction.” Id. at 552.
Both restitution and damages may be appropriate remedies for
breach of contract; however, they each measure the remedy
differently. Id. “Restitution measures the remedy by the
defendant’s gain and seeks to force disgorgement of that gain.
It differs in its goal or principle from damages, which
measures the remedy by the plaintiff’s loss and seeks to
18 QualChoice, Inc. v. Rowland No. 02-3614
provide compensation for that loss.” Id. at 555. Under this
analysis, QualChoice’s action could be characterized
appropriately as one seeking damages for Rowland’s breach
of contract, in that QualChoice seeks to recoup the money it
lost because Rowland breached the plan’s reimbursement
provision. QualChoice’s action could also be characterized
appropriately as one seeking restitution for Rowland’s breach
of contract, in that QualChoice seeks to disgorge the unjust
enrichment that Rowland received via her double recovery.
As Knudson points out, however, determining that
QualChoice can bring an action for restitution is only half of
the analysis. To fall within the district court’s original federal
question jurisdiction under § 1132(e)(1), QualChoice’s action
must seek equitable rather than legal restitution. Knudson,
534 U.S. at 214. According to Professor Dobbs, “Restitution
claims for money are usually claims ‘at law.’ . . . On the other
hand, restitution claims that may require coercive intervention
or some judicial action that is historically ‘equitable[]’ may
be regarded as equitable claims.” Dobbs at 556 (emphasis
added). “The most notable equitable procedures to enforce
restitution are the constructive trust, the equitable lien, and
subrogation. These procedures give the plaintiff restitution
by giving the plaintiff title to, or a security interest in
particular property.” Id. at 565. Therefore, the procedural
posture of this case gives rise to a conundrum — QualChoice
seeks restitution of money, which is typically a claim at law;
however, QualChoice also seeks to obtain restitution by
asking the court to impose a constructive trust or an equitable
lien upon the identifiable fund of settlement recovery that
Rowland allegedly possesses, which is typically an equitable
claim. The Fifth and Seventh Circuits hold that Knudson
indicates that district courts have federal question jurisdiction
to impose a constructive trust or an equitable lien in cases
such as this — where the plan participant or beneficiary has
recovered from another entity and possesses that recovery in
an identifiable fund. Bombardier, 354 F.3d 348; Varco, 338
F.3d 680.

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No. 02-3614 QualChoice, Inc. v. Rowland 19
We conclude, however, that the source of the claim asserted
by QualChoice is a contract to pay money, and that the
procedural mechanisms of constructive trust and equitable
lien are not proper mechanisms for enforcing this right, as
such relief would not have traditionally been awarded by a
court of equity in a breach of contract action. Historically,
legal restitution was limited by the concept of formal title.
Dobbs at 586. Equitable restitution developed to fill the void
left by that limitation and allowed plaintiffs, who lacked
formal title, to bring actions for restitution. The problem of
formal title was irrelevant in cases where the plaintiff sought
intangibles, such as money; therefore, all plaintiffs could
bring such actions in the courts of law. Historically, when a
plaintiff sought restitution of money for breach of contract, he
brought an action for assumpsit, which is a legal remedy. Id.
at 571, 578-79 (“Assumpsit was the common law form of
action by which contract claims were redressed.”).
Contrary to Rowland’s assertions, a plaintiff is not
necessarily required to prove wrongdoing by the defendant in
order to obtain relief through imposition of a constructive
trust or an equitable lien. Id. at 597-98. “The constructive
trust is based on property, not wrongs.” Id. at 597 (emphasis
added). “In the constructive trust case the defendant has legal
rights in something that in good conscience belongs to the
plaintiff. . . . The defendant is thus made to transfer title to the
plaintiff who is, in the eyes of equity, the true ‘owner.’” Id.
at 587. “The equitable lien uses similar ideas to give the
plaintiff a security interest in the property or to give the
plaintiff only part of the property rather than all of it.” Id. at
588. It is true that an equitable lien or a constructive trust
may be imposed on a particular bank account. See id. at 591.
The fact that a plan participant or beneficiary places the
money he recovered from another in a bank account does not,
however, change the nature of the action. The plan may have
obligated Rowland to reimburse QualChoice in the event that
20 QualChoice, Inc. v. Rowland No. 02-3614
4The plan states, “If you re ceive payment, however designated, from
a third party, you are obligated to reimburse QualChoice Health Plan,
less a pro rata share of the reasonable attorneys’ fees and costs you
sustained in obtaining such recovery.” J.A. at 28 (emphasis added).
QualChoice paid for Rowland’s medical expenses, but it did
not give QualChoice a property right in any particular fund.4
This court has explicitly held that subrogation is not
available in a situation such as this, when the plan participant
or beneficiary has already recovered, because subrogation
allows a plan fiduciary only to step into the shoes of a plan
participant or beneficiary and assert the rights of the
participant or beneficiary against another; subrogation does
not allow a plan fiduciary to obtain a judgment of personal
liability against a plan beneficiary or particpant. Mosser, 347
F.3d at 623-24; see also Dobbs at 588, 604. Therefore,
QualChoice may have been able to use subrogation to step
into the shoes of Rowland during the settlement negotiations
with W & LE, but QualChoice may not now use the doctrine
of subrogation to impose personal liability on Rowland.
We are aware of significant scholarly criticism of Knudson
for defining the scope of relief available under ERISA by
looking to historical practice of the courts of England. See,
e.g., John H. Langbein, What ERISA Means by “Equitable”:
The Supreme Court’s Trail of Error in Russell, Mertens, and
Great-West, 103 Colum. L. Rev. 1317, 1318-20 (2003)
(arguing that in drafting ERISA, Congress intended to
incorporate substantive trust law, including “make-whole
relief,” such as money damages). The Supreme Court,
however, has twice defined the scope of relief available under
§ 1132(a)(3) of ERISA in terms of the relief “typically
available in equity.” Mertens, 508 U.S. at 256-57 (listing
“injunction, mandamus, and restitution” as examples of
equitable relief); see Knudson, 534 U.S. at 213-16 (limiting
restitution available under § 1132(a)(3) to equitable
restitution). Applying the Supreme Court’s cases, we hold

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No. 02-3614 QualChoice, Inc. v. Rowland 21
that a plan fiduciary’s action to enforce a plan-reimbursement
provision is a legal action, regardless of whether the plan
participant or beneficiary recovered from another entity and
possesses that recovery in an identifiable fund.
D. Additional Discovery
Because we hold that QualChoice’s action is a legal one
seeking to recover money for Rowland’s breach of the plan’s
reimbursement provision, regardless of whether Rowland
possess an identifiable fund, we need not reach QualChoice’s
argument that the district court abused its discretion by
dismissing this action without allowing sufficient discovery
and within twenty-four hours of requesting that the parties
submit additional information.
III. CONCLUSION
Based on the foregoing, we AFFIRM the district court’s
order dismissing this action for lack of subject matter
jurisdiction.

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