Sereboff v. Mid Atlantic Medical Services, Inc.

(Slip Opinion) OCTOBER TERM, 2005 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader.

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

SEREBOFF ET UX. v. MID ATLANTIC MEDICAL

SERVICES, INC.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE FOURTH CIRCUIT

No. 05–260. Argued March 28, 2006—Decided May 15, 2006

Petitioner Sereboffs are beneficiaries under a health insurance plan

administered by respondent Mid Atlantic and covered by the Em

ployee Retirement Income Security Act of 1974 (ERISA). The plan

provides for payment of covered medical expenses and has an “Acts of

Third Parties” provision. This provision requires a beneficiary who is

injured as a result of an act or omission of a third party to reimburse

Mid Atlantic for benefits it pays on account of those injuries, if the

beneficiary recovers for those injuries from the third party. The

Sereboffs were involved in an automobile accident and suffered inju

ries. The plan paid the couple’s medical expenses. The Sereboffs

sought compensatory damages for the accident from third parties in

state court. After the Sereboffs settled their tort suit, Mid Atlantic

filed suit in District Court under §502(a)(3) of ERISA, seeking to col

lect from the Sereboffs’ tort recovery the medical expenses it had paid

on the Sereboffs’ behalf. The Sereboffs agreed to set aside from their

tort recovery a sum equal to the amount Mid Atlantic claimed, and

preserve this sum in an investment account pending the outcome of

the suit. The court found in Mid Atlantic’s favor and ordered the

Sereboffs to turn over the amount set aside. The Fourth Circuit af

firmed in relevant part, and observed that the Courts of Appeals are

divided on the question whether §502(a)(3) authorizes recovery in

these circumstances. This Court granted review to resolve this dis

agreement.

Held: Mid Atlantic’s action properly sought “equitable relief” under

§502(a)(3). Pp. 3–11.

(a) A fiduciary may bring a civil action under §502(a)(3)(B) “to ob

tain . . . appropriate equitable relief . . . to enforce . . . the terms of the

2 SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

Syllabus

plan.” The only question here is whether the relief requested was

“equitable.” In Mertens v. Hewitt Associates, 508 U. S. 248, this

Court construed §502(a)(3)(B) to authorize only “those categories of

relief that were typically available in equity,” and thus rejected a

claim that this Court found sought “nothing other than compensatory

damages.” Id., at 207–208. This Court elaborated on this construc

tion of §502(a)(3) in Great-West Life & Annuity Ins. Co. v. Knudson,

534 U. S. 204, which involved a provision in an ERISA plan similar to

the “Acts of Third Parties” provision in the Sereboffs’ plan. Relying

on such a provision, Great-West sought equitable restitution of bene

fits it had paid when Knudson recovered in tort from a third party.

In considering whether §502(a)(3)(b) authorized such relief, this

Court asked whether the restitutionary remedy Great-West sought

would have been equitable in “the days of the divided bench,” id., at

212. This Court found that it would not have been equitable, because

the funds Great-West sought were not in Knudson’s possession but

had been placed in a trust under California law. That impediment is

not present here. Mid Atlantic sought identifiable funds within the

Sereboffs’ possession and control—that part of the tort settlement

due Mid Atlantic under the ERISA plan and set aside in the invest

ment account. Pp. 3–5.

(b) This Court’s case law from the days of the divided bench con

firms that Mid Atlantic’s claim is equitable. In Barnes v. Alexander,

232 U. S. 117, attorney Barnes promised two other attorneys “one

third of the contingent fee” he expected in a case, id., at 119. Based

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

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

soon as he gets a title to the thing,” id., at 121, the Court found that

Barnes’ undertaking “create[d] a lien” upon the portion of the recov

ery due him from the client, ibid., which the other attorneys could

“follow . . . into [Barnes’] hands” “as soon as [the fund] was identi

fied,” id., at 123. The “Acts of Third Parties” provision in the Sere

boffs’ plan, like Barnes’ promise, specifically identified a particular

fund distinct from the Sereboffs’ general assets, and a particular

share of that fund to which Mid Atlantic was entitled. Thus, Mid At

lantic could rely on a “familiar rul[e] of equity” to collect for the medi

cal bills it had paid by following a portion of the recovery “into the

[Sereboffs’] hands” “as soon as [the settlement fund] was identified,”

and imposing on that portion a constructive trust or equitable lien.

Ibid.

The Sereboffs object that Mid Atlantic’s suit would not have satis

fied the strict tracing rules that they say accompanied equitable res

titution at common law. But Barnes confirms that no such tracing

requirement applies to equitable liens imposed by agreement or as

Cite as: 547 U. S. ____ (2006) 3

Syllabus

signment, like that in Barnes itself. And Knudson did not endorse

application of all restitutionary conditions, like the tracing rules the

Sereboffs identify, to every action for an equitable lien under

§502(a)(3). Knudson simply held that equitable restitution was un

available because the funds Great-West sought were not in

Knudson’s possession.

The Sereboffs also argue that equitable relief is inappropriate, even

under Barnes, because at the time they agreed to the plan terms, no

fund existed in which they could grant Mid Atlantic an equitable in

terest. But Barnes explicitly disapproved of a rule requiring identifi

cation at the time a contract is made of the fund to which a lien speci

fied in the contract attached.

The Sereboffs also claim that the rule announced in Barnes applies

only to equitable liens claimed under an attorney’s contingency fee

arrangement. But Barnes did not attach any particular significance

to the identify of the parties seeking recovery, and other cases of this

Court, not involving attorneys’ contingency fees, have applied the

same “familiar rul[e] of equity” that Barnes did. See, e.g., Walker v.

Brown, 165 U. S. 654. Pp. 5–10.

(c) The Sereboffs’ contention that the lower courts erred in allowing

enforcement of the “Acts of Third Parties” provision, without impos

ing limitations that would apply to an equitable subrogation action,

is rejected. Mid Atlantic’s claim is not considered equitable because

it is a subrogation claim. Rather, it is considered equitable because it

is indistinguishable from an action to enforce an equitable lien estab

lished by agreement, of the sort epitomized by Barnes. Pp. 10–11.

407 F. 3d 212, affirmed in relevant part.

ROBERTS, C. J., delivered the opinion for a unanimous Court.

Cite as: 547 U. S. ____ (2006) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Wash

ington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 05–260

_________________

JOEL SEREBOFF, ET UX., PETITIONERS v. MID

ATLANTIC MEDICAL SERVICES, INC.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FOURTH CIRCUIT

[May 15, 2006]

CHIEF JUSTICE ROBERTS delivered the opinion of the

Court.

In this case we consider again the circumstances in

which a fiduciary under the Employee Retirement Income

Security Act of 1974 (ERISA) may sue a beneficiary for

reimbursement of medical expenses paid by the ERISA

plan, when the beneficiary has recovered for its injuries

from a third party.

I

Marlene Sereboff ’s employer sponsors a health insur

ance plan administered by respondent Mid Atlantic Medi

cal Services, Inc., and covered by ERISA, 88 Stat. 829, as

amended, 29 U. S. C. §1001 et seq. (2000 ed. and Supp.

III). Marlene Sereboff and her husband Joel are benefici

aries under the plan. The plan provides for payment of

certain covered medical expenses and contains an “Acts

of Third Parties” provision. This provision “applies when

[a beneficiary is] sick or injured as a result of the act or

omission of another person or party,” and requires a bene

ficiary who “receives benefits” under the plan for such

injuries to “reimburse [Mid Atlantic]” for those benefits

2 SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

Opinion of the Court

from “[a]ll recoveries from a third party (whether by law

suit, settlement, or otherwise).” App. to Pet. for Cert. 38a.

The provision states that “[Mid Atlantic’s] share of the

recovery will not be reduced because [the beneficiary] has

not received the full damages claimed, unless [Mid Atlan

tic] agrees in writing to a reduction.” Ibid.

The Sereboffs were involved in an automobile accident

in California and suffered injuries. Pursuant to the plan’s

coverage provisions, the plan paid the couple’s medical

expenses. The Sereboffs filed a tort action in state court

against several third parties, seeking compensatory dam

ages for injuries suffered as a result of the accident. Soon

after the suit was commenced, Mid Atlantic sent the Sere

boffs’ attorney a letter asserting a lien on the anticipated

proceeds from the suit, for the medical expenses Mid

Atlantic paid on the Sereboffs’ behalf. App. 87–90. On

several occasions over the next 2½ years, Mid Atlantic

sent similar correspondence to the attorney and to the

Sereboffs, repeating its claim to a lien on a portion of the

Sereboffs’ recovery, and detailing the medical expenses as

they accrued and were paid by the plan.

The Sereboffs’ tort suit eventually settled for $750,000.

Neither the Sereboffs nor their attorney sent any money to

Mid Atlantic in satisfaction of its claimed lien which, after

Mid Atlantic completed its payments on the Sereboffs’

behalf, totaled $74,869.37.

Mid Atlantic filed suit in District Court under §502(a)(3)

of ERISA, 29 U. S. C. §1132(a)(3), seeking to collect from

the Sereboffs the medical expenses it had paid on their

behalf. Since the Sereboffs’ attorney had already distrib

uted the settlement proceeds to them, Mid Atlantic sought

a temporary restraining order and preliminary injunction

requiring the couple to retain and set aside at least

$74,869.37 from the proceeds. The District Court ap

proved a stipulation by the parties, under which the Sere

boffs agreed to “preserve $74,869.37 of the settlement

Cite as: 547 U. S. ____ (2006) 3

Opinion of the Court

funds” in an investment account, “until the [District]

Court rules on the merits of this case and all appeals, if

any, are exhausted.” App. 69.

On the merits, the District Court found in Mid Atlantic’s

favor and ordered the Sereboffs to pay Mid Atlantic the

$74,869.37, plus interest, with a deduction for Mid Atlan

tic’s share of the attorney’s fees and court costs the Sere

boffs had incurred in state court. See 303 F. Supp. 2d 691,

316 F. Supp. 2d 265 (Md. 2004). The Sereboffs appealed

and the Fourth Circuit affirmed in relevant part. 407

F. 3d 212 (2005). The Fourth Circuit observed that the

Courts of Appeal are divided on the question whether

§502(a)(3) authorizes recovery in these circumstances. See

id., at 219–220, n. 7.1 We granted certiorari to resolve the

disagreement. 546 U. S. ___ (2005).

II

A

A fiduciary may bring a civil action under §502(a)(3) of

ERISA “(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). There is no dispute that Mid Atlantic is a

fiduciary under ERISA and that its suit in District Court

was to “enforce . . . the terms of ” the “Acts of Third Par

ties” provision in the Sereboffs’ plan. The only question is

whether the relief Mid Atlantic requested from the Dis

——————

1 Compare Administrative Comm. of Wal-Mart Assoc. Health & Wel

fare Plan v. Willard, 393 F. 3d 1119 (CA10 2004), Bombardier Aero

space Employee Welfare Benefits Plan v. Ferrer, Poirot & Wansbrough,

354 F. 3d 348 (CA5 2003), and Administrative Comm. of Wal-Mart

Stores, Inc. v. Varco, 338 F. 3d 680 (CA7 2003), with Qualchoice, Inc. v.

Rowland, 367 F. 3d 638 (CA6 2004), and Westaff (USA) Inc. v. Arce, 298

F. 3d 1164 (CA9 2002).

4 SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

Opinion of the Court

trict Court was “equitable” under §502(a)(3)(B).

This is not the first time we have had occasion to clarify

the scope of the remedial power conferred on district

courts by §502(a)(3)(B). In Mertens v. Hewitt Associates,

508 U. S. 248 (1993), we construed the provision to author

ize only “those categories of relief that were typically

available in equity,” and thus rejected a claim that we

found sought “nothing other than compensatory damages.”

Id., at 255–256. We elaborated on this construction of

§502(a)(3)(B) in Great-West Life & Annuity Ins. Co. v.

Knudson, 534 U. S. 204 (2002), which involved facts simi

lar to those in this case. Much like the “Acts of Third

Parties” provision in the Sereboffs’ plan, the plan in

Knudson reserved “ ‘a first lien upon any recovery,

whether by settlement, judgment or otherwise,’ that the

beneficiary receives from [a] third party.” Id., at 207.

After Knudson was involved in a car accident, Great-West

paid medical bills on her behalf and, when she recovered

in tort from a third party for her injuries, Great-West

sought to collect from her for the medical bills it had paid.

Id., at 207–209.

In response to the argument that Great-West’s claim in

Knudson was for “restitution” and thus equitable under

§502(a)(3)(B) and Mertens, we noted that “not all relief

falling under the rubric of restitution [was] available in

equity.” 534 U. S., at 212. To decide whether the restitu

tionary relief sought by Great-West was equitable or legal,

we examined cases and secondary legal materials to de

termine if the relief would have been equitable “[i]n the

days of the divided bench.” Ibid. We explained that one

feature of equitable restitution was that it sought to im

pose a constructive trust or equitable lien on “particular

funds or property in the defendant’s possession.” Id., at

213. That requirement was not met in Knudson, because

“the funds to which petitioners claim[ed] an entitlement”

were not in Knudson’s possession, but had instead been

Cite as: 547 U. S. ____ (2006) 5

Opinion of the Court

placed in a “Special Needs Trust” under California law.

Id., at 207, 214. The kind of relief Great-West sought,

therefore, was “not equitable—the imposition of a con

structive trust or equitable lien on particular property—

but legal—the imposition of personal liability for the

benefits that [Great-West] conferred upon [Knudson].”

Id., at 214. We accordingly determined that the suit could

not proceed under §502(a)(3). Ibid.

That impediment to characterizing the relief in Knudson

as equitable is not present here. As the Fourth Circuit

explained below, in this case Mid Atlantic sought “specifi

cally identifiable” funds that were “within the possession

and control of the Sereboffs”—that portion of the tort

settlement due Mid Atlantic under the terms of the ERISA

plan, set aside and “preserved [in the Sereboffs’] invest

ment accounts.” 407 F. 3d, at 218. Unlike Great-West,

Mid Atlantic did not simply seek “to impose personal

liability . . . for a contractual obligation to pay money.”

Knudson, 534 U. S., at 210. It alleged breach of contract

and sought money, to be sure, but it sought its recovery

through a constructive trust or equitable lien on a specifi

cally identified fund, not from the Sereboffs’ assets gener

ally, as would be the case with a contract action at law.

ERISA provides for equitable remedies to enforce plan

terms, so the fact that the action involves a breach of

contract can hardly be enough to prove relief is not equi

table; that would make §502(a)(3)(B)(ii) an empty promise.

This Court in Knudson did not reject Great-West’s suit out

of hand because it alleged a breach of contract and sought

money, but because Great-West did not seek to recover a

particular fund from the defendant. Mid Atlantic does.

B

While Mid Atlantic’s case for characterizing its relief as

equitable thus does not falter because of the nature of the

recovery it seeks, Mid Atlantic must still establish that

6 SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

Opinion of the Court

the basis for its claim is equitable. See id., at 213

(whether remedy “is legal or equitable depends on ‘the

basis for [the plaintiff ’s] claim’ and the nature of the un

derlying remedies sought”). Our case law from the days of

the divided bench confirms that Mid Atlantic’s claim is

equitable. In Barnes v. Alexander, 232 U. S. 117 (1914),

for instance, attorneys Street and Alexander performed

work for Barnes, another attorney, who promised them

“one-third of the contingent fee” he expected in the case.

Id., at 119. In upholding their equitable claim to this

portion of the fee, Justice Holmes recited “the familiar

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

even before it is acquired will make the contractor a trus

tee as soon as he gets a title to the thing.” Id., at 121. On

the basis of this rule, he concluded that Barnes’ undertak

ing “create[d] a lien” upon the portion of the monetary

recovery due Barnes from the client, ibid., which Street

and Alexander could “follow . . . into the hands of . . .

Barnes,” “as soon as [the fund] was identified,” id., at 123.

Much like Barnes’ promise to Street and Alexander, the

“Acts of Third Parties” provision in the Sereboffs’ plan

specifically identified a particular fund, distinct from the

Sereboffs’ general assets—“[a]ll recoveries from a third

party (whether by lawsuit, settlement, or otherwise)”—

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.” App. to Pet. for Cert.

38a. Like Street and Alexander in Barnes, therefore, Mid

Atlantic could rely on a “familiar rul[e] of equity” to collect

for the medical bills it had paid on the Sereboffs’ behalf.

Barnes, supra, at 121. This rule allowed them to “follow”

a portion of the recovery “into the [Sereboffs’] hands” “as

soon as [the settlement fund] was identified,” and impose

on that portion a constructive trust or equitable lien. 232

U. S., at 123.

The Sereboffs object that Mid Atlantic’s suit would not

Cite as: 547 U. S. ____ (2006) 7

Opinion of the Court

have satisfied the conditions for “equitable restitution” at

common law, particularly the “strict tracing rules” that

allegedly accompanied this form of relief. Reply Brief for

Petitioners 8. When an equitable lien was imposed as

restitutionary relief, it was often the case that an asset

belonging to the plaintiff had been improperly acquired by

the defendant and exchanged by him for other property.

A central requirement of equitable relief in these circum

stances, the Sereboffs argue, was the plaintiff ’s ability to

“‘trac[e]’ the asset into its products or substitutes,” or “trace

his money or property to some particular funds or assets.”

1 D. Dobbs, Law of Remedies §4.3(2), pp. 591, n. 10, 592

(2d ed. 1993).

But as the Sereboffs themselves recognize, an equitable

lien sought as a matter of restitution, and an equitable

lien “by agreement,” of the sort at issue in Barnes, were

different species of relief. See Brief for Petitioners 24–25;

Reply Brief for Petitioners 11; see also 1 Dobbs, supra,

§4.3(3), at 601; 1 G. Palmer, Law of Restitution §1.5, p. 20

(1978). 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 prop

erty the defendant held, yet that did not preclude them

from securing an equitable lien. To the extent Mid Atlan

tic’s action is proper under Barnes, therefore, its asserted

inability to satisfy the “strict tracing rules” for “equit-

able restitution” is of no consequence. Reply Brief for

Petitioners 8.

The Sereboffs concede as much, stating that they “do not

contend—and have never suggested—that any tracing was

historically required when an equitable lien was imposed

by agreement.” Id., at 11. Their argument is that such

tracing was required when an equitable lien was “predi

cated on a theory of equitable restitution.” Ibid. The

8 SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

Opinion of the Court

Sereboffs appear to assume that Knudson endorsed ap

plication of all the restitutionary conditions—including

restitutionary tracing rules—to every action for an equita

ble lien under §502(a)(3). This assumption is inaccurate.

Knudson simply described in general terms the conditions

under which a fiduciary might recover when it was seek

ing equitable restitution under a provision like that at

issue in this case. There was no need in Knudson to cata

log all the circumstances in which equitable liens were

available in equity; Great-West claimed a right to recover

in restitution, and the Court concluded only that equitable

restitution was unavailable because the funds sought were

not in Knudson’s possession. 534 U. S., at 214.

The Sereboffs argue that, even under Barnes, equitable

relief would not have been available to fiduciaries relying

on plan provisions like the one at issue here, because

when the beneficiary agrees to such a provision “no third-

party recovery” exists which the beneficiary can “place . . .

beyond his control and grant [the fiduciary] a complete

and present right therein.” Brief for Petitioners 25–26

(internal quotation marks omitted). It may be true that,

in contract cases, equity originally required identification

at the time the contract was made of the fund to which a

lien specified in the contract attached. See, e.g., Trist v.

Child, 21 Wall. 441, 447 (1875) (“[A] mere agreement to

pay out of such fund is not sufficient. Something more is

necessary. There must be an appropriation of the fund pro

tanto”). But Barnes explicitly disapproved of this rule,

observing that Trist addressed the issue only in dicta

(since the contract containing the lien provision in Trist

was illegal), and treating the “question as at large,” even

in light of earlier opinions that had dealt with it head on.

Barnes, supra, at 120 (citing Trist, supra; Christmas v.

Russell, 14 Wall. 69 (1872); Wright v. Ellison, 1 Wall. 16

(1864)).

Apart from those cases, which Barnes discredited, the

Cite as: 547 U. S. ____ (2006) 9

Opinion of the Court

Sereboffs offer little to undermine the plain indication in

Barnes that the fund over which a lien is asserted need

not be in existence when the contract containing the lien

provision is executed. See 4 S. Symons, Pomeroy’s Equity

Jurisprudence §1236, pp. 699–700 (5th ed. 1941) (“[A]n

agreement to charge, or to assign . . . property not yet in

existence,” although “creat[ing] no legal estate or interest

in the things when they afterwards come into existence . . .

does constitute an equitable lien upon the property” just

as would “a lien upon specific things existing and owned

by the contracting party at the date of the contract”);

Peugh v. Porter, 112 U. S. 737, 742 (1885) (“[I]n contempla

tion of equity, [it] is not material” that the “very fund now in

dispute” was “not . . . in existence” when an equitable lien

over that fund was created). Indeed, the most they can

muster in this regard are several state cases predating

Barnes and a single decision that rests, contrary to the

Sereboffs’ characterization, on the simple conclusion that a

contractual provision purporting to secure an equitable

lien did not properly do so. See Brief for Petitioners 26;

Reply Brief for Petitioners 12; Taylor v. Wharton, 43 App.

D. C. 104 (1915).

The Sereboffs finally fall back on the argument that

Barnes announced a special rule for attorneys claiming an

equitable lien over funds promised under a contingency fee

arrangement. Outside of this context, they say, the “typi

cal rules regarding equitable liens by assignment” per

sisted and would have prevented recovery here. Reply

Brief for Petitioners 13.

But Barnes did not attach any particular significance to

the identity of the parties seeking recovery. See 232 U. S.,

at 119. And as Barnes itself makes clear, other cases of

this Court—not involving attorneys’ contingency fees—

apply the same “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

10 SEREBOFF v. MID ATLANTIC MEDICAL SERVICES, INC.

Opinion of the Court

the thing.” Id., at 121. In Walker v. Brown, 165 U. S. 654

(1897), for instance, the Court approved an equitable lien

over municipal bonds transferred to a company to facilitate

its business. When a supplier of the company suspended

shipments because of delinquent debts, the individual who

had transferred the bonds assured the supplier that “ ‘any

indebtedness that they may be owing you at any time, shall

be paid before the return to me of these bonds . . . and that

these bonds . . . are at the risk of the business of [the com

pany], so far as any claim you may have against [it].’ ” Id.,

at 663. The Court found that this undertaking created an

equitable lien on the bonds, which the supplier could enforce

against the individual after the bonds had been returned to

him when the company became insolvent. Id., at 666. As in

Barnes, the Court resolved the case by applying general

equitable principles, stating that “[t]o dedicate property to a

particular purpose, to provide that a specified creditor and

that creditor alone shall be authorized to seek payment of

his debt from the property or its value, is unmistakably to

create an equitable lien.” 165 U. S., at 666.

C

Shifting gears, the Sereboffs contend that the lower courts

erred in allowing enforcement of the “Acts of Third Parties”

provision, without imposing various limitations that they

say would apply to “truly equitable relief grounded in prin

ciples of subrogation.” Reply Brief for Petitioners 5. Accord

ing to the Sereboffs, they would in an equitable subrogation

action be able to assert certain equitable defenses, such as

the defense that subrogation may be pursued only after a

victim had been made whole for his injuries. Id., at 5–6.

Such defenses should be available against Mid Atlantic’s

action, the Sereboffs claim, despite the plan provision that

“[Mid Atlantic’s] share of the recovery will not be reduced

because [the beneficiary] has not received the full damages

claimed, unless [Mid Atlantic] agrees in writing to a re

Cite as: 547 U. S. ____ (2006) 11

Opinion of the Court

duction.” App. to Pet. for Cert. 38a.

But Mid Atlantic’s claim is not considered equitable be

cause it is a subrogation claim. As explained, Mid Atlantic’s

action to enforce the “Acts of Third Parties” provision quali

fies as an equitable remedy because it is indistinguishable

from an action to enforce an equitable lien established by

agreement, of the sort epitomized by our decision in Barnes.

See 4 Palmer, Law of Restitution §23.18(d), at 470 (A subro

gation lien “is not an express lien based on agreement, but

instead is an equitable lien impressed on moneys on the

ground that they ought to go to the insurer”). Mid Atlantic

need not characterize its claim as a freestanding action for

equitable subrogation. Accordingly, the parcel of equitable

defenses the Sereboffs claim accompany any such action are

beside the point.2

* * *

Under the teaching of Barnes and similar cases, Mid

Atlantic’s action in the District Court properly sought

“equitable relief ” under §502(a)(3); the judgment of the

Fourth Circuit is affirmed in relevant part.

It is so ordered.

——————

2 The Sereboffs argue that, even if the relief Mid Atlantic sought was

“equitable” under §502(a)(3), it was not “appropriate” under that provision

in that it contravened principles like the make-whole doctrine. Neither

the District Court nor the Court of Appeals considered the argument that

Mid Atlantic’s claim was not “appropriate” apart from the contention that

it was not “equitable,” and from our examination of the record it does not

appear that the Sereboffs raised this distinct assertion below. We decline

to consider it for the first time here. See National Collegiate Athletic Assn.

v. Smith, 525 U. S. 459, 470 (1999).