## Facts

- Robert Montanile, an ERISA plan participant, was injured by a drunk driver; the plan paid over $120,000 in medical expenses.
- The plan required Montanile to reimburse the plan if he later recovered from a third party for the same injuries.
- Montanile obtained a $500,000 settlement from the drunk driver.
- The plan fiduciary asserted a reimbursement claim; negotiations failed.
- Montanile’s attorney warned the fiduciary the settlement (held in a trust account) would be released absent an objection; the fiduciary did not act before disbursement.
- When the fiduciary later sued under ERISA § 502(a)(3), Montanile asserted he had spent most or all settlement proceeds on nontraceable living expenses, leaving no identifiable fund or traceable property.

## Issues

1. Whether ERISA § 502(a)(3) permits a plan fiduciary to enforce a reimbursement provision by recovering from a participant’s general assets after the participant has dissipated a third-party settlement on nontraceable items.
2. Whether an “equitable lien by agreement” remains enforceable under § 502(a)(3) when the specifically identified fund is no longer in the participant’s possession and cannot be traced.

## Decision

- The Supreme Court reversed the Eleventh Circuit and remanded.
- The Court held that when a participant dissipates the entire third-party settlement on nontraceable items, § 502(a)(3) does not authorize recovery from the participant’s general assets.
- The Court remanded because it was unclear whether any settlement proceeds, or property traceable to them, remained to which an equitable lien could attach.

## Legal Principles

- “Appropriate equitable relief” under ERISA § 502(a)(3) is limited to relief typically available in equity, determined by the basis of the claim and the nature of the remedy sought.
- A plan fiduciary may seek equitable restitution (e.g., constructive trust or equitable lien) only against specific, identifiable funds or traceable property in the defendant’s possession.
- If the defendant has dissipated the specifically identified fund on nontraceable items, a suit seeking the fund’s value from general assets imposes personal liability and is legal relief, not equitable relief, and is therefore unavailable under § 502(a)(3).
- An equitable lien by agreement can be enforced only to the extent the settlement fund or its traceable proceeds remain identifiable.

## Conclusion

ERISA § 502(a)(3) allows a plan fiduciary to enforce a reimbursement clause through equitable remedies only against identifiable settlement funds or traceable proceeds; once a participant has spent the entire settlement on nontraceable items, the fiduciary cannot recover the amount from the participant’s general assets, and the case must turn on whether any traceable res remains.


Montanile v. Bd. of Trs. of the Nat'l Elevator Indus. Health Benefit Plan, 136 S. Ct. 651 (2016)