In the
United States Court of Appeals
For the Seventh Circuit

No. 99-2018

Wal-Mart Stores, Incorporated Associates’ Health
and Welfare Plan; and Administrative Committee,
administrator of the Plan,

Plaintiffs-Appellees,

v.

Denise Wells,

Defendant-Appellant.



Appeal from the United States District Court
for the Northern District of Indiana, Hammond Division.
No. 97 C 422--Rudy Lozano, Judge.


Argued February 15, 2000--Decided May 17, 2000



 Before Posner, Chief Judge, and Easterbrook and Diane
P. Wood, Circuit Judges.

 Posner, Chief Judge. This is a suit by an ERISA
welfare plan and its administrator (only the
latter is a fiduciary and hence a proper
plaintiff, ERISA sec. 502(a)(3), 29 U.S.C. sec.
1132(a)(3); Administrative Committee v. Gauf, 188
F.3d 767, 770 (7th Cir. 1999), but we’ll ignore
that detail), for reimbursement of $10,982.61
paid under the plan to a participant for medical
expenses that she incurred because of an
automobile accident. After receiving the money
from the plan, she brought a personal injury suit
against the driver of the other car involved in
the accident and obtained from that driver’s
insurer a settlement of some $75,000, of which a
third went to her lawyer. (Actually, the
settlement was for claims by Wells and her
husband, but as the parties make nothing of the
husband’s participation in the settlement,
neither shall we.) The plan documents entitle the
plan to reimbursement of 100 percent of any
benefits paid to a participant to the extent of
"any payment resulting from a judgment or
settlement, or other payment or payments, made or
to be made by any person or persons considered
responsible for the condition giving rise to the
medical expense or by their insurers." Wells
claims that the plan should contribute a pro rata
share of her attorneys’ fees, since they were
expended for the plan’s benefit as well as her
own. Her lawyer has a check from the insurer,
payable to him as well as to Wells and her
husband and to "Wal-Mart as subrogee of Denise
Wells," for the entire $10,982.61 for which the
plan seeks to be reimbursed. He refuses to
endorse the check over to the plan. As well as
seeking reimbursement, the plan asks that Wells
be enjoined from continuing to violate the plan’s
rights by instructing or permitting her lawyer to
withhold the insurer’s check. It does not,
however, seek interest--just the amount of the
check.

 We must consider whether the relief sought by
the plan is equitable, because that is the only
type of relief that ERISA authorizes a fiduciary
to obtain. ERISA sec. 502(a)(3), 29 U.S.C. sec.
1132(a)(3); Mertens v. Hewitt Associates, 508
U.S. 248 (1993); Health Cost Controls of
Illinois, Inc. v. Washington, 187 F.3d 703, 710
(7th Cir. 1999). We can set to one side the claim
for an injunction, to which--were the claim
legitimate--a claim for damages could ordinarily
be appended under the "clean-up" doctrine of
equity and, so appended, would be classified as
itself equitable, e.g., Burns v. First National
Bank, 985 S.W.2d 747 (Ark. 1999); American
Appliance, Inc. v. Brady, 712 A.2d 1001 (Del.
1998); see also Medtronic, Inc. v. Intermedics,
Inc., 725 F.2d 440, 442 (7th Cir. 1984); see
generally 1 Dan B. Dobbs, Dobbs on the Law of
Remedies: Damages--Equity--Restitution sec. 2.7,
pp. 180-81 (2d ed. 1993)--though possibly not in
an ERISA case. For the Supreme Court said in
Mertens that only typical equitable relief is
available under that statute. 508 U.S. at 255-57;
see also Reich v. Continental Casualty Co., 33
F.3d 754, 756 (7th Cir. 1994). However that may
be, a plaintiff cannot convert a claim of damages
for breach of contract into an equitable claim by
the facile trick of asking that the defendant be
enjoined from refusing to honor its obligation to
pay the plaintiff what the plaintiff is owed
under the contract and appending to that request
a request for payment of the amount owed. A claim
for money due and owing under a contract is
"quintessentially an action at law." Hudson View
II Associates v. Gooden, 644 N.Y.S.2d 512, 516
(A.D. 1996); see also Atlas Roofing Co. v.
Occupational Safety & Health Review Comm’n, 430
U.S. 442, 459 (1977).

 But there is more here. Wells’s lawyer is
holding $10,982.61 to which the plan claims to be
entitled. Wells wants the claim reduced to
reflect the attorneys’ fees she expended in
obtaining the settlement of which the $10,982.61
is a part. But since she concedes that some (in
fact the bulk) of this amount is rightfully the
plan’s, the lawyer’s interception of the entire
amount en route from the insurer to the plan is
clearly wrongful. In Health Cost Controls of
Illinois, Inc. v. Washington, supra, 187 F.3d at
710-11, a similar case, we held that the plan was
seeking to impose on the money intercepted in
transit a constructive trust--a classic form of
equitable relief against someone (not necessarily
a fiduciary, e.g., In re Estate of Cohen, 629
N.E.2d 1356, 1359 (N.Y. 1994); Schwartz v. Horn,
290 N.E.2d 816, 817-18 (N.Y. 1972); Pope v.
Garrett, 211 S.W.2d 559, 561-62 (Tex. 1948)) who
is holding property that is rightfully the
plaintiff’s. Clair v. Harris Trust & Savings
Bank, 190 F.3d 495, 498-99 (7th Cir. 1999);
Beatty v. Guggenheim Exploration Co., 122 N.E.
378, 386 (N.Y. 1919) (Cardozo, J.). In the
Washington case the money was being held in
escrow pending the resolution of the dispute
between the plan and the participant. In this
case the money is being held by a lawyer,
presumably also in an escrow account (a lawyer is
not permitted to commingle a client’s funds with
his own), and the question is whether the
beneficial owner is Wells, by virtue of the
settlement with the tortfeasor, or the plan, by
virtue of its contract with Wells.

 Some cases, including our own Administrative
Committee v. Gauf, supra, 188 F.3d at 770-71,
seem inclined to classify all claims of
reimbursement by an ERISA plan as equitable,
perhaps because of ERISA’s very broad preemption
clause, ERISA sec. 514, 29 U.S.C. sec. 1144; Jay
Conison, Employee Benefit Plans in a Nutshell
302, 317-19 (2d ed. 1998), which might disable a
plan from enforcing its rights to reimbursement
if suits to enforce them were classified as
legal. See also Blue Cross & Blue Shield of
Alabama v. Sanders, 138 F.3d 1347, 1352-53 n. 5
(11th Cir. 1998); Southern Council of Industrial
Workers v. Ford, 83 F.3d 966, 969 (8th Cir. 1996)
(per curiam). The Ninth Circuit is at the
opposite pole. See Reynolds Metals Co. v. Ellis,
202 F.3d 1246, 1247-49 (9th Cir. 2000); Cement
Masons Health & Welfare Trust Fund v. Stone, 197
F.3d 1003 (9th Cir. 1999); FMC Medical Plan v.
Owens, 122 F.3d 1258, 1260-62 (9th Cir. 1997). We
need not consider in this case the outer bounds
of ERISA’s concept of equity, as a suit to impose
a constructive trust nestles comfortably within
them under any view. Owens, in contrast, was
explicit in saying that the plan had not sought
the imposition of a constructive trust. Id. at
1261.

 So we have jurisdiction and can proceed to the
merits. The language from the plan document that
we quoted earlier seems clear, and clearly to
favor the plan’s claim. But contracts--which for
most purposes ERISA plans are, Herzberger v.
Standard Ins. Co., 205 F.3d 327, 330 (7th Cir.
2000); see also John H. Langbein, "The
Contractarian Basis of the Law of Trusts," 105
Yale L.J. 625 (1995)--are enacted against a
background of common-sense understandings and
legal principles that the parties may not have
bothered to incorporate expressly but that
operate as default rules to govern in the absence
of a clear expression of the parties’ intent that
they not govern. This principle has been applied
to the interpretation of ERISA plans in a number
of cases in this and other courts. See Cutting v.
Jerome Foods, Inc., 993 F.2d 1293, 1297-99 (7th
Cir. 1993); Waller v. Hormel Foods Corp., 120
F.3d 138, 141 (8th Cir. 1997); Cagle v. Bruner,
112 F.3d 1510, 1520-22 (11th Cir. 1997) (per
curiam); Barnes v. Independent Automobile Dealers
Ass’n, 64 F.3d 1389, 1394-96 (9th Cir. 1995). To
read the Wal-Mart plan literally would allow the
plan to free ride on the efforts of the plan
participant’s attorney, contrary to the equitable
concept of "common fund" that governs the
allocation of attorney’s fees in cases in which
the lawyer hired by one party creates through his
efforts a fund in which others are entitled to
share as well. Boeing Co. v. Van Gemert, 444 U.S.
472, 478 (1980); Sprague v. Ticonic National
Bank, 307 U.S. 161, 166 (1939); Davis v. Carl
Cannon Chevrolet-Olds, Inc., 182 F.3d 792, 795
(11th Cir. 1999); 1 Dobbs, supra, sec. 3.10(2),
pp. 393-98; John P. Dawson, "Lawyers and
Involuntary Clients: Attorney Fees From Funds,"
87 Harv. L. Rev. 1597 (1974).

 It would also gratuitously deter the exercise of
the tort rights of plan participants. For one can
easily imagine a case in which, under the plan’s
interpretation, the participant (or
nonparticipant beneficiary, such as a spouse or
child) would lose part of her plan benefits
simply by virtue of having exercised her right to
bring a tort suit against a third party. Suppose
Wells had obtained a settlement of $12,000 of
which her lawyer got $4,000 pursuant to a
standard contingent-fee contract, leaving her
with $8,000. Since her settlement would be
greater than $10,982.61, the plan under its
theory would be entitled to that entire amount,
leaving her worse off by $2,982.61 than she would
have been had she not sued. This would be true
even if she had sought no medical benefits, or
any other benefits available under the plan, in
that suit--it might have been a suit purely for
damage to her car. This prospect might well deter
a suit likely to result in a judgment or
settlement not much larger than the benefits
available under the plan--and in that event the
language on which the plan relies would produce
undercompensation for harms that were unrelated
to the type of harm to which the benefits
pertain. Wells would have been surprised to have
been told when she signed onto this plan that as
a result of it she might not be able to obtain
compensation for tortiously inflicted property
damage. The plan itself might well be worse off
in the long run, as it would have to incur
attorneys’ fees in order to enforce its right of
subrogation. See Blackburn v. Sundstrand Corp.,
115 F.3d 493, 496 (7th Cir. 1997).

 The plan documents neither advert to the anomaly
just discussed nor expressly repudiate common-
fund principles, and so they do not alter the
background understanding of the allocation of
attorneys’ fees that is embodied in those
principles. We interpolate those principles to
avoid wreaking unintended consequences. United
McGill Corp. v. Stinnett, 154 F.3d 168, 172-73
(4th Cir. 1998), and Bollman Hat Co. v. Root, 112
F.3d 113, 116-18 (3d Cir. 1997), are only
superficially in conflict with this result. They
refuse to invalidate a plan provision interpreted
to bar the application of common-fund principles;
we pose the issue as one not of validity but of
sound application of principles of contract
interpretation. More problematic is Walker v.
Wal-Mart Stores, Inc., 159 F.3d 938 (5th Cir.
1998) (per curiam), which upheld a literal
reading of identical language--but did so as a
matter of deference to the interpretation by the
plan’s administrator.

 That’s a critical qualification. In cases in
which the plan documents give the plan’s
administrator discretion to interpret the plans,
our review is deferential. E.g., Mers v. Marriott
International Group Accidental Death &
Dismemberment Plan, 144 F.3d 1014, 1020 (7th Cir.
1998); Fuller v. CBT Corp., 905 F.2d 1055, 1058
(7th Cir. 1990). But the presumption is against
deference, Herzberger v. Standard Ins. Co.,
supra, and has not been rebutted. For there is no
reference to discretion in the part of the plan
documents that deals with the plan’s right to
reimbursement--only in the part that deals with
benefits determinations. Determinations of
benefits, determinations that supervene on
interpretation of key terms such as "disability,"
invite the exercise of discretion, being
inescapably particularistic and fact-bound;
determinations of issues related solely to the
financial aspects of the plan do not.

 An amendment in 1996 to the plan that was in
force when Wells was injured and sought and
received benefits explicitly refuses to pick up
any part of the plan participant’s attorneys’
fees, as in Health Cost Controls v. Isbell, 139
F.3d 1070 (6th Cir. 1997), and Ryan v. Federal
Express Corp., 78 F.3d 123, 124, 127 (3d Cir.
1996). The plan argues that the amendment is
applicable to the claim of reimbursement because
the claim was made in 1997, after the amendment
took effect. This is an astonishing argument,
implying as it does that the amending power can
be used to force plan participants and
beneficiaries to return benefits already received
and spent. The logic of the argument is that if
the plan were amended to abolish some class of
benefits (say, reimbursement for the cost of
treating mental disorders), the recipients could
be forced to disgorge them even if they had
received the benefits many years earlier. The
argument was rejected in the very case that the
plan mistakenly cites in support of it. Member
Services Life Ins. Co. v. American National Bank
& Trust Co., 130 F.3d 950, 957-58 (10th Cir.
1997).

 Because the 1996 amendment is inapplicable to
this case, we need not consider whether state
"common fund" law, see Ind. Code. sec.sec. 34-53-
1-2, 34-51-2-19, is applicable at all, because
either in terms, Ind. Code sec. 34-53-1-2, or as
a matter of interpretation, Allstate Ins. Co. v.
Smith, 656 N.E.2d 1156, 1158 (Ind. App. 1995);
Standard Mutual Ins. Co. v. Pleasants, 627 N.E.2d
1327, 1330 (Ind. App. 1994), it is applicable
only to insurers, and an ERISA plan is not deemed
to be (and the Wal-Mart plan is not contended to
be) an insurer. ERISA sec. 514(b)(2)(B), 29
U.S.C. sec. 1144(b)(2)(B); Stillmunkes v. Hy-Vee
Employee Benefit Plan & Trust, 127 F.3d 767, 770
(8th Cir. 1997). We likewise need not consider
whether, if the state’s common fund law is
otherwise applicable, it is preempted by ERISA.
Although, as explained in Blackburn v. Sundstrand
Corp., supra, 115 F.3d at 496, state laws of
general applicability that affect ERISA plans no
differently from similar economic activity are
not preempted by ERISA, our decision in
Administrative Committee v. Gauf, supra, 188 F.3d
at 771, holds that when (unlike the situation in
Blackburn) an ERISA plan is the plaintiff in a
suit claiming reimbursement, its claim arises
under and is governed by ERISA, or by federal
common law created under the authority of ERISA.
Whether Gauf and Blackburn can coexist is thus
another issue we needn’t try to resolve today;
nor whether, if the state’s common fund law is
not preempted and is fully applicable, it can
nevertheless be overridden by an express
contractual provision, as intimated in Sell v.
United Farm Bureau Family Life Ins. Co., 647
N.E.2d 1129, 1133 (Ind. App. 1995); nor whether
if it is preempted it is preempted in favor of a
similar federal common law doctrine, as implied
by McIntosh v. Pacific Holding Co., 120 F.3d 911
(8th Cir. 1997), and Waller v. Hormel Foods
Corp., supra, 120 F.3d at 141, but rejected in
Harris v. Harvard Pilgrim Health Care, Inc., 208
F.3d 274, 278-79 (1st Cir. 2000), and if so
whether that doctrine, too, can be overridden by
an express provision in the plan, as implied by
United McGill Corp. v. Stinnett, supra, 154 F.3d
at 172-73; Health Cost Controls v. Isbell, supra;
Bollman Hat Co. v. Root, supra, 112 F.3d at 116-
18, and Ryan v. Federal Express Corp, supra, 78
F.3d at 127.

 Wells seeks not only a sharing of the attorneys’
fees with the plan, to which she is entitled, but
also a sharing of the reduction of her claim in
the settlement by 25 percent to reflect her
comparative fault. We are at a loss to understand
how that reduction, unlike the expense of the
lawyer who obtained the settlement, could be
thought to have conferred a benefit on the plan
for which it should contribute a part of the cost
under common-fund principles. And while Indiana
law, were it applicable, might provide the relief
she is seeking, see Ind. Code sec. 34-51-2-19,
she does not invoke that or any other provision
of Indiana law, and so has waived the argument.

Reversed.
