226 F.3d 574 (7th Cir. 2000)
TAMYRA S. BOWERMAN, Plaintiff-Appellee,v.WAL-MART STORES, INCORPORATED and  ASSOCIATES' HEALTH AND WELFARE PLAN, Defendants-Appellants.
No. 98-4130
In the  United States Court of Appeals  For the Seventh Circuit
Argued September 24, 1999Decided August 18, 2000

Appeal from the United States District Court  for the Southern District of Indiana, Indianapolis Division.  No. 96 C 1380--Larry J. McKinney, Judge.[Copyrighted Material Omitted][Copyrighted Material Omitted]
Before BAUER, RIPPLE and DIANE P. WOOD, Circuit  Judges.
RIPPLE, Circuit Judge.


1
From October 1993 until  July 1995, and then from August 1995 until  September 1996, Tamyra Bowerman was employed by  Wal-Mart Stores, Inc. ("Wal-Mart"). As a full-  time employee of Wal-Mart, Ms. Bowerman was  entitled to participate in a Wal-Mart-sponsored  and -maintained employee welfare benefit plan  called the Wal-Mart Stores, Inc. Associates'  Health and Welfare Plan ("the Plan"). While she  was employed at Wal-Mart, Ms. Bowerman elected to  obtain her medical insurance coverage through the  Plan.


2
The present lawsuit between Ms. Bowerman and  Wal-Mart stems from the Plan's decision not to  pay nearly $12,000 in medical expenses related to  Ms. Bowerman's pregnancy. Ms. Bowerman contends  that the Plan should have paid these expenses.  The Plan concedes that expenses incurred due to a  pregnancy ordinarily would be covered by the  Plan. Nevertheless, the Plan maintains that,  because of the one-month hiatus in her employment  at Wal-Mart in 1995, Ms. Bowerman's pregnancy  must be treated as a pre-existing condition that  the terms of the Plan exclude from coverage.


3
Ms. Bowerman brought this suit under the civil  enforcement provision of the Employment  Retirement Income Security Act of 1974 ("ERISA"),  29 U.S.C. sec. 1132. After a bench trial, the  district court rendered a decision for Ms.  Bowerman and ordered Wal-Mart to cover Ms.  Bowerman's pregnancy-related claims. The court  further ordered Wal-Mart to improve its  explanations in its plan documents, and it  awarded Ms. Bowerman attorneys' fees. For the  reasons set forth in the following opinion, we  affirm, as modified, the judgment of the district  court.


4
* BACKGROUND

A.  The Wal-Mart Plan

5
The Wal-Mart Plan is a single-employer, unfunded  plan governed by ERISA. Eligible Wal-Mart  employees may participate in the Plan's medical  benefit program. The Plan's Administrative  Committee (the "Administrator") acts as its  administrator and fiduciary, and, according to  the terms of the Plan, the Administrator has  discretionary authority "to resolve all questions  concerning the administration, interpretation, or  application of the Plan." R.28, Ex.1 (1995 SPD)  at Q-2. Furthermore, the Administrator has the  sole power to amend the terms of the Plan, and  all amendments must be made in writing.


6
These aspects of the Plan, along with other  important Plan provisions, are explained in the  annual Associate Benefit Book, also known as the  Summary Plan Description ("SPD"). Each newly-  hired employee receives a copy of the then-  current SPD, and, thereafter, Wal-Mart's annual  distribution of new SPDs to each employee  coincides with the effective date for the SPDs.  The relevant SPD for this litigation is the 1995  SPD. The 1995 SPD directed Plan participants who  had questions regarding their benefits to contact  a Plan service representative at designated  telephone numbers.


7
At all times relevant to this litigation, and as  explained in the 1995 SPD, the Wal-Mart Plan  subjected new full-time employees to a 90-day  waiting period before they were eligible for  benefits. Furthermore, newly-hired employees  could not obtain benefits for charges related to  "pre-existing conditions" until the new employees  had been covered by the Plan for 12 consecutive  months.1 When employees ended their employment  at Wal-Mart, they would lose their Plan benefits  on the last day they worked.2


8
For those Plan participants who became  ineligible for benefits because their employment  had been terminated, the Plan's 1995 SPD informed  them that they could obtain continuation of  coverage as provided under the Consolidated  Omnibus Budget Reconciliation Act ("COBRA"), 29  U.S.C. sec. 1161 et seq. According to the 1995  SPD, a participant had 60 days from the date the  COBRA notification form was mailed to the  employee to elect COBRA coverage. The 1995 SPD  explained to participants that, if they chose  COBRA coverage, they could continue that coverage  for up to 18 months. Additionally, the 1995 SPD  explained that COBRA coverage would terminate  upon the occurrence of certain events, one of  which was a participant's failure to pay the  premium within 30 days of its due date.


9
In addition to these rather standard plan  attributes, the Wal-Mart Plan had a distinctive  feature. When employees of Wal-Mart terminated  their employment but then returned to work for  the company within 12 months, the Administrator  had a policy of allowing the returning employees  to immediately "return" to the same medical  coverage that they had had before leaving the  company. The Plan's 1995 SPD explained this  feature of the Plan to Wal-Mart employees in  these terms:


10
If you are rehired, reinstated to full-time  employment, or are cancelled for non-payment of  premiums, and you return to work in less than 12  months from the end of coverage, you will  automatically receive the same benefits you had  before. You will not have a 90-day wait for  benefits, but pre-existing condition limitations  will apply.


11
R.28, Ex.1 (1995 SPD) at C-3. Under this  provision, the Administrator would ignore the  interruption in employment, and the rehired  employees would not be subjected to the 90-day  waiting period for coverage to begin. For  purposes of the pre-existing condition  limitation, however, the Plan would not overlook  the interruption in employment; the Plan would  apply the year-long pre-existing condition  limitation against rehired employees who had a  break in their coverage under the Plan. Notably,  however, the 1995 SPD never informed the  employees that fully paid COBRA coverage would  constitute continuous coverage and thus obviate  the 12 month pre-existing condition limitation.

B.  Facts

12
Ms. Bowerman enrolled in the Wal-Mart Plan when  she began working at the Wal-Mart Photo Lab in  Crawfordsville, Indiana, in October 1993. As a  newly-hired employee, Ms. Bowerman was subject to  the Plan's 90-day waiting period for medical  benefits. Ms. Bowerman's medical coverage under  the Plan became effective on January 11, 1994.  She was also subject to the Plan's pre-existing  condition limitation.


13
On July 20, 1995, Ms. Bowerman quit her job at  Wal-Mart in order to take another position with a  different company. During her exit interview, Ms.  Bowerman obtained information about continuing  her medical coverage by electing COBRA coverage,  and, either at the exit interview or shortly  thereafter, Ms. Bowerman also received a "NOTICE  OF RIGHT TO CONTINUE COVERAGE (COBRA)" and a  COBRA enrollment form from Wal-Mart. Dist. Ct. R.  Stipulated Ex.2 at 10. The COBRA notice was  written in a question and answer format, and  stated in part:


14
When do you pay for the coverage? PLEASE DO NOT  SEND A PAYMENT NOW!!


15
If you elect coverage, you will owe premiums back  to your qualifying event date. Once you have been  enrolled, we will mail you a payment book to  submit payments by. Your first payment will bill  you from your event date through the month in  which we enroll you for COBRA. IT COULD BE MORE  THAN ONE MONTHS PREMIUM! This payment will be due  45 days from the due date shown on your payment  book. Every month thereafter you will make your  normal monthly payment which is due on the first  of each month. . . .


16
Id. The notice also stated that COBRA coverage  would end "[t]he first day for which timely  payment is not made to the Plan." Id. The 1995  SPD provided that COBRA coverage would be  terminated if the COBRA premium was not paid  within 30 days of the due date.


17
At the time she quit her job at Wal-Mart on July  20, Ms. Bowerman was unaware that she was nearly  one month pregnant. Later, on August 8, Ms.  Bowerman went to her physician's office to have a  pregnancy test performed. A medical technician  administered a test similar to a home pregnancy  test, and, from the results of this test, Ms.  Bowerman learned that she was pregnant. Ms.  Bowerman never saw her physician during this  visit to his office, but the results of her  pregnancy test were placed in her medical file.  The district court specifically found that the  test administered to her could have been  conducted at home without the assistance of a  medical provider, and if the test had been self-  administered, the pregnancy would not have been  considered a pre-existing condition under the  Plan.


18
A few days after having the pregnancy test  performed, Ms. Bowerman filled out her COBRA  enrollment form and later mailed it into the  Plan's COBRA department. The Plan received the  form on August 23 and then generated a coupon  book for Ms. Bowerman's payments.


19
Because she found her new job to be more  strenuous than her job at Wal-Mart, Ms. Bowerman  returned to the Wal-Mart Photo Lab on August 14,  1995, and asked to be rehired. She also informed  the employees at the Photo Lab that she was  pregnant. Her former boss rehired her on the  spot, but, because Ms. Bowerman had been feeling  ill that week, they both decided she should wait  until the following Sunday to start work. On  August 20, 1995, Ms. Bowerman began working at  Wal-Mart again, and this date became her official  rehire date.


20
When Ms. Bowerman returned to work at Wal-Mart  on August 20, her need for COBRA coverage ended  because, as an employee who returned to the  company within 12 months, Ms. Bowerman could take  advantage of the Administrator's special rehire  policy. On August 20, the day Ms. Bowerman began  working again for Wal-Mart, the Plan immediately  restored her medical coverage and resumed  deducting medical benefit premiums from Ms.  Bowerman's paycheck. Because there had been such  a short interval since her prior employment with  Wal-Mart, the payment for her COBRA coverage was  not yet due; indeed, Ms. Bowerman had not yet  received the coupon book by which she was to make  payments. Her first COBRA premium would have been  due on October 9, 1995. Although October 9 was  the due date, if the 1995 SPD's 30-day grace  period for paying COBRA premiums is applied to  that due date, the very last date on which Ms.  Bowerman could have paid her premium and obtained  her COBRA coverage would have been November 8,  1995.


21
A few days after returning to Wal-Mart, Ms.  Bowerman met with Chuck Spencer, who was an  administrative assistant at the Photo Lab and who  was responsible for administering benefit plan  enrollment for that department. Ms. Bowerman  recounts their conversation as follows:


22
And I [Bowerman] don't know if I asked him  [Spencer] if I had to wait my 90 days until my  insurance was picked up. I am not sure. And he  told me because I returned to Wal-Mart within the  same calendar year that my regular insurance  would be picked back up the day I came back to  work on August 20th. And I asked him, so I don't  need my COBRA, and he told me no. Because I  didn't want to be making COBRA payments and  already have my regular insurance.


23
R.78 at 5-6. After her conversation with Spencer,  Ms. Bowerman apparently believed that she did not  need COBRA coverage. On or about September 17,  1995, Ms. Bowerman executed a "DISCONTINUE  COVERAGE(S) FORM" from her COBRA coupon book and  mailed that form to the Plan's COBRA department.  Id. at 6. Ms. Bowerman indicated on the form that  her reason for discontinuing COBRA coverage was  that:"I went back to work at Wal-Mart so my  insurance is still in effect." Id. Ms. Bowerman  never made the COBRA premium payment that was due  on October 9. Nobody from the Plan contacted Ms.  Bowerman to follow up on her decision to decline  COBRA coverage.3 Nor is there any indication in  the record that she ever received a prorated bill  for the actual period during which she was not  employed by Wal-Mart and therefore dependent upon  COBRA for coverage. According to the district  court's findings, Ms. Bowerman received no  response to the comment she placed on the form.  The district court also noted that Ms. Bowerman  assumed that any payments that she owed were  being deducted from her paycheck.


24
Ms. Bowerman received pregnancy-related  treatment on several occasions after she had  returned to work at Wal-Mart on August 20.  Consequently, in September, Ms. Bowerman's  medical providers began submitting claims for  medical services related to her pregnancy. The  Plan did not pay those claims. When Ms. Bowerman  was admitted to the hospital on October 9 for a  pregnancy-related incident, a hospital employee  called the Plan to verify coverage for Ms.  Bowerman. A Plan service representative told the  hospital employee that Ms. Bowerman had coverage  with an effective date of January 11, 1994 (the  date Ms. Bowerman's coverage first became  effective after Wal-Mart initially had hired  her). Nevertheless, when the hospital later  submitted its claim, it went unpaid by the Plan.


25
Over the course of the next several weeks and  months, Ms. Bowerman and her health providers  repeatedly contacted the Plan to determine why  claims were not being paid.4 They received  varying answers in their inquiries. First, as we  have already mentioned, the Plan explained to the  hospital employee that Ms. Bowerman had coverage  with an effective date of January 11, 1994. Then,  on October 24, 1995, an employee of Ms.  Bowerman's physician called the Plan to obtain an  explanation for why the Plan had denied a claim  submitted by that office.5 The following is  part of the conversation between the doctor's  employee and the Plan's service representative:


26
REP. . . You just wanted to know about what  happened with the claim?


27
CALLER: Well, it shows that, that uh,


28
her coverage  or it says coverage has been terminated on 07-20  of 95 and I had went through your system, oh I  don't know, (inaudible). But I gathered an  effective date of 08-20 of 95. Which is before  the date of service on my claim.


29
REP: O.K. Hold on one moment and let me check the  eligibility for you.


30
CALLER: O.K.


31
REP: O.K. I'm showing that regular medical  coverage ended as of 07-20 and they picked up  COBRA . . .


32
CALLER: Uh-huh.


33
REP: Or were going to pick it up as of 7-21, it  didn't . . .


34
CALLER: O.K.


35
REP: So coverage actually ended on 07-21.


36
CALLER: O.K. So she does not have COBRA coverage?


37
REP: No m'aam [sic].


38
CALLER: O.K.


39
REP: Looks like she had signed up and was going .  . . and then it looks like she was gonna take it  and something happened and she didn't.


40
Dist. Ct. R. Group Ex.1. The next day, October  25, 1995, Ms. Bowerman herself called the  appropriate Plan service center in an effort to  determine why her pregnancy-related claims were  not being paid by the Plan. The following is the  conversation that Ms. Bowerman had with one of  the Plan's service representatives


41
REP: How may I help you?


42
CALLER: Well, I, I just talked to someone and she  said the reason my bills aren't being paid is  cause you guys don't have me down as insurance,  but it's not. Cause I quit and had the COBRA and  then I went back to work in like less than a  month so my insurance picked back up and she said  that she didn't find that it, so when I, I picked  my insurance back up.


43
REP: OK, I shown you did on August 20th.


44
CALLER: Right, that's when I, yeah, that's when I  went back to work. So I want to know why all  these bills I'm getting are not being covered. If  I have insurance, why aren't they being covered?


45
REP: OK, just a moment. Let me go to the claims  screen. Just a second. So you agree that your  effective date should be 8-20.


46
CALLER: Yeah.


47
REP: OK.


48
CALLER:That's when I went back, yeah.


49
REP: Great.


50
CALLER: I was just gone for like a month or so . .  .


51
REP: OK, what I can do, what they need to do is we  need to update the system.


52
CALLER: Um-hum.


53
REP: And, reconsider the three charges that we  have, that was for August.


54
CALLER: What do you mean reconsider?


55
REP: Well, I'll send them back over.


56
CALLER: Oh, OK.


57
REP: To be processed.


58
CALLER: Oh.


59
REP: OK?


60
CALLER: OK. Well I was just wondering cause my  doctor's been calling and . . . .


61
REP: I, I show that the provider has called this  morning already.


62
CALLER: OK.


63
REP: So I will, I will get this fixed for you. OK?


64
CALLER: OK, I appreciate it.


65
REP: OK. Have a nice day.


66
CALLER: OK, you too.


67
Id.


68
Also in October 1995, the Plan generated  statements called "Explanations of Benefits"  ("EOBs"), which were sent to Ms. Bowerman in  response to the claims submitted by her health  care providers. The EOBs generated in October  1995--one generated on October 10 and two  generated on October 16--stated that the claims  had been denied because the Plan's records  "indicate[d] that no coverage was selected." R.78  at 10. One of the October 16 EOBs also indicated  that the claim had been denied because Ms.  Bowerman's "coverage ha[d] been terminated." Id.


69
Over the course of the next few months, Ms.  Bowerman contacted the Plan on a number of other  occasions in an effort to determine why the Plan  was not covering her claims. It was not until a  January 22, 1996, telephone call, however, that  Ms. Bowerman first became aware that her claims  might be denied because they related to her  pregnancy. During this telephone call, a Plan  representative revealed that the Plan was  reviewing whether Ms. Bowerman's pregnancy was a  pre-existing condition that would not be covered.


70
In the next few months, the Plan conducted its  pre-existing condition investigation, which  lasted until March 1996. On March 18, Ms.  Bowerman learned for certain from a Plan  representative that her pregnancy-related claims  would not be paid and that the Plan considered  her pregnancy to be a pre-existing condition. Her  pregnancy was a pre-existing condition, Ms.  Bowerman was told, because the original pregnancy  test performed on August 8, 1995, had been  documented in her medical file. Ms. Bowerman's  failure to pay for COBRA coverage for the time  between July 20 and August 20, the representative  explained, meant that her coverage had lapsed and  that she was subject to a new pre-existing  condition limitation.


71
When Ms. Bowerman tried to explain that she had  elected COBRA but then had returned to work so  that her "insurance was never dropped," the  representative explained to Ms. Bowerman that she  still would have had to "pick up" COBRA coverage  for the interim period in order to avoid the pre-  existing condition limitation. R.78 at 9. At no  time before this did a Plan representative  explain to Ms. Bowerman that she would be without  insurance coverage for the period between July 20  and August 20 if she did not pay her COBRA  premium. Also, until this conversation in March  1996, no one from the Plan had explained to her  that the failure to pay her COBRA premium would  cause a "break" in coverage and that the break  would cause her to be subject to a new pre-  existing condition limitation period.


72
Unable to obtain from the Plan the medical costs  of her pregnancy, Ms. Bowerman filed this ERISA  lawsuit against Wal-Mart on September 25, 1996.  In her complaint, Ms. Bowerman alleged that Wal-  Mart, through its Plan, wrongfully denied her  coverage in violation of 29 U.S.C. sec. 1133 and  that she was therefore entitled to recover those  benefits pursuant to 29 U.S.C. sec.  1132(a)(1)(B). Ms. Bowerman alternatively alleged  that Wal-Mart breached its fiduciary duties under  ERISA by not timely informing her of the  consequences of failing to elect COBRA coverage  for the time she was not working at Wal-Mart. Ms.  Bowerman sought damages in the amount of her  pregnancy-related expenses that would have  otherwise been covered by the Plan. She also  sought attorneys' fees, costs, punitive damages,  and all other necessary and appropriate relief.

C.  Decision of the District Court

73
The district court conducted a bench trial, and  the court later issued its findings of fact and  memorandum of law.

1.  Claim for Personal Benefits

74
The district court first addressed Ms.  Bowerman's contention that she was entitled to  have the Plan cover her pregnancy-related  expenses.


75
The district court concluded that the Plan  documents adequately alerted Ms. Bowerman to the  possibility that a pre-existing condition  limitation might apply to her when she returned  to work at Wal-Mart. The court noted that the  relevant SPD provided that returning employees  would not have a 90-day wait for benefits, "but  pre-existing condition limitations will apply."  R.78 at 19. Moreover, the district court  explained, Ms. Bowerman's pregnancy undoubtedly  qualified as a pre-existing condition under the  Plan's terms.


76
Nevertheless, the district court explained, it  was not dispositive that the Plan had warned  participants that the pre-existing condition  limitation might apply to them. Rather, the  Plan's explanation was not sufficient, according  to the district court, because the Plan's  documents contained no description of how COBRA  coverage would "bridge the gap" and thereby  prevent the pre-existing condition limitation  from applying to a returning employee. In  "ordinary circumstances," continued the court,  Ms. Bowerman would be responsible for the gap in  her coverage because she failed to pay the COBRA  premium. Id. at 21. The circumstances here,  however, were not ordinary. The Plan's special  re-hire policy for those who had left Wal-Mart's  employ within the past year created an acute need  for the Plan to provide additional information to  employees about how COBRA coverage would "bridge  the gap" between their regular coverage and would  allow the returning employee to avoid a new pre-  existing condition limitation. When employees  returned after a short time away from the  company, as Ms. Bowerman did, the court explained  that those employees especially needed timely and  accurate information about their status under the  plan.


77
The Plan's failure to provide the needed  information to Ms. Bowerman, however, did not end  with its SPD, according to the district court.  Rather, "the combination of an SPD that says  nothing about bridging a gap in coverage with  COBRA to avoid pre-existing condition  limitations, the advice given by Spencer, and all  of the other circumstances taken together,  [including the advice of the Plan's employees who  answered telephonic inquiries,] constituted  materially misleading information, on which [Ms.]  Bowerman reasonably relied." Id. at 28. These  circumstances, according to the district court,  "lulled" Ms. Bowerman into a false impression  about her medical coverage for that one-month  period she did not work at Wal-Mart. Id. at 29.  As the district court explained, "[u]nder these  circumstances, Spencer's representation misled  [Ms.] Bowerman to the point where she could not  be expected to ask the customer service  representatives the right questions about her  coverage." Id. at 28. At the time, continued the  court, it was not clear to Ms. Bowerman that the  COBRA premium was a separate matter from her  renewed coverage. Nor was it clear to her that  her return to work would not prevent a break in  coverage if she failed to elect and to pay for  COBRA coverage for the time between July 20 and  August 20. Therefore, the district court  reasoned, Ms. Bowerman was entitled to rely on an  estoppel theory to recover her benefits from the  Plan.


78
In reaching this conclusion, the district court  indicated that it was aware of the rule  forbidding oral modifications of substantive plan  provisions. Rather, it characterized the oral  representations made to Ms. Bowerman by Spencer  and by the Plan's service representatives as the  Plan Administrator's "discretionary application"  of the Plan. Id. at 25. Moreover, although  Spencer did not work for the Administrator and  was not mentioned in the SPD as a source of  authoritative information about the Plan, the  district court concluded that the Administrator  had clothed Spencer with sufficient apparent  authority to make the Plan accountable for his  representation.


79
To prevail on an estoppel theory, the district  court explained, Ms. Bowerman had to show that  the Plan had made a misleading representation,  that she had reasonably relied on that  misrepresentation, and that her reliance was  detrimental. As to the first element, it was  clear to the district court that the Plan had  made misleading representations to Ms. Bowerman.  The 1995 SPD, along with Spencer's answers and  the service representatives' explanations, all  amounted to a misleading representation,  according to the district court, because none of  them explained to Ms. Bowerman the relationship  between COBRA and the pre-existing condition  limitation in the context of the Plan's special  rehire policy.


80
The court also found that Ms. Bowerman's  reliance on those misleading representations was  reasonable. Specifically, the district court  explained that Ms. Bowerman reasonably had relied  on Spencer's statement that she did not need  COBRA coverage. Her reliance was justified,  according to the district court, because Ms.  Bowerman had no reason to doubt Spencer's  authority to explain the provisions of the Plan.


81
Finally, the district court found that Ms.  Bowerman had been adversely affected by her  reliance: She did not make her COBRA premium  payment because she believed that she did not  need it once she returned to work at the Photo  Lab. By not making the COBRA payment, Ms.  Bowerman incurred thousands of dollars in medical  expenses related to her pregnancy, which the Plan  refused to pay.


82
Because the requisites for applying estoppel  were present in this case, the district court  held that the Plan should be estopped from  denying coverage for Ms. Bowerman's pregnancy-  related expenses. The court ordered Wal-Mart to  accept from Ms. Bowerman the COBRA premium  payment she should have paid in October 1995. The  court ordered that, once that payment had been  made, the Plan had to pay Ms. Bowerman the  benefits that she would have received had there  been no gap in her coverage.

2.  Breach of Fiduciary Duty

83
Even though the court held that Ms. Bowerman was  entitled to estop the Plan from denying her  benefits, the district court also addressed Ms.  Bowerman's claim that the Plan breached its  fiduciary duty to her. Because an ERISA claim for  breach of fiduciary duty can be brought only  against an individual or entity that acts as a  plan fiduciary, the district court first  determined which parties might exercise  discretion over the Plan so as to qualify as  fiduciaries of the Wal-Mart Plan. According to  the district court, Spencer and the service  representatives did not exercise the necessary  degree of discretion to expose them to fiduciary  liability under ERISA. The district court did  conclude, however, that the Administrator  qualified as a fiduciary. Moreover, the district  court concluded that the Administrator had  breached its fiduciary duty to Ms. Bowerman  because of the Plan's failure to explain fully  how paid-up coverage under COBRA would affect the  pre-existing condition limitation for individuals  rehired with only a short break in service. The  district court further reasoned that the  combination of the inadequate explanation of the  policy in the Plan documents along with the  misinformation provided by Spencer and the  service representatives amounted to a breach of  fiduciary duty by the Administrator.


84
Finally, the district court concluded that this  breach of fiduciary duty entitled Ms. Bowerman to  Plan-wide equitable relief. The court held that  Ms. Bowerman was entitled to an injunction  requiring Wal-Mart to provide a more accurate and  comprehensive explanation of the relationship  between the Plan's pre-existing condition  limitation and continuing coverage under COBRA.  Additionally, the court's injunction required  Wal-Mart to provide an explanation of how COBRA  coverage could "bridge the gap" for employees  rehired by Wal-Mart within one year.

3.  Attorneys' Fees

85
In light of its holding entitling Ms. Bowerman  to her benefits and to injunctive relief, the  district court also considered Ms. Bowerman's  request for attorneys' fees under ERISA. The  district court concluded that it could employ one  of two tests for determining whether attorneys'  fees were appropriate in this case. According to  the district court, under one test it would ask  whether Wal-Mart's position had been  "substantially justified." R.78 at 38. Under the  other test, the court explained, it would weigh  five factors: "1) the degree of [Wal-Mart's]  culpability or bad faith; 2) the ability of [Wal-  Mart] to satisfy personally an award of  attorneys' fees; 3) whether or not an award of  attorneys' fees would deter other persons acting  under similar circumstances; 4) the amount of  benefit conferred on participants of the plan as  a whole by the litigation; and 5) the relative  merits of the parties' positions." Id. The  district court also noted that there was a  "modest presumption" for awarding fees in favor  of the prevailing party, especially in cases  where that party is a plan beneficiary or  participant. Id.


86
Although the district court rejected Ms.  Bowerman's assertion that Wal-Mart had acted in  bad faith, the court held that a fee award  nevertheless was appropriate in this case. The  district court came to this conclusion in part  because of the modest presumption in favor of  awarding fees to prevailing parties when the  prevailing party is the plan participant or  beneficiary and because, despite this  presumption, Wal-Mart had not made an argument or  presented evidence to oppose a fee award.


87
The district court noted that, regardless of the  test employed, "the bottom-line question is  essentially the same: was the losing party's  position substantially justified and taken in  good faith, or was that party simply out to  harass its opponent?" Id. at 39. In this case,  the district court explained, Wal-Mart's position  was not substantially justified. Thus, after  taking into consideration the modest presumption  favoring an award to Ms. Bowerman, Wal-Mart's  response to her request, and Wal-Mart's  unjustified position, along with the remedial  purpose of ERISA, the district court ruled that  Ms. Bowerman was entitled to reasonable  attorneys' fees and costs.6

II
DISCUSSION

88
Because this case comes to us after the district  court conducted a bench trial, we review the  district court's factual findings for clear  error, see Petrilli v. Drechsel, 94 F.3d 325, 329  (7th Cir. 1996), and the court's legal  conclusions de novo, see Ross v. Indiana State  Teacher's Ass'n Ins. Trust, 159 F.3d 1001, 1008  (7th Cir. 1998), cert. denied, 525 U.S. 1177  (1999); Petrilli, 94 F.3d at 329.7

A.  Equitable Estoppel
1.

89
The district court correctly held that Wal-Mart  should be estopped from denying coverage for Ms.  Bowerman's pregnancy-related expenses. We have  held that "estoppel principles are applicable to  claims for benefits under unfunded single-  employer welfare benefit plans under ERISA."  Black v. TIC Inv. Corp., 900 F.2d 112, 115 (7th  Cir. 1990); see also Miller v. Taylor Insulation  Co., 39 F.3d 755, 758 (7th Cir. 1994). We have  emphasized on several occasions, however, that  the availability of estoppel in the ERISA context  is constrained by other important considerations  animating ERISA. Most notably, we have stressed  repeatedly that equitable estoppel cannot dilute  the rule forbidding oral modifications to an  ERISA plan. See Coker v. Trans World Airlines,  Inc., 165 F.3d 579, 585 (7th Cir. 1999); Frahm v.  Equitable Life Assurance Soc'y of the U.S., 137  F.3d 955, 961 (7th Cir. 1998), cert. denied, 525  U.S. 817 (1998); Schmidt v. Sheet Metal Workers'  Nat'l Pension Fund, 128 F.3d 541, 546 (7th Cir.  1997), cert. denied, 523 U.S. 1073 (1998).8 We  simply have rejected the claim that "bad advice  delivered verbally entitles plan participants to  whatever the oral statement promised, when  written documents provide accurate information."  Frahm, 137 F.3d at 961.


90
Nevertheless, despite these important  restrictions, we have applied estoppel principles  when countervailing ERISA principles would not be  impeded and "one party has made a misleading  representation to another party and the other has  reasonably relied to his detriment on that  representation." Gallegos v. Mount Sinai Med.  Ctr., 210 F.3d 803, 811 (7th Cir. 2000), petition  for cert. filed, 69 U.S.L.W. 3003 (U.S. June 27,  2000) (No. 99-2083). As the court recently  explained in Gallegos, the "basic policy  consideration arguing in favor of applying  estoppel is the principle of contract law that 'a  party who prevents the occurrence of a condition  precedent may not stand on that condition's non-  occurrence to refuse to perform his part of the contract.'"  Id. at 809 (quoting Swaback v. American Info.  Techs. Corp., 103 F.3d 535, 542 (7th Cir. 1996)).  In Gallegos, the court noted that we have applied  estoppel principles to ERISA claims "where the  claimant was misled by written representations of  the insurer or plan administrator into failing to  take an action that would have enabled the  claimant to receive benefits under the Plan." Id.  We further noted that estoppel is appropriate in  an ERISA action "where the defendant insurer  misrepresented the contractual limitations period  in the plan summary" because "'a defendant whose  own activities made the plaintiff miss the  deadline should not be allowed to litigate over  whether the plaintiff could have sued earlier.'"  Id. at 809 (quoting Doe v. Blue Cross & Blue  Shield United of Wisc., 112 F.3d 869, 876 (7th  Cir. 1997)).9 Furthermore, in Swaback we held  that when an employer has provided "repeated  misinformation" to an ERISA claimant, and that  misinformation prevented the claimant from making  an election of benefits, estoppel should be  applied to prevent the employer from denying  those benefits to the claimant. 103 F.3d at 542-  43.

2.

91
We now turn to an examination of the Plan  documents to ascertain whether the record will  support the conclusion that Ms. Bowerman was  misled into believing that she need not pay her  COBRA premium for the time she was not employed  by Wal-Mart in order to avoid the pre-existing  condition limitation. We think that the district  court was on solid ground in deciding that the  1995 SPD and the other Plan documents  insufficiently explained the need for employees  like Ms. Bowerman, who were rehired by Wal-Mart  after a brief hiatus, to obtain COBRA coverage  through the Plan.


92
An ERISA plan's SPDs must be written "in a  manner calculated to be understood by the average  plan participant, and [be] sufficiently accurate  and comprehensive to reasonably apprise such  participants and beneficiaries of their rights  and obligations under the plan." 29 U.S.C. sec.  1022(a). The SPD must include, among other  things, information about "the plan's  requirements respecting eligibility for  participation and benefits" as well as  information regarding the "circumstances which  may result in disqualification, ineligibility, or  denial or loss of benefits." Id. sec. 1022(b).  When we interpret ERISA plan SPDs, we interpret  them according to their plain meaning as  understood by an average person. See Gallegos,  210 F.3d at 810.


93
The district court believed that the Plan's 1995  SPD adequately disclosed that, upon rehire,  employees would be subject to a pre-existing  condition limitation. Nevertheless, we agree with  the district court that the Plan documents never  explain adequately that this pre-existing  condition limitation period is not applicable to  individuals who leave Wal-Mart's employ for a  short period, elect COBRA coverage, and pay the  premium due for that period. Given Wal-Mart's  policy of immediately reinstating the health  benefits of individuals who rejoin the company  after a short interval, the absence of this  information gives those employees an inaccurate  view of their coverage. We believe that the  explanations provided in the SPD, as well as the  COBRA-specific information provided to Ms.  Bowerman after she left Wal-Mart's employ, did  not provide the critical information needed by  employees in her circumstances--circumstances, it  must be remembered, that were created by Wal-  Mart's policy on the reinstatement of medical  benefits for rehired employees. Merely informing  Ms. Bowerman that she might be subject to that  pre-existing condition limitation did not  sufficiently inform her of the importance of  maintaining COBRA coverage after her separation  from Wal-Mart in order to avoid a new pre-  existing condition limitation when she was  rehired.


94
We must conclude that, as applied to employees  in Ms. Bowerman's circumstances, the 1995 SPD  lacked the clarity and completeness required by  sec. 1022. Having failed to provide Ms. Bowerman  with an adequate explanation in its Plan  documents, we believe that the Plan cannot now  rely on its interpretation of those documents to  deny coverage to Ms. Bowerman.

3.

95
The appropriateness of applying estoppel in this  case becomes even more clear when we take into  consideration, as did the district court, that  the Plan, through its own actions, reinforced the  confusion created by its own documents and  consequently prevented Ms. Bowerman from paying  the COBRA premium that would have "bridged the  gap" between July 20 and August 20.


96
We have made clear in our earlier cases that the  oral representations of an ERISA plan may not be  relied upon by a plan participant when the  representation is contrary to the written terms  of the plan and those terms are set forth  clearly. See Plumb v. Fluid Pump Serv., Inc., 124  F.3d 849, 856 (7th Cir. 1997); Vershaw v.  Northwestern Nat'l Life Ins. Co., 979 F.2d 557,  559 (7th Cir. 1992); Pohl, 956 F.2d at 128. Here,  that rule is not applicable because the Wal-Mart  Plan documents are not free from ambiguity;  indeed, they leave the employee in Ms. Bowerman's  situation guessing as to the appropriate course  of action. Faced with similar circumstances, our  colleagues in other circuits have held that  estoppel is permissible when the ERISA plan has  supplied ambiguous documentation and the  participant is further misled by the statements  of the Plan's agents. In its en banc opinion in  Sprague v. General Motors Corp., 133 F.3d 388  (6th Cir.) (en banc), cert. denied, 524 U.S. 923  (1998), the Court of Appeals for the Sixth  Circuit held that, although principles of  estoppel can never be applied to vary the terms  of an unambiguous plan document, estoppel may be  invoked in the case of ambiguous plan provisions.  Id. at 404. Estoppel, reasoned the court,  requires reasonable or justifiable reliance by  the party asserting estoppel. That party's  reliance, continued the court, can seldom, if  ever, be justifiable when it is inconsistent with  plan documents that are unambiguous and clear.  Allowing estoppel when the documents are clear,  moreover, would be inconsistent with the purpose  of ERISA. See id.; Fink v. Union Cent. Life Ins.  Co., 94 F.3d 489, 492 (8th Cir. 1996) (holding  that written and oral misrepresentations could  not serve as a basis of estoppel when the plan  documents were clear); see also Frahm, 137 F.3d  at 961 ("In federal law, a person cannot rely on  an oral statement, when he has in hand written  materials disclosing the truth."). By contrast,  in Kane v. Aetna Life Insurance, 893 F.2d 1283  (11th Cir. 1990), the Court of Appeals for the  Eleventh Circuit explicitly held that, when the  plan documents are ambiguous, the oral  interpretations of authorized plan employees may  be the basis for an estoppel because allowing  estoppel under such circumstances does not  undermine the policies of ERISA. See 893 F.2d at  1285-86; see also Alday v. Container Corp. of  Am., 906 F.2d 660, 666 (11th Cir. 1990)  (reaffirming the holding in Kane). The Ninth  Circuit has adopted explicitly the rationale of  the Eleventh Circuit. See Greany v. Western Farm  Bureau Life Ins. Co., 973 F.2d 812, 821-22 (9th  Cir. 1992).10


97
Here, the district court made an explicit  finding of fact that the Plan had clothed  Spencer, the administrative employee who handled  employee enrollments for Ms. Bowerman's  department, with sufficient indicia of "apparent  authority" to make it reasonable for her to rely  on his pointed statement that she did not need  COBRA coverage. R.78 at 31-32. Although we must  accept this finding of fact from the district  court unless the finding is clearly erroneous, we  approach this particular finding with great  circumspection. The Plan documents state  unequivocally that inquiries concerning the Plan  are to be addressed to a representative of the  Plan at a stated toll-free number. There is  considerable force to the argument that, given  the clarity of this particular direction, it was  not reasonable for Ms. Bowerman to seek advice  elsewhere. On the other hand, the Plan documents  do not state that this toll- free number ought to  be the sole source of information and, in the  context of a single-employer welfare benefit plan  administered by the employer, we cannot say that  the district court erred by taking into account  Spencer's misstatements.11


98
In any event, the district court's finding  cannot be, on this record, reversible error  because it is clear that Ms. Bowerman did indeed  inquire of the Plan service representative  available through the toll-free number. Indeed,  it was the representation of this service  representative that caused Ms. Bowerman to have  the fatal break in her coverage. Not  understanding why her claims were being denied by  the Plan, Ms. Bowerman telephoned the Plan  service representative, as instructed by the 1995  SPD, to obtain answers related to her medical  benefits. Ms. Bowerman explained her situation to  the Plan's service representative, and she was  told that the representative would "get this  fixed" for her. Dist. Ct. R. Group Ex.1. The Plan  now asserts that Ms. Bowerman's pregnancy should  be treated as a pre-existing condition because  she failed to pay her COBRA premium. But Ms.  Bowerman could have paid her premium at the time  she called the Plan on October 25--or even as  late as November 8--and still made a timely  payment for her COBRA coverage.


99
As the district court found, "[t]he reason she  did not make that COBRA premium payment was that  she did not want to be making double premium  payments after she returned to work, and she  understood from talking with Spencer that she  would not need COBRA coverage." R.78 at 7. The  Plan documents failed to address Ms. Bowerman's  need to pay her COBRA premium in order to avoid  the pre-existing condition limitation. "Had [Ms.  Bowerman] known that payment of that premium  would have enabled her to avoid any pre-existing  condition problems with her pregnancy," the  district court found, "she would have paid it."  Id. at 29. Not only did the Plan documents fail  to address Ms. Bowerman's situation, a situation  faced by all individuals who are re-employed  after a short break in service, but the Plan's  representative frustrated any possibility that  Ms. Bowerman would pay that COBRA premium. When  Ms. Bowerman squarely presented her situtation to  the Plan's service representative, that  representative, rather than providing the crucial  information she needed, essentially told Ms.  Bowerman that nothing more needed to be done. But  for the Plan's misleading and incomplete  information, Ms. Bowerman would have paid her  COBRA premium on time.


100
Accordingly, we affirm the district court's  determination that Ms. Bowerman is entitled to  assert equitable estoppel in these circumstances.  We also approve of the remedy fashioned by the  district court.

B.  Breach of Fiduciary Duty
1.

101
The district court also ruled that the Plan had  breached its fiduciary duty to Ms. Bowerman. The  district court held that the Plan's  Administrator, as the Plan's fiduciary, had  breached its fiduciary duty to Ms. Bowerman  because of its failure to explain fully in the  Plan documents the operation of the rehire policy  vis- -vis COBRA coverage and the pre-existing  condition limitation. Noting that neither Spencer  nor the Plan's service representatives could be  considered fiduciaries, the district court  nevertheless observed that the misstatements of  these individuals had harmed Ms. Bowerman because  the Plan documents afforded her no accurate  information on the issues upon which these  individuals had given her erroneous information.  We agree with the district court's assessment.


102
To be a fiduciary of an ERISA plan, an  individual or entity "must exercise a degree of  discretion over the management of the plan or its  assets, or over the administration of the plan  itself." Schmidt, 128 F.3d at 547. Here, the  Plan's Administrator undoubtedly is a fiduciary  of the Plan. Under ERISA, a fiduciary must  "discharge his duties with respect to a plan  solely in the interest of the participants and  beneficiaries." 29 U.S.C. sec. 1104(a)(1).  Fiduciaries breach this duty "if they mislead  plan participants or misrepresent the terms or  administration of a plan." Anweiler v. American  Elec. Power Serv. Corp., 3 F.3d 986, 991 (7th  Cir. 1993); accord Harte v. Bethlehem Steel  Corp., 214 F.3d 446, 452-53 (3d Cir. 2000); Krohn  v. Huron Mem'l Hosp., 173 F.3d 542, 547-48 (6th  Cir. 1999); Eddy v. Colonial Life Ins. Co. of  Am., 919 F.2d 747, 750 (D.C. Cir. 1990). Although  not every error in communicating information  regarding a plan will be found to violate a  fiduciary's duty under ERISA, see Frahm, 137 F.3d  at 958-59; Chojnacki v. Georgia-Pacific Corp.,  108 F.3d 810, 817-18 (7th Cir. 1997), we have  made clear that fiduciaries must communicate  material facts affecting the interests of plan  participants or beneficiaries and that this duty  to communicate exists when a participant or  beneficiary "asks fiduciaries for information,  and even when he or she does not," Anweiler, 3  F.3d at 991.


103
As we already have noted, an ERISA plan's SPD  must be "written in a manner calculated to be  understood by the average plan participant" and  must be "sufficiently accurate and comprehensive  to reasonably apprise such participants and  beneficiaries of their rights and obligations  under the plan." 29 U.S.C. sec. 1022(a).  Moreover, the SPD must contain, among other  items, information regarding "the plan's  requirements respecting eligibility for  participation and benefits" and also a  description of the "circumstances which may  result in disqualification, ineligibility, or  denial or loss of benefits." 29 U.S.C. sec.  1022(b).


104
We agree with the district court that the 1995  SPD as well as the Plan's COBRA documents failed  to provide material information that affected Ms.  Bowerman's interests under the Plan.  Specifically, the Plan documents failed to  explain how maintaining paid-up COBRA coverage  rendered inapplicable a new pre-existing  condition limitation period when an employee was  rehired and eligible for immediate medical  coverage. The Plan documents failed to explain  adequately the relationship between COBRA  coverage and regular coverage for employees who  left Wal-Mart's employ but then returned shortly  thereafter.


105
ERISA does not require "plan administrators to  investigate each participant's circumstances and  prepare advisory opinions for literally thousands  of employees," Chojnacki, 108 F.3d at 817-18, but  it does require plans to provide material  information to participants and beneficiaries. In  this case, the information the Plan should have  provided to Ms. Bowerman would not have been  information unique to her situation; rather, the  information she needed would have been  information relevant to all Plan participants who  were rehired by Wal-Mart within a few weeks or  months after leaving the company. The Plan's  explanation of its policy in the 1995 SPD simply  failed to fully and fairly communicate how the  policy would work to the benefit of any of the  Plan's participants who found themselves in such  circumstances.


106
As the district court explained, Ms. Bowerman  not only received inadequate explanations in the  Plan's documents, she also received inaccurate  and misleading information from those she thought  would answer the questions created by the Plan's  inadequate documents. Both Spencer and the  service representative failed to provide accurate  and forthright answers to Ms. Bowerman's queries  about her coverage in general and about her need  to obtain COBRA coverage. In analogous  circumstances, the Court of Appeals for the  Second Circuit has held an ERISA plan's fiduciary  liable for a breach of fiduciary duty when the  plan's documents provided inaccurate disclosures  and therefore provided the participant with no  recourse to verify the accuracy of the  information given by the non-fiduciary agent. See  Estate of Becker v. Eastman Kodak Co., 120 F.3d  5, 9-10 (2d Cir. 1997). Similarly, in Schmidt, we  warned that "[i]f the written materials [are]  inadequate, then the fiduciaries themselves must  be held responsible for the failure to provide  complete and correct material information in the  event that a nonfiduciary agent provides  misleading information." Schmidt, 128 F.3d at  548. Ms. Bowerman's situation presents us with  this very scenario.


107
In contrast to the situation in Schmidt, in  which we held that the plan documents were  adequate, the Wal-Mart Plan provided Ms. Bowerman  with documents that failed to explain adequately  the relationship between COBRA coverage, the pre-  existing condition limitation, and the Plan's  rehire policy. This problem with the Plan  documents themselves was then exacerbated by the  incorrect and misleading answers provided by  Spencer and the service representatives when Ms.  Bowerman inquired about her coverage under the  Wal-Mart Plan. In these circumstances, we hold  that Wal-Mart breached its fiduciary duty by  failing to provide complete and accurate  information to Ms. Bowerman regarding the terms  of the Plan.

2.

108
We now turn to the appropriate remedy for this  violation of fiduciary duty. The district court  believed that Ms. Bowerman could not obtain  individual relief because 29 U.S.C. sec.  1132(a)(3) precluded such individual relief.  Instead, the court explained, the most Ms.  Bowerman could obtain for the Administrator's  breach of its fiduciary duty was "an injunction  against Wal-Mart, ordering it to cease  administering the Plan in a way that is not  supported by, or apparent in, the written  provisions." R.78 at 37. Thus, the district court  ordered Wal-Mart "to fully disclose the  relationship between COBRA and the pre-existing  condition limitation upon rehire in less than one  year, so that the average person can understand  his or her rights and obligations under the  Plan." Id. In our view, however, this remedy is  not appropriate in this case.


109
Section 1132(a)(3) allows a participant to bring  a civil action "to enjoin any act or practice  which violates any provision of this subchapter  or the terms of the plan, or . . . to obtain  appropriate equitable relief . . . to redress  such violations." 29 U.S.C. sec. 1132(a)(3). A  fiduciary's breach of fiduciary duties violates  ERISA. In Varity v. Howe, 516 U.S. 489 (1996),  the Supreme Court held that individuals could  obtain individual relief under sec. 1132 (a)(3).  See id. at 509-15. Therefore, we cannot agree  with the district court that Ms. Bowerman could  not obtain individual equitable relief for the  breach of fiduciary duty under sec. 1132(a)(3).


110
In Mertens v. Hewitt Associates, 508 U.S. 248  (1993), the Supreme Court held that "appropriate  equitable relief" under sec. 1132(a)(3) is  limited to traditional equitable remedies such as  awarding an injunction or restitution. See id. at  255. The district court therefore correctly  decided that "legal" remedies, such as money  damages, are not "appropriate equitable relief"  under sec. 1132(a)(3). However, "when sought as a  remedy for breach of fiduciary duty[,]  restitution is properly regarded as an equitable  remedy because the fiduciary concept is  equitable." Health Cost Controls of Ill., Inc. v.  Washington, 187 F.3d 703, 710 (7th Cir. 1999),  cert. denied, 120 S. Ct. 979 (2000); accord Strom  v. Goldman, Sachs & Co., 202 F.3d 138, 144-45 (2d  Cir. 1999) (holding that, for a breach of  fiduciary duty, restitution would be "equitable  relief" within the meaning of sec. 1132 (a)(3)).  Because the Plan's Administrator has breached its  fiduciary duty to Ms. Bowerman, she is entitled  to the equitable remedy of restitution. In this  case, we see no reason why that remedy cannot  take the same form as the remedy fashioned by the  district court with respect to the equitable  estoppel claim. Ms. Bowerman ought to have an  opportunity to tender the COBRA payment that  would have been paid if the Plan had lived up to  its obligation to inform her fully of the  operation of the Plan. If she makes that payment,  the Plan then must pay the maternity-related  medical expenses that it has refused to pay in  reliance on the pre-existing condition  limitation.


111
The district court's misreading of the statute  and of the Supreme Court's decision in Varity  caused it to enter an injunction for Plan-wide  relief. Such relief was not requested by Ms.  Bowerman. Accordingly, we modify the court's  judgment to eliminate this relief from its  equitable remedy.

C.  Attorneys' Fees and Costs

112
Wal-Mart also appeals the district court's award  of attorneys' fees to Ms. Bowerman. ERISA  provides that, in an action brought by a  participant, beneficiary or fiduciary, "the court  in its discretion may allow a reasonable  attorney's fee and costs of action to either  party." 29 U.S.C. sec. 1132(g)(1). We have said  that district courts entertain a "modest  presumption" that prevailing parties are entitled  to a reasonable attorneys' fee. Little v. Cox's  Supermarkets, 71 F.3d 637, 644 (7th Cir. 1995).  This modest presumption, however, is rebuttable.  See Harris Trust & Savs. Bank v. Provident Life &  Accident Ins. Co., 57 F.3d 608, 617 (7th Cir.  1995). We review a district court's award of  attorneys' fees for an abuse of discretion. See  Trustmark Life Ins. Co. v. University of Chicago  Hosps., 207 F.3d 876, 884 (7th Cir. 2000). "'A  district court's determination will not be  disturbed if it has a basis in reason.'" Id.  (quoting Little, 71 F.3d at 644).


113
To determine whether a prevailing party is  entitled to attorneys' fees, we have employed two  formulas in ERISA actions. See Quinn v. Blue  Cross and Blue Shield Ass'n, 161 F.3d 472, 478  (7th Cir. 1998); Little, 71 F.3d at 644; Harris  Trust, 57 F.3d at 616-17 & n.5; Meredith v.  Navistar Int'l Transp. Corp., 935 F.2d 124, 128  (7th Cir. 1991). Under the first test used in  this circuit, we look to five factors:


114
1) [T]he degree of the offending parties'  culpability or bad faith; 2) the degree of the  ability of the offending parties to satisfy  personally an award of attorney's fees; 3)  whether or not an award of attorney's fees  against the offending parties would deter other  persons acting under similar circumstances; 4)  the amount of benefit conferred on members of the  plan as a whole; and 5) the relative merits of  the parties' positions.


115
Quinn, 161 F.3d 478 (citing Filipowicz v.  American Stores Benefit Plans Comm., 56 F.3d 807,  816 (7th Cir. 1995)). Under the second test, we  look to whether or not the losing party's  position was "'substantially justified.'" Id.  (quoting Bittner v. Sadoff & Rudoy Indus., 728  F.2d 820, 830 (7th Cir. 1984)). Regardless of  which test is used, however, the question asked  is essentially the same: "[W]as the losing  party's position substantially justified and  taken in good faith, or was that party simply out  to harass its opponent?" Id. (quotation marks and  citations omitted); see also Trustmark, 207 F.3d  at 884 (stating that this question is the  "general test" for analyzing whether a party is  entitled to attorneys' fees in an ERISA case);  Little, 71 F.3d at 644 (calling this question the  "bottom-line" question); Meredith, 935 F.3d at  128 (same).


116
The district court articulated both of the  standards employed in this circuit and then  awarded Ms. Bowerman attorneys' fees and costs in  this action. The district court provided several  reasons for its decision to award attorneys' fees  to Ms. Bowerman. First, the district court noted  the modest presumption favoring an award to Ms.  Bowerman as the prevailing party. Moreover, the  court explained that Wal-Mart had provided "no  argument or evidence" to oppose an award. R.78 at  39. Finally, the court found that Wal-Mart's  position had not been substantially justified  because Wal-Mart had "admitted that the way it  applied the Plan was not disclosed in the Plan  documents, it conceded that [Ms.] Bowerman would  have been entitled to benefits for her pregnancy  had she only paid a one-month premium for COBRA,  it did not and could not deny that Spencer told  [Ms.] Bowerman she did not need COBRA, and it  acknowledged that its customer service department  inexplicably delayed, and made mistakes with  respect to, ascertaining [Ms.] Bowerman's status  under the Plan." Id. In these circumstances, we  cannot say that the district court abused its  discretion in awarding attorneys' fees and costs  to Ms. Bowerman, and we therefore uphold its  determination.

Conclusion

117
We hold that the Plan should be estopped from  denying benefits for Ms. Bowerman's pregnancy.  Ms. Bowerman should make the COBRA premium  payment that was due on October 9. Thereafter,  the Plan must cover those pregnancy-related  expenses that would have been covered under the  Plan had there been no gap in coverage. The  district court's imposition of Plan-wide relief,  however, is inappropriate and, upon receipt of  our mandate, the district court shall amend its  judgment to eliminate that requirement. We  therefore modify the judgment of the district  court in this one regard but otherwise affirm  that judgment. Within 15 days of the issuance of  our mandate, Ms. Bowerman may make application in  the district court for her attorneys' fees on  this appeal. Ms. Bowerman may recover her costs  in this court.

AFFIRMED AS MODIFIED


Notes:


1
 The 1995 SPD defined the pre-existing condition  limitation in this manner
Any charge with respect to any participant for  any illness, injury, or symptom (including  secondary conditions and complications) which was  medically documented as existing, or for which  medical treatment, medical service,  prescriptions, or other medical expense was  incurred within 12 months preceding the effective  date of these benefits as to that participant,  shall be considered pre-existing and shall not be  eligible for benefits under this [Plan], until  the participant has been continuously covered  under this [Plan] 12 consecutive months. (Pre-  existing conditions include any diagnosed or  undiagnosed condition.)
R.28, Ex.1 (1995 SPD) at D-5.


2
 The 1995 SPD stated, in relevant part
Your coverage and/or the coverage of your  dependent will terminate . . . [upon the]  [t]ermination of your employment (i.e., last day  worked--clocked in) . . . .
R.28, Ex.1 (1995 SPD) at C-3.


3
 It appears that the Plan's COBRA department  routinely ignored the stated reasons for  discontinuing coverage, and by Wal-Mart's  records, the first date that a Plan  representative handled Ms. Bowerman's form was on  January 15, 1996. By this time, though, Ms.  Bowerman's COBRA coverage had been terminated  because she had not paid her premium.


4
 The Plan recorded nearly all of the telephone  calls to its service representatives, and  transcripts of these recorded calls have been  made part of the record in this case.


5
 The employee had accessed the Plan's system  electronically and had discovered that Ms.  Bowerman's coverage was terminated as of July 20  and that she had a new effective date of August  20.


6
 We also note that, because punitive damages are  not available in an ERISA action, the district  court held that Ms. Bowerman could not recover  punitive damages from Wal-Mart.


7
 Although Ms. Bowerman's complaint set forth  claims under sec. 1132(a)(1)(B) and sec.  1132(a)(3), we note that the district court  appropriately characterized the gravamen of Ms.  Bowerman's allegations as falling within the  ambit of sec. 1132(a)(3).


8
 See also Russo v. Health, Welfare & Pension Fund,  Local 705, Int'l Bhd. of Teamsters, 984 F.2d 762,  767 (7th Cir. 1993); Pohl v. National Benefits  Consultants, Inc., 956 F.2d 126, 128 (7th Cir.  1992); Bartholet v. Reishauer A.G. (Zurich), 953  F.2d 1073, 1078 (7th Cir. 1992).


9
 Indeed, in Gallegos, we held that a party may be  precluded from asserting the defense of  exhaustion of administrative remedies when "that  failure results from the claimant's reliance on  the written misrepresentations of the insurer or  plan administrator." 210 F.3d at 810. We also  have applied estoppel in the context of an  employer's written assurance that a particular  employee would be a participant in the ERISA  benefit plan. See Miller, 39 F.3d at 758-59.


10
  Although we have discussed in passing the  Eleventh Circuit's approach, we have not had  occasion to adopt it definitively. See Thomason  v. Aetna Life Ins. Co., 9 F.3d 645, 650 (7th Cir.  1993); Schoonmaker v. Employee Savs. Plan of  Amoco Corp. & Participating Cos., 987 F.2d 410,  413-14 (7th Cir. 1993); Russo, 984 F.2d at  767-68.


11
 The district court is not alone in its reliance  on the concept of apparent authority in this  context. In Taylor v. Peoples Natural Gas, Co.,  49 F.3d 982 (3d Cir. 1995), the Court of Appeals  for the Third Circuit considered whether an ERISA  plan fiduciary could be held liable for a breach  of fiduciary duty precipitated by misstatements  made by a non-fiduciary agent acting with  apparent authority. The non-fiduciary in Taylor  was an employee of the plan's sponsor, not the  fiduciary, and was a supervisor of employee  benefits. The non-fiduciary had provided advice  to a plan participant regarding possible changes  in the plan. The court looked to the federal  common law of agency and, in particular, the  common law requirements for apparent authority.  Apparent authority arises, the court explained,  "in those situations where the principal causes  persons with whom the agent deals to reasonably  believe that the agent has authority." Id. at 989  (quotation marks and citation omitted). According  to the court, under the circumstances present in  that case, the plan's participants reasonably  believed that the fiduciary had given the  supervisor of employee benefits the authority to  counsel them regarding possible changes in the  plan. Thus, the court held that the fiduciary  would be liable "for any affirmative material  misrepresentations" made by the supervisor  regarding the possible changes in the plan. Id.


