                               RECOMMENDED FOR FULL-TEXT PUBLICATION
                                   Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                            File Name: 14a0137p.06

                         UNITED STATES COURT OF APPEALS
                                        FOR THE SIXTH CIRCUIT
                                          _________________


 CENTRAL STATES, SOUTHEAST AND SOUTHWEST                         ┐
 AREAS HEALTH AND WELFARE FUND, an Employee                      │
 Welfare Benefit Plan, by Arthur H. Bunte, Jr., a                │
 Trustee thereof, in his representative capacity,                │         No. 13-2077
                                     Plaintiff-Appellee,         │
                                                                  >
                                                                 │
                                                                 │
            v.
                                                                 │
                                                                 │
 FIRST AGENCY, INC. and GUARANTEE TRUST LIFE                     │
 INSURANCE COMPANY,                                              │
                         Defendants-Appellants.                  │
                                                                 ┘
                               Appeal from the United States District Court
                          for the Western District of Michigan at Grand Rapids.
                            No. 1:10-cv-01288—Janet T. Neff, District Judge.
                                           Argued: June 24, 2014
                                     Decided and Filed: July 1, 2014

                 Before: SUTTON and COOK, Circuit Judges; MARBLEY, District Judge.*
                                      _________________

                                                 COUNSEL

ARGUED: Jonathan B. Frank, JONATHAN B. FRANK, P.C., Bloomfield Hills, Michigan, for
Appellants. Francis J. Carey, CENTRAL STATES LAW DEPARTMENT, Rosemont, Illinois,
for Appellee. ON BRIEF: Jonathan B. Frank, JONATHAN B. FRANK, P.C., Bloomfield
Hills, Michigan, for Appellants. Francis J. Carey, CENTRAL STATES LAW DEPARTMENT,
Rosemont, Illinois, for Appellee.




        *
         The Honorable Algenon L. Marbley, United States District Judge for the Southern District of Ohio, sitting
by designation.




                                                        1
No. 13-2077       Cent. States, SE & SW Areas v. First Agency, et al.            Page 2

                                       _________________

                                            OPINION
                                       _________________

       SUTTON, Circuit Judge. Central States and Guarantee Trust both issued insurance
coverage for the same claims. Central States’ contract says that it will pay only if Guarantee
Trust does not. Guarantee Trust’s contract insists that it will pay only if Central States does not.
We must break this “you first” paradox, sometimes called a gastonette. Black’s Law Dictionary
795 (10th ed. 2014); see Jon O. Newman, Birth of a Word, 13 Green Bag 2d 169 (2010).

                                                 I.

       Central States, an employee benefit plan governed by the Employee Retirement Income
Security Act, provides health insurance for Teamsters and their families. Guarantee Trust, an
insurance company, provides sports injury insurance for student athletes.

       This case involves thirteen high school and college students, all athletes and all children
of Teamsters. Each of them holds general health insurance from Central States and sports injury
insurance from Guarantee Trust. Each suffered an injury while playing sports (most often
football) between 2006 and 2009, after which they sought insurance coverage from both
insurance companies. Each time Guarantee Trust refused to pay the athlete’s medical expenses,
and each time Central States picked up the bill under protest.

       Invoking one of ERISA’s civil enforcement provisions, 29 U.S.C. § 1132(a)(3)(B),
Central States sued Guarantee Trust and First Agency (a company that administers Guarantee
Trust’s insurance policies). The district court ruled that, when Central States’ and Guarantee
Trust’s coverage of student athletes overlap, Guarantee Trust must pay. It entered a declaratory
judgment to that effect, ordered Guarantee Trust to reimburse Central States for the payouts to
the thirteen students, and awarded Central States attorneys’ fees.

                                                II.

       Which company should pay for the students’ medical expenses?
No. 13-2077         Cent. States, SE & SW Areas v. First Agency, et al.          Page 3

       Central States’ contract answers the question one way.             In a provision captioned
“Coordination of Benefits,” the contract lists rules that determine which insurer has “primary
responsibility” when plans overlap.      R. 1-1 at 49.    Under one of these rules, it says that
whichever insurer covers the insured “other than as a Dependent” has primary responsibility. Id.
Central States covers the thirteen students as dependents: The students have insurance because
they are children of Teamsters. Guarantee Trust, by contrast, covers the thirteen students “other
than as . . . [d]ependent[s]”: The students have insurance in their own names. So under Central
States’ contract, Guarantee Trust must pay for the students’ medical expenses up to its maximum
before Central States will contribute anything.

       Guarantee Trust’s contract answers the question another way. The contract contains a
blanket coordination-of-benefits rule. If insurance provided by Guarantee Trust overlaps with
insurance provided by anyone else, the other insurer always has primary responsibility. R. 31-2
at 11. So under Guarantee Trust’s contract, Central States must pay for the students’ medical
expenses up to its maximum before Guarantee Trust will contribute anything.

       When it comes to paying the students’ medical bills, it thus seems that one insurance
company has said: “You first, Central States.” To which the other has responded: “After you,
Guarantee Trust.”
No. 13-2077        Cent. States, SE & SW Areas v. First Agency, et al.          Page 4

         Of course, today’s insurance-coverage dispute does not turn on matters of social
etiquette. But a rule of legal etiquette points the way. If an ERISA plan and an insurance policy
“contain conflicting coordination of benefits clauses,” then as a matter of federal common law
“the terms of the ERISA plan, including its [coordination of benefits] clause, must be given full
effect.” Auto Owners Ins. Co. v. Thorn Apple Valley, Inc., 31 F.3d 371, 374 (6th Cir. 1994); see
also Great-West Life & Annuity Ins. v. Allstate Ins., 202 F.3d 897, 900 (6th Cir. 2000). Here, the
terms of the ERISA plan—Central States’ plan—say that Guarantee Trust has primary
responsibility for the students’ expenses. Guarantee Trust thus has primary responsibility for the
students’ expenses.

         Guarantee Trust responds that its policy provides “excess insurance” rather than ordinary
insurance. In the more ambitious passages of its brief, Guarantee Trust claims that ERISA plans
may never coordinate benefits with excess policies. In the more modest passages of its brief, it
accepts that an ERISA plan can overcome excess policies, but only if the plan’s coordination
clause expressly refers to excess insurance. Neither incarnation of the argument gets Guarantee
Trust where it wants to go.

         An excess policy (at least a “pure” or “true” excess policy) supplements an insured’s
main policy by providing an extra layer of coverage. It does so by covering losses in excess of a
stated threshold. Some excess policies express the threshold as a dollar figure. (“This policy
covers losses in excess of $5 million.”) Others express the threshold by referring to the main
policy. (“This policy covers losses in excess of the coverage provided by Policy No. 3141592.”)
Either way, the excess policy protects the insured against catastrophes, while the main policy
protects him against routine losses. See McGurl v. Trucking Empls. of N. Jersey Welfare Fund,
124 F.3d 471, 478–79 (3d Cir. 1997); 15 Steven Plitt et al., Couch on Insurance § 219:33 (3d ed.
2013).

         Guarantee Trust’s theory starts off on the wrong foot because its policy does not provide
excess insurance, at least not pure excess insurance. An excess policy has a fixed threshold
below which it never applies. If the insured has no primary policy to cover losses below the
threshold, the excess policy does not pick up the slack. It covers a layer of losses above the
threshold, nothing else. Guarantee Trust’s policy by contrast has no fixed level—neither a dollar
No. 13-2077        Cent. States, SE & SW Areas v. First Agency, et al.         Page 5

amount nor an amount set by reference to another policy—above which it kicks in and below
which it recedes. If the insured has no other policy, Guarantee Trust’s policy covers all of his
losses, however small. That shows that Guarantee Trust has provided ordinary coverage subject
to a blanket coordination-of-benefits clause, not pure excess coverage. See McGurl, 124 F.3d at
479; 15 Plitt et al., supra, § 219:33.

        The more fundamental mistake, however, lies in the assumption that excess policies, pure
or otherwise, hold a privileged position in coordination-of-benefits cases. We can think of no
good reason to create an excess-insurance exception, and a handful of good reasons not to. For
starters, Thorn Apple Valley reflects the reality that ERISA’s byzantine system of employee
benefits would not work unless courts respect the written terms of ERISA plans. “The statutory
scheme . . . is built around reliance on the face of written plan documents.” US Airways, Inc. v.
McCutchen, 133 S. Ct. 1537, 1548 (2013) (internal quotation marks omitted). The importance of
enforcing the plan’s terms, its coordination clauses included, does not shrink when the other
insurance policy in the picture provides excess coverage in this way.

        More than that, “[t]he next worst thing to having no insurance at all is having two
insurance companies cover the same claim.” PM Group Life Ins. Co. v. W. Growers Assur.
Trust, 953 F.2d 543, 544 (9th Cir. 1992). Coverage overlaps often prompt years of fighting
about who must pay, a battle that can delay payment to the insured or the hospital. We should
try to keep rules about coordinating insurance benefits as simple as possible, an objective
slighted by adding a proliferation of exceptions to Thorn Apple Valley’s straightforward holding.

        An example reveals the intuition behind Guarantee Trust’s argument. Suppose that a
policy covers all losses in excess of $5 million. And suppose the insured suffers a $1 million
loss, meaning the policy gives him nothing ($1 million being less than $5 million). The ERISA
plan’s coordination clause surely cannot force the policy to cover the loss anyway. Doesn’t this
result prove that excess policies follow a special rule? No, because the result reflects a broader
principle rather than an exception. Thorn Apple Valley empowers ERISA plans to coordinate
preexisting benefits, not to invent new benefits to foist upon other insurers. This principle
prevents rewriting an excess policy to cover small losses, just as it prevents rewriting a fire
No. 13-2077        Cent. States, SE & SW Areas v. First Agency, et al.             Page 6

policy to cover flood damage, a marine policy to cover car accidents, or a 2013 policy to cover
2014 events.

       A variation on this example confirms that excess insurance works just like any other kind
of insurance. Suppose again that the policy covers all losses in excess of $5 million. But this
time the insured suffers a $7 million loss, so the policy gives him $2 million ($7 million minus
$5 million). If an ERISA plan’s coverage overlaps with this $2 million entitlement, why
shouldn’t the plan’s terms decide how to coordinate the two?

       No good in short comes of categorizing insurance as pure excess, impure excess, or
something else. An ERISA plan may coordinate benefits with another policy (whatever its
taxonomy), though it may not redefine the coverage of another policy (whatever its taxonomy).
Here, in the absence of Central States’ plan, Guarantee Trust’s policy would cover the sports
injuries at hand without question. The ERISA plan insists that the policy keep doing in that
plan’s presence what it would do in that plan’s absence. That amounts to coordinating benefits,
not redefining coverage.      The district court thus got it right when it held that primary
responsibility for the sports injuries in this case falls on Guarantee Trust, not Central States.

                                                 III.

       Now that Central States has paid for expenses that Guarantee Trust should have covered,
what relief may it get from Guarantee Trust? In addition to granting a declaratory judgment, the
district court ordered Guarantee Trust to pay Central States a little more than $112,000 as
repayment for the medical expenses Central States had covered in Guarantee Trust’s stead. On
appeal, Guarantee Trust does not challenge the declaratory relief, but it insists that ERISA does
not authorize this money judgment.

       Before addressing the merits of that ruling, we must take care of a procedural skirmish.
Central States argues, and the district court agreed, that Guarantee Trust forfeited its objection to
the monetary award. We disagree.

       When Central States first asked the district court to enter a money judgment, Guarantee
Trust spoke up at once. It filed a brief claiming that ERISA did not empower the court to grant
No. 13-2077       Cent. States, SE & SW Areas v. First Agency, et al.             Page 7

the requested relief, a conclusion it backed up with two pages of legal argument. See R. 39.
That suffices to preserve Guarantee Trust’s objection.

       According to Central States, Guarantee Trust should have objected even earlier, when
responding to the complaint. This approach overlooks what the Civil Rules have to say about
preserving defenses. Under the Rules, a defendant loses affirmative defenses (like contributory
negligence and estoppel) and some procedural defenses (like lack of personal jurisdiction and
improper venue) unless he raises them at the pleading stage. See Fed. R. Civ. P. 8(c)(1),
12(h)(1). But other defenses, most importantly failure to state a claim to relief, remain stout until
the end of the trial despite the defendant’s pleading-stage silence. See Fed. R. Civ. P. 12(h)(2).
Guarantee Trust objects that ERISA does not empower the court to grant a money judgment in
this case—in other words, that Central States failed to state a claim to a money judgment. It
would have been better practice for Guarantee Trust to make this argument right after it got the
complaint (which made it clear that Central States wanted a monetary award), but under the Civil
Rules the company’s failure to do so does not amount to a forfeiture.

       Central States persists that Guarantee Trust should have objected when responding to
Central States’ motion for partial summary judgment. The argument overlooks that the motion
asked only for “partial summary judgment on the issue of liability.” R. 20 at 1 (emphasis added).
The motion did not ask for judgment on the issue of monetary relief, and Guarantee Trust had no
obligation to object to a request that Central States had not yet made. Guarantee Trust thus did
not forfeit its objection at the summary judgment stage either.

       As for the merits, Central States filed this lawsuit under a provision of ERISA that allows
it “to obtain . . . appropriate equitable relief . . . to enforce any provisions of this [Act] or the
terms of the plan.” 29 U.S.C. § 1132(a)(3)(B). The judgment directing Guarantee Trust to pay
Central States can thus stand only if it provides “equitable relief” as opposed to legal relief. It
does not.

       The district court’s money judgment, ordering Guarantee Trust to pay Central States
around $112,000, looks by all appearances like an award of money damages. And money
damages, the paradigm of legal relief, lie beyond the radius of § 1132(a)(3)(B). See Great-West
Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210 (2002).
No. 13-2077        Cent. States, SE & SW Areas v. First Agency, et al.            Page 8

       Central States tries to escape these principles by placing a different label—“restitution”
rather than “damages”—on the money award. In doing so, it must come to terms with the
Supreme Court’s observation that, when a court “compel[s] the defendant to pay a sum of money
to the plaintiff,” the remedy “[a]lmost invariably” qualifies as “money damages” (and thus as
legal relief). Id. We need not, however, decide the case on these grounds. Even assuming the
money judgment qualifies as “restitution,” it does not qualify as “equitable relief.”

       The United States Reports tell us that § 1132(a)(3)(B) authorizes “restitution in equity,”
but not “restitution at law.” Id. at 213–14; Sereboff v. Mid Atlantic Med. Servs., 547 U.S. 356,
362–63 (2006). A court awards equitable restitution when it imposes a constructive trust or lien
on “particular funds or property in the defendant’s possession” but legal restitution when it holds
the defendant liable for a sum of money. Knudson, 534 U.S. at 214. A pair of Supreme Court
cases, Sereboff and Knudson, illustrates the distinction. In each case an ERISA beneficiary
suffered a car accident, received benefits from an ERISA plan, then won a tort case against a
third party responsible for the accident. And in each case the terms of the ERISA plan required
the beneficiary to reimburse the plan out of the tort recovery. In Sereboff, the ERISA plan tried
to get a constructive trust on the tort lawsuit’s proceeds, which had been “set aside and
preserved” in the beneficiary’s accounts. 547 U.S. at 363 (internal quotation marks omitted).
The plan asked for equitable restitution, because “it sought its recovery through a constructive
trust . . . on a specifically identified fund, not from the [beneficiary’s] assets generally.” Id. In
Knudson, the ERISA plan tried to get a money judgment from the beneficiary. The plan asked
for legal restitution, because it claimed an entitlement to “some funds for benefits that [it had]
conferred” rather than “particular funds” that were in the beneficiary’s possession. 534 U.S. at
214.

       Central States did not ask for—and the district court did not impose—a constructive trust
or lien on any identifiable fund. The court’s judgment indeed has no connection to any particular
fund at all. The court ordered Guarantee Trust to pay money, and Guarantee Trust can satisfy
that obligation by dipping into any pot it chooses. That means Central States sought legal rather
than equitable restitution.
No. 13-2077        Cent. States, SE & SW Areas v. First Agency, et al.              Page 9

        Central States tries to portray its restitution as equitable, insisting that the requested funds
“are specifically identifiable” because “[t]he funds are measured by the amount of [the] bills
Central States paid.” Central States Br. 40. But a money judgment does not become equitable
merely because its size is known or otherwise identifiable in that way. It is the fund, not its size,
that must be identifiable. Nor does the match between the size of the judgment and the size of
the bills pull an identifiable fund into the picture. No matter how the district court figured out
the size of the monetary recovery, the recovery continues to come out of Guarantee Trust’s assets
in general, not out of any fund in particular.

        Unable to win the game on these terms, Central States tries to sweep the pieces off the
chessboard. Even if the distinction between legal and equitable restitution works everywhere
else, it maintains, the dichotomy “cannot control a [coordination-of-benefits] dispute” between
an ERISA plan and an insurance company. Central States Br. 35. This request for a special
dispensation, bereft of any textual or historical foundation, leans on an appeal to highly
generalized statutory purposes and policies. A plan fighting with an insurance company, Central
States explains, can rarely if ever find a specific fund (analogous to the tort recovery in Sereboff)
that the company holds but that belongs to the plan. So applying the law-equity distinction in
this context will (it persists) often leave plans without remedy, frustrating the enforcement of
coordination-of-benefits clauses and thwarting the Act’s objective of enforcing plans according
to their terms.

        This argument—the same argument—has come up before. In Knudson, the ERISA plan
asked the Court to interpret “equitable relief” to include legal restitution, in order to “prevent [it]
from being deprived of any remedy” and in order to vindicate “a primary purpose of ERISA, . . .
the enforcement of the terms of a plan.” 534 U.S. at 220 (internal quotation marks omitted). The
Court’s responses there work just as well here. For one, “there may have been other means for
[the plan] to obtain the essentially legal relief [it] seek[s],” including perhaps a lawsuit under
state law. Id. For another, appeals to ERISA’s purpose cannot “overcome the words of its text.”
Id. That text, a “carefully crafted and detailed enforcement scheme,” “only allows for equitable
relief,” a category that does not include legal restitution. Id. at 221.
No. 13-2077         Cent. States, SE & SW Areas v. First Agency, et al.         Page 10

        Does our fidelity to the text somehow contradict our earlier application of Thorn Apple
Valley, a federal common law rule developed in light of the Act’s policies? No. The Act says
nothing either way about coordinating benefits, and purposes and policies have their place when
filling the gap. The Act by contrast says something about what relief a plaintiff can get in
lawsuits under § 1132(a)(3)(B): He can get only equitable relief. No gap remains for purposes
and policies to fill.

        In so holding, we join other courts that have reached the same conclusion for the same
reasons. See, e.g., Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Health Special Risk,
Inc., No. 13-10705 (5th Cir. June 23, 2014). All in all, the district court erred by entering a
money judgment for Central States.

                                                 IV.

        Two loose ends dangle. Guarantee Trust points out that, under its insurance policy, “[a]
legal action may not be brought to recover on this Policy” more than three years after the
deadline for filing the written proof of loss, which in turn occurs 60 or 90 days after the loss in
question happens. R. 31-2 at 14. Guarantee Trust believes that this provision shuts out Central
States’ claims involving six of the thirteen students. The district court rejected the argument, but
we need not take a stand on it. Guarantee Trust has not argued that this limitations period affects
the district court’s declaratory judgment, a prospective remedy that concerns liability for future
losses rather than recovery for past losses. So the limitations clause at most affects the money
judgment, a part of the district court’s decision that we have just reversed anyway.

        Guarantee Trust also appeals the district court’s decision to award attorneys’ fees to
Central States. Under the Act, the district court “in its discretion may allow a reasonable
attorney’s fee . . . to either party.” 29 U.S.C. § 1132(g)(1). The statute gives district courts more
leeway to shift fees than the American Rule, the common-law principle that allows fee awards
only in rare cases. See Foltice v. Guardsman Prods., Inc., 98 F.3d 933, 939 (6th Cir. 1996). Our
cases have identified a range of factors that district courts should consider when exercising their
authority under the statute. See Sec’y of Dep’t of Labor v. King, 775 F.2d 666, 669–70 (6th Cir.
1985). Here, the district court addressed all of the relevant factors with care. R. 67 at 17–21. Its
conclusion does not amount to an abuse of discretion.
No. 13-2077     Cent. States, SE & SW Areas v. First Agency, et al.   Page 11

      For these reasons, we affirm in part and reverse in part.
