The Court ruled unanimously that ERISA permitted the fiduciary to recover costs from the settlement proceeds a beneficiary received in a personal injury lawsuit.

[1] Marlene Sereboff and her husband Joel were the beneficiaries of a health insurance plan administered by Mid Atlantic Medical Services, Inc., and covered by ERISA.

The District Court approved a stipulation under which the Sereboffs agreed to preserve the amount claimed in an investment account until after the case was decided on the merits and all appeals exhausted.

The Court analyzed this issue by considering both the nature of the remedy Mid Atlantic sought, and the basis for its claim against the Sereboffs.

Knudson had involved similar facts, and the Court had ruled that the restitution sought was not equitable because the funds were not actually in the beneficiary's possession.

The Court believed that Mid Atlantic's claim was one for equitable restitution, because the Sereboffs' possession of the settlement funds satisfied the requirement that was missing in Knudson.