Secretary of Labor v. Doyle

PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 10-3598

SECRETARY OF LABOR,

Appellant

v.

JAMES DOYLE; CYNTHIA HOLLOWAY; MICHAEL
GARNETT; MARK MACCARIELLA; PITWU HEALTH
AND WELFARE; TIM FOSTER; FREEDMAN & LORRY;
DANTE GEORENO; NEIL S. GOLDSTEIN, ESQ.;
FRANKLIN MILITELLO; THE MCKEOUGH COMPANY;
UNION PRIVILEGE CARE, INC.; DAVID WEINSTEIN

On Appeal from the United States District Court
for the District of New Jersey
(D. C. No. 1-05-cv-02264)
District Judge: Honorable Joseph H. Rodriguez

Argued on April 27, 2011
 Before: SLOVITER, GREENAWAY, JR., and ROTH,
Circuit Judges

(Opinion filed: March 27, 2012)

Marcia E. Bove, Esquire (Argued)
Senior Trial Attorney
M. Patricia Smith, Esquire
Solicitor of Labor
Timothy D. Hauser, Esquire
Associate Solicitor, Plan
Benefits Security Division
Elizabeth Hopkins, Esquire
Counsel for Appellate and Special Litigation
United States Department of Labor
Room N-4611
200 Constitution Avenue, N. W.
Washington, DC 20210

Dennis K. Kade, Esquire
Patricia M. Rodenhausen, Esquire
Andrew Karonis, Esquire
Office of the Solicitor
U. S. Department of Justice
201 Varick Street
New York, NY 10014

Counsel for Appellant

2
Keith R. McMurdy, Esquire (Argued)
Fox Rothschild
100 Park Avenue, Suite 1500
New York, NY 10017

Counsel for Appellees

James Doyle
28 Sirius Court
Sewelll NJ 08080
Pro Se Appellee

OPINION

ROTH, Circuit Judge:

This case concerns an action by the Secretary of Labor
(the Secretary) against James Doyle, Cynthia Holloway, and
others, arising from their alleged breach of fiduciary duties to
the Professional Industrial Trade Workers Union (PITWU)
Health & Welfare Fund (Fund), a health benefit plan
governed by the Employee Retirement Income Security Act
(ERISA). After a bench trial, the District Court entered
judgment for Doyle and Holloway. The Secretary appeals the
District Court’s judgment, contending that the District Court
failed to adequately address its breach of fiduciary duty
arguments and to consider whether the defendants were

3
responsible for diversion of plan assets held by the Fund. 1
For the reasons that follow, we will vacate the judgment of
the District Court and remand for additional factual findings.

I. Background

A. Procedural History

In April 2005, the Secretary brought this action for
breach of fiduciary duty against Holloway, Doyle, the
PITWU Fund, and two other defendants, Michael Garnett and
Mark Maccariella. The Secretary’s complaint alleged that
PITWU had established a health benefit plan that was a
“multi-employer welfare arrangement” (MEWA) governed by
ERISA. Two companies, Privileged Care, Inc. (PCI) and
NorthPoint PEO (NorthPoint or NP), enabled small
businesses to obtain health benefits for their employees by
enrolling the employees in the Fund, even though the
employees never joined the union. Privileged Care Marketing
Group (PCMG) marketed this scheme to small businesses.
Businesses that chose to enroll their employees in the Fund
were required to make benefit payments to PCMG. PCMG
retained a portion of the payments as compensation and
remitted the balance to PCI and NP. PCI and NP also

1
Another defendant in this action, Michael Garnett,
did not appear at trial and the District Court entered a default
judgment against him. Garnett did not file a notice of appeal,
but five months after the entry of judgment, he filed in this
Court a pro se brief challenging the judgment. Because
Garnett’s appeal is untimely, we lack jurisdiction to consider
it. See Fed. R. App. P. 4(a)(1)(B); Bowles v. Russell, 551
U.S. 205, 215 (2007).

4
retained a substantial portion of the payments as
compensation and remitted the remainder to claims
administrators established by the Fund. The complaint
alleged that these payments were assets of the Fund
improperly diverted by PCI, NP, and PCMG and that PCI, NP
and PCMG were required by ERISA to use the assets only for
the purpose of defraying reasonable plan expenses for the
benefit of plan participants.

The complaint alleged that Garnett and Maccariella at
various times owned and operated PCI and NorthPoint and
were fiduciaries under ERISA because the payments they
received from their business clients were assets of the Fund
under their control. Garnett and Maccariella allegedly
breached their fiduciary duties to the Fund by using assets of
the Fund for purposes other than defraying reasonable plan
expenses for the benefit of plan participants. The complaint
similarly alleged that Doyle had owned and operated PCMG
and that he was a fiduciary because he exercised discretionary
control over payments that were assets of the Fund. It further
alleged that Doyle had breached his fiduciary duties to the
Fund by improperly using plan assets for his own benefit.
Finally, the complaint alleged that Holloway was a named
trustee of the Fund, had breached her fiduciary duties to the
Fund, and was liable both directly and as a co-fiduciary for
failing to detect and prevent the diversion of Fund assets by
Garnett, Maccariella, and Doyle. The complaint sought
restitution of losses to the plan, a permanent injunction
against any of the defendants serving as a fiduciary or service
provider to an ERISA plan, appointment of an independent
fiduciary to manage the Fund, an accounting, costs, and other
appropriate equitable relief.

5
 After extensive discovery, the case proceeded to a
bench trial in October 2009. Solis v. Doyle, No. 05-2264,
2010 WL 2671984 *3 (D.N.J. June 30, 2010). At the
beginning of the trial, Maccariella accepted a consent
judgment enjoining him from serving as fiduciary or service
provider to an ERISA plan and requiring him to pay
$195,317. A default judgment was entered against Garnett at
the close of trial because he failed to appear at trial “[d]espite
numerous continuances granted at his request.”

B. The District Court’s Findings

The District Court made the following factual findings
based on the bench trial. In 2000, David Weinstein
established PITWU. Holloway owned and operated
Employers Depot, Inc. (EDI), a professional employer
organization (PEO) that she had established in 1989. 2 At
some point in 2000, she learned of PITWU from a health
insurance broker. An attorney, Neil Goldstein, who later
became counsel to the Fund, provided Holloway with
verification of PITWU’s union status. On May 1, 2001,

2
A professional employer organization (PEO) provides
human resources and administrative services to business
clients – typically small to medium size businesses – and
often handles its clients’ payroll, workers’ compensation, and
health and retirement benefits. See generally United States v.
Jennings, 599 F.3d 1241, 1245 (11th Cir. 2010); Tri-State
Emp’t Servs., Inc. v. Mountbatten Sur. Co., Inc., 295 F.3d
256, 263 (2d Cir. 2002). PEOs often arrange with their
clients to be considered as co-employers of their clients’
employees to facilitate management of human resource
functions for their clients.

6
Holloway and three other trustees established the PITWU
Fund by an Agreement and Declaration of Trust. The Fund
initially had two employer members, EDI and Employers
Consortium, Inc. (ECI). The EDI and ECI employees were
enrolled as participants in the Fund. The Trust Agreement
obligated EDI and ECI to make regular contributions to the
Fund for each of their employees covered by the Fund. The
Fund made annual filings with the federal government, had
trustees, counsel, an actuary, and claims administrators. The
District Court found that counsel for the Fund never
expressed a concern that PITWU was not a valid union or that
the Fund was not a valid multi-employer fund.

1. PCI/NP and PCMG

In January 2002, ECI terminated its relationship with
PITWU. PCI and NP then became employer members of the
PITWU Fund. PCI and NP entered into identical collective
bargaining agreements (CBA) with PITWU in which they
agreed to make contributions to the Fund so that their
employees could receive health benefits under the Fund. 3
The CBAs provided that PITWU had “been designated by a
majority of employees in certain client companies of
[PCI/NP] as their exclusive bargaining representative for
those terms and conditions of employment controlled by
[PCI/NP] as per its ‘client Service Agreement.’” The “client
Service Agreement” referred to a PEO Services Contract,
which was executed by clients of PCI/NP who wished to

3
“PCI and [NP] were effectively the same organization
in that they shared consultants, office space, owners, and
employees.” Id. at *4.

7
obtain health benefits for their employees. 4 Once an
employer executed the contract and began making
contribution payments, its employees would become
members of the PITWU union and obtain access to health
benefits from the Fund. Although the contract allowed clients
to choose not to join the PITWU union, clients were required
to select the union option to obtain health benefits for their
employees through PCI/NP’s CBAs with the Fund.
Similarly, the contract listed a number of additional PEO
services, but the only service consistently offered by PCI/NP
was health benefits through the PITWU Fund. 5

After PCI/NP became an employer member of the
Fund, Holloway and another trustee appointed Weinstein as a
trustee of the Fund. Later in May, Weinstein sold PCI/NP to

4
PCI/NP’s PEO Services Contract contained a co-
employment clause stating that PCI or NP “and Client shall
be considered co-employers for those employees provided to
the Client by [PCI or NP] (designated employees) for . . .
purposes” of compliance with certain federal civil rights laws,
ERISA, and the Federal Drug Free Workplace Act or any
state equivalent.
5
PCI/NP attempted at some point to offer payroll
services—payment of employees’ checks and payment of
payroll taxes—but one business owner that selected this
service testified at trial that he discontinued it after several
months because PCI/NP had failed to make the necessary tax
payments, subjecting the business to significant penalties.

8
Garnett, resigned as trustee, and was replaced by Garnett. 6

Doyle’s company, PCMG, marketed the services of a
variety of entities, including PCI/NP. 7 In January of 2002,
ariety of entities, including PCI/NP. 8 In January of 2002,
Doyle signed a Marketing Service Agreement with PCI, in
which PCMG agreed to market PCI’s services for a fee.
PCMG also collected payments from PCI/NP’s clients.
Clients made payments by two checks, one to PCI/NP for
participation in the Fund (Check 1), and one to PCMG for
administrative service fees (Check 2). PCMG received both
checks and would forward the first on to PCI/NP. It retained
the second check to cover its expenses, which included sales
commissions paid to PCMG’s sales consultants and fees for
additional services selected by the client, such as gap
insurance. 9 PCMG also provided monthly reports to PCI/NP

6
Garnett operated the company until August 2002,
when Maccariella took over. Maccariella operated
PCI/NorthPoint until it ceased operations in March 2003.
7
PCI/NP did not market its services exclusively
through PCMG. For example, Weinstein’s wife also brought
a number of clients to PCI/NorthPoint.
8
PCI/NP did not market its services exclusively
through PCMG. For example, Weinstein’s wife also brought
a number of clients to PCI/NorthPoint.
9
Gap insurance is purchased to cover potential gaps in
insurance coverage, for example when an employee is

9
regarding funds received and paid certain union dues.

At some point, PCMG stopped marketing for PCI/NP,
but continued to provide billing and administrative services
until May 2003. PCMG received $4.5 million in Check 1
funds, and $2.1 million in Check 2 funds. 10 PCMG
forwarded $3.1 million of the Check 1 funds to PCI/NP, and
paid $645,000 directly to claim administrators and medical
providers. 11 In addition to the $3.1 million received from
PCMG, PCI/NP also directly received $816,000 from
employers enrolled in the Fund through Weinstein’s wife. Of
this roughly $3.9 million, PCI/NP sent $2.1 million to claims
administrators to pay employee health benefit claims. Thus,
in total, PCMG and PCI/NP collected $7.4 million in
payments relating to the Fund, but only $2.7 million was sent
to claim administrators for the payment of health benefit
claims. The remaining $4.7 million was retained by PCMG
or PCI/NP.

between jobs. PCMG made between $20,000 and $33,000 in
payments for gap insurance. Id. at *4 n.4.
10
Doyle testified that PCMG made a net profit of
$112,788.13. A substantial portion of the Check 2 monies
was used to pay PCMG’s sales consultants, who received
$1.3 million in total (although not all of this money was
related to promotion of PCI/NorthPoint).
11
The record before the District Court indicates that
this $645,000 was sent after November 2002. At that time,
PCI/NorthPoint stopped making required contributions to the
Fund and Doyle was instructed by Fund’s trustees to send
Check 1 monies directly to claims administrators.

10
 2. Management of the Fund

The Fund retained a third-party claims administrator to
pay health benefit claims by employees covered by the Fund.
The Fund’s first claims administrator was Union Privileged
Care (UPC), which was owned by Weinstein. Oak Tree
Administrators (Oak Tree) replaced UPC as claims
administrator and served in that capacity from March to June
of 2002. 12 In a meeting with Oak Tree in April 2002,
Holloway learned of many pending claims and of Oak Tree’s
concern that claims may not have been paid since November
2001. In May 2002, Oak Tree reported that it had still not
obtained necessary documents and financial information from
UPC and therefore could not provide the trustees with a
financial report; moreover, the Fund’s actuary could not
perform a study on the financial condition of the Fund.
Holloway also decided in May 2002 to appoint Weinstein as
trustee of the Fund despite “general concerns” she had about
him. On September 20, 2002, the Fund’s new claims
administrator, Brokerage Concepts, Inc., informed Holloway
of problems relating to lack of funding because of PCI/NP’s
failure to make contributions to the Fund and other problems
arising from inadequate paperwork. 13

12
A claims administrator is an entity that processes
employee benefit claims to ensure that they are legitimate and
consistent with plan documents, and then arranges for
payment of valid claims.
13
The District Court’s opinion uses Benefits Concepts,
Inc. and Brokerage Concepts, Inc. interchangeably.
Holloway referred to the entity as Brokerage Concepts and
we follow her usage. In December 2002, Southern Plan

11
 These problems were illustrated by the testimony of
five business owners who had obtained access to the Fund
through PCI/NP. They testified that they had difficulty
presenting claims and did not have claims paid to their
satisfaction. Additionally, several of these witnesses testified
that they did not consider their employees unionized or part
of the PITWU union. One employer was assured by PITWU
union officials that PITWU brought small businesses “under
its umbrella for purposes of medical benefits and payroll, but
that there was no interest in unionizing the employees.” 14

In response to these problems, Holloway asked
Goldstein, the Fund’s attorney, “to bring some accountability
to the Fund, but he asked [Holloway] to talk to the trustees
about that.” She also asked Goldstein to obtain membership
information from PCI. However, Holloway did not seek
mediation of disputes with other trustees regarding the
management of the Fund or seek to remove any trustee. 15
Nor did she demand an audit of PCI/NP or PCMG or contact
the Department of Labor to complain about the lack of
funding, lack of financial accountability, or “chaotic state of

Administrators replaced Brokerage Concepts, Inc. as claims
administrator for the Fund.
14
It is not clear whether the District Court credited this
testimony; it did note, however, that the Secretary had not
presented any signed enrollment forms establishing that the
employees of these businesses were enrolled in the Fund.
15
The District Court did not describe Holloway’s
disputes with several of the trustees, but Holloway’s
resignation letter refers to these disputes.

12
affairs.” Instead, on September 27, 2002, Holloway resigned
as trustee. She identified several reasons leading to her
resignation, including the lack of financial accountability for
contributions to the Fund and resulting lack of funding to pay
claims. She described the “vulnerability of the Fund due to
actions taken by membership that has created insolvency of
the Fund.” Holloway also noted that several states had issued
cease and desist orders “based on the representation by other
membership/trustees that PITWU [was] an insurance
program.” 16

Holloway continued to participate in the
administration of the Fund after her resignation. In October
2002, for example, Holloway met with Brokerage Concepts
to discuss the Fund’s lack of funding. She agreed that
contribution rates should be increased. EDI, Holloway’s
company, used its own funds to satisfy claims by its clients’
employees that were not paid by the Fund. Holloway also
sought to resolve outstanding claims with health care
providers and sought payment of claims from Southern Plan
Administrators.

3. The District Court’s Conclusions

The District Court concluded that the Secretary had
failed to show that Holloway or Doyle breached their
fiduciary duties to the Fund. Although the Secretary argued
at length that funds collected by PCI/NP were plan assets

16
The Fund’s attorney would draft responses to these
orders stating, as Holloway put it, “this is a union-sponsored
plan, it is not insurance, you state commissioners don't have
jurisdiction over this.”

13
governed by ERISA, the court did not make any findings of
facts or conclusions of law as to which of the monies received
by PCI/NP and PCMG – if any – were plan assets. Instead,
the court focused on whether the Secretary had established
that necessary contributions had not been made to the Fund or
that the Fund had unpaid claims when it closed on May 2003.
The court noted the Secretary’s concession that she did “not
allege that defendant Holloway failed to collect contributions
from employers” and the testimony of the Secretary’s
summary witness that none of the financial analyses
presented by the Secretary would have indicated to an
observer that the Fund was underfunded. The court also
noted Doyle’s unrefuted testimony that the fees charged by
PCI/NP and PCMG were customary and reasonable, and
observed that the Secretary introduced no evidence that the
fees charged by PCI/NP or PCMG “were excessive,
unreasonable, or contrary to plan documents.

C. Additional Evidence

In addition to the District Court’s factual findings, we
summarize additional evidence in the record that we find
relevant to our legal analysis.

1. PCI/NP’s Evasion of State Insurance
Regulation

We find significant the cease and desist orders issued
by insurance commissioners of seven states against PCI/NP,
PCMG, Doyle, and in some cases, the PITWU Fund and
Holloway. Some regulatory background is necessary to
understand the significance of these orders. Providing and
selling insurance, including health insurance, is generally

14
regulated by the states. See Rush Prudential HMO, Inc. v.
Moran, 536 U.S. 355, 387 (2002). Certain self-insured
employer and union plans that are subject to ERISA’s
funding, vesting, and fiduciary standards are exempted from
state insurance regulation. 17 See 29 U.S.C. §§ 1003(a),
1144(b)(2)(B). However, health insurance plans involving
multiple employers are deemed “multi-employer welfare
arrangements” (MEWAs) under ERISA, see 29 U.S.C. §
1002(40)(A), and are subject both to ERISA standards and to
state insurance regulation, see id. § 1144(b)(6). Nevertheless,
certain union-sponsored health insurance plans covering
union members working for multiple different employers are
excepted from the definition of MEWA and thus remain
exempt from state insurance regulation. 18 See 29 U.S.C. §
1002(40)(A)(i). It is not disputed that the Fund was a
MEWA, and therefore subject both to ERISA standards and
to state insurance regulation. See 29 U.S.C. § 1144(b)(6).

The record illustrates that, even though the Fund was
properly considered a MEWA and therefore subject to state
insurance regulation, PCI /NP and PCMG marketed the Fund
as a self-insured union sponsored plan, exempted from state
regulation. This connection to the union was reinforced by a
form that PCI/NP required its clients to sign entitled

17
This rough summary of ERISA’s complex
preemption scheme is provided only as background. See
Moran, 536 U.S. at 364-65 (noting complexity of ERISA’s
preemption scheme).
18
In 2003, the Department of Labor promulgated
regulations setting forth criteria for bona fide union health
and retirement plans. See 29 C.F.R. § 2510.3-40.

15
“Professional Industrial Trade Workers Union Health &
Welfare Fund Plan “B” Disclosure Form,” which stated:

This health & welfare plan is sponsored by the
Professional Industrial Trade Workers Union
(P.I.T.W.U.). The plan is self-funded and
exempt from state regulation, as outlined in the
Employment Retirement Income Security Act
(ERISA) of 1974. The plan is under the
jurisdiction of the United States Secretary of
Labor. This plan is not regulated by any state
department of insurance. The plan being self-
funded is not covered by any state or federal
guarantee fund in the event of fund insolvency.

PCI/NP and PCMG thus relied on the Fund’s relationship
with PITWU to claim that ERISA exempted the Fund, and
their marketing of the Fund, from state regulation.

From the outset, this scheme attracted the scrutiny of
state insurance regulators. In January 2002, less than a month
after PCI/NP and PCMG were created, the Oklahoma
Insurance Commissioner entered a cease and desist order
against PCI, PCMG, and two of its marketing affiliates,
finding that they were engaging in the unauthorized sale of
insurance and ordering them to cease and desist from any
further sales or marketing of insurance in the state. 19

In June 2002, the Louisiana Insurance Commissioner
issued a cease and desist order based on its finding that PCI

19
The record contains a certified mail slip showing
that this order was received by PCMG on February 4, 2002.

16
and PCMG were selling health insurance without
authorization. The Louisiana Commissioner found that PCI
purported to offer PEO services, including health benefits, to
its clients. PCI “allegedly assumes the role of ‘co-employer’
to the employees of its client employers” and thereby
provided these employees access to the Fund, pursuant to a
CBA between PCI and the Fund. However, the
Commissioner found, inter alia, that

[T]here is no collective bargaining for wages or
improved working conditions as in a bona fide
union agreement. . . . Employees of the
employers contracting with PCI . . . do not
directly join the union, and receive no
representation or benefit from PITWU other
than access to the union sponsored health plan.
One “employer” from Louisiana who contracted
with PCI and enrolled in the health and welfare
fund did not include employees or activate any
PEO services other than the health benefits.

The Commissioner concluded that PITWU was a self-
insurance plan covering employees of multiple employers and
had not acquired the necessary authorization to sell insurance
in Louisiana. 20 The Commissioner summarized several of

20
ERISA exempts from state insurance regulation
certain self-insured employee health benefit plans maintained
by a single employer for its employees or by a union for its
members. See 29 U.S.C. §§ 1003(a), 1144(a)-(b). Benefit
plans established for employees of multiple employers,
however, are not exempted from state regulation. See id. §
1144(b)(6).

17
PCI, PCMG, and their affiliates’ marketing practices as
follows:

The individuals and entities named above have
been involved directly or indirectly in making,
issuing, circulating, or causing to be made,
issued, or circulated written and oral statements
in the form of sales presentations and marketing
materials used to solicit potential marketing
agents and prospective client employers for PCI
by, 1) misrepresenting to the public, and on an
official document filed with the Louisiana
Department of Insurance, that the PITWU or
Privilege Care Employee Health and Welfare
Fund is not insurance and therefore exempt
from regulation under state laws governing
insurance and insurance agents; 2) deceptively
claiming that PCI’s “health benefit services”
have been approved by the Louisiana
Department of Insurance; 3) falsely claiming
that a [sic] official representative of the
Louisiana Department of Insurance had been
invited and wanted to attend a “compliance and
training” meeting held by PCMG and PCI in
Louisiana on May 16, 2002; and 4) falsely
claiming that PCI had been licensed by the
Louisiana Department of Labor as a PEO doing
business in this state; 5) falsely representing
that PCMG had not been issued a cease and
desist order prior to April 20, 2002; and 6)
violating several prohibitory laws of this state.

The Commissioner accordingly ordered PCI, PCMG, the

18
PITWU Fund, Weinstein, Doyle, Garnett, Oak Tree
Administrators, and several affiliates to cease and desist from
marketing or providing health care services in the state.
By the time the Fund ceased operations in May 2003,
five other states – North Carolina, Texas, Massachusetts,
Colorado, and Illinois – had entered similar orders against
PCI/NP, the PITWU Fund, PCMG, Doyle, and others.
Several of these orders were based on hearings before state
insurance commissioners at which it emerged that, as in
Louisiana, PCI/NP purported to offer PEO services but
actually offered almost exclusively health benefits through
the Fund by enabling its clients’ employees to obtain health
benefits from the Fund without union membership. Several
of the later cease and desist orders also noted that the Fund
had numerous unpaid claims -- for example, Colorado’s
Insurance Commissioner noted that as of December 9, 2002,
the Fund had over $7 million in unpaid claims.

The findings of these insurance commissioners are
corroborated by the record before the District Court.
Evidence showed that PCI/NP required its clients to sign a
disclosure form in which it falsely represented that the
PITWU Fund was “exempt from state regulation, as outlined
in the Employment Retirement Income Security Act (ERISA)
of 1974.” At the bench trial, five managers whose businesses
contracted with PCI/NP testified that their employees were
not unionized. One witness stated that he had been assured
by PITWU officials that the union had no interest in
unionizing employees – it was merely a means of providing
health insurance and other benefits. The business owners also
testified to serious problems resulting from unpaid claims for
health benefits from the Fund. Financial data presented by

19
the Secretary supports this testimony, showing that the Fund
had $7.6 million in unpaid claims on October 31, 2002.

Both Doyle and Holloway were aware of at least some
of the cease and desist orders. Doyle had contact with
insurance commissioners in some states and participated in
some of the related proceedings. 21 He is named in each of the
orders, and in several cases the record contains certified mail
slips confirming that he or PCMG received copies of the
orders. 22 Holloway also learned of some of the cease and
desist orders while serving as trustee, mentioning them in her
resignation letter as one of her reasons for resigning. But the
extent of her knowledge about the orders is unclear, and the

21
The Louisiana Insurance Commissioner noted that
Doyle had falsely represented in filings before the
Commission that PCMG had not been “subject to regulatory
action including cease and desist orders, revocations of
license, or similar actions,” even though PCMG had received
a cease and desist order from the Oklahoma Insurance
Commission only two months before filing its application.
22
Although not clearly related to this case, on October
27, 2007, Doyle pleaded guilty to a felony violation of Texas
laws against selling unauthorized insurance, was sentenced to
five years of community supervision, and agreed to pay
$380,788.39 in restitution to unspecified victims. The
indictment to which Doyle pleaded guilty is not included in
the record, however, and the judgment of conviction states
that the offense was committed on February 1, 2001, several
months before the Fund was created and nearly a year before
PCMG began marketing for PCI/NP.

20
orders with the most troubling findings were issued after her
resignation. As the District Court found, the Fund’s attorney
assured Holloway that he would respond to these orders,
arguing that “this is a union-sponsored plan, it is not
insurance, you state commissioners don’t have jurisdiction
over this.”

We find it significant that PCI/NP’s promotion of the
Fund bears striking similarities to the type of scheme that
ERISA’s MEWA provisions were specifically designed to
prevent: an aggressively marketed, but inadequately funded
health benefit plan masquerading as an ERISA-exempt plan
in order to evade the solvency controls imposed by state
insurance regulation. 23 Although the record is not entirely

23
See Legislative Hearing on Pension Issues, Hearing
on Hr. 1641, H.R. 3632, H.R. 6462 Before the Subcomm. on
Labor-Management Relations of the H Comm. on Education
and Labor, 97th Cong. 1-2 (1982) (statement of Rep. Burton
explaining that MEWA amendments were made to prevent
“fraudulent” insurance trusts from using ERISA preemption
to sell health insurance to small businesses without
“comply[ing] with the basic solvency controls which each
State establishes to protect health care consumers”).
Although the Secretary claims that PITWU was a
“bogus” union, we think this claim is too strong. The record
shows that the CBAs between PITWU and PCI/NorthPoint
were bogus – they were not the result of bona fide collective
bargaining, and the employees it enrolled in the union by
PCI/NorthPoint were not genuine union members – but no
similar evidence was presented concerning the CBAs between
PITWU and its other employer members, ECI and EDI.

21
clear on this point, it appears that the ultimate result of this
arrangement was that which Congress feared: the Fund was
ultimately unable to pay all employee claims, and thus
employees participating in the Fund were not provided
promised health benefits. 24 Doyle and Holloway were not the
principal architects of this scheme, and the question presented
by this case is the extent of their awareness of the scheme and
liability for its consequences. But we think it is important to
keep the nature of the scheme firmly in mind.

2. Holloway’s Management of the Fund and
Subsequent Resignation

We also find relevant some additional details
concerning Holloway’s management of the Fund. It appears
from the record that Holloway first learned of problems with
the management of the Fund in a meeting in April 2002 with
the Fund’s claims administrator at that time, Oak Tree
Administrators, and the Fund’s trustees. The meeting
minutes, prepared by Holloway, report that:

24
The District Court noted that the Secretary did not
submit enrollment forms and establish that there were valid
participant benefit claims that should have been paid pursuant
to the plan documents and noted that “there was no testimony
to the effect that as of the date of the closure of the PITWU
Fund in May 2003, there were any claims unpaid by the
Fund.” We do not disturb this finding, but simply note that it
is highly unlikely that all $7 million in unpaid employee
claims as of December 2002 were invalid claims; or that the
Fund somehow managed to pay all valid, outstanding claims
before closing in May 2003.

22
 It was discussed that several boxes of unpaid
claims had been shipped from Union Privilege
and that Oak Tree was inputting all the claims
to determine the magnitude of requirements. It
was noted that many claims were very old and
dated back to mid 2001 with no claims
reflecting payment since November 2001.
Cindy Holloway requested a date for the all
[sic] claims to be entered into the data base.
Oak Tree advised that this would be completed
by the following Tuesday, April 30.

The Fund’s actuary reported that he had not been paid by
UPC and was owed $10,000; the trustees authorized payment
of the bill. The trustees also learned in the meeting that two
new health benefit plans – i.e., new types of coverage with
different pricing schemes – had been added to the Fund by
PCI/NP without their approval. One of the trustees, Dante
Georeno, observed that “he didn’t see a problem with the
plans, although the premium rates were very low, because the
plans have limited coverage. The plans were already in use
and the [summary plan descriptions] already in the hands of
the membership. It was therefore determined the plans would
be continued.” Additionally, Oak Tree noted that enrollment
applications submitted by PCI/NP were not complete. A
week after this meeting, Holloway and the other trustees
agreed to appoint Weinstein, the owner and operator of UPC
and PCI/NP, as a trustee of the Fund. 25

25
Holloway did not investigate Weinstein’s
qualifications before agreeing to appoint him. But at some
point prior to resigning as trustee, Holloway learned from the
Fund’s attorney that Weinstein had been the subject of a

23
 The trustees held another meeting on May 30, 2002. A
draft of the minutes from the meeting prepared by the Fund’s
attorney indicates that Weinstein resigned at that meeting and
was replaced by Garnett, who succeeded him as owner and
operator of PCI/NP. The Fund’s accountant informed the
trustees that he could not prepare a financial statement for the
Fund because certain financial information he had requested
from UPC had not yet been provided. The Fund’s actuary
reported to the trustees that he had received some information
from Weinstein but was still missing necessary information
about the number of claims for prescription benefits
submitted by plan participants and the number of participants
enrolled per plan per month. Without this data, he was unable
to offer an opinion as to whether the Fund’s “reserves were
adequate to meet its ongoing needs.” Oak Tree also reported
that it was awaiting additional information from Weinstein
and UPC. Weinstein then joined the trustees’ meeting and
they developed a list of information that Weinstein would
provide; the trustees directed UPC and Oak Tree to provide
all necessary data to the Fund’s accountant and actuary within
two weeks. According to Holloway, the Fund’s attorney sent
Weinstein a letter after the meeting to confirm the request for
information.

On September 20, 2002, Holloway learned from the
Fund’s latest claims administrator, Brokerage Concepts, that
it was having problems paying claims because PCI/NP had
stopped making contributions to the Plan and that necessary

cease and desist order from the state of Florida in connection
with an organization called “NAPT.” Holloway could not
recall whether she learned this before or after agreeing to
appoint him as trustee to the Fund.

24
information and paperwork from PCI/NorthPoint was lacking.
The District Court found that (1) Holloway instructed the
Fund’s attorney “to bring some accountability to the Fund,
but he asked [Holloway] to talk to the trustees about that,”
and (2) Holloway “took steps to try to get membership
information from PCI.” It is not clear from the record
whether Holloway followed up on these requests before
submitting her resignation letter on September 27, 2002. 26

Holloway’s resignation letter enumerated 15 specific
reasons for resigning, which she explained were “examples
and are not representative of all the issues related to my
resignation.” Many of these reasons related to disagreements
with other trustees about their approach to Fund management.
For example, she strongly disagreed with the other trustees’
dismissal of Oak Tree Administrators without consulting her.
Her reasons for resigning also included:

e. Lack of continuity or communication by the
Union representatives.

f. No financial accountability for contributions
to the Health and Welfare Fund by other
membership. Employers Depot [Holloway’s
company] provided monthly audits and
accountability since the inception of the
program.

g. Lack of proper follow through to ensure that

26
The letter is dated September 20, 2002, and is not
signed, but Holloway stipulated that she submitted the letter
to the other Fund trustees on September 27, 2002.

25
Union Privilege provided required financial
records to the accountants and actuary that
determined the financial solvency of the fund.

h. Establishment of two additional plans
without the consent of the Trustees.

i. Contribution rates established for two
additional plans without the expressed consent
of the Trustees or approval by actuary.

j. Vulnerability of the fund due to actions taken
by membership that has created insolvency of
the fund.

k. The consensual approach by the PITWU to
allow staff of certain membership to make
decisions, develop programs and direct the
outcome of contracts and TPA activity.

l. Cease and desist orders in multiple states
based on the representation by other
membership/Trustees that PITWU is an
insurance program.

m. Legal issues with the Department of
Insurance in multiple states due to the
representation by other membership that
PITWU is an insurance program.

n. Lack of follow through by responsible
parties to ensure the structure, insurance

26
 programs and related requirements are managed
timely and effectively.

Holloway expressed concern about “the chaotic state
of affairs of the Fund,” which had “brought undue damage in
multiple states, created credit damage to the membership due
to claims that are in excess of 9 months old and generally has
ruined the credibility of the Union and its associated
fiduciaries.” Holloway did not find another person to replace
her as trustee before resigning, nor was she immediately
replaced. 27

III. Discussion

The District Court had jurisdiction over this action
pursuant to 28 U.S.C. § 1331 and we have jurisdiction of this
appeal pursuant to 28 U.S.C. § 1291. In considering an
appeal from a bench trial, we “review the District Court’s
findings of fact for clear error and its conclusions of law de
novo.” 28 Travelers Cas. and Sur. Co. v. Ins. Co. of North
Am., 609 F.3d 143, 156 (3d Cir. 2010) (brackets omitted).
27
Tim Foster was later appointed a trustee of the Fund.
It is not clear from the record whether Holloway ever
communicated her concerns to Foster or whether Foster ever
read her resignation letter.
28
Holloway moved for a directed verdict at the close
of the bench trial and the District Court mistakenly styled its
opinion as a ruling on a directed verdict under Fed. R. Civ. P.
50. Because there was no jury trial in this case, we treat the
court’s decision as a ruling on partial findings of fact under
Fed. R. Civ. P. 52 and review it accordingly. See Fed. Ins.
Co. v. HPSC, Inc., 480 F.3d 26, 32 (1st Cir. 2007).

27
 A. Determination of Plan Assets

The Secretary urges in this appeal that the District
Court erred in failing to determine whether payments
collected by PCI/NP and PCMG were plan assets subject to
ERISA. We agree. The identification of plan assets in this
case determines ERISA’s reach. If, as the Secretary claims,
all of the money collected from employers by PCI/NP and
PCMG were plan assets from the moment of collection, then
Doyle may be a fiduciary by virtue of exercising control over
those assets, see 29 U.S.C. § 1002(21)(A)(i), and, if he is a
fiduciary, he and Holloway may be liable for breaching their
fiduciary duties with respect to those assets. See 29 U.S.C. §§
1104(a), 1105(a), 1109(a). But if, as Doyle and Holloway
claim, the payments collected by PCI/NP and PCMG were
not plan assets, and the only assets of the Fund were those
payments received by the Fund’s claims administrators, then
Doyle did not handle any plan assets, and could not be a
fiduciary under ERISA, and Holloway’s duties as a fiduciary
were not implicated by PCI/NP’s and PCMG’s disposition of
the payments they collected from employers.

1. Doyle’s Fiduciary Status

Identification of plan assets is essential to determining
Doyle’s fiduciary status. Under ERISA, even if a person is
not named as a fiduciary in plan documents, he may still be “a
fiduciary with respect to a plan to the extent . . . he . . .
exercises any authority or control respecting management or
disposition of its assets . . . .” 29 U.S.C. § 1002(21)(A)(i);
see also Board of Trustees of Teamsters Local 863 Pension
Fund v. Foodtown, Inc., 296 F.3d 164, 174 (3d Cir. 2002).

28
The Secretary argues that Doyle was a fiduciary because all
or part of the payments that PCMG collected from PCI/NP’s
clients were plan assets and Doyle, as head of PCMG,
exercised discretionary control over those assets. Doyle
contends that the payments PCMG collected from employers
who enrolled their employees in the Fund were not plan
assets and that the only plan assets were funds remitted to the
Fund’s claim administrators pursuant to the collective
bargaining agreements between PITWU and PCI/NP.

The District Court, however, made no findings as to
which, if any, of the monies under Doyle’s control were plan
assets, or whether Doyle was a fiduciary. Instead, the District
Court appears to have concluded that Doyle could not have
breached any fiduciary duties he might have owed to the
Fund based on (1) his testimony that he forwarded all
required Check 1 monies, and (2) his testimony that the
Check 2 monies he collected as marketing fees were
“customary” and the absence of evidence that the fees were
“excessive, unreasonable, or contrary to plan documents.”
Doyle, 2010 WL 2671984 *7-8. Both of these conclusions
are problematic.

First, the District Court’s findings cast doubt on
Doyle’s testimony that he forwarded all required Check 1
monies. The court found that Doyle had collected $4.5
million in Check 1 monies, of which $3.1 million was
forwarded to PCI/NP and $645,000 was sent directly to the
Fund’s claim administrator pursuant to instructions from the
Fund’s trustees after PCI/NP stopped making contributions in
November 2002. Doyle, 2010 WL 2671984 *4. But this
leaves $755,000 of the $4.5 million collected by Doyle
unaccounted for. Doyle’s claim that he properly forwarded

29
all required Check 1 monies cannot be credited without
addressing this $755,000 discrepancy between the amounts
Doyle collected and the amounts he transmitted to PCI/NP or
the Fund’s claims administrator. In any case, the District
Court would still need to determine whether Check 1 monies
were plan assets and whether Doyle exercised sufficient
control over those monies to be considered a fiduciary. See
In re Mushroom Transp. Co., Inc., 382 F.3d 325, 346-47 (3d
Cir. 2004).

Second, Doyle’s unrefuted testimony that the Check 2
funds he collected for marketing fees were customary or
reasonable does not mean that he did not violate any fiduciary
duties under ERISA. If Check 2 monies were plan assets and
Doyle was a fiduciary, he was required to use these monies
“for the exclusive purposes of providing benefits to
participants in the plan and their beneficiaries [and] defraying
reasonable expenses of administering the plan.” 29 U.S.C. §
1104(a)(1)(A). The Check 2 monies retained by PCMG were
used to pay expenses it incurred in marketing the Fund. It is
far from obvious how plan participants benefitted from
PCMG’s marketing of the Fund to other businesses with
whom they had no connection or why the Fund would
reasonably incur such expenses. Moreover, as we have
explained above, the “PEO services” of PCI/NP that PCMG
was promoting were actually part of a scheme to abuse
ERISA preemption and avoid state insurance regulations
through a sham collective bargaining relationship with
PITWU. At a minimum, expenditures for marketing this

30
illegal scheme were not reasonable expenses for the benefit of
plan participants. 29
Accordingly, on remand, the District Court should
make detailed factual findings concerning the nature of the
funds received and controlled by Doyle to determine which, if
any of these funds, were plan assets. The court should
specifically address whether Check 1 and Check 2 monies
were “plan assets,” considering in particular those monies
sent at the direction of the trustees directly to claims
administrators. If the District Court determines on remand
that some or all of these monies are “plan assets,” it should
then consider whether Doyle had sufficient control over these
assets to support a finding of fiduciary status. See In re
Mushroom Transp. Co., Inc., 382 F.3d at 346-47. If the
District Court finds that Doyle is a fiduciary with respect to
certain plan assets, it should then consider whether Doyle
breached his fiduciary duties to the Fund. See 29 C.F.R. §
2509.75-8, FR-16; Bd. of Trs. of Teamsters Local 863
Pension Fund v. Foodtown, Inc., 296 F.3d 164, 174 (3d Cir.
2002).
2. Holloway’s Liability

The identification of plan assets is also important to
the Secretary’s breach of fiduciary duty claims against
Holloway. It is undisputed that, as a trustee, Holloway was a

29
The mere fact that activities violate applicable state
or federal regulations does not mean that expenditures for
such activities are automatically unreasonable or improper
under 29 U.S.C. § 1104(a)(1)(A). The expenditures at issue
here are unusual because their principal purpose was to
promote a scheme that improperly circumvented state and
federal regulations designed to protect plan participants.

31
named fiduciary, and thus was obligated to discharge her
duties to the Fund “with the care, skill, prudence, and
diligence under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims.” 29 U.S.C. § 1104(a)(1)(B).
The Secretary primarily argues that Holloway failed to act
prudently to prevent the improper diversion of Check 1 and
Check 2 monies by PCI/NP and PCMG. The District Court
did not address this argument, however, apparently because it
concluded that Holloway did not breach any fiduciary duties
owed to the Fund.

Holloway contends that “there was no evidence that
Ms. Holloway acted in a way that caused the Fund to (i) fail
to provide benefits to eligible participants or be underfunded,
(ii) fail to defray costs, or (iii) fail to adhere to plan
documents.” That argument, however, only addresses some
of the fiduciary duties enumerated in ERISA § 404(a), which
is not an exhaustive list. 30 See Glaziers & Glassworkers

30
ERISA describes a fiduciary’s duties to a plan as
follows:
a fiduciary shall discharge his duties with
respect to a plan in the interest of the
participants and beneficiaries and --
(A) for the exclusive purpose of:
(i) providing benefits to participants and
their beneficiaries; and
(ii) defraying the reasonable expenses of
administering the plan;

32
Union Local No. 252 Annuity Fund v. Newbridge Sec., 93
F.3d 1171, 1180-81 (3d Cir. 1996).

Rather, ERISA § 404(a) incorporates the fiduciary
standards of trust law, of which several are relevant here. See
id. at 1180. In particular, a trustee has a duty to maintain
financial records and to preserve and protect the assets of the
plan, including from diversion or embezzlement. See
Restatement (Third) of Trusts §§ 76(2)(b), 83; Ream v. Frey,
107 F.3d 147, 156 (3d Cir. 1997). Because the District Court
did not resolve the question of plan assets, it did not address
the Secretary’s arguments regarding the question of
Holloway’s knowledge of asset diversion or her
corresponding duties, if any. Those arguments turn on close

(B) with the care, skill, prudence and
diligence under the circumstances then
prevailing that a prudent man acting in a like
capacity and familiar with such matters would
use in the conduct of an enterprise of a like
character and with like aims;
(C) by diversifying the investments of the
plan so as to minimize the risk of large losses,
unless under the circumstances it is clearly
prudent not to do so; and
(D) in accordance with the documents and
instruments governing the plan insofar as such
documents and instruments are consistent with
the provisions of this subchapter and subchapter
III of this chapter.
29 U.S.C. § 1104(a).

33
questions of fact regarding what Holloway knew and could
reasonably be expected to know.

In addition, a trustee must also take prudent
precautions, such as by providing for a “suitable and
trustworthy replacement,” to ensure that his resignation does
not harm the Fund or its beneficiaries. See Ream, 107 F.3d at
154. Because the record does not indicate who replaced
Holloway as trustee, it is unclear whether that person is
“suitable and trustworthy.”

Finally, when confronted with suspicious
circumstances, a trustee may be required to investigate
potential risks to a plan. See Chao v. Merino, 452 F.3d 174
(2d Cir. 2006). The record indicates that Holloway took
several steps to rectify recordkeeping problems. The District
Court failed, however, to address whether Holloway had a
duty to investigate, how extensive an investigation would
have been required, or whether an adequate investigation
would have revealed the Fund’s potential insolvency and/or
the diversion of assets.
If Holloway has breached any of these duties, as the
Secretary contends, then she may be liable for any resulting
loss of plan assets. 31 The Secretary’s claims cannot be

31
The Secretary argues that Holloway is both directly
liable for losses to the plan under ERISA § 409, 29 U.S.C. §
1109, and liable as co-fiduciary under ERISA § 405(a), 29
U.S.C. § 1105(a). If the District Court finds that some of the
Check 1 and/or Check 2 monies were plan assets and that
Holloway breached her fiduciary duties, it should consider
whether Holloway is liable for any resulting losses of plan
assets under both theories. Additionally, even if the District

34
evaluated, however, without first determining whether any of
the Check 1 or Check 2 monies were plan assets that
Holloway was obligated preserve. Accordingly, as explained
above, the District Court should make appropriate findings as
to which, if any, of these monies were plan assets. If on
remand the District Court finds that any of the monies
retained by PCMG or PCI/NP were plan assets, it should then
consider whether Holloway breached her fiduciary duties
relating to those assets and is liable for any resulting losses to
the plan. In considering Holloway’s fiduciary duties, the
District Court should resolve the relevant questions of fact,
including those raised above.

B. Identification of Plan Assets

To facilitate the District Court’s analysis on remand,
we provide the following guidance on identification of plan
assets under ERISA. The term “plan assets” is not
comprehensively defined in ERISA or in the Secretary’s
regulations. ERISA provides that “the term ‘plan assets’
means plan assets as defined by such regulations as the
Secretary may prescribe . . . .” 32 29 U.S.C. § 1002(42). The

Court finds that none of the Check 1 or Check 2 monies were
plan assets, it should still consider whether Holloway
breached any of the fiduciary duties discussed above, as such
a finding is relevant to the injunctive relief sought by the
Secretary.
32
The statute also establishes specific rules to
determine when an entity’s assets become assets of a
retirement plan by virtue of the plan’s ownership of an equity
interest in the entity. 29 U.S.C. § 1002(42).

35
Secretary’s regulations define the scope of “plan assets” in
two specific contexts: (1) where an employee benefit plan
invests assets by purchasing shares in a company, 29 C.F.R. §
2510.3-101, and (2) where contributions to a plan are
withheld by an employer from employees’ wages, 29 C.F.R. §
2510.3-102. The first regulation is not relevant here, and the
second regulation does not apply because the Secretary has
not presented any evidence that employer contributions to the
Fund were withheld from the wages of employees
participating in the Fund. See In re Luna, 406 F.3d 1192,
1199 n.3 (10th Cir. 2005).

As the Tenth Circuit Court of Appeals has
persuasively explained, in the absence of specific statutory or
regulatory guidance, the term “plan assets” should be given
its ordinary meaning, and therefore should be construed to
refer to property owned by an ERISA plan. 33 See In re Luna,
406 F.3d at 1199 (considering dictionary definition of “asset”
and noting that “[c]entral to the definition of ‘asset,’ then, is
that the person or entity holding the asset has an ownership

33
Some courts have adopted a functional approach to
defining plan assets, which considers “whether the item in
question may be used to the benefit (financial or otherwise) of
the fiduciary at the expense of plan participants or
beneficiaries.” Acosta v. Pac. Enters., 950 F.2d 611, 620 (9th
Cir. 1991) (holding that list of shareholders held by plan was
a plan asset). Although this approach may be helpful when
considering whether items other than cash or financial
instruments are properly considered assets of an ERISA plan,
the parties do not argue for its application in this case, and we
do not think that it helps to determine which of the payments
at issue here were assets of the Fund.

36
interest in a given thing, whether tangible or intangible”).
This approach is also consistent with guidance provided by
the Secretary on the meaning of “plan assets,” which states
that “the assets of a plan generally are to be identified on the
basis of ordinary notions of property rights under non-ERISA
law. In general, the assets of a welfare plan would include
any property, tangible or intangible, in which the plan has a
beneficial ownership interest.” Department of Labor,
Advisory Op. No. 93-14A, 1993 WL 188473 *4 (May 5,
1993); see also Kalda v. Sioux Valley Physician Partners,
Inc., 481 F.3d 639, 647 (8th Cir. 2007) (finding “the
Secretary’s reasoning in its rulings regarding ‘plan assets’
thorough, valid, and particularly consistent” and adopting the
Secretary’s definition). 34

As a general rule, the first step in identifying the
property of an ERISA plan is to consult the documents
establishing and governing the plan. Cf. In re Lucent Death
Benefits ERISA Litig., 541 F.3d 250, 254-55 (3d Cir. 2008).
A court should then, in light of these documents, consult

34
The Supreme Court has also strongly suggested that
this is the proper approach to defining “plan assets.” See
Jackson v. United States, 129 S. Ct. 1307 (2009) (vacating
Fourth Circuit’s holding that unpaid employer contributions
were plan assets and remanding for further consideration “in
light of the position asserted by the Solicitor General in his
brief for the United States”); Brief for United States at 11-12,
2009 WL 133443, at *11-*12, in Jackson v. United States
(explaining that “in situations not covered by the plan asset
regulations, ‘the assets of a plan generally are to be identified
on the basis of ordinary notions of property rights under non-
ERISA law’”).

37
contracts to which the plan is a party or other documents
establishing the rights of the plan. See, e.g., Metzler v.
Solidarity of Labor Organizations Health & Welfare Fund,
No. 95-7247, 1998 WL 477964, *6 (S.D.N.Y. Aug. 14,
1998), aff’d 224 F.3d 128 (2d Cir. 2000) (per curiam), cert.
denied 533 U.S. 928 (2001); Galgay v. Gangloff, 677 F.
Supp. 295, 301-02 (M.D. Pa. 1987), aff’d 932 F.2d 959 (3d
Cir. 1991). The Secretary further argues that representations
made by PCI/NP and PCMG to businesses which purchased
health benefits from the Fund should also be considered in
determining what monies were assets of the Fund. Given the
District Court’s limited factual findings, we are reluctant to
rule on this argument. We merely note that such
representations are relevant only to the extent that they affect
the property rights of the Fund under ordinary property law
principles. We leave it to the District Court to determine on
remand what representations were made and their relevance,
if any, to the Fund’s property rights.

IV. Conclusion

For the foregoing reasons, we will vacate the judgment
of the District Court in favor of Holloway and Doyle and
remand for further proceedings consistent with this opinion.

38