Peggy Spradling McCord, Executrix v. Nina M. Spradling

Summary

The Supreme Court of Mississippi held that, although the widow was entitled to receive Federal Employees' Group Life Insurance Act proceeds under the federal statutory order of precedence, a constructive trust could be imposed on those proceeds in favor of the decedent's children. The court reversed the Court of Appeals on that issue and remanded with instructions to impose the constructive trust. All other issues addressed by the Court of Appeals and not addressed in the opinion were affirmed.

Holdings

1. FEGLIA does not preempt a state-court equitable claim seeking a constructive trust over proceeds after the insurer has paid those proceeds to the person designated by the statute's order of precedence.
2. The chancery court must impose a constructive trust on the FEGLIA proceeds in favor of J.W. Spradling's children because the widow's retention of proceeds intended for the children constituted unjust enrichment.

Questions Presented

1. Whether FEGLIA preempts a state-court equitable action seeking to impose a constructive trust on proceeds paid to a widow under FEGLIA's statutory order of precedence.
2. Whether the widow's receipt of FEGLIA proceeds under the federal payment scheme prevented a Mississippi court from determining that retaining the proceeds constituted unjust enrichment and imposing a constructive trust for the decedent's children.

Disposition

reversed_and_remanded