Dora Ernestine Luck Barnett, et al. v. Marleen Kovalchik Barnett

Summary

The Supreme Court of Texas held that a term life insurance policy issued during marriage through an ERISA employee benefit plan was community property under Texas law. However, it held that the surviving wife's claims for constructive fraud on the community and imposition of a constructive trust on the policy proceeds were preempted by ERISA. The court reversed the judgment in part and otherwise affirmed and remanded for further proceedings.

Holdings

1. A term life insurance policy issued during the marriage is presumed to be community property under Texas law when it was not a renewal or mutation of an earlier policy that existed before marriage.
2. ERISA preempts a Texas community-property claim for constructive fraud when the claim would give the surviving spouse an interest in proceeds of an ERISA-governed life insurance plan contrary to the beneficiary designation and plan documents.
3. The constructive-trust remedy is likewise preempted because it rests on the underlying community-property right and would require recovery of proceeds in a manner inconsistent with the ERISA plan's beneficiary designation.
4. The challenges to the court of appeals' disposition of the surviving-spouse allowance and attorney's-fee issues lack merit.

Questions Presented

1. Whether the Prudential term life insurance policy issued during the marriage was community property or Christopher's separate property.
2. Whether ERISA preempted Marleen Barnett's Texas-law claim for constructive fraud on the community based on the disposition of the Prudential policy proceeds.
3. Whether ERISA preempted the corresponding constructive-trust remedy.
4. Whether the challenges to the surviving-spouse allowance and attorney's-fee award had merit.

Disposition

reversed_and_remanded