Ridgway v. Ridgway, 454 U.S. 46 (1981)

Ridgway v. Ridgway

No. 80-1070

Argued October 7, 1981
Decided November 10, 1981
454 U.S. 46

CERTIORARI TO THE SUPREME JUDICIAL COURT OF MAINE

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Syllabus

When Army Sergeant Ridgway and his first wife, April, were granted a divorce by a Maine court, the decree, inter alia, ordered Ridgway to keep in force the insurance policies on his life then outstanding for the benefit of the Ridgways’ three children. At the time of the divorce, the sergeant’s life was insured under a $20,000 policy issued by petitioner Prudential Insurance Co. of America (Prudential) pursuant to the Servicemen’s Group Life Insurance Act of 1965 (SGLIA), and April was the designated beneficiary. Subsequently, Ridgway married petitioner Donna, and changed the policy’s beneficiary designation to one directing that the proceeds be paid as specified "by law," which meant that, under the SGLIA, the proceeds would be paid to the insured’s "widow," i.e., his "lawful spouse . . . at the time of his death." Thereafter, Ridgway died, survived by Donna as his lawful wife. After April and Donna had both filed claims to the policy proceeds, April instituted suit in Maine Superior Court against Prudential, seeking to enjoin payment of the proceeds to Donna and to obtain a declaratory judgment that the proceeds were payable to the children under the divorce decree. Donna joined the suit as a plaintiff, asserting a claim to the proceeds based on the beneficiary designation and her status as Ridgway’s widow. April filed a cross-claim, praying for the imposition of a constructive trust for the children’s benefit on any proceeds paid to Donna. The Superior Court rejected April’s claims, taking the view that a constructive trust would interfere with the operation of the SGLIA, and thus would run afoul of the Supremacy Clause. The Maine Supreme Judicial Court vacated the dismissal of April’s cross-claim, and remanded with directions to enter an order naming Donna as constructive trustee of the policy proceeds.

Held: The insured’s beneficiary designation under the SGLIA policy prevails over the constructive trust imposed upon the policy proceeds by the state court. Pp. 533.

(a) As a consequence of the Supremacy Clause, a state divorce decree, like other law governing the economic aspects of domestic relations, must give way to clearly conflicting federal enactments. Here, the provisions of the SGLIA according the insured service member the right freely to designate the beneficiary and to alter that choice at any time by communicating the decision in writing to the proper office prevail over and displace inconsistent state law. Wissner v. Wissner, 338 U.S. 665 controlling; Yiatchos v. Yiatchos, 376 U.S. 306, distinguished. Pp. 53-60.

(b) The imposition of a constructive trust upon the insurance proceeds is also inconistent with the provision of the SGLIA which, in addition to exempting policy proceeds "from the claims of creditors," prohibits any "attachment, levy, or seizure by or under any legal or equitable process whatever," whether accomplished "either before or after receipt by the beneficiary." Any diversion of the proceeds of the policy by means of a court-imposed constructive trust would operate as a forbidden "seizure" of those proceeds. Pp. 60-61.

419 A.2d 1030, reversed.

BLACKMUN, J., delivered the opinion of the Court, in which BURGER C.J., and BRENNAN, WHITE, and MARSHALL, JJ., joined. POWELL, J., filed a dissenting opinion, in which REHNQUIST, J., joined, post, p. 64. STEVENS, J., filed a dissenting opinion, post, p. 71. O’CONNOR, J., took no part in the consideration or decision of the case.