Rice v. Garrison

Lockett, J.,

dissenting: I respectfully dissent. The majority does not cite a case supporting its finding that a constructive trust cannot be imposed on the proceeds of the optional life insurance policy issued through KPERS. The majority merely concludes that because of the nature of the trust fund and because KPERS has a rule that requires an employee to have the same beneficiary under the State retirement plan and the additional insurance policy, the district court was precluded from using its equitable powers to impose a constructive trust.

The general rule is that the insured’s designation of a beneficiary is ordinarily controlling. There are exceptions to the general rule. See Brown v. Modem Woodmen, 97 Kan. 665, 156 Pac. 767 (1916). Under one exception, the district court has the equitable power to create a constructive trust of fire proceeds of an insurance policy when it determines there is an unjust enrichment to the named beneficiary. Tivis v. Hulsey, 148 Kan. 892, 84 P.2d 862 (1938). Under our prior decisions, the exception would also apply to the optional life insurance policy issued through KPERS.