Opinion ID: 1110248
Heading Depth: 2
Heading Rank: 4

Heading: MissouriKidd v. Pritzel

Text: ¶ 18. In Kidd v. Pritzel, 821 S.W.2d 566 (Mo.Ct.App.1991), the Missouri Court of Appeals similarly dealt with the issue of whether FEGLIA preempted equitable state law claims. In Kidd, the federal employee, Mr. Kidd, as part of a settlement agreement to his divorce, agreed to maintain his four children of that marriage as the beneficiaries of his life insurance policy written under FEGLIA. Id. at 567. Later, Mr. Kidd executed a designation of beneficiary form with his employer that instead named his two sisters as the beneficiaries of the FEGLIA policy. Id. Later still, Mr. Kidd executed his will that provided, inter alia, that the entire residue of his estate (including the FEGLIA policy) would go into a trust, with his sisters as the trustees, and his children as sole beneficiaries. Id. The trust would remain in effect until his last child was emancipated, then the remainder would be divided equally among the children. Id. ¶ 19. A few years after the last child was emancipated, Mr. Kidd died. Id. In accord with the designation of beneficiary form, the proceeds from the FEGLIA insurance policy were paid to the sisters. Id. Instead of placing the policy proceeds in the trust or dividing the proceeds among the children, as required by the will, the sisters kept the proceeds for their own benefit. Id. The children filed a petition to recover the trust assets and remove the sisters as trustees. Id. The sisters filed a motion for summary judgment, which the court granted, holding that the children's claims were preempted by the FEGLIA statute. Id. at 568. ¶ 20. On appeal, the Missouri court first noted the instances where federal law preempts state law: Where a federal statute contains specific language of preemption; when federal regulation is so persuasive that Congress left no room to supplant it; or when state law stands as an obstacle to congressional intent. Id. (citing Tectonics, Inc. of Fla. v. Castle Constr. Co., 753 F.2d 957, 961 (11th Cir. 1985)). Next, the Missouri court noted that Congressional intent is the guidepost to judicial interpretation of federal statutes. Id. (citing Stribling v. United States, 419 F.2d 1350, 1350 (8th Cir.1969)). Then the court examined the legislative history behind FEGLIA to determine whether Congress intended FEGLIA to preempt state law claims: FEGLIA was first proposed in 1954 for the purpose of providing low cost group life insurance to federal employees. 1954 U.S.Code Cong. & Admin. News., Volume 2, p. 3052. The Congressional committee which introduced the bill felt it was one of the important new proposals necessary to provide federal employees with a well-rounded personnel program and that the bill carried out the plan outline by President Eisenhower in his message to Congress of May 19, 1954. In that message President Eisenhower noted that there were two predominant features which made the plan especially advantageous to government and its personnel. First, it allowed federal employees to carry out their responsibilities to their families, and secondly, it made available group life insurance which was an essential element in the development of a comprehensive personnel program that applies to Government service the best practices of progressive, private employers. Id. (internal citations omitted). The Missouri court then examined § 8705, and § 8509(d)(1) of the statute, and 5 C.F.R § 870.902, sections cited by the sisters as proof of Congress's intent that FEGLIA preempt all state law claims.