Crawford v. Haddock, Record No. 050236.

• Citation: 621 S.E.2d 127
• Decision Date: 04 November 2005
• Docket Number: Record No. 050236.
• Parties: Destiny Joy CRAWFORD, et al. v. Terry B. HADDOCK, et al.
• Court: Virginia Supreme Court

621 S.E.2d 127

Destiny Joy CRAWFORD, et al. v. Terry B. HADDOCK, et al.

Record No. 050236.

Supreme Court of Virginia.

November 4, 2005.

Jack E. Ferrebee (Hofheimer/Ferrebee, on briefs), Virginia Beach, for appellants.

M. Michelle P. McCracken (Fine, Fine, Legum & McCracken, on brief), Virginia Beach, for appellee Terry B. Haddock.

No brief or argument for appellee Eloisa O. Crawford.

Present: All the Justices.

DONALD W. LEMONS, Justice.

In this appeal, we consider whether the trial court erred in its judgment that Code § 51.1-510 bars imposition of a constructive trust upon proceeds from a Virginia Retirement System group life insurance policy. For the reasons discussed herein, the judgment of the trial court will be affirmed.

I. Facts and Proceedings Below

This appeal arises from an interpleader action filed by Minnesota Life Insurance Company ("Minnesota Life") requesting the trial court to determine the proper distribution of proceeds of a life insurance policy insuring the life of Steven Mark Crawford ("Steven"). Steven was insured under a group life insurance policy issued to the Virginia Retirement System ("VRS") pursuant to Title 51.1 of the Code of Virginia. On January 24, 2000, Steven designated his sister, Terry B. Haddock ("Terry"), as the sole beneficiary of his life insurance policy. Steven died on January 13, 2003.

In addition to Terry, Minnesota Life named Eloisa O. Crawford ("Eloisa"), Destiny Joy Crawford ("Destiny"), Scott Zachary Crawford ("Scott"), and Micah Zebulon Crawford ("Micah") as defendants in its interpleader action. Eloisa was Steven's third wife and his surviving legal spouse at the time of his death. Destiny is Steven's daughter from his second marriage. Scott and Micah are Steven's sons from his first marriage.

Minnesota Life paid the life insurance proceeds, plus the accrued interest, into the trial court and was discharged. The trial court then ordered each of the defendants to file written statements as to the nature of their respective claims. Terry claimed that she was entitled to the benefits because she was the sole designated beneficiary. Eloisa responded that, as Steven's surviving legal spouse, she was either the sole beneficiary of Steven's life insurance policy or entitled to her elective share of Steven's augmented estate. Destiny stated that she was entitled to the proceeds because the separation agreement between Steven and Destiny's mother, entered on February 7, 2000, named her as the "primary irrevocable beneficiary" of Steven's life insurance policy.¹ Finally, Scott and Micah argued that, pursuant to the separation agreement between Steven and their mother entered on April 7, 1992, they were each entitled to $25,000 from the proceeds of Steven's life insurance policy.² With the exception of Terry, each of the defendants also asked the trial court to impose a constructive trust upon the life insurance proceeds.

After the defendants filed their respective answers, Terry filed a motion for summary judgment. In it she claimed that there was no material fact in dispute and that Code § 51.1-510 exempted Steven's life insurance proceeds "from levy, garnishment[,] and other legal process including imposition of [the] constructive trust" sought by the other defendants. Therefore, Terry argued that she was entitled to all of the proceeds because she was the sole designated beneficiary.

The trial court granted Terry's motion for summary judgment, stating that the "anti-alienation, anti-attachment provisions set forth [in Code § 51.1-510] bars [sic] the imposition of [the] constructive trust" sought by Eloisa, Destiny, Scott, and Micah. The trial court noted that Eloisa had filed a separate suit asserting her elective share in Steven's augmented estate and specifically did not rule regarding the validity of this claim by Eloisa.

Destiny, Scott, and Micah filed timely appeals,³ which we subsequently granted in order to consider two assignments of error: (1) error by the trial court "in denying the imposition of a constructive trust by declining to apply the child support exception provided in" Code § 51.1-124.4 to Code § 51.1-510; and (2) error by the trial court "in not distinguishing the enforcement of the life insurance obligations of the insured to his children from ordinary commercial debts."

II. Analysis

In the instant case, no material facts are in dispute. This appeal is a matter of statutory interpretation and is therefore "a pure question of law subject to de novo review." Horner v. Dep't of Mental Health, Mental Retardation & Substance Abuse Servs., 268 Va. 187, 192, 597 S.E.2d 202, 204 (2004). When interpreting statutes,

courts must ascertain and give effect to the legislature's intention, which is to be deduced from the words used, unless a literal interpretation would result in a manifest absurdity. When, as here, the General Assembly uses words that are clear and unambiguous, courts may not interpret them in a way that amounts to a holding that the legislature did not mean what it actually has expressed. In other words, courts are bound by the plain meaning of clear statutory language.

Id. at 192, 597 S.E.2d at 204 (citations omitted). In a situation where "`one statute speaks to a subject generally and another deals with an element of that subject specifically, the statutes will be harmonized, if possible, and if they conflict, the more specific statute prevails.' This is so because `a specific statute cannot be controlled or nullified by a statute of general application unless the legislature clearly intended such a result.'" Gas Mart Corp. v. Board of Supervisors, 269 Va. 334, 350, 611 S.E.2d 340, 348 (2005) (quoting Commonwealth v. Brown, 259 Va. 697, 706, 529 S.E.2d 96, 101 (2000)).

On appeal, Destiny, Scott, and Micah argue that the exceptions enumerated in Code § 51.1-124.4 apply to all of Title 51.1, and that these exceptions are not modified by Code § 51.1-510. They argue that the trial court failed to properly harmonize the statutes and incorrectly held that a constructive trust could not be imposed upon Steven's life insurance proceeds. The arguments advanced by Destiny, Scott, and Micah are incorrect.

Code § 51.1-124.4, part of the "General Provisions" addressing the Virginia Retirement System ("VRS") in Chapter 1 of Title 51.1, states that an individual's VRS assets "shall not be subject to execution, attachment, garnishment, or any other process whatsoever." Code §...