## Facts

- In 1968, Jerome C. Rogers and his first wife, Susan Rogers, executed a separation agreement (incorporated into their divorce decree).
- The agreement required Jerome to keep in force his then-existing life insurance policy for approximately $15,000 and to name Susan and their children as equal, irrevocable beneficiaries.
- Jerome’s existing coverage was a $15,000 group policy through his employer; it terminated in 1970 when he left that employment.
- Jerome remarried in 1974.
- In 1976, through a new employer, Jerome became insured under a new $15,000 group policy issued by Phoenix Mutual Life Insurance Company and named his second wife, Judith Rogers, as beneficiary.
- Jerome died in 1980; both Judith and Susan/children asserted claims to the Phoenix proceeds.
- Phoenix paid the proceeds to Judith after notifying plaintiffs it would do so unless restrained by court order.
- Plaintiffs sued to impose a constructive trust on the Phoenix proceeds, alleging the separation agreement created an equitable right to the promised insurance benefit.

## Issues

1. Whether a separation agreement obligating a spouse to maintain an existing life insurance policy naming the first wife and children as irrevocable beneficiaries creates an equitable interest enforceable against proceeds of later-acquired substitute insurance.
2. Whether a constructive trust may be imposed on the proceeds of a later policy naming a different beneficiary when the original policy lapsed due to termination of employment and the agreement did not expressly require replacement coverage.

## Decision

- The Court of Appeals reversed the dismissal of the complaint and the affirmance by the Appellate Division.
- The court held that plaintiffs had an equitable interest arising from the separation agreement sufficient to support a constructive trust.
- The court imposed a constructive trust on the Phoenix policy proceeds in favor of Susan and the children, notwithstanding that the Phoenix policy named Judith as beneficiary.
- The court directed entry of judgment awarding the $15,000 proceeds to plaintiffs in equity.

## Legal Principles

- A separation agreement provision requiring life insurance for the benefit of a spouse and children—particularly where they are designated irrevocable beneficiaries—may vest them with an equitable interest in the promised insurance protection.
- If the obligor allows the original policy to lapse and later obtains substitute insurance while naming a new beneficiary without consideration, equity may impose a constructive trust on the substitute policy’s proceeds to prevent unjust enrichment.
- In enforcing such agreements, courts may treat changes in the form or source of coverage as insufficient to defeat the promise’s intended protective function, and may relax strict tracing requirements where the obligor’s conduct defeats the agreed protection.

## Conclusion

The court enforced the divorce-related insurance obligation in equity by imposing a constructive trust on the proceeds of later substitute coverage, preventing the second spouse—named beneficiary of the later policy—from retaining benefits inconsistent with the first family’s equitable rights under the separation agreement.


Rogers v. Rogers, 63 N.Y.2d 582, 473 N.E.2d 226 (N.Y. 1984)