Tortious Interference with Expectancy of Inheritance: New
Tort, New Trap
Probate lawyers and judges should familiarize themselves
with the elements of tortious interference and consider when a claim might be
appropriate to pursue, what defenses may be raised, and how to harmonize it with
Arizona’s probate law.
It could be the perfect crime.
Uncle has a will that leaves everything equally to his only
surviving relations, Niece and Nephew. Niece lives in a different state, leaving
Nephew to look after Uncle’s needs. Resentful of this burden, Nephew decides to
take matters into his own hands. He isolates Uncle from outside contact, tells
him lies about Niece’s character and behavior, defrauds him into immediately
signing over his house, and threatens to cut off cable service and worse unless
the kindly old gentleman rewrites his will. After months of this treatment and
enfeebled by mental deterioration, Uncle finally breaks down and executes a new
will which leaves everything to Nephew and nominates him to be personal
representative of the estate.
Why the perfect crime? Because Nephew has virtually nothing to
lose. If Niece gets wind of the scheme, she can contest the will on the basis of
capacity, fraud and undue influence. But if she wins, the previous will is
reinstated (or Uncle is deemed to have died intestate) and Nephew is out only
the half of the estate he had snatched from his sister. In other words, he is
right back where he started, with no penalty paid for his conduct. Indeed,
unless Niece can successfully challenge the inter vivos transfer as well, Nephew
keeps the house because it is no longer part of Uncle’s estate. Chances are that
Niece, confronting expensive litigation in a distant state and the daunting
burden all will contestants face, will settle for less than her half. Nephew
wins again. And regardless of the outcome, Uncle’s estate pays for Nephew’s
lawyers.
All is not lost for Niece, however. If Nephew lives in one of an
increasing number of states, he can be found liable for tortious interference
with expectancy of inheritance. Based on the traditional tort of intentional
interference with contractual relations, this emerging theory provides
disappointed heirs with their day in court even if a traditional probate action
would afford little or no relief. Moreover, it permits the recovery of punitive
damages and attorney’s fees, which a will contest normally does not.
Elements
If an Arizona court were to entertain a cause of action for
tortious interference with expectancy, it is likely that the court would look to
the Restatement to supply the required elements. Section 774B of the Restatement
(Second) of Torts, “Intentional Interference with Inheritance or Gift,” provides
as follows:
One who by fraud, duress or other tortious means intentionally
prevents another from receiving from a third person an inheritance or gift that
he would otherwise have received is subject to liability to the other for loss
of the inheritance or gift.
Courts generally have held that a plaintiff must plead and prove
the following five elements:
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The existence of an expectancy.
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The defendant’s intentional interference with that expectancy.
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Interference that constitutes conduct tortious in itself.
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Reasonable certainty that the devise would have been received by
the potential devisee but for the defendant’s interference.
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Damages.
1. Existence of an Expectancy. The most frequently contested
element of the tort is whether a plaintiff had a legitimate expectancy. The
clearest proof of an expectancy is an earlier will. The plaintiff in such a case
need merely establish that the revocation of the earlier will was the product of
tortious conduct. A draft or a testator’s written intention may be sufficient to
establish an expectancy.
But an expectancy may exist even without proof of the decedent’s
intent. Under the Restatement, “inheritance” includes “any property that would
have passed to the plaintiff by intestate succession.” Under Arizona’s intestacy
statutes, a long-estranged son or daughter could establish expectancy based
solely on the parent-child relationship.
Perhaps inadvertently, a Florida court has implied that the mere
allegation that a decedent intended to make a bequest creates an issue of fact
as to the decedent’s state of mind, an issue to be decided at trial:
It is our opinion that when there is an allegation that the
testator had a fixed intention to make a bequest in favor of the plaintiff and
there existed a strong possibility that this intention would have been carried
out but for the wrongful acts of the defendant there exists a cause of action.
While it is true that such a cause of action is difficult to prove, that does
not affect the existence of a ground of tort liability.
It is doubtful the court intended such a broad interpretation:
under this reasoning, virtually any complaint, no matter how specious, which
included the bare allegation that the decedent intended a bequest could survive
summary judgment. Other jurisdictions have required written evidence of the
testator’s intent.
Because revocable inter vivos trusts often function as will
substitutes, several courts have held that a beneficiary’s expectancy under such
a trust can form the basis of a tort action.
2. Intentional Conduct. This is an intentional tort. Mere
negligence or even recklessness in breaching a duty to use reasonable care does
not rise to the level of intentional conduct. Nevertheless, some commentators
have suggested that negligent interference may be actionable where a special
relationship exists between testator and defendant.
In contrast to a will contest based on undue influence, where
the contestant must establish that the free will of the testator was overborne,
a tortious interference claim does not require such a proof. Rather, the focus
is on the defendant’s intention: whether the defendant intended to interfere
with an inheritance and acted on that intention. But as with most intentional
torts, proving a defendant’s state of mind can be difficult.
3. Independently Tortious Conduct. It is not enough for a
plaintiff to show that the defendant intended to interfere with an inheritance.
A plaintiff also must prove that the defendant’s conduct was independently
actionable. “The usual case is that in which the third person has been induced
to make or not to make a bequest or a gift by fraud, duress, defamation or
tortious abuse of a fiduciary duty, or has forged, altered or suppressed a will
or a document making a gift.” As in an undue influence contest, legitimate means
of persuasion are not actionable.
4. Causation/Reasonable Certainty. A plaintiff who makes it this
far faces another hurdle: establishing “but for” causation. “[T]here must be
proof amounting to a reasonable degree of certainty that the bequest or devise
would have been in effect at the time of the death of the testator … .”
Complete certainty is not required.
The causation requirement raises an interesting question: may a
plaintiff bring a tortious interference claim before the testator dies?
Conventional wisdom would reject such a claim, as causation could not be
established – no one, not even the testator, could predict what the testator
would want at death. Some jurisdictions, however, have permitted such an action
to proceed under certain circumstances. In Carlton v. Carlton, for example, the
testator remained alive but the alleged tortfeasor had died. If the plaintiffs
were forced to wait until the testator’s death, the statute of limitations on
creditor’s claims could have barred their claims against the tortfeasor’s
estate. In general, however, courts have refused to extend pre-death suits
beyond the extraordinary circumstances of Carlton.
5. Damages. Damages typically consist of the value of the
property plaintiffs would have received in the absence of the tortious conduct.
Because the defendant has interfered with an expectancy, not a certainty, and
because the testator can change his or her mind prior to death, the nature and
amount of damages are necessarily speculative and uncertain. If the tortfeasor
received any property, a court may place a constructive trust or equitable lien
on the property or execute a monetary judgment.
Consequential damages, such as damages for emotional distress,
are also available, as are punitive damages. Indeed, a successful will
contestant may be well advised to bring a subsequent action for tortious
interference, seeking punitive damages in the amount of the attorney’s fees
incurred in the will contest.
Finally, a payment made in settlement of an interference claim
is not deductible as a claim against the estate because the damages are not a
personal obligation of the decedent or the estate.
Prerequisites
Most states that have considered the issue have held that a
claim for tortious interference with expectancy of inheritance may only be
brought where conventional probate relief would be inadequate. A deprived
legatee must either make an attempt to probate the offending will or show that
such a probate is impossible. If a will contest is available to the plaintiffs,
and a successful contest would provide complete relief, no tort action is
warranted. Likewise, the action may not be brought where the offending will has
been probated, and plaintiffs had adequate notice of the probate proceedings and
an opportunity to contest. If an earlier will exists on which plaintiffs base
their claim, they should attempt to probate that will and contest the later will
by conventional means.
If, however, plaintiffs allege that a will’s proponents also
induced the decedent to make inter vivos transfers to them, thereby reducing the
size of decedent’s estate, plaintiffs may bring a tortious interference claim in
conjunction with a will contest: in such a case, a successful will contest by
itself would reinstate the earlier will but would not provide the plaintiffs
with full relief. A plaintiff who is fraudulently induced to forgo a will
contest during the limitations period may bring a subsequent action for tortious
interference.
Some courts permit plaintiffs to bring a will contest and a tort
action simultaneously, even in cases where the probate action, if successful,
would provide complete relief. A successful will contest would necessitate the
dismissal of the tort action. However, if the contest were to fail, the
plaintiffs’ probate remedy would be inadequate and the tort action could
proceed.
Punitive damages are generally not available in a will contest.
This unavailability does not itself constitute inadequate relief, such that a
contestant would be permitted automatically to bring a tort action in which such
damages are sought.
As with any collateral action, res judicata and issue preclusion
could bar a subsequent tort suit. The grounds for a will contest – fraud,
duress, undue influence, etc. – can also form the basis for an interference
claim. If the particular issue is fully litigated in the will contest, a
plaintiff may not bring a tort action on the same theory.
On the other hand, exceptions may arise in those jurisdictions
that require differing standards of proof. In Peffer v. Bennett, for example, a
plaintiff succeeded in invalidating a will on a theory of undue influence. The
probate court’s finding of constructive fraud was based on the parties’
relationship rather than on any proof of actual intent to deceive. Therefore,
the doctrine of collateral estoppel did not bar the defendant from defending
against a subsequent fraud action.
Properly enforced, the prerequisite of inadequate probate relief
would reduce the risk of frivolous or abusive filings. In our example, Niece
could bring her claim because the inter vivos transfer of the house reduced the
amount available to her under the previous will. Niece would not obtain complete
relief in a successful will contest.
Dangers
The advantages of the theory are clear. The disadvantages,
although less obvious, are no less important. First, the tort can play havoc
with traditional probate law. In Arizona, as in most states, a presumption of
testacy attaches to a will admitted to probate: testators may do what they wish
with their estates, absent a statutory prohibition, and the courts do not
substitute their judgment for the testators’. A contestant must prove, by clear
and convincing evidence, that a will was the product of undue influence.
Contestants whose evidence would not survive summary judgment may be tempted to
throw in a tortious interference claim, lessen the burden of proof, and thereby
do an end-run around settled probate law.
Second, the litigation could deteriorate into sheer speculation
as both sides argue what the decedent would have done, had certain events not
occurred. The evidentiary morass could exasperate even an experienced judge and
thoroughly befuddle a jury as it attempted to separate fact from argument.
Third, a contestant who loses a will contest may bring a
subsequent tort action, receive one more crack at the prize and delay the
administration of the estate. The will’s proponents may find it more economical
to settle a frivolous claim than to subject the family to two lengthy court
proceedings.
Fourth, “to allow what amount to collateral attacks on the
determinations of courts sitting in probate” could result in fraud, inconsistent
judgments and a general assault on the concept of issue preclusion.
Fifth, the existence of the tort changes the rules for estate
planning. Unless named as a beneficiary of the estate plan, a drafting attorney
is rarely subject to liability if a will contest is successful. But in an action
for tortious interference, the drafting attorney could be named as a defendant
and drawn into expensive – and reputation-damaging – litigation.
Perhaps the greatest danger posed by the tort, at least at this
point, is the unsettled state of the law. An unscrupulous attorney or a
sympathetic judge faced with circumstances in which conventional relief is
unavailable could expand the tort into an exception that would swallow the
conventional rule.
Let us change the facts of our illustration. Suppose Niece is
the in-state caregiver and performs her duties without complaint. Uncle, in full
command of his faculties, decides to change his will to reward Niece at the
expense of the distant ne’er-do-well Nephew. Conventional probate law stacks the
deck against Nephew. To set aside the will, he must either prove that Uncle was
incapacitated at the moment he put pen to paper, or prove, by clear and
convincing evidence, that Niece unduly influenced or defrauded their uncle. But
a tortious interference theory provides Nephew with another arrow for his
quiver. As one of Uncle’s heirs, and with the earlier will in hand, he satisfies
the expectancy element. If he can survive the prerequisite of inadequate probate
relief – or convince the court that no such prerequisite applies in the state –
he can avoid probate’s traditional burdens of proof and the presumption of
Uncle’s capacity and intent. Niece’s chances of disposing of the case through a
pre-trial motion are slim. She is faced with the unpalatable choice of either
footing the bill for extensive litigation and a trial or paying Nephew to settle
his meritless claim. Until the law of the tort develops more fully, courts may
be unable or unwilling to weed out the frivolous actions at an early stage.
Conclusion
Arizona has not yet recognized a claim for tortious interference
with expectancy of inheritance. But the tort has appeared in an increasing
number of jurisdictions and in the Restatement of Torts, to which Arizona looks
to fill the interstices in its law. Therefore, the question of Arizona’s
recognition is probably not if, but when. Probate lawyers and judges should
familiarize themselves with the elements of the tort and consider when such a
claim might be appropriate to pursue, what defenses may be raised to counter it,
and how best to harmonize this theory with Arizona’s existing probate law. |
