Torts and estates: remedying wrongful interference with inheritance.
INTRODUCTION I. FREEDOM OF DISPOSITION AND THE LAW OF INHERITANCE A. Freedom of Disposition B. Safeguarding Freedom of Disposition Through Will Contests and Restitution Actions 1. Will contests a. Inferences, presumptions, and burden shifting b. Other specialized procedural rules 2. Restitution by way of constructive trust a. Remedying wrongful interference with will formation or revocation b. Remedying "extrinsic fraud" c. The capaciousness of restitution II. THE EMERGENCE OF THE INTERFERENCE-WITH-INHERITANCE TORT A. Nineteenth and Early Twentieth Century Doctrine B. The First and Second Restatements of Torts C. Recognition in Contemporary Law III. REDUNDANCY AND CONFLICT WITH INHERITANCE LAW A. Bohannon and the Confused Origins of the Tort B. An Unnecessary Tort: The Forgetting of Restitution 1. Interference with a nonprobate transfer 2. Fraud in connection with a probate proceeding 3. Inter vivos transfer that depletes the estate C. Reform Without Reason and "Adequacy of Probate" 1. Rivaling the will contest 2. Unprincipled application of the "adequacy of probate" rule IV. THE INCONGRUITY OF INTERFERENCE WITH INHERITANCE AS A TORT A. Interference with Inheritance as a Derivative Claim B. Interference with Inheritance as a Primary Claim 1. Multiple primary claims versus derivative claims 2. The implausibility of a right in the expectant beneficiary 3. The special case of malicious interference C. The Realist Conception of Tort: Law and Equity Revisited 1. The imperialism of Realist tort 2. Law, equity, and the inapt analogy to legal malpractice CONCLUSION
Spurred by an innovative Restatement provision (1) and two U.S. Supreme Court decisions in a case involving former Playboy Playmate Anna Nicole Smith, (2) courts, lawyers, and legal scholars are increasingly inclined to recognize a tort cause of action for wrongful interference with an expected inheritance. An extension of actions for interference with contract and commercial expectancies, the interference-with-inheritance tort subjects to liability one who, by tortious means, intentionally prevents another from receiving an inheritance. (3)
For example, suppose that Goneril fraudulently induces Lear to execute a new will in Goneril's favor and to revoke Lear's prior will in favor of Cordelia. (4) Under section 774B of the Second Restatement of Torts and case law in about twenty states, (5) Cordelia can sue Goneril for tortious interference with Cordelia's expected inheritance, have the claim tried before a jury, and recover compensatory damages (including damages for pain and suffering) and possibly punitive damages. In some states, Cordelia can commence her tort suit prior to Lear's death even though Lear could thereafter change his will yet again. (6)
Bucking the current trend, we argue that the interference-with-inheritance tort should be repudiated. Because courts are increasingly being asked to recognize the tort, (7) because the American Law Institute (ALI) will revisit the instigating Restatement provision in the next few years, (8) and because we are in the midst of a massive intergenerational transfer of wealth, (9) the soundness of the tort is a pressing policy issue in need of close scrutiny.
The tort is problematic because it is both redundant and in conflict with the law of inheritance, (10) The organizing principle of American inheritance law is the donor's right to freedom of disposition. (11) A prospective beneficiary's expectancy of a future inheritance is entirely dependent on the donor's exercise of this right in favor of the beneficiary. Inheritance law thus does not afford a prospective beneficiary direct recourse for harm suffered as a consequence of a third party's interference with the beneficiary's expected inheritance. Instead, the disappointed expectant beneficiary may bring actions in probate or in restitution by way of constructive trust to vindicate the donor's right to freedom of disposition.
Accordingly, in almost any circumstance in which a prospective beneficiary could make out a tort claim to remedy wrongful interference with an expected inheritance, those same interests could be vindicated through the traditional inheritance law procedures of a probate will contest or an action in restitution. The remaining circumstances in which the tort has been invoked, typically involving fraud in a probate proceeding or wrongful procurement of an inter vivos transfer that depletes the decedent's estate, are likewise covered by well-established non-tort procedures.
What makes the redundancy between tort law and inheritance law pernicious is that tort, as a general law of wrongful injury, is ill-suited to posthumous reconstruction of the true intent of a decedent. Such an undertaking, which is hampered by the inability of the decedent to give testimony to authenticate or clarify his intentions, requires the court to distinguish between legitimate persuasion and "undue influence" or "duress," and to do so in the context of nuanced family dynamics and customs that are often inaccessible to outsiders. In contrast to tort law, inheritance law has developed a host of specialized doctrines and procedures to deal with these difficulties. (12) There is thus little reason to suppose that tort concepts and procedures, which have developed primarily to deal with less subtle forms of injurious misconduct, will help courts better distinguish a bona fide claim of wrongful interference from a strike suit by a disappointed expectant beneficiary.
Because the interference-with-inheritance tort changes the rules under which inheritance disputes are litigated and offers different remedies than inheritance law, recognition of the tort is in truth recognition of a rival legal regime for addressing these same problems. The tort allows a disappointed expectant beneficiary to choose his preferred rules of procedure and potential remedies--the specialized rules of inheritance law, or the general civil litigation rules of tort law. This development is troubling because it has arisen without consideration of the reasons for the specialized rules of inheritance law. Courts have offered little justification for the creation of this alternative regime. Some have reasoned, incoherently, that the tort is redundant with inheritance law yet necessary to fill gaps in that law. Other courts have allowed interference claims to proceed under different rules and to obtain different remedies for no other reason than the plaintiff chose to sue in tort rather than to bring a will contest or an action in restitution.
This pattern of unreflective law reform might be understandable if interference with inheritance presented a clean example of tortious conduct. But in fact it makes for an awkward tort. (13) As stated authoritatively in section 774B of the Second Restatement of Torts, an interference-with-inheritance claim must be premised on conduct that is "independently tortious" in character--that is, the sort of wrongful conduct that would in other contexts support tort liability. (14) Yet neither undue influence nor duress, both typical allegations in these kinds of cases, is independently tortious in this sense. (15)
More fundamentally, the interference-with-inheritance tort runs afoul of the basic principle that a tort claim vindicates the plaintiff's own right not to be mistreated rather than the rights of others. In Justice Cardozo's canonical formulation, a tort plaintiff must "sue in her own right for a wrong personal to her, and not as the vicarious beneficiary of a breach of duty to another." (16) Yet in the teeth of this principle, some courts have characterized the tort as a means by which an expectant beneficiary can vindicate the donor's right to freedom of disposition. (17)
Other courts have characterized the interference-with-inheritance claim as alleging that the defendant's interference with the donor's intended disposition is also a violation of a freestanding right of the beneficiary. (18) But recognizing in the beneficiary a right to an expected inheritance brings tort law into direct conflict with the principle of freedom of disposition that undergirds inheritance law. The fundamental conflict between protecting an expected inheritance under the rubric of tort law while denying protection to the same interest under the rubric of inheritance law distinguishes the expectation of an inheritance from those "prospective advantages" that courts, working at the edges of tort doctrine, have sometimes protected from wrongful interference. (19)
The failure of courts and commentators to confront the conceptual and practical problems of the interference-with-inheritance tort is symptomatic of a larger wrong turn in modern thinking about tort law. The last seventy years have witnessed the rise to dominance of a "Realist" conception of tort law. On this view, tort law is a general grant of power to courts to shift losses from victims to antisocial actors when doing so might serve the goals of deterrence or compensation. The Realist conception strips away the structure and substance of tort law, including the core tenet that the plaintiff must establish that the defendant's conduct infringed a right personal to the plaintiff. Reduced to an open-ended invitation to courts to shift losses in the name of policy, tort threatens to swallow more structured bodies of law--in this instance, probate and restitution.
When legal academics today hail the virtues of interdisciplinary study, they have in mind the use of analytical methods developed in other disciplines, such as economics, psychology, and the other social sciences. An implicit claim of this Article is that interdisciplinary study across fields of law is no less important. That the ALI endorsed and the courts then recognized a new tort that so profoundly conflicts with fundamental inheritance law rules and policies is a clear example of the need for coordination among experts in different fields of law, particularly in law reform projects. The tort's ill-considered displacement of specialized inheritance law rules also provides a cautionary tale about the need for modesty in top-down reform of the common law through innovative Restatement and Uniform Act provisions that have not been tested in practice or vetted in the literature. (20)
The remainder of this Article is organized as follows. Part I provides a brief overview of inheritance law, focusing on the traditional mechanisms by which it deals with wrongful interference with a donor's freedom of disposition. Part II recounts the emergence of the interference-with-inheritance tort. Part III examines courts' confused and contradictory assertions that the tort is both redundant with inheritance law and yet necessary to fill gaps in that law. Part IV examines the conceptual flaws of the interference-with-inheritance tort and relates them to the tort's grounding in the problematic Realist conception of tort law.
I. FREEDOM OF DISPOSITION AND THE LAW OF INHERITANCE
We begin with an overview of freedom of disposition and the traditional procedures by which the law of inheritance protects that right against wrongful interference. Our aim is to demonstrate the grounding of inheritance law in the rights of the donor; the existence of ample procedures within inheritance law to protect those rights; and the extent to which those procedures have been designed to cope with the difficulties of posthumous reconstruction of the subtle dynamics of a decedent's familial and other close relationships as they pertain to the decedent's wealth.
A. Freedom of Disposition
The "organizing principle" of the American law of inheritance is "freedom of disposition." (21) Prevailing doctrine regards the right to dispose of one's property at death as a "separate, identifiable stick in the bundle of rights called property." (22) The Third Restatement of Property puts the point thus: "Property owners have the nearly unrestricted right to dispose of their property as they please.... American law does not grant courts any general authority to question the wisdom, fairness, or reasonableness of the donor's decisions about how to allocate his or her property." (23) The primary function of the law of inheritance is "to facilitate rather than regulate" the implementation of the donor's wishes. (24) The underlying policy value is that, although an "inheritance may grant wealth to donees without regard to their competence and performance, ... the economic reasons for allowing inheritance are viewed in terms of proper rewards and socially valuable incentives to the donor." (25)
The donor's freedom of disposition is, of course, subject to wealth transfer taxation and a handful of policy limitations. (26) But those policy limits tend to reflect venerable anti-dead-hand social values, such as the rule against perpetuities and the rule against trusts for capricious purposes, (27) or to be triggered by the donor's lifetime conduct, such as the mandatory spousal share and rules protecting creditors. (28) No limitation on the donor's freedom of disposition is rooted in the interest of a prospective beneficiary in receiving a future gratuitous transfer. To the contrary, American law denies the existence of any such interest.
The breadth of freedom of disposition under American law--in particular, the absence of a right in the decedent's children or other blood relatives to inherit-is unique among modern legal systems. (29) A classic teaching example is Shapira v. Union National Bank. (30) In that case, the court upheld a father's bequest to his son that was conditioned on the son marrying within seven years "a Jewish girl whose both parents were Jewish." (31) The court emphasized the father's right to "restrict a child's inheritance," even "entirely [to] disinherit his children." (32) The court regarded the son's "right to receive property by will" as "a creature of the law" subordinate to the father's freedom of disposition. (33)
An important corollary to the principle of freedom of disposition is that the donor remains free to revise her estate plan until the moment of death. Wills and other instruments of deathtime donative transfer, the latter called "will substitutes," (34) are "ambulatory," that is, subject always to amendment or revocation by the donor. (35) The interest of a prospective beneficiary under a will or will substitute does not ripen into a cognizable legal right until the donor's death. Until then, a prospective beneficiary has a mere "expectancy" that is subject to defeasance at the donor's whim. (36)
A similar analysis applies to the interest of a prospective intestate heir, called an "heir apparent." (37) The interest of an heir apparent is not a right but an expectancy that is contingent on the heir apparent surviving the donor and the donor not otherwise disposing of his property. (38) Like a prospective beneficiary, an heir apparent has no legally cognizable interest, not even a reliance interest, in an expected inheritance prior to the donor's death. (39)
To be sure, a donor can obligate himself by contract to make a particular disposition of certain property at death--for example, as part of a premarital agreement or a divorce settlement. (40) If the requirements of contract law for an enforceable promise are met, then the expectant beneficiary has a legally cognizable right and may enforce the donor's promise. (41) However, in such circumstances the expectant beneficiary's right arises in contract law and is rooted in the volitional lifetime act of the donor, much like a completed inter vivos gift.
An arresting illustration of the foregoing rights structure is found in the modern law governing revocable trusts. Unlike an irrevocable trust, in which the donor (the "settlor" in trust parlance) makes a completed gift for the benefit of the beneficiaries, in a revocable trust the settlor retains the power to revoke the trust and take back the trust property. A revocable trust is therefore a will substitute. (42) And just as the beneficiary under a will has no rights until the testator's death, under modern law the beneficiary of a revocable trust has no right to enforce the trust while the trust remains revocable. (43) Instead, so long as the settlor retains the power of revocation, the trustee is subject to the control of the settlor, and only the settlor may enforce the trustee's fiduciary duties. (44)
B. Safeguarding Freedom of Disposition Through Will Contests and Restitution Actions
It follows from the principle of freedom of disposition that "[a] donative transfer is invalid to the extent that it was procured by undue influence, duress, or fraud." (45) This rule, which pertains to both inter vivos and testamentary transfers, (46) safeguards the donor's right to freedom of disposition by ensuring that only a volitional exercise of that right is enforced. Inheritance law offers procedures for challenging a posthumous disposition on the grounds that it was wrongfully procured.
At the same time, courts have long recognized that posthumous litigation over wrongful interference with a donor's freedom of disposition poses an obvious and serious difficulty given the inability of the donor "to authenticate or clarify his declarations, which may have been made years, even decades past." (47) This "worst evidence" problem is inherent to the derivative structure of such litigation. (48) Although the competing claimants advance their own interests in the sense that each asserts a right to the donor's property, those claims are derivative of the donor's right to freedom of disposition. The worst evidence problem is aggravated by the fuzzy definition of undue influence, which is the most common basis for a will contest, and by the profound difficulty of reconstructing the subtle dynamics of familial and other close personal relationships.
Below we canvass the structure of posthumous litigation over wrongful interference with a donor's freedom of disposition. The traditional mechanisms for resolving such claims are (1) a will contest or (2) an action in restitution by way of constructive trust. Our aim is to demonstrate the capaciousness of these procedures and the extent to which they have been designed specifically to cope with the worst evidence problem, to give organizing structure to the nebulous concept of undue influence, and to deal with the difficulty of reconstructing the dynamics of familial relationships.
To be clear, we do not contend that procedures for inheritance disputes are now optimal, though they have come a long way from old English Chancery practice famously lampooned by Charles Dickens. (49) It may well be that other procedures would be more apt. Rather, our point is that the procedures and remedies in inheritance law for posthumous litigation over the intent of a decedent are rooted in principled policy decisions, ongoing and self-consciously made, about how best to resolve such matters given the derivative nature of the litigation and the worst evidence problem.
1. Will contests
A will contest is normally brought after the donor's death by a person who would take more from the decedent's estate if the contested will, amendment to the will, or revocation of a prior will were deemed invalid, (50) Standing to bring the contest is based on the contestant's position in the decedent's earlier, unaffected estate plan. (51) The purpose of a will contest is to vindicate the decedent's right to freedom of disposition. If the contestant prevails, the court will deny probate to the wrongfully procured will or amendment or probate the will that the decedent did not volitionally revoke.
The most common basis for a will contest involving wrongful interference is undue influence. (52) The Third Restatement of Property summarizes the concept thus:
The doctrine of undue influence protects against overreaching by a wrongdoer seeking to take unfair advantage of a donor who is susceptible to such wrongdoing on account of the donor's age, inexperience, dependence, physical or mental weakness, or other factor. A donative transfer is procured by undue influence if the influence exerted over the donor overcame the donor's free will and caused the donor to make a donative transfer that the donor would not otherwise have made. (53)
Two problems recur in undue influence litigation. First, shorthand formulations of undue influence, such as in the Restatement provision just quoted, do not answer the critical question of what influence is "undue." (54) In deciding this issue, the trier of fact inevitably will be affected by social context and the perceived fairness of the donor's dispositions. (55) Second, because direct evidence of undue influence is rare, in most cases the contestant must rely on circumstantial evidence. (56)
The combination of these two problems poses a systemic risk to the system of transferring wealth at death. Safeguarding freedom of disposition requires the court to invalidate a disposition that was not volitional because it was procured by undue influence. (57) But openness to circumstantial evidence facilitates the bringing of strike suits by disgruntled family members whom the decedent truly meant to exclude. (58) Moreover, the plasticity and vagueness of the undue influence concept allow judges and juries leeway to rewrite the decedent's estate plan in accordance with their own views of fairness and morality. (59)
a. Inferences, presumptions, and burden shifting
To impose structure on the unruly undue influence concept, courts have developed an elaborate scheme of inferences, presumptions, and burden shifting. The contestant normally has the burden of proving that a will was procured by undue influence. (60) But the trier of fact can infer undue influence from circumstantial evidence which shows that "(1) the donor was susceptible to undue influence, (2) the alleged wrongdoer had an opportunity to exert undue influence, (3) the alleged wrongdoer had a disposition to exert undue influence, and (4) there was a result appearing to be the effect of the undue influence." (61) This rule of inference brings order to the question of what circumstantial evidence is admissible.
In most jurisdictions, moreover, the contestant is entitled to a presumption of undue influence if she shows (1) the existence of a "confidential relationship" between the alleged influencer and the testator and (2) other "suspicious circumstances." (62) The rules for triggering this presumption--in particular, the meanings given to the terms confidential relationship and suspicious circum stances--help structure the difficult task of reconstructing the nature of the decedent's relationship with the alleged wrongdoer.
Confidential relationships encompass traditional fiduciary relationships, such as between a lawyer and client, as well as other relationships "based on special trust and confidence" that justify the donor in "placing confidence in the belief that the alleged wrongdoer would act in the interest of the donor." (63) For example, a confidential relationship may be found between a caregiver and an enfeebled patient or an adult child and an enfeebled parent. (64)
Suspicious circumstances include a will executed while the donor was in a weakened physical or mental state, the absence of an independent lawyer representing the donor's interests, the making of the will "in secrecy or in haste," and the making of a will that is a substantial departure from the donor's prior estate plan. (65) An especially powerful suspicious circumstance, which may give rise to an enhanced presumption of undue influence, is if "the disposition of the property is such that a reasonable person would regard it as unnatural, unjust, or unfair, for example, whether the disposition abruptly and without apparent reason disinherited a faithful and deserving family member." (66)
When a presumption of undue influence is triggered, the burden shifts to the proponent to come forward with rebuttal evidence--for example, by showing that the presumed influencer "acted in good faith throughout the transaction and the grantor acted freely, intelligently, and voluntarily." (67) In the absence of such evidence, the contestant is entitled to judgment as a matter of law. (68) The theory is that a person who benefits from a confidential relationship "can take precautions to ensure that proof exists that the transaction was fair and that his principal was fully informed, and he is in the best position after the transaction to explain and justify it." (69)
Estate of Lakatosh, decided by a Pennsylvania intermediate appellate court in 1994, (70) is typical in its underlying facts and in its resolution on the basis of a presumption of undue influence. Rose, an older woman in poor health, came to depend on a younger man named Roger. (71) In November 1988, Rose executed a power of attorney designating Roger as her agent and a will leaving him all but $1000 of her $268,000 estate. An audio recording of the execution ceremony showed that Rose was "easily distracted and clearly had difficulty remaining focused on the issue of the will." (72) She was also "somewhat out of touch with reality," having "referred to Roger as 'an angel of mercy' who 'saved her life."' (73) In fact, Roger had stolen more than $128,000 from her, leaving her delinquent on her household bills and property taxes and "living in squalor and filth." (74) Rose died in 1993 without having revoked the will benefiting Roger. (75) The court denied probate to the will on the grounds of undue influence. The circumstances gave rise to a presumption of undue influence that Roger could not rebut. (76)
b. Other specialized procedural rules
Inheritance law's preoccupation with the worst evidence problem and sensitivity to the difficulty of policing familial relationships for undue influence is reflected in other specialized procedural rules. For example, because experience has shown that juries may be more sympathetic to the disinherited than to the intentions of "an eccentric decedent who is in any event beyond suffering," (77) the "direction of the law is away from the trial of will contests before a jury." (78) As such, will contests are moving into procedural alignment with contests over a revocable trust, the primary will substitute, which is commonly recommended when a contest is anticipated because it exists in "the jury-free realm of equity law." (79)
Another specialized rule is the relatively short limitations period for bringing a will contest. (80) This rule balances the need to allow challenges to vindicate the donor's freedom of disposition against the need for expeditious settlement of ownership rights in the decedent's property. The Uniform Trust Code, adopted in about half the states, likewise provides for a short limitations period to bring a posthumous challenge to a revocable trust that became irrevocable at the death of the donor (that is, a trust that is a will substitute). (81)
The adherence of inheritance law to the American rule on attorneys' fees, although not a specialized rule, also bears mention as an example of a considered judgment not to adjust the ordinary rules of civil litigation. Scholars have criticized the absence of an English-style loser-pays rule in will contests, (82) but the American rule nonetheless remains the norm. (83) Regardless of outcome, the default rule is that a person who contests a will pays his own fees, (84) and a person who acts as a fiduciary in propounding a will in good faith is entitled to have his attorneys' fees and other costs paid out of the estate. (85)
2. Restitution by way of constructive trust
A will contest is the traditional mode of remedying the wrongful procurement of a will, amendment to a will, or revocation of a will. But what if a person has wrongfully prevented the decedent from making, amending, or revoking a will? Or what if a person has wrongfully interfered with a nonprobate transfer of the decedent, such as an inter vivos trust or pay-on-death bank or brokerage account? In such cases, a will contest in probate offers no relief. A will or an amendment to a will that was not in fact executed in accordance with the procedures prescribed by the Wills Act for the making of a will cannot be probated. (86) A will that was not in fact revoked in accordance with the procedures prescribed by the Wills Act for the revocation of a will must be probated. (87) And a nonprobate transfer operates outside of the reach of probate. (88)
In such cases, the traditional fallback has been to award the equitable remedy of constructive trust in an action for restitution to prevent unjust enrichment. (89) The First Restatement of Restitution, published in 1937, states the underlying principle thus: "Where a disposition of property by will or an intestacy is procured by fraud, duress or undue influence, the person acquiring the property holds it upon a constructive trust, unless adequate relief can otherwise be given in a probate court." (90)
A constructive trust is a flexible remedy that courts of equity have long used to prevent unjust enrichment. In Justice Cardozo's often-quoted formulation: "A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee." (91) A more direct expression of the concept is this:
If a defendant is unjustly enriched by the acquisition of title to identifiable property at the expense of the claimant or in violation of the claimant's rights, the defendant may be declared a constructive trustee, for the benefit of the claimant, of the property in question and its traceable product. (92)
The sole duty of the constructive trustee is to convey the property to its rightful claimant. (93)
The recently published Third Restatement of Restitution and Unjust Enrichment explains liability in restitution owing to wrongful interference with a donor's freedom of disposition as follows: "If assets that would otherwise have passed by donative transfer to the claimant are diverted to another recipient by fraud, duress, undue influence, or other intentional misconduct, the recipient is liable to the claimant for unjust enrichment." (94) The reference to "donative transfer" instead of "by will or an intestacy," as in the First Restatement, acknowledges the applicability of the principle to nonprobate modes of transfer and inter vivos gifts. (95) The Third Restatement continues:
A claim in restitution with a remedy via constructive trust is the traditional response to wrongful interference that prevents a donative transfer, given the inability of probate to enforce an intended disposition that was never carried out. Wrongful interference may prevent either the making or the revocation of a will, codicil, or bequest; the alteration of prior dispositions, such as a substitution of insurance or trust beneficiaries; or the making of an intended inter vivos gift. (96)
Crucially, restitution by way of constructive trust is a gap-filling complement, rather than a rival, to the will contest in probate. A disappointed beneficiary who can obtain relief in probate must do so. This limiting principle is explicit in the 1937 Restatement provision quoted above and is carried forward in the commentary in the 2011 Restatement. (97) Moreover, the law of restitution is sensitive to "the rules of procedure, standards of proof, and limitations periods applicable in probate cases," so that restitution cannot be used "to circumvent" probate's specialized procedures. (98) For example, if an action in restitution is brought "to overturn a formal testamentary disposition, the court may impose the same heightened standard of proof (such as 'clear and convincing evidence') applicable" in comparable probate litigation. (99)
a. Remedying wrongful interference with will formation or revocation
The leading cases of Latham v. Father Divine, (100) Pope v. Garrett, (101) and Brazil v. Silva (102) illustrate the role of restitution actions in safeguarding freedom of disposition against wrongful interference and the coordination of such actions with the specialized procedures of probate.
In Latham, the decedent had previously executed a will leaving the bulk of her estate to one of the defendants, Father Divine. (103) The plaintiffs alleged that the decedent later attempted to execute a new will that would have given the plaintiffs $350,000, but that "by reason of ... false representations [fraud], ... undue influence and ... physical force [duress]," the defendants prevented its execution and then arranged for the decedent's murder. (104) The New York Court of Appeals held that if "by fraud, duress or undue influence" a beneficiary prevents the testator from making a new will, the beneficiary holds the property he receives under the prior will upon a constructive trust for the intended beneficiary under the unexecuted new will. (105)
In Pope, some but not all of the decedent's heirs wrongfully prevented the decedent from executing a will in favor of her friend. (106) Shortly after this incident, the decedent died. The Supreme Court of Texas imposed a constructive trust in favor of the friend on all the heirs, not just those who had wrongfully prevented the new will's execution. The court reasoned that the innocent heirs, too, would be unjustly enriched if they were permitted to keep property acquired by reason of wrongful acts by the other heirs. (107)
In Brazil, a wife tricked her husband, who wanted to revoke his will, into thinking that she had destroyed it for him. (108) After the husband's death, the wife offered the will for probate, as she would take more under the will than in intestacy. The husband's other heirs, who would take more in intestacy, contested the will on the grounds of the wife's fraud. (109) The California Supreme Court held that the probate court was required by the Wills Act to probate the will, which had not in fact been revoked. (110) "If relief can be given at all for such a wrong," said the court, "it must be sought by suit in equity to declare the wrongdoer a trustee for the heirs with respect to the property received by such wrongdoer in virtue of the will." (111) So the heirs brought such an action against the wife, and on appeal the same court held that the heirs had stated a valid cause of action. (112) However, recognizing the potential for "false testimony ... since the evidence in most cases must be largely parol," the court held that on remand the heirs would have to prove their case "clearly and satisfactorily," (113) that is, by clear and convincing evidence. The court thus harmonized the standard of proof for this kind of restitution action with that required in probate for other kinds of claims based on parol evidence that contradicts the plain language of a duly executed will. (114)
b. Remedying "extrinsic fraud"
Relief in restitution is also available to rectify wrongdoing in connection with probate administration. Thus, a constructive trust may be imposed to prevent unjust enrichment if probate is fraudulently obtained, such as by failing to serve notice on an interested party (115) or by wrongfully destroying or suppressing a will, (116) circumstances that are sometimes called "extrinsic fraud." (117)
Caldwell v. Taylor is instructive. (118) In that case, a son petitioned for a constructive trust to be imposed upon property that his father bequeathed to the father's purported wife. (119) The son alleged that she procured the will by deceiving the father into believing that "she was a woman of fine character and good reputation and prior to her marriage to him was a single woman." (120) The son further alleged that, during the six month limitations period for contesting the will, (121) the purported wife deceived the son "with the intent and purpose" of inducing him not to bring a contest. (122) After the contest limitations period expired, the son discovered that the purported wife, a "grossly immoral woman of the streets," was in fact married to someone else at the time she purported to marry the father. (123)
The California Supreme Court held that the son had stated a valid claim, though it also expressed skepticism that he could prove the allegations in the complaint. (124) The court emphasized that the son had sufficiently pleaded an "extrinsic" or "collateral" fraud, separate from the fraud upon the father, in the misrepresentations that induced the son not to contest the will. (125) The basis for equitable relief in Caldwell was that the purported wife's misrepresentations to the son "prevented [the son] from setting up a real defense to the probate of his father's will." (126)
The availability of restitution to prevent unjust enrichment arising from manipulation of the probate process, as in Caldwell, was codified in the Uniform Probate Code in 1969:
Whenever fraud has been perpetrated in connection with any proceeding or in any statement filed under this Code or if fraud is used to avoid or circumvent the provisions or purposes of this Code, any person injured thereby may obtain appropriate relief against the perpetrator of the fraud or restitution from any person (other than a bona fide purchaser) benefitting from the fraud, whether innocent or not. (127)
c. The capaciousness of restitution
The interference-with-inheritance tort is sometimes defended as a necessary supplement to the limited ability of probate courts to provide relief for certain wrongful interferences with a testamentary transfer. (128) But the law of restitution already plays this role, and it has done so since long before the tort emerged. "Legal rules that give the property to the wrongdoer cannot simply be ignored, but they can be accommodated to the doctrine prohibiting unjust enrichment by a simple equitable device: a decree that the wrongdoer holds the property as constructive trustee for someone else." (129)
In keeping with the role of restitution in inheritance matters as a supplement to probate, the test for whether an inheritance causes unjust enrichment is measured in relation to the donor's right to freedom of disposition. The question is whether the transfer must be undone because it was induced by wrongful means. In the words of the Third Restatement of Restitution: "Unjustified enrichment is enrichment that lacks an adequate legal basis; it results from a transaction that the law treats as ineffective to work a conclusive alteration in ownership rights." (130) In Latham, Pope, Brazil, and Caldwell, what made the defendants' inheritance an unjust enrichment was not an abridgement of a right to inherit enjoyed by the plaintiff, but rather the violation of the donor's freedom of disposition. As in a will contest, the underlying question was to whom the donor would have given the property but for the wrongful conduct of the defendant.
II. THE EMERGENCE OF THE INTERFERENCE-WITH-INHERITANCE TORT
As late as 1979, there was little recognition in American law of wrongful interference with inheritance as a tort. In the years since, however, the tort has been recognized by the courts in nearly half the states. The swift emergence of this tort traces to the work of William Prosser, who endorsed it in his scholarship and then wrote it into the Second Restatement of Torts. Since the publication of that Restatement in 1979, litigators have seized upon the tort to take advantage of its different rules, including most prominently the availability of jury trials and pain-and-suffering and punitive damages.
A. Nineteenth and Early Twentieth Century Doctrine
Amidst the sparse pre-1979 case law on interference with inheritance as a tort, the leading early authority is Hutchins v. Hutchins, a New York case decided in 1845. (131) The plaintiff brought a tort action for deceit, alleging that the defendants had fraudulently induced the testator to revoke a will under which the plaintiff had been devised a farm. The court dismissed the complaint, reasoning that the defendants had interfered with a "naked possibility" rather than a "right" of the plaintiff. (132)
The reasoning in Hutchins, which exemplifies nineteenth and early twentieth century orthodoxy, (133) might seem to beg the critical question of why the disappointed beneficiary should be understood not to have a right. But there is logic to it. The premise is the donor's unqualified right to set the terms on which his property will be disposed of at death. If the donor has a right to unfettered freedom of disposition up until the moment of death, (134) a potential donee cannot have a right to receive, for such a right would be subject to complete defeasance by the donor's change of mind. (135)
On this view, the plaintiff's claim in Hutchins was comparable to that of a plaintiff who sues to recover economic losses resulting from a trespass upon land in which the plaintiff has no possessory interest. Even if such a plaintiff could prove that she suffered a loss because of the trespass, she would have no trespass claim, because no property right of hers had been invaded by the defendant. In Hutchins, the defendants may have violated the decedent's right to freedom of disposition, but the defendants did not violate any legal right of the plaintiff.
Perhaps the first decision clearly breaking from the nineteenth and early twentieth century orthodoxy, albeit in dicta, was Lewis v. Corbin, decided in 1907 by the Supreme Judicial Court of Massachusetts. (136) Anticipating the view that Prosser would later write into the Second Restatement of Torts, (137) Lewis sidestepped the question of whether the plaintiff could claim to have suffered the violation of a right. Instead the court focused on whether the plaintiff could adduce adequate proof of the defendant's wrongful act, causation, and harm. The court dismissed the plaintiff's tort claim for want of sufficient evidence. (138) However, the court left open the possibility that other claimants could recover in tort with more compelling evidence. (139)
In 1936, the North Carolina Supreme Court recognized the interference-with-inheritance tort in Bohannon v. Wachovia Bank & Trust Co. (140) In that case, the plaintiff alleged that the defendants had wrongfully interfered with the decedent's plan to make a provision for the plaintiff, who was the decedent's grandson, in the decedent's will. (141) The court upheld the complaint against what was effectively a motion to dismiss, reasoning that a tort cause of action for interference with inheritance followed from the recognition in prior decisions of a tort cause of action for "malicious and wrongful" interference with a contractual expectancy. (142) The court's opinion, which did not address the prior case law that had rejected the tort, relied instead on precedent involving equitable relief by way of constructive trust, a point to which we return below. (143)
B. The First and Second Restatements of Torts
Three years after Bohannon, the interference-with-inheritance tort received an obscure form of recognition in two illustrations to provisions toward the end of the ALI's First Restatement of Torts. One of these provisions, section 870, provides that "[a] person who does any tortious act for the purpose of causing harm to another ... is liable to the other for such harm if it results." (144) To illustrate this principle, the Restatement describes a suit by a disappointed beneficiary against a defendant who murders the decedent for the purpose of preventing the decedent from making a new will in favor of the beneficiary. (145) Later, in commentary to section 912 (on proof of damages), there is an illustration involving a suit against a defendant who purposefully interferes with the plaintiffs expected inheritance by defrauding the decedent. (146) There is no mention that these illustrations, which resemble Latham v. Father Divine and Brazil v. Silva respectively, (147) would give rise to an action in restitution by way of constructive trust. Nor is there acknowledgment that the case law stood against recovery in tort for interference with an expected inheritance.
Section 870, the substantive basis for liability in these illustrations, is an awkward provision. It seems to offer a generic principle that, if taken at face value, could supplant much of the black-letter doctrine recognized in earlier provisions of the Restatement. Victims of established torts such as assault, battery, and false imprisonment could make out claims under section 870, rendering those traditional torts mere specifications of this general principle. So read, the section would carry forward a version of Oliver Wendell Holmes's controversial contention that the various nominate torts could be reduced to a single liability formula, which he sometimes referred to as the "general theory" of tort liability. (148)
But section 870 does not appear to have been intended to function as a general principle of liability. Each of the nominate torts that Holmes's general theory would have subsumed are elaborately specified in earlier and more prominent portions of the Restatement. By contrast, section 870 is found in "Division 11" of the Restatement, entitled "Miscellaneous Rules," hardly the august framing befitting an organizing principle of tort liability. The structure and organization of the Restatement therefore suggest that section 870 was meant to fill gaps among the more specific tort rules.
Section 870's uncertain scope and awkward placement probably trace to its late insertion into the First Restatement. In 1937, fourteen years into the project, the reporter, Francis Bohlen, became incapacitated, so the ALI tapped Warren Seavey, among others, to finish the project. (149) Seavey took the occasion of "mopping up" after Bohlen to insert sections 870 and 912. (150) So far as we are aware, there is no record explaining Seavey's inclusion of these illustrations in the absence of supporting case law, (151) nor of the ALI's decision to approve these sections and their accompanying illustrations. (152)
The First Restatement's two interference-with-inheritance illustrations had little immediate impact on case law. (153) Indeed, the absence of decisional support for an interference-with-inheritance tort was contemporaneously recognized by Prosser. Ironically, he would later write an interference-with-inheritance tort into the black letter of the Second Restatement. In the 1941 first edition of his classic torts treatise, Prosser placed interference-with-inheritance claims into the category of tortious interference with prospective advantage, which he regarded as an offshoot of the category of claims for tortious interference with contract. (154) According to Prosser, since the 1893 English decision of Temperton v. Russell, (155) courts regularly had deemed actionable wrongful interferences with a person's efforts to obtain employment, hire employees, secure customers, and purchase property. (156) Yet he also acknowledged that, outside the realm of "commercial dealings," courts had "usually ... refused to allow" interference-with-expectancy claims such as for "interference with an expected gift or a legacy under a will." (157) Nevertheless, embracing the dicta of the Massachusetts Supreme Judicial Court in Lewis v. Corbin, (158) Prosser insisted that this hesitancy was not based on any principled grounds, but rather on practical worries over proof of causation and loss. (159)
Prosser seems to have supposed that the grounds for compensation in an interference-with-inheritance case were obvious. In the standard case, the plaintiff claimed to be the innocent victim of wrongful conduct by the defendant. To Prosser's way of thinking, in such circumstances the only compelling reason not to allow the victim to bring a tort claim would be a concern about the competence of the courts to sort valid from invalid claims. But Prosser thought that this concern could be addressed by means less drastic than refusing to recognize the tort. In Lewis v. Corbin, for example, the court had addressed the problem by requiring the plaintiff to offer ample evidence of a concrete and well-defined expectancy. (160) Prosser also found support for the justiciability of interference-with-inheritance tort claims in the restitution case law described above. (161) But he neglected to attend to the distinct procedural and remedial rules that had evolved in those cases to address the problems of judicial administration that he was considering anew. (162)
In the 1955 second edition of his treatise, Prosser again acknowledged that the case law stood against recognizing an interference-with-inheritance tort. (163) But he also identified a modest doctrinal countertrend. (164) This revision to the treatise portended Prosser's plan for the Second Restatement, for which he had been selected as Reporter. Six years later, he drafted a provision for the new Restatement expressly recognizing the tort. (165)
Like section 870 of the First Restatement, Prosser's interference-with-inheritance provision was slated for the back end of the Second Restatement. As such, the provision was not published until 1979, when it was promulgated as section 774B. In its final form, section 774B reads 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. (166)
The phrase "fraud, duress or other tortious means" was meant to impose a limit on the tort by requiring the plaintiff to prove that the defendant's conduct was "independently tortious in character"--that is, the sort of wrongful conduct that would in other contexts support tort liability. (167)
Between Prosser's first draft in 1961 and the publication of the final version in 1979, section 774B was subject to little discussion and few changes. (168) The most significant discussion seems to have occurred at the 1969 Annual Meeting. (169) Prosser acknowledged that "[t]he older cases denied liability outright," but he misdescribed them as resting on evidentiary rather than principled grounds. (170) Prosser also pointed to "cases of a remedy in equity," which he regarded as de facto tort decisions, rather than a standard application of restitution by way of constructive trust to prevent unjust enrichment. (171) At a subsequent Annual Meeting, John Wade, who succeeded Prosser as Reporter for the Second Restatement, likewise asserted that "clear authority" supported section 774B, though he admitted that most of the cases were "brought in restitution for constructive trust or something of that sort." (172)
C. Recognition in Contemporary Law
Section 774B did not set off a doctrinal revolution like the one that followed section 402A's endorsement of strict products liability. (173) Still, section 774B has had much more influence than section 870 of the First Restatement. (174) In eleven states, the court of last resort has recognized the tort, (175) and in one more the court assumed it was a valid cause of action. (176) In eight states, an intermediate appellate court has recognized it. (177) So the tort has been accepted by appellate courts in twenty states--twenty-one, if we add Colorado based on a projection by a federal court sitting in diversity. (178)
But these numbers understate courts' receptiveness to the tort and the influence of the Restatement. Since the promulgation of section 774B, only Tennessee and Virginia have rejected the tort (179) (New York had rejected it previously (180)). In the remaining twenty-seven states, the viability of the tort is an open question. In ten of these states, a court has declined to recognize the tort on the facts presented rather than categorically rejecting it (six courts of last resort, (181) three appellate courts, (182) and one projection by a federal court sitting in diversity (183)). In sixteen states and the District of Columbia, the law is unclear owing to a lack of precedent (twelve) (184) or to precedent that is contradictory or not authoritative (four plus D.C.). (185)
In just two decades, therefore, lawyerly sensibilities have shifted much closer to Prosser's views on the suitability of tort for policing interference with inheritance. This shift is evident in the growing number of reported appellate decisions accepting the tort and in the proliferation of practitioner-oriented writings about it. (186) The tort has also penetrated the teaching and scholarly discourse in trusts and estates. Recent editions of the leading casebooks offer much-expanded coverage of the tort relative to prior editions, typically taking the Second Restatement as their starting point. (187) A small but growing corpus of scholarly oriented writing has examined the tort, (188) a significant increase from the previously limited scholarly attention. (189)
Although we have focused on the role of academics and the ALI, the emergence of the interference-with-inheritance tort also reflects on-the-ground realities of litigation practice. Like numerous other academic innovations, section 774B might well have remained obscure had it not meshed with the interests of practicing lawyers. Lawyers representing disappointed expectant beneficiaries have understandably seized upon the tort to circumvent certain of the specialized procedures of inheritance law and to try their cases before juries with the possibility of pain-and-suffering and punitive damages.
The tort's contemporary salience also derives in part from the publicity surrounding a suit involving former Playboy Playmate Anna Nicole Smith, which reached the U.S. Supreme Court twice. (190) Smith's litigation is featured in the leading trusts and estates casebooks and is routinely cited by commentators. (191) Smith alleged that her stepson tortiously interfered with her expected gift from her deceased husband, Texas oil magnate J. Howard Marshall. Although the Texas probate court with jurisdiction over Marshall's estate rejected Smith's inheritance law claims against the estate, her tort claim against her stepson was litigated in federal court incident to her bankruptcy proceeding. (192)
The Supreme Court's first opinion, a unanimous decision that addressed the substantive nature of Smith's tortious interference allegations, changed the litigation landscape in two ways. First, the Court gave its imprimatur to the tort by characterizing it as "widely recognized" and citing section 774B. (193) Second, the Court confirmed the availability of federal jurisdiction for litigation involving the tort, holding that it falls outside of the probate exception to federal jurisdiction. (194) The availability of a federal forum for interference-with-inheritance claims caught the immediate attention of practitioners. (195)
Underpinning the Court's reasoning was the dubious but increasingly prevalent assumption that the tort is substantively well founded and detachable from specialized inheritance policy concerns. Writing for the Court, Justice Ginsburg explained: "State probate courts possess no 'special proficiency' ... in handling [such] issues." (196) This sentiment is a realization of Prosser's aspiration for claims of wrongful interference with inheritance to migrate out of probate and restitution and into tort.
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|Title Annotation:||Introduction through II. The Emergence of the Interference-With-Inheritance Tort, p. 335-365|
|Author:||Goldberg, John C.P.; Sitkoff, Robert H.|
|Publication:||Stanford Law Review|
|Date:||Feb 1, 2013|
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