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Archer v. Anderson

Supreme Court of Texas

June 22, 2018

Richard T. Archer, David B. Archer, Carol Archer Bugg, John V. Archer, Karen Archer Ball, and Sherri Archer, Petitioners,
v.
T. Mark Anderson and Christine Anderson, as Co-Executors of the Estate of Ted Anderson, Respondents

          Argued October 11, 2017

          On Petition for Review from the Court of Appeals for the Third District of Texas

          Justice Green, Justice Guzman, Justice Devine, and Justice Blacklock joined.

          OPINION

          Hecht Chief Justice

         Last Term, in Kinsel v. Lindsey, we noted that Texas has never recognized a cause of action for intentional interference with inheritance but left open the question whether we should do so.[1]Today, to eliminate continuing confusion over the matter and resolve a split among the courts of appeals, we answer that question. Because existing law affords adequate remedies for the wrongs the tort would redress, and because the tort would conflict with Texas probate law, we hold that there is no cause of action in Texas for intentional interference with inheritance. We affirm the judgment of the court of appeals.[2]

         I

         John R. "Jack" Archer, a successful oil-and-gas businessman, married and divorced 4 times but had no children. His closest family was a brother, Richard Archer, and Richard's 6 children (loosely referred to as "the Archers").[3] Jack executed a will in 1991 that left the bulk of his roughly $7.5 million estate to the Archers, including a 1, 000-acre ranch, mineral interests, homes, life insurance, bank accounts, a large coin collection, and many other assets. The little Jack did not leave to them-part of his mineral interests worth some $90, 000-Jack left to 12 Christian charities.[4]

         In August 1998, Jack, then 71, suffered a stroke and was hospitalized for several weeks. When he returned home, the Archers assisted with his care. He regularly misidentified people, was delusional, and was sometimes disoriented. He never fully recovered.

          A few weeks after Jack's stroke, Ted Anderson, an attorney and Jack's longtime friend, drafted durable and medical powers of attorney appointing himself as Jack's attorney-in-fact. Jack signed the documents, but his medical records showed that the day he signed them he was delusional and appeared confused. Anderson also tried to have Jack change his estate plan. Anderson proposed that Jack sell his ranch and transfer the proceeds into a charitable remainder trust with the 12 charities as beneficiaries so that Jack's entire estate would go to the charities and the Archers would be disinherited. Jack complained that Anderson was forcing him to sell the ranch against his will, so Anderson dropped the proposal.

         Anderson then hired attorneys Richard Leshin and Buster Adami to draft estate planning documents for Jack. Jack began distancing himself from the Archers, and for a while they lost all contact. So in the fall of 1999, the Archers instituted guardianship proceedings for Jack in Blanco County. Leshin and Adami appeared for Jack and agreed to the appointment of temporary guardians of his person and estate. Leshin advised Anderson that further estate planning for Jack would have to await termination of the guardianship. But Anderson retained a new lawyer for Jack, who repudiated the agreed guardianship. At Anderson's request, Leshin had Jack sign wills and trust documents, all disinheriting the Archers and leaving Jack's entire estate to the charities. Leshin later testified that he received all his instructions from Anderson, did not talk with Jack before preparing the wills and trust documents, and knew doctors disagreed about Jack's mental capacity. Leshin also testified that he did not determine for himself whether Jack had the mental capacity to validly execute the documents but instead relied on Anderson's representations.

          The Archers nonsuited the guardianship proceeding in Blanco County and refiled it in Bexar County. Over Jack's new attorney's opposition, the court appointed guardians of Jack's person and estate. After an accounting of Jack's estate was filed, showing that all his assets were in trust, the Archers learned of the wills and trust disinheriting them. Rather than wait until Jack's death and challenge the charities in a will contest, the Archers decided to immediately challenge the trust. The Archers agreed to pay their attorneys, who had been charging hourly rates, a contingent fee of 40% of all Jack's assets recovered. With Jack still alive, the Archers sued for a declaratory judgment that Jack had lacked the mental capacity to execute the wills and trust documents. The charities, the beneficiaries of the trust, were defendants. In May 2002, the parties settled. The charities agreed not to probate Jack's post-1991 wills, and the Archers agreed to give the charities Jack's coin collection and pay their attorney fees. Those fees and the value of the coin collection, which was in addition to what the charities would receive under Jack's 1991 will, totaled $588, 054.

         The Archers sued Anderson on Jack's behalf for breach of fiduciary duty, intentional infliction of emotional distress, and legal malpractice. The Archers also sued others on Jack's behalf and settled for, in their words, "hundreds of thousands of dollars". Anderson died in March 2006, and Jack died a month later. Jack's 1991 will was probated, and the Archers took their bequests under it. The following year, the Archers brought this action against Anderson's estate for intentional interference with their inheritance, alleging that Anderson influenced Jack to disinherit them. They concede that Anderson never profited personally from his efforts and that they have never been able to show his motivation other than some unexplained personal malice. They also concede that in the end, they received all that Jack left them in his 1991 will, but they claim as damages the $588, 054 they gave the charities in settlement, plus $2, 865, 928 in attorney fees and litigation expenses they incurred avoiding Jack's post-1991 wills and trusts. The jury found in favor of the Archers but awarded only $2, 006, 150 in damages. The trial court rendered judgment on the verdict but added $588, 054.

         Both sides appealed. The court of appeals concluded that this Court has never recognized tortious interference with inheritance as a cause of action in Texas and deferred to this Court to decide whether to do so.[5] The appeals court reversed and rendered judgment for Anderson.[6] We granted the Archers' petition for review.[7]

         II

         The Archers argue that tortious interference with an inheritance has long been part of Texas law, but as we noted at the outset, less than a year ago we stated in Kinsel v. Lindsey that neither this Court nor the Legislature has ever recognized such an action.[8] The appellate courts that have recognized the tort, we explained, largely relied on King v. Acker, a decision of the Court of Appeals for the First District of Texas in Houston.[9] King concluded that this Court impliedly recognized the cause of action in Pope v. Garrett.[10] But this, we said, was "an inaccurate reading of our precedent", and whether to recognize the tort remained "an open question" that could be answered only by weighing the factors that we have repeatedly held must be considered in determining whether to recognize a new cause of action.[11] We declined to consider the matter further because the claimants had another adequate remedy-the imposition of a constructive trust.[12]

         The court of appeals in the present case, which issued its opinion before Kinsel, correctly concluded that this Court has not recognized a tort of intentional interference with inheritance.[13]Further, the court of appeals acknowledged, neither the appellate courts nor the trial courts should recognize the tort "in the first instance".[14] "Absent legislative or supreme court recognition of the existence of a cause of action," the court wrote, "we, as an intermediate appellate court, will not be the first to do so. We must . . . follow the existing law rather than change it".[15]

         Since Kinsel, both courts of appeals sitting in Houston have considered whether the tort should be recognized. In Yost v. Fails, the Court of Appeals for the First District of Texas continued to follow its precedent, King, in holding that a cause of action for intentional interference with an inheritance exists.[16] Yost neither cited Kinsel nor analyzed the factors for deciding whether to recognize a new cause of action; it simply followed King.[17] A few weeks later, in Rice v. Rice, the Court of Appeals for the Fourteenth District of Texas, also in Houston, reached the opposite conclusion.[18] The court acknowledged that it had recognized the tort in Brandes v. Rice Trust, Inc., relying on King, which had relied on Pope.[19] But following Kinsel's contrary analysis of Pope, the court concluded that it was relieved of its stare decisis obligation to follow Brandes.[20] Nor would it follow Yost, the Rice court said, because that court had neither cited Kinsel nor analyzed the factors noted in that case to be considered in determining whether to recognize a new cause of action.[21] Ultimately, it concluded that the case before it did "not warrant an extension of existing law" because "the parties . . . already [had] an adequate remedy."[22]

         The First and Fourteenth Courts of Appeals' 10-county districts completely overlap.[23] Cases are randomly assigned between them.[24] In the aftermath of Kinsel, judges, lawyers, and parties in cases in those districts must follow opposite rules: a cause of action for intentional interference with an inheritance does and may not exist. The concurring opinion minimizes this confusion, speculating that the cases will be relatively few, and courts will eventually follow Kinsel's holding that a tort does not exist when there is another adequate remedy.[25] As we will explain, whether to recognize a tort to provide an adequate remedy begs the question of what remedy is adequate. Existing remedies are not inadequate merely because they do not provide the relief a tort would. The fundamental difficulty with the tort is that it claims for the judiciary the authority to supplant or augment statutory probate law and settled remedies and principles whenever they are perceived to be unfair. Whether there will be many cases or few in the Houston courts of appeals districts and throughout Texas, we think we should avoid the waste of public and private resources arguing over a question we can answer, especially when the answer is as clear as we think it is.

         III

         A

         Courts that have recognized the tort of intentional interference with inheritance have mostly relied on Section 774B of the Restatement (Second) of Torts, which provides that "[o]ne 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."[26] Section 774B has been replaced by Section 18 of the Restatement (Third) of Torts: Liability for Economic Harm, [27] which states:

(1) A defendant is subject to liability for interference with an inheritance or gift if:

(a) the plaintiff had a reasonable expectation of receiving an inheritance or gift;
(b) the defendant committed an intentional and independent legal wrong;
(c) the defendant's purpose was to interfere with the plaintiff's expectancy;
(d) the defendant's conduct caused the expectancy to fail; and
(e) the plaintiff suffered injury as a result.

         (2) A claim under this Section is not available to a plaintiff who had the right to seek a remedy for the same claim in a probate court.

         Section 18(1) changes 4 elements of the tort:

• the inheritance or gift is one the plaintiff "had a reasonable expectation of receiving" rather than one the plaintiff "would otherwise have received";
• the defendant must commit an "independent legal wrong" rather than act by "fraud, duress or other tortious means";
• the defendant's conduct must "cause[] the expectancy to fail" rather than "prevent[] [the plaintiff] from receiving" the property; and
• the plaintiff must incur simply an "injury" rather than the "loss of the inheritance or gift."

         None of these differences appears to be material. But Section 18(2) is a substantive change, at least insofar as it makes explicit that the tort is "not available to a plaintiff who had the right to seek a remedy for the same claim in a probate court."

         While a cause of action for intentional interference with an inheritance might take other forms, we focus our analysis on Sections 774B and 18. We have repeatedly explained the policy analysis we use in deciding whether to recognize a new cause of action:

The considerations include social, economic, and political questions and their application to the facts at hand. We have weighed the risk, foreseeability, and likelihood of injury against the social utility of the actor's conduct, the magnitude of the burden of guarding against the injury, and the consequences of placing the burden on the defendant. Also among the considerations are whether one party would generally have superior knowledge of the risk or a right to control the actor who caused the harm.[28]

         The issue here is not whether these considerations support remedies for misconduct that prevents a person from disposing of his estate as he wishes. They all certainly do. Rather, the issue is whether these considerations support additional or different remedies than those already afforded by statutory probate law and a suit in equity for unjust enrichment. We begin by examining the conflicts between existing law and the Section 774B and Section 18 tort and then turn to whether an additional tort remedy is needed.

         B

         Harvard Law Professors John C.P. Goldberg and Robert H. Sitkoff have made a strong case against recognizing the tort in a lengthy article recently published in the Stanford Law Review.[29] They conclude that the tort

is conceptually and practically unsound. . . . [I]t is deeply problematic from the perspectives of both inheritance law and tort law. It undermines the core principle of freedom of disposition that undergirds American inheritance law. It invites circumvention of principled policies encoded in the specialized rules of procedure applicable in inheritance disputes. In many cases, it has displaced venerable and better-fitting causes of action for equitable relief. It has a derivative structure that violates the settled principle that torts identify and vindicate rights personal to the plaintiff. . . . [T]he emergence of the interference-with-inheritance tort is symptomatic of two related and unhealthy tendencies in modern legal thought: the forgetting of restitution and equitable remedies, and the treatment of tort as an unstructured delegation of power to courts to impose liability whenever doing so promises to deter antisocial conduct or compensate victims of such conduct.[30]

         There are opposing views, Professors Goldberg and Sitkoff acknowledge, [31] but their rebuttals of contrary arguments are convincing.

         Fundamentally, probate law protects a donor's right to freely dispose of his property as he chooses.[32] An interference tort, it is argued, reinforces that protection.[33] But a prospective beneficiary has no right to a future inheritance; he has only an expectation that is dependent on the donor's exercise of his own right. The tort of intentional interference with inheritance gives a beneficiary his own right, one he does not otherwise have. That right is sometimes said to be derivative of the donor's right, but the beneficiary's exercise of his own right may or may not protect the donor's right of free disposition.[34] A beneficiary's interests and motives and those of his donor may be consistent, but they may also conflict. Family relationships and the very personal feelings they involve change. An expectancy is powerful motivation to ignore reality and misperceive a donor's true intent.

         Intentional interference with inheritance is thus different from intentional interference with a business opportunity, another kind of expectancy. Like the beneficiary of an inheritance, a competitor has no right to a future opportunity.[35] But he does have the right not to be disadvantaged by unfair competition that is tortious or wrongful.[36] The plaintiff and defendant share that right, and the question is whether the defendant crossed the line. When there is unlawful interference with a commercial or business opportunity, tort law recognizes a remedy.[37] A remedy is warranted because the defendant's unlawful behavior impeded the plaintiff's liberty interest, that is, "an interest in pursuing productive activity free from wrongful interference."[38] The expectation of a prospective beneficiary is different. He has no right to fairness; he gets only what the donor chooses to give, fairly or unfairly. Probate law protects the donor's interest in making that choice freely.

         Tort law "is ill-suited to posthumous reconstruction of the true intent of a decedent."[39] Even before his death, a donor may not wish to disclose his true intentions, offending family and friends. Probate law employs specialized doctrines and procedures to arrive at the testator's true intent. Courts use principles of "undue influence" and "duress" to distinguish the unclear demarcation between legitimate persuasion and overbearing influence.[40] These carefully developed doctrines take into account the context of "nuanced family dynamics and customs that are often inaccessible to outsiders."[41]

         Moreover, the evidentiary rules and procedures in probate law strike a balance between honoring a testator's actions while addressing situations where those actions were wrongfully taken. "Safeguarding freedom of disposition requires the court to invalidate a disposition that was not volitional because it was procured by undue influence. But openness to circumstantial evidence facilitates the bringing of strike suits by disgruntled family members whom the decedent truly meant to exclude."[42] This justifies the rule that a will contestant has the burden of proving that a will was wrongfully procured.[43] These and other carefully constructed provisions were enacted by the Legislature and should be respected. It is not prudent for the Court to recognize a new tort simply because probate procedures sometimes present hardships or even bar a plaintiff's recovery.

         Comment a to Section 18 states that the tort "is not meant to interfere with probate law or to provide a way for a plaintiff to avoid its limits and restrictions" but is "to provide relief when . . . no remedy is available in probate."[44] It is not enough, according to comment c, that probate law "offers less generous relief than would be attainable in tort."[45] The tort is available only "if a probate court, for whatever reason, lacks the power to provide redress."[46] But limits on a probate court's power are among the "limits and restrictions" of probate law with which the tort "is not meant to interfere".[47] Given probate law's extensive and thorough provisions to protect an owner's free devise of his property, the lack of further remedies must be viewed not as legislative oversight but legislative choice.

         C

         A tort of intentional interference with inheritance is needed, it is argued, as a gap-filler when probate and other law do not provide an adequate remedy.[48] Texas law thoroughly governs inheritance through probate and restitution and, as we noted in Kinsel, provides remedies for unfairness, such as a constructive trust.[49] If these remedies are inadequate, it is because of legislative choice or inaction, and filling them is work better suited for further legislation than judicial adventurism.

          A court already has broad authority to rectify inequity using a constructive trust in an action for restitution to prevent unjust enrichment.[50] As early as the first Restatement of Restitution, published in 1937, the underlying principle has been stated as 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."[51] Most recently, the Restatement (Third) 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."[52] The doctrine, therefore, is malleable to fit the particular needs of each situation.

         "[R]estitution by way of constructive trust" operates as "a gap-filling complement, rather than a rival, to the will contest in probate."[53] Most importantly, the body of restitution law "is sensitive to 'the rules of procedure, standards of proof, and limitations periods applicable in probate cases,' so that [it] cannot be used 'to circumvent' probate[] . . . procedures."[54] In Kinsel, we concluded that the constructive trust remedy was adequate to redress the alleged injuries.[55] Suits on established torts, such as fraud, conversion, theft, and breach of fiduciary duty, as well as suit under the Declaratory Judgment Act, may also be available. The Court has never been persuaded that the remedies provided by probate law and established torts are inadequate.

         In Kinsel, we left open the possibility that situations could arise to justify recognition of the tort of intentional interference with inheritance, but we did not hint at what they might be.[56] Nor are we able to do so. Professor Diane Klein, a prominent proponent of the tort, posits 4 specific factual scenarios in which the probate system falls short, justifying the need for a tort action. None of the situations warrants recognition of the tort.

         One scenario is when an intestate heir tortiously induces the testator to make a will that is more favorable to the tortfeasor than to another heir.[57] The estate's payment of the expenses of a good-faith will contest would diminish the value of the challenger's share, and if the will is struck down, the tortfeasor would still collect through intestacy or a prior will, leaving the offender unpunished.[58] But the rule that costs of a good-faith will contest are paid from the estate is established by the law of probate.[59] Good policy arguments can certainly be made that the rule punishes the innocent and provides no deterrence to wrongdoing. But to use this example to argue for a tort remedy is to say, not that probate law is inadequate, but that it is wrong, and that courts should circumvent legislative policy.

         Another proffered scenario justifying recognition of the tort is when a would-be beneficiary lacks standing to contest a will.[60] But standing rules are broad. A person interested in the outcome of an estate plan has standing, [61] including anyone having "a property right in or claim against [the] estate being administered".[62] An interested person also may file an application admitting a will to probate, even when the will has been destroyed.[63] To the extent that these rules might not include someone with some expectation of a gift is, again, a legislative choice.

         A third situation posited by Professor Klein is when someone obtains a gift in place of the testator's originally named beneficiary through undue influence.[64] Even if the will provision is invalidated in probate, it is argued, the gift may not be restored, and the tortfeasor will not be penalized.[65] The tortfeasor may even still benefit if he is a residuary beneficiary.[66] Further, the wrongdoing may be concealed until probate is closed. But in such circumstances, restitution may afford relief, and if the relief is lacking, the reason is legislative choice. ...


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