After Beckwith: an Update on the Interference With Inheritance Tort in California

• Publication year: 2021
• Author: By Evan D. Winet, Esq.*

AFTER BECKWITH: AN UPDATE ON THE INTERFERENCE WITH INHERITANCE TORT IN CALIFORNIA

By Evan D. Winet, Esq.*

MCLE Article

'Tortious interference?' That sounds like a disease caught by a radio.¹

I. INTRODUCTION

A. IIEI In California

In 2012, with the publication of Beckwith v. Dahl,² California recognized the tort of intentional interference with expectancy of inheritance ("IIEI"). The Beckwith decision inspired considerable speculation as to whether the new tort would transform the landscape of California trust litigation and perhaps even the role of the probate courts.³ Indeed, since Beckwith, many litigators have pled IIEI, typically as a cause of action in a civil complaint, sometimes concurrently with a probate proceeding. In late 2020, the increase of such practices finally resulted in California's second published IIEI decision. Gomez v. Smith⁴ is not only the first published decision on IIEI since Beckwith, but the first published California decision to uphold recovery on an IIEI claim. As such, it provides valuable guidance for future IIEI claimants and defendants.

Nevertheless, even with Gomez, the usefulness of IIEI to California trust and estate litigation remains somewhat murky. In light of early prognostications both for and against recognizing IIEI, the legacy of Beckwith has been underwhelming, or at least more subtle than anticipated. Until last year, Beckwith remained the only published case, and the Beckwith court declined to rule on the underlying merits. Furthermore, the California Supreme Court has not yet weighed in on the new tort,⁵ and there has been no new legislation to provide any kind of statutory guidance.⁶ Overall, it does not appear that California has ventured with any confidence into a "brave new world" of inheritance tort claims. Like Mr. Pacino's character in The Insider, California has regarded tortious interference with somewhat perplexed skepticism.

B. The National Debate Over IIEI

Meanwhile, the national debate about whether to adopt IIEI and, if so, how to limit it, rages on. At the time of the Beckwith decision, California was the 26th state to adopt IIEI.⁷ There have been a few scattered decisions suggesting expansion of the number of adopting states.⁸ Across other states that had already adopted the tort, a substantial body of case law has begun to support common approaches and principles. Significantly, most states have adopted a five or six prong analysis in evaluating IIEI claims similar to that set out in Beckwith, and this growing consensus has been endorsed by section 19 ("Section 19") of the new Restatement Third of Torts (published in 2020).⁹ Meanwhile, about a dozen states have explicitly declined to recognize the tort,¹⁰ and some of the states whose courts previously endorsed IIEI have even reversed or significantly curtailed that recognition.¹¹ Suffice to say that at the national level, acceptance of IIEI has been highly volatile, notwithstanding the declaration of the United States Supreme Court in 2002 that the tort is "widely recognized."¹²

At the outset, it should be noted that IIEI is an area in which California litigants would be especially well advised to consider authorities beyond California case law. California courts generally must look to the common law where no California authority can be found on a particular question,¹³ and the common law is presumed to be the rule of decision in other states.¹⁴ Such recourse to the common law is particularly appropriate in construing IIEI in California where: 1) there have only been two published decisions, and 2) authority for recognizing the tort is drawn from section 774B of the Restatement Second of Torts ("Section 774B"), which has been interpreted both by the case law of numerous states and several subsequent Restatements of the Law. Given these considerations, this article will cite liberally to non-California authority on IIEI.

II. BARBARIANS AT THE GATES OF PROBATE COURT

Section 774B, defines IIEI 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."¹⁵ IIEI is thus, at least in theory, a fundamentally different claim from any typically brought in probate. Trust and estate proceedings exert in rem jurisdiction; they concern the disposition of the property of an estate or trust.¹⁶ An IIEI action, in contrast, is in personem; it pertains to a specific plaintiff's rights to recover against a specific defendant. It follows from this distinction that a potential heir claiming IIEI might obtain relief regardless of the validity of instruments, the assets remaining in an estate or that claimant's own standing (or lack thereof) in a related probate proceeding.

[Page 23]

It is enshrined in the Civil Code that for every wrong, there must be a remedy.¹⁷ Advocates of IIEI argue that the tort is needed because there are aggrieved beneficiaries whose wrongs, for one reason or another, cannot be remedied in probate. Situations where probate may fail to provide adequate remedy arguably include the following: 1) where an action is properly brought prior to the settlor's death (e.g., due to likely spoliation of evidence);¹⁸ 2) where the defendant causes the settlor to transfer property out of their estate during their lifetime;¹⁹ 3) where the defendant's own wrongful conduct in some way prevented the settlor from making the plaintiff a beneficiary of an instrument;²⁰ 4) where a defendant's own wrongful conduct in probate prevents a plaintiff from seeking probate remedies (e.g., by completing probate of a fraudulent will);²¹ 5) where a plaintiff's potential claims in probate are time-barred (e.g., due to expiration of the statutory limitations period for a will contest);²² 6) Where the alleged interference involves an expectancy in non-probate assets (e.g., plaintiff's status as a joint tenant on real estate or a joint account, or as a designated beneficiary on a policy or investment);²³ or 7) where the plaintiff's expectancy is interfered with by a defendant who does not actually receive the property at issue.²⁴

Detractors of IIEI have argued that the tort undermines the probate system for no good reason because remedies available in probate are actually sufficient to address nearly any legitimate inheritance claim. In an oft-cited article published shortly after the Beckwith decision, John Goldberg and Robert Sitkoff take up this argument, explicitly rejecting the claim that IIEI provides remedies unavailable in probate:

[I]n 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.²⁵

Goldberg and Sitkoff argue that any of the situations contemplated in relation to IIEI may be addressed through equitable remedies (e.g., imposition of a constructive trust) that are available in a probate proceeding.²⁶ They maintain that the IIEI tort is pernicious not only because the problem it purports to solve is chimerical, but also because it undermines the principles of freedom of disposition on which American trust law is based.²⁷ IIEI, they argue, allows a plaintiff to bypass the probate court's elevation of the settlor's intent as the fundamental guiding principle and allow a claimant effectively to circumvent an estate plan by seizing bequests directly from beneficiaries.²⁸

Counsel on either side of an IIEI claim will be well-advised to frame their arguments in relation to these longstanding policy perspectives. The defendant may often argue effectively that an IIEI claim would be duplicative of other causes of action, that any legitimate rights of the plaintiff may be adjudicated in probate, or that the plaintiff has failed to exhaust remedies in probate. The defendant may further argue that it is inefficient, wasteful, and a misuse of the structure of the court system to divert inheritance claims into a civil court and that California courts have created probate departments for the purpose of exercising superior expertise over such matters. The plaintiff, in contrast, must frame the nature of an IIEI claim with care and be prepared to explain why there is no adequate remedy in probate. A plaintiff who adopts the common strategy of initiating parallel proceedings in probate and civil courts must be prepared to argue why an IIEI claim is not merely an attempt to take a "second bite at the apple."

III. BECKWITH AND GOMEZ

California courts dealt with the issues addressed by IIEI for at least a century prior to Beckwith without the benefit of a recognized tort. Opponents of IIEI often point to early cases such as In re Silva's Estate (1915), Brazil v. Silva (1919)²⁹ and Caldwell v. Taylor (1933)³⁰ as proof that IIEI is unnecessary. The tort was briefly recognized in 1989 in In re Legeas,³¹ but that opinion was depublished two and a half months later. Various decisions from the 1980s and thereafter have decided IIEI-like claims on other grounds without recognizing the tort.³² Then, just two years before a Fourth District Court of Appeal panel decided Beckwith, a different division of the same appellate district explicitly declined to recognize the tort in Munn v. Briggs.³³

A. Beckwith v. Dahl: Establishing The Tort And Its Analytic Framework

In 2012, Beckwith established IIEI and provided the analytic framework that has been used subsequently. And yet, Beckwith is not an IIEI decision on the merits.

[Page 24]

In Beckwith, the decedent (Marc...