Iowa Supreme Court Issues Ruling on Century Farm Inheritance Dispute

On June 11, 2021, the Iowa Supreme Court released an opinion involving a claim of interference with an inheritance. The year before she passed away, the decedent changed the beneficiaries of her will. On appeal, the Supreme Court affirmed that the new beneficiaries did not have the required knowledge to meet the elements of tortious interference with an inheritance.

Background

In 2016, the decedent passed away at 92 years of age. In 2001, the decedent executed a will leaving her century farm in equal shares to her cousin and her farm tenant. However, in 2015, the decedent executed a new will removing her cousin, who had passed away, and the farm tenant as beneficiaries. The new will named Kumari Durick as the beneficiary of the farm and made Patricia Birusingh, Durick’s mother, the executor. Durick and Birusingh, the wife of the decedent’s doctor, had assisted the decedent in her later years by helping her run errands, buy groceries, and complete other similar tasks.

The farm tenant and the daughter of the decedent’s cousin, brought this lawsuit against Durick and Birusingh, alleging undue influence and tortious interference with an inheritance. The defendants resisted and petitioned for summary judgment on the interference with an inheritance claim, arguing there was insufficient evidence that they knew of the plaintiffs’ expected inheritance. Agreeing with the defendants, the district court granted the motion for summary judgment. After trial, the jury found in favor of the plaintiffs on the undue influence claim. The plaintiffs appealed the dismissal of their interference with an inheritance claim and the defendants cross-appealed, claiming that the district court improperly admitted hearsay testimony.  The Iowa Supreme Court granted review.

Elements of Tortious Interference with an Inheritance

The Court first determined whether the tort of interference with an inheritance requires evidence that a defendant had knowledge of a plaintiff’s expected inheritance. While the Iowa Supreme Court has recognized this claim since 1978, none of the previous cases list the elements of the tort.[i]

Rejecting the plaintiffs’ use of the Restatement (Second) of Torts to determine the elements, the Court instead turned to the more recent Restatement (Third) of Torts.

(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 economic loss as a result.

Restatement (Third) of Torts: Liab. for Econ. Harm § 19, at 160–61 (Am. L. Inst. 2020).  The Court determined that, while not specifically stated, subsection (c) requires not only purposeful intent, but also knowledge of the inheritance. Without that knowledge, the defendant could not have the intent to interfere with the plaintiff’s expected inheritance.  

The plaintiffs argued that no specific knowledge of an inheritance was necessary because there is the general knowledge that property will pass to some beneficiary, either through a testamentary instrument or intestacy laws. Rejecting this argument, the Court stated that the purpose of the tort is to remedy interference with a specific plaintiff’s inheritance. Without this specificity requirement, the Court explained, well-intentioned individuals providing assistance to their elderly neighbors could become “ensnared” in this tort without intending to interfere with someone else’s expectancy of an inheritance. The Court thus ruled that the district court did not err in requiring that the plaintiffs prove the defendant’s knowledge of the plaintiffs’ expectancy of an inheritance from the decedent.

Evidence of Knowledge of Inheritance

Next turning to consider whether the district court erred in granting the motion for summary judgment, the Court analyzed the evidence offered by the plaintiffs to prove the defendants’ knowledge of an inheritance. The plaintiffs introduced evidence that the tenant had rented part of the decedent’s land since 1991, that Birusingh discussed the decedent’s estate plans with her and even drove her to execute her 2015 will, and that the tenant offered to buy the decedent’s farm.

The Court determined that none of this evidence showed that the defendants possessed knowledge of the plaintiffs’ expectancy of an inheritance. First, while both plaintiffs knew the decedent well before the defendants, this was insufficient to determine that an expectancy of an inheritance between a landlord and tenant, or between distant family members, existed. Second, the conversations between Birusingh and the decedent only concerned the decedent’s future estate planning rather than the decedent’s past wills or intentions. Finally, the Court concluded that the evidence pertaining to the tenant’s offer to buy the farm undermined the plaintiffs’ argument. If the tenant believed he would inherit the farmland, it made little sense to offer to buy it when the decedent was 90 years old. Therefore, the plaintiffs failed to meet their burden showing that the defendants had knowledge of the inheritance.

What Was Not Decided

On appeal, the defendants also contended that no claim for intentional interference with inheritance could stand where the underlying conduct does not include “independently tortious conduct.” This, they argued, required the plaintiffs to show conduct other than the “undue influence,” which was the conduct supporting the plaintiffs’ successful cause of action. Finding that the defendants had not preserved this issue by raising it before the district court, the Court did not decide this question, thus postponing the resolution of this question for another case.

Improper Hearsay Evidence

On cross-appeal, the defendants argued that the Court should grant them a new trial because the district court improperly admitted hearsay evidence. At trial, the tenant, over the defendants’ objection, testified regarding a conversation between himself and the probate attorney who prepared the decedent’s 2015 will. According the tenant, the probate attorney stated that Birusingh told the decedent that she didn’t need the money and that the decedent should give the farm to her daughter. The tenant also testified that the probate attorney told him that the decedent’s bequest of the farm to Durick is “dirty and it stinks.”

Hearsay is a statement used to prove the truth of the matter asserted in the statement and is usually not admissible. Iowa R. Evid. 5.801. However, a party’s out-of-court statement may be used to impeach a witness about an inconsistent in-court statement if the witness has the opportunity to explain the out-of-court statement and the opposing party has the chance to question the witness about the statement. After reviewing the trial testimony, the Court concluded that the district court properly admitted the hearsay evidence for impeachment purposes.