In a detailed and lengthy opinion, the California Court of Appeal, Third District, in Gomez v. Smith, affirmed a trial court judgment which held a decedent’s children by a prior marriage intentionally interfered with the expected inheritance of the decedent’s second wife (surviving spouse). The Gomez case supplies an instructive overview of California law regarding intentional interference with an expected inheritance, undue influence, testamentary capacity, and fiduciary duty. The full opinion is an interesting read for any probate litigator. The highlights are below.
The Facts of Gomez v. Smith
As stated succinctly by the California appeals court:
Frank Gomez and plaintiff Louise Gomez rekindled their love over 60 years after Frank broke off their first engagement because he was leaving to serve in the Korean War. Frank’s children from a prior marriage, defendants Tammy Smith and Richard Gomez, did not approve of their marriage. After Frank fell ill, he attempted to establish a new living trust with the intent to provide for Louise during her life. Frank’s illness unfortunately progressed quickly. Frank’s attorney, Erik Aanestad, attempted to have Frank sign the new living trust documents the day after Frank was sent home under hospice care. Aanestad unfortunately never got the chance to speak with Frank because Tammy and Richard intervened and precluded Aanestad from entering Frank’s home. Frank, who was bedridden, died early the following morning.
Louise (surviving spouse) sued Tammy and Richard (children from a prior marriage) for intentional interference with expected inheritance, intentional infliction of emotional distress, and elder abuse. Tammy filed a cross-complaint against Louise for recovery of trust property.
The highlights from Louise’s case presentation are as follows:
- Louise and Frank married in November 2014.
- Frank had a stroke in 2015 and later had surgery to correct an abdominal aortic aneurysm.
- Prior to the surgery, Frank went to see an attorney, McProud. Frank told Louise that he wanted to make sure she was taken care of if anything happened to him.
- Frank was admitted to the hospital on July 14, 2016, and later transferred to a nursing home.
- Attorney Aanestad went to meet with Frank at the nursing home on August 15, 2016 to create a new trust, the Frank and Louise Gomez Living Trust.
- Louise was present for part of the conversation between Aanestad and Frank. Aanestad asked Frank what he wanted done and who the beneficiaries would be.
- Louise did not discuss the trust with Frank after Aanestad left.
- Frank went home under hospice care on August 19. That day, when Frank and Louise were discussing the upcoming meeting with Aanestad, Frank said “[his] kids and [Louise] w[ould] be taken care of” and Louise “could stay in the house as long as [she] wanted.” Louise said Frank’s “body was weak” and he did not “rouse as fast as he normally would” but “[h]is mind knew what was going on at every point.”
On August 20, 2016:
- Louise administered morphine to Frank around 8:00 a.m. and 9:00 a.m. but could not recall when she gave him another dose.
- Frank and Louise discussed Aanestad’s expected arrival later that morning.
- Louise told Tammy, “[t]he lawyer’s coming to see your dad, and you’re going to have to stay out while they’re talking because they’ll want to be talking privately.” Tammy responded, “[d]on’t let him sign anything” and “[y]ou have to promise me that you’ll not let him sign anything.” Louise said, “I can’t promise, you know, you have to wait and see” and “[w]e don’t know what will happen.”
- When Aanestad arrived at the house, Louise was tending to Frank. Louise did not see anything but she could hear Tammy yelling. Aanestad arrived around 11:30 a.m., someone called the sheriff’s office, and Aanestad left. After Aanestad left, Louise told Frank that Aanestad had gone back to his office but she would call him to return. Frank responded, “God be willing.”
Frank died at 1:00 a.m. on August 21.
Frank’s financial advisor, Kenneth Meyers, attended the first meeting between Aanestad and Frank. Frank told Meyers that he wanted to leave a life estate for Louise, and for his assets to pass to his children upon his death. Frank also told Meyers at one point that Tammy was quizzing him about why he went to see an attorney, and that Frank told her it was none of her business.
Aanestad testified that he first met Frank on August 15, 2016. Frank was lucid and wanted a survivor’s trust with everything going to Louise and then to his children. On August 20, Aanestad and his paralegal arrived at Frank’s house between 11:00 a.m. and 11:30 a.m. Richard, Tammy, and another gentleman confronted them before they onto the driveway. “Tammy was saying, You’re not going in the house. This isn’t her house. It’s my mom’s house.” Tammy further said “quote, unquote, it wasn’t Frank’s decision to make and that was their mother’s house and that Frank cannot change the trust.”
Richard and Tammy prevented Aanestad and his paralegal from entering the house.
A psychiatrist testified as to Frank’s capacity, and said there was nothing indicating that Frank failed to retain the capacity to review a complex trust document because of the pain medication he had received.
The highlights from Tammy’s case presentation are as follows:
- In 2015, Frank told Tammy he wanted to execute a third amendment to the Frank and Beverly Gomez 1998 Revocable Trust to give Louise a life estate in his house. Frank asked Tammy for her thoughts. Frank intended for Tammy and her husband, Tim Smith, to take care of the maintenance on the house. Tammy told Frank she did not agree with his decision and did not want to be linked to Louise.
- Tammy visited Frank on August 19. Frank could barely whisper hello in the morning and was minimally responsive around 3:00 p.m. that afternoon.
- Tammy returned to the house on August 20 around 9:00 a.m. or 9:30 a.m. Louise told her, “there’s a lawyer coming.” Tammy thought to herself, “I gotta see what Dad looks like because this doesn’t seem right.” Tammy went to see Frank; he did not respond when she greeted him. 8 Tammy asked Louise to call the attorney and cancel the appointment. Louise refused. Tammy also asked about the subject matter of the attorney’s visit; Louise said it was none of Tammy’s business. Louise told Tammy: “Well, we’re still gonna like go through it. We’ll — if need be, they would take his hand — SHE would take his hand and sign with an ‘X.’ ”
- When the attorney and paralegal arrived, Tammy told them to leave, it was not a good time, and Frank was “in no condition.” They ignored her. Tim was talking too but Tammy could not recall what he said. When Tammy reiterated it was not a good time, the attorney responded, “Well, we’ll determine that.” The attorney continued: “We’ll take an ‘X,’ and we’ll sign it.”
- Piffero opened the screen door twice to let the attorney in, but Tammy closed it. Tammy asked someone to call the sheriff. Tammy then went inside and picked up the phone, which was ringing. Meyers was on the other end of the line. Meyers told Tammy to let the attorney in, “[t]his is what your dad would want.” Tammy said no and ultimately hung up on Meyers.
- Tammy never got a response or utterance from Frank on August 20; she tried to talk to him and prayed over him throughout the day.
- Tammy acknowledged that, in July 2014, she researched “what Louise did with [Louise’s] Santa Cruz house.” She denied ever telling Aanestad, “ ‘This is my mother’s house.’ ”
A medical social worker at hospice testified that on August 19, 2016 she assessed Frank at home. Frank was groggy, drowsy, but he was not disoriented. He was not hallucinating. He was not delusional. He knew where he was. He was speaking clearly about events that [Louise] had corroborated the information [sic].”
A registered nurse that met with Frank on August 19, 2016 testified. Although she had no independent recollection of the meeting, she acknowledged that her notes were in conflict regarding whether Frank was oriented and able to answer questions during her assessment.
The trial court issued a statement of decision finding in favor of Louise on the intentional interference with expected inheritance cause of action, and favor of Tammy and Richard on Louise’s other claims. Tammy lost her cross-complaint. Tammy appealed the trial court’s ruling in favor of Louise on the intentional interference with expected inheritance cause of action, and made several arguments as to why the judgment for intentional interference with the expectancy of inheritance should be reversed.
What Are The Elements Of An Intentional Interference With Expected Inheritance Claim Under California Law?
In California, the elements of an intentional interference with an expected inheritance claim are:
- The plaintiff had an expectancy of an inheritance;
- The defendant interfered with plaintiff’s expectancy through independently tortious conduct directed at someone other than the plaintiff;
- The defendant acted with requisite intent;
- The defendant’s actions caused the testator to exclude the plaintiff from his or her estate plan;
We have written about intentional interference with expected inheritance claims under California law here.
What Is An Expectancy of Inheritance?
An expectancy of inheritance is just as it sounds, but there must be some basis for the expectation. Here, the trial court found that Louise expected an inheritance, relying substantially on Aanestad’s testimony.
The evidence showed that Frank wanted to change his trust, and wanted Louise to the be trustee and have a life estate in the trust assets which would pass to decedent’s children upon Louise’s death. Louise understood that it was Frank’s intention to take care of Louise during her lifetime.
Although Tammy argued that some of Louise’s own testimony indicated that she did not have an expectancy, the appeals court noted that this testimony was either taken out of context or did not support Tammy’s argument.
Knowledge By The Tortfeasor of The Expected Inheritance
The appellate court also found that substantial evidence supported the trial court’s finding that Tammy knew of Louise’s expectation of inheritance. The court found that Tammy was unhappy about Frank’s marriage to Louise. Additionally, Kenneth Myers (the financial advisor and friend) testified that Frank told him that Tammy was prying into his business and questioning him about why he was meeting with an attorney. Frank was angry at Tammy for interfering.
The appellate court quoted the trial court’s findings:
“Defendants’ actions and comments directed at Mr. Aanestad when he arrived at the decedent[’s] and plaintiff’s home on August 20, 2016 are also circumstantial evidence that defendants knew the purpose of Mr. Aanestad’s visit was to create a trust wherein plaintiff would receive an inheritance. Mr. Aanestad testified that as soon as he stepped out of his car, he was confronted by the defendants. He described Ms. Smith as confrontational and screaming that he could not enter the house because it was her mother’s home. Mr. Aanestad testified that Ms. Smith stated, ‘It wasn’t Frank’s decision to make and that was their mother’s house and that Frank cannot change the trust.’ The defendants then physically blocked the doorway refusing to allow Mr. Aanestad to enter the decedent[’s] and plaintiff’s home. Mr. Aanestad testified he was prevented from entering the residence by the defendants’ actions.”
What Independently Tortious Conduct Can Serve As The Basis For Intentional Interference With An Expectancy of Inheritance?
A required element of the tort of intentional interference with expectancy of inheritance is that the defendant interfered with plaintiff’s expectancy through independently tortious conduct directed at someone other than the plaintiff. Here, Tammy argued that her conduct was not tortious independent of her interference. The trial court identified two types of tortious conduct directed by Tammy toward Frank.
Undue influence can serve as an independent tort for purposes of intentional interference with expectancy of inheritance in California. The appellate Court stated:
The trial court’s finding of undue influence is supported by substantial evidence that Tammy took a grossly unfair advantage of Frank’s distress. Tammy indisputably “knew of [Frank’s] physical weakness and distress and took actions whereby [she] physically separated [his] attorney from [him] intentionally preventing [Frank] from confirming an estate plan that he had been trying to put in place for months.” Frank’s will was overborne by Tammy because he was bedridden and unable to intervene when Tammy precluded Aanestad from entering the home. Tammy precluded Frank from signing the new trust documents, an act the trial court found he would have done if left to act freely.
Breach of Fiduciary Duty
Tammy urged that her actions of stopping Frank from executing the trust were authorized under the law, and that there could not be any interference with Louise’s expectancy of inheritance under California law, because she was acting under a durable power of attorney. This argument was quickly dismantled:
Essentially, Tammy asserts she cannot be held liable for breaching her fiduciary duty to Frank because Frank gave her broad authority to act on his behalf and the power of attorney provides that Frank ratified her conduct. This assertion traverses the line of reason into absurdity.
An attorney-in-fact under a power of attorney is a fiduciary and thus owes fiduciary duties to his or her principal. (Prob. Code, § 39.) Probate Code3 section 4266 provides: “The grant of authority to an attorney-in-fact, whether by the power of attorney, by statute, or by the court, does not in itself require or permit the exercise of the power. The exercise of authority by an attorney-in-fact is subject to the attorney-in-fact’s fiduciary duties.” One such fiduciary duty is laid down in section 4232, subdivision (a): “An attorney-in-fact has a duty to act solely in the interest of the principal and to avoid conflicts of interest.” It is further well-established common law that an agent is dutybound to give the principal his or her undivided allegiance and to exercise toward the principal the utmost good faith and loyalty. (Beeler v. West American Finance Co. (1962) 201 Cal.App.2d 702, 705.) The power of attorney signed by Frank did not authorize Tammy to act in contravention of her fiduciary duties to him. Tammy was not “free to substitute her judgment for her father’s” where her judgment was in direct contravention of Frank’s wishes and born out of Tammy’s self-interest.
A power of attorney is not free to substitute her judgment for the principal’s. Tammy was acting in her own self-interest, and against her father’s wishes, when she interfered with his wishes to execute a trust benefiting his spouse.
Mental Capacity To Make A Trust
Section 810 establishes a rebuttable presumption “that all persons have the capacity to make decisions and to be responsible for their acts or decisions,” recognizing that persons with mental or physical disorders “may still be capable of contracting, conveying, marrying, making medical decisions, executing wills or trusts, and performing other actions.” The appellate court found that the trial court applied the correct legal standard under sections 810 through 812.
This case is important because there are not many cases regarding intentional interference with expectancy of inheritance under California law. It serves as an important primer and example of what actions and facts can amount to a finding of intentional interference with an expectancy of inheritance in California.