Iowa Supreme Court: Tortious Interference With An Inheritance Action Barred Unless Joined With A Timely Will Contest

In Youngblut v. Youngblut, the Iowa Supreme Court considered its first tortious interference with an inheritance case in almost 30 years, overruling its prior decisions and holding that a claim alleging that a decedent’s will resulted from tortious interference by a beneficiary must be joined with a timely will contest; otherwise, it is barred.

The Facts of Youngblut v. Youngblut

Harold and Leonard Youngblut are brothers.  Their parents, Earl and Agnes Youngblut, were successful farmers, who formed Youngblut Farmland Ltd. (YFL) in 1980 and transferred most of their farm-related assets into it.  Earl and Agnes died a day apart from each other in 2014.

A dispute arose between Harold and Leonard concerning Earl and Agnes’ 2014 mirror wills.

The 2014 Mirror Wills

The 2014 mirror wills provided that Harold would receive his parents’ YFL shares. However, the South Farm (a property owned by Earl and Agnes in their own names) would go to Leonard provided he tendered his YFL stock to Harold for one dollar.  In Earl and Agnes’ penultimate wills executed in 2011, the South Farm and YFL shares passed to Harold, while the rest and residue of the estate was divided among Leonard and the other children.

Harold Does Not File A Timely Will Contest Under Iowa Law

The 2014 mirror wills were probated.  The statutory deadline under Iowa law to file a will contest was October 20.  Harold decided not to file a will contest.

Harold Files a Tortious Interference With An Inheritance Action

Days after Leonard tendered his YFL shares to Harold for $1 (shares that were worth about $400,000), Harold sued Leonard for tortious interference with an inheritance in Iowa District Court.

The Jury Instructions

The case proceeded to a jury trial.

The jury was instructed that for Harold to recover, he had to prove that Leonard “intentionally interfered with the expected inheritance by the wrongful means of A. defamation, or B. fraud, or C. duress, or D. undue influence for the purpose of inducing Agnes Youngblut to make a change to her will.”  The jury was also instructed that:

[a] lawsuit for intentional interference with a bequest or inheritance is not the same as an action to contest or set aside a will. It is an independent cause of action that focuses on a wrongdoer’s unlawful intent to prevent another from receiving a request or inheritance rather than on the mental state of the maker of the will.

What Is The Deadline To File A Will Contest In Iowa?

Section 633.309 of the Iowa Code provides that a will contest must be filed within the later to occur of four months from the date of second publication of notice of admission of the will to probate or one month following the mailing of the notice to all heirs of the decedent and devisees under the will whose identities are reasonably ascertainable.

Harold declined to bring a will contest and instead allowed the deadline to lapse.

The Law Regarding Tortious Interference With An Inheritance In Iowa

The Iowa Supreme Court began by discussing the landscape of tortious interference with an inheritance law in Iowa up until this decision, highlighting several cases.

Gigilos v. Stavropoulos (1973)

In Gigilos v. Stavropoulos, a 1973 case where heirs of a decedent brought a separate, stand-alone fraud action against the executor, the Iowa Supreme Court reasoned:

It is clear the action is a collateral attack on the order admitting the will to probate. A direct attack was available to plaintiffs in the form of an action to set aside the will. It appears such a direct attack was later separately undertaken but the plaintiffs have not succeeded in contesting the will. We note the will contest resulted in a verdict in favor of the proponents and that verdict is now the subject of post-trial motions in district court. The first question is whether plaintiffs’ claim will be heard unless and until the order admitting the will is set aside. The clear answer is that it will not.

. . . .

“The general rule is that a judgment or decree admitting a will to probate, when made by a court having jurisdiction thereof, may be attacked only in such direct proceedings as are authorized by a statute, and is not open to attack or impeachment in a collateral proceeding . . . .”

Frohwein v. Haesemeyer (1978)

A few years later, in Frohwein v. Haesemeyer, the Iowa Supreme Court clarified that “an independent cause of action for wrongful interference with a bequest does exist.”

In Frohwein, a will contest was dismissed based upon the statute of limitations.   The separate action was not viewed as a collateral attack on the probate order.

Huffey v. Lea (1992)

In Huffey v. Lea the Iowa Supreme court directly confronted the issue of whether a tortious interference with an inheritance action is barred when the action is not brought with the underlying will contest.

The Iowa Supreme Court determined that the tortious interference with an inheritance action was not barred after a successful will contest because the will contest and the tortious interference case involved “differences in proof.”

The Huffey decision was directly at odds with a 1991 Iowa Supreme Court decision, Abel v. Bittner, where the court determined that under the doctrine of reaffirmation a will contest could not proceed as to a first codicil where beneficiaries had withdrawn their challenges to the second and third codicils that reaffirmed the first codicil.

The Recent Trend Against Actions for Tortious Interference With An Inheritance

The Iowa Supreme Court noted that the trend in the law is moving toward barring the tort of tortious interference with an inheritance, citing to the Restatement (Third) of Torts, scholarly articles, and recent decisions from other jurisdictions.

The Iowa Supreme Court also noted the 2016 Iowa decision in Villarreal v. United Fire & Casualty Co., stating:

Additionally, in 2016, in Villarreal v. United Fire & Casualty Co., we embraced the view of the Restatement (Second) of Judgments section 24 and held that a policyholder seeking recovery of benefits from an insurer had to bring a bad-faith claim together with the breach-of-contract claim to avoid the potential effects of claim preclusion when both claims arose out of the same transaction. 873 N.W.2d 714, 719-22, 728-29 (Iowa 2016). It did not matter that bad faith would require “some additional proof.” Id. at 729. We explained, “Perfect identity of evidence is not the standard in Iowa for whether claim preclusion applies.” Id.

Should A Tortious Interference With An Inheritance Action Be Allowed To Bypass A Will Contest Under Iowa Law?

The Iowa Supreme Court said no.  While the tort of tortious interference with an inheritance has value in circumstances when a probate proceeding cannot provide an adequate remedy, it should not be a de facto substitute for a will contest, for a variety of reasons.

Probate Provides The Means For Resolution of Issues Relating To A Decedent’s Estate

First, probate is meant to provide a prompt, efficient, centralized way of resolving issues relating to a decedent’s estate.   The Iowa Supreme Court stated:

When a tortious-interference claim is based on “dissatisfaction with the contents of the will,”  there is no reason it cannot be joined with and brought at the same time as the challenge to the will itself. Efficiency favors this outcome. There is a benefit in knowing that if the statutory deadline passes without event, the testamentary plan of distribution will not be disturbed either by a will contest or by an action that seeks equivalent damages on equivalent grounds.

The Law Of Undue Influence In Iowa Probate Is Well-Developed

Second, undue influence is a well-developed probate concept, and includes a requirement that causation must be “clearly” established, which adds a level of protection to the free will of the testator and filter out claims that are unduly speculative.

Allowing the pursuit of a separate tortious interference with an inheritance claim cuts against the well-developed concepts of undue influence law.

The Proof Substantially Overlaps In Will Contests and Tortious Interference Actions

Third, the foundation of Huffey (where the Iowa Supreme Court determined that a tortious interference with an inheritance action was not barred after a successful will contest) has been eroded in the last 30 years.  Rather than viewing a will contest and a tortious interference with an inheritance action as requiring “differences in proof,” the Iowa Supreme Court acknowledged the more modern view that:

If the will reflects the true wishes of the testator, then no claim should lie, either for undue influence or tortious interference. In short, the two claims involve ” ‘a substantial overlap’ of proofs and witnesses” because a central issue is common to both claims.

Iowa’s Legislative Scheme Has No Place For Tortious Interference With An Inheritance As A Will Contest Substitute

Fourth, an action for tortious interference, brought later as a belated substitute for a will contest, does not fit into Iowa’s legislative scheme.

The Iowa Supreme Court noted that a jury trial is available in will contest actions, just like in tort actions, requiring that interested parties be joined as defendants.

Additionally, Iowa Code section 633.487 is intended to give preclusive effect to the “distribution” and “the list of heirs” as to all persons with notice upon court approval of the final report. Section 633.487 essentially cuts off the rights of persons who received notice, and does not appear to contemplate separate actions that would have the effect of overturning the distribution carried out by a will.

A Tortious Interference Action Can Not Be Used As A Will Contest Substitute In Iowa

The Iowa Supreme Court held that a party alleging a decedent’s will was procured in whole or in part by tortious interference must join such claim together with a timely will contest under Iowa Code section 633.308.  The Court overruled Frohwein and Huffey to the extent they stand for the contrary.

The court also noted that its decision does not foreclose a plaintiff from pursuing additional remedies via a tortious interference claim, just that it must be joined with a timely will contest.

Here, Harold could have brought a timely will contest.  He did not.  In sum, Harold’s tortious-interference claim was a de facto substitute for a will contest based on undue influence, and was barred because it was not brought in conjunction with a timely will contest.

 

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