Doughty v. Morris
871 P.2d 380, 117 N.M. 284 (1994)
Rule of Law:
New Mexico recognizes a cause of action for intentional interference with an expected inheritance where a defendant, through tortious conduct such as undue influence, prevents another from receiving an inheritance or gift they would have otherwise received.
Facts:
- Emily, the mother of Bill and Sydney, owned a house, furniture, three $10,000 certificates of deposit with Bill as joint tenant, three $10,000 certificates of deposit with Sydney as joint tenant, an $18,000 savings account with Bill as joint tenant, a $19,000 savings account with Sydney as joint tenant, and approximately $240,000 worth of Chevron stock.
- Emily's Will specified that her estate was to be divided equally between Bill and Sydney.
- In February 1989, Emily became severely ill, and Bill told Sydney that Emily wanted them to share the house in Ruidoso after her death, which Sydney declined, stating Bill could have the house if he paid her half its value.
- After Bill conveyed Sydney's refusal to Emily, Emily transferred title to her home and all furniture to Bill in May 1989.
- The following month, Bill relayed to Emily Sydney's objection to paying income tax liability on Chevron stock dividends, which, according to Bill, upset Emily.
- On September 8, 1989, Emily became distraught and entered the hospital after Bill told her he 'just could not cope any longer' and was moving out of her house.
- Five days later, Bill spoke with bank employees about transferring the three certificates of deposit and savings account, which were in Emily and Sydney's joint names, to Emily and himself, and Bill then brought Emily a letter for notarized signature in the hospital.
- Emily signed the transfer letter in the hospital, taking forty-five minutes and repeatedly stating, 'I don’t know why I have to sign this,' after which the certificates of deposit and savings account were transferred to Bill and Emily as joint tenants.
Procedural Posture:
- Sydney filed a lawsuit against her brother Bill in the trial court, alleging tortious interference with an expected inheritance.
- The trial court took evidence regarding Sydney's claim.
- The trial court found in favor of Sydney and entered judgment against Bill.
- The trial court adopted Sydney's proposed conclusion of law, stating that New Mexico recognized the cause of action for tortious interference with an expected inheritance.
- Bill appealed the trial court's judgment to the New Mexico Court of Appeals, challenging the sufficiency of the evidence.
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Issue:
Does New Mexico recognize a cause of action for tortious interference with an expected inheritance, and if so, was there substantial evidence to support the trial court's finding that Bill tortiously interfered with Sydney's expected inheritance from Emily as to specific inter vivos property transfers?
Opinions:
Majority - Chavez, Judge
Yes, New Mexico now recognizes a cause of action for intentional interference with an expected inheritance, and while the trial court's finding of interference regarding the certificates of deposit and savings account is affirmed, its finding regarding the house and furniture is reversed. The court formally recognizes this tort, aligning New Mexico with the Restatement (Second) of Torts § 774B and acknowledging existing state precedents for other forms of tortious interference. To recover, a plaintiff must prove (1) the existence of an expectancy; (2) a reasonable certainty the expectancy would have been realized but for the interference; (3) intentional interference with that expectancy; (4) tortious conduct (e.g., fraud, duress, undue influence); and (5) damages. The court found that Sydney had an expectancy, which was reasonably certain, and that she suffered damages. Regarding the certificates of deposit and savings account, substantial evidence supported a finding of undue influence: Bill had a confidential relationship with Emily, who was in a weakened physical and mental condition (fear of being left alone, heightened by Bill's threat to move out), making her susceptible to influence. The transfers represented an unnatural or unjust disposition, contradicting Emily's stated intent for equal sharing. Bill actively participated in procuring these transfers by initiating bank contact, arranging documents, and delivering them, while also keeping the transactions secret from Sydney. The court noted a lack of direct evidence of Bill's domination but found the other factors sufficient. However, for the house and furniture transfer, there was insufficient evidence of undue influence. Emily was mentally competent, initiated the transfer herself, was cautioned by an abstractor, read and willingly signed documents, and informed Sydney of the transfer, who acquiesced. Bill did not actively procure this transfer beyond preparing a furniture inventory. The court concluded that an independent finding of undue influence satisfies the 'tortious conduct' element for this tort, distinguishing it from an improper means and motive analysis used in prospective contract claims.
Analysis:
This case is groundbreaking for New Mexico, formally recognizing the tort of intentional interference with an expected inheritance. It provides a crucial remedy for individuals whose inheritances are lost due to tortious inter vivos transfers, particularly through undue influence, where traditional probate remedies might be insufficient. The decision aligns New Mexico with the Restatement (Second) of Torts and a majority of other states, clarifying the elements required for such a claim. Furthermore, its detailed application of the undue influence factors provides a valuable framework for future litigants and courts, emphasizing the importance of a confidential relationship combined with suspicious circumstances like weakened mental state, unnatural disposition, and beneficiary participation and secrecy.
