Allen v. Hall, s. USDC

• Court: Supreme Court of Oregon
• Citation: 974 P.2d 199,328 Or. 276
• Docket Number: CV-96-00563-J,USCA,Nos. USDC,s. USDC
• Parties: Kristine Sandoz ALLEN and Eric S. Sandoz, Plaintiffs, v. Sheryl Ann HALL and Daniel Hall, Defendants. 96-35996, SC S45130.
• Decision Date: 11 February 1999

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974 P.2d 199 328 Or. 276 Kristine Sandoz ALLEN and Eric S. Sandoz, Plaintiffs,
v.
Sheryl Ann HALL and Daniel Hall, Defendants. Nos. USDC CV-96-00563-JJ, USCA 96-35996, SC S45130. Supreme Court of Oregon,
En Banc. Argued and Submitted Sept. 14, 1998.
Decided Feb. 11, 1999.

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Margaret Fiorino, Portland, argued the cause for plaintiffs. With her on the brief were Julie R. Vacura and Fiorino & Vacura, LLP, Portland.

Steven Carl Berman, Portland, argued the cause for defendants. With him on the brief were Sara J. Ryan and Ball Janik, LLP, Portland.

Richard S. Yugler, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association.

[328 Or. 278] GILLETTE, J.

This case is before the court on two certified questions from the United States Court of Appeals for the Ninth Circuit. See ORS 28.200 et seq. (providing for certification of certain questions of Oregon law from specified federal courts and appellate courts of other states to Oregon Supreme Court). As framed by the Ninth Circuit, the questions are:

1. Does Oregon recognize the tort of intentional interference with prospective inheritance?

2. If a tort action for intentional interference with prospective inheritance is available, what are the elements of that tort?

Framed more narrowly, the two questions resolve themselves into a single issue: Have plaintiffs in this case, who have

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brought a tort action based on a theory that defendants wrongfully interfered with a prospective inheritance that otherwise would have gone to plaintiffs, alleged facts which, if proved, would form a basis for relief under Oregon law? ¹ To that reformulated question, our answer is "Yes."

The underlying case arises out of a tort action that was filed in the United States District Court for the District of Oregon under 28 USC § 1332 (diversity of citizenship). The case was assigned to a magistrate judge. In that action, plaintiffs Kristine Sandoz Allen and Eric Sandoz alleged the following facts, as summarized by the magistrate judge:

"Following heart transplant surgery in 1984, Gregory Putman developed a number of serious medical problems. As his illness advanced, Putman became increasingly dependent on [defendants Sheryl and Daniel] Hall[ ] for assistance in managing his medical and financial needs. During the last four years of his life, Putman gave the Halls possession of various wills he had executed, placed Sheryl Hall's name on his bank accounts, and placed title to various motor vehicles in the Halls' names.

[328 Or. 279] "On October 9, 1995, Putman executed a will devising substantially all of his assets, including homes in Pacific City, Oregon, and Oregon City, Oregon, to the Halls. That will, prepared on Putman's home computer, devised nothing to plaintiffs. Putman gave the Halls the original of this will.

"Putman drafted a second will on his home computer on October 13, 1995. This will, unlike the will executed four days earlier, left Putman's Oregon City home to plaintiffs.

"Putman met with an attorney, Stephanie Barrie, on October 19, 1995, in order to draft and execute a new will. Putman brought a copy of the October 13, 1995 draft with him to that meeting, and told Barrie that he wanted to leave his Oregon City home to plaintiffs. Putman told Barrie that his illness required that the new will be prepared immediately. Barrie prepared a will according to these instructions.

"Defendant Sheryl Hall became aware of Putman's efforts to change his will, and brought Putman for admission to Good Samaritan Hospital in Portland, Oregon, on October 30, 1995. At the hospital, Sheryl Hall falsely stated that Putman had been confused during the previous two weeks.

"Putman telephoned Barrie's office from the hospital on October 31, 1995, asking Barrie to return his call on his pager. Sheryl Hall telephoned Barrie the same day, asking Barrie to call her on Putman's pager regarding Putman's will.

"The next day, Barrie spoke with Sheryl Hall by telephone. Sheryl Hall told Barrie that Putman could not execute a new will because he was not lucid, and agreed to inform Barrie when he was lucid enough to sign a will. Sheryl Hall never telephoned Barrie with such information.

"On November 3, 1995, Sheryl Hall falsely claimed to have a power of attorney to decide whether Putman should be given life support, and instructed the Good Samaratin Hospital staff not to provide such support to Putman. Putman died two days later, deprived by Sheryl Hall's conduct of the opportunity to execute the will Barrie had prepared."

[328 Or. 280] Plaintiffs further alleged that but for the Halls' intentional interference, they would have inherited the Oregon City home. They sought $245,000, the value of the home, in damages.

On the Halls' motion, the district court dismissed the action for failure to state a claim. The magistrate judge opined that, although some jurisdictions have recognized a claim for intentional interference with prospective inheritance, Oregon courts have not, and most likely would not, follow that trend. The judge also opined that, even if Oregon did recognize a claim for intentional interference with prospective inheritance, plaintiffs' complaint would fail, because it did not allege a necessary element of such a claim, viz., that

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the conduct complained of be "independently tortious."

On plaintiffs' appeal, the Ninth Circuit concluded that, in the absence of controlling precedent from the courts of this state regarding the existence or elements of the tort of intentional interference with prospective inheritance, certification of the foregoing two questions under ORS 28.200 et seq. was appropriate. We accepted certification. See generally Western Helicopter Services v. Rogerson Aircraft, 311 Or. 361, 811 P.2d 627 (1991) (setting out statutory and discretionary criteria for acceptance of certified questions). However, as already indicated, we do not confine our answer to the strict terms of the Ninth Circuit's questions. Rather, we direct our answer at what we perceive to be the substance of the Ninth Circuit's inquiry. We turn to the questions.

1. Does Oregon recognize the tort of intentional interference with prospective inheritance?

On the facts presented, this case does not afford this court a reason to resolve that specific question. It is true that this court to date has not recognized a separate and distinct claim of intentional interference with a prospective inheritance. The reason that the issue need not be answered now (or, perhaps, ever) is that, under Oregon law, an intentional interference with a prospective inheritance may be actionable under a reasonable extension of the well-established tort known as intentional interference with economic relations. Although, heretofore, this court has applied that tort only to contractual and business relationships and prospects, we are [328 Or. 281] persuaded that the tort also may, by a reasonable and principled extension, be made applicable to some noncommercial relationships and prospects, such as the one alleged by plaintiffs in the present case.

Our cases to date have stated the elements of the tort of intentional interference with economic relations as follows: (1) the existence of a professional or business relationship (which could include, e.g., a contract or a prospective economic advantage); (2) intentional interference with that relationship or advantage; (3) by a third party; (4) accomplished through improper means or for an improper purpose; (5) a causal effect between the interference and the harm to the relationship or prospective advantage; and (6) damages. See McGanty v. Staudenraus, 321 Or. 532, 535, 901 P.2d 841 (1995) (stating elements); Uptown Heights Associates v. Seafirst Corp., 320 Or. 638, 651, 891 P.2d 639 (1995) (same). As noted, this court heretofore has applied those elements only to business and contractual relationships and prospects. It follows that, before we attempt to relate the allegations in the present complaint to the elements of that tort, we must explain why the tort may, by a reasonable and principled extension, be made applicable to a prospective inheritance--typically a noncommercial expectancy.

The answer lies in the very close analogy that exists between an expectancy of inheritance and those other interests to which this...