Doughty v. Morris

• Decision Date: 02 February 1994
• Docket Number: No. 13256,13256
• Citation: 871 P.2d 380,117 N.M. 284,1994 NMCA 19
• Court: Court of Appeals of New Mexico
• Parties: Sydney Morris DOUGHTY, Plaintiff-Appellee, v. William W. MORRIS, Defendant-Appellant.

Page 380

871 P.2d 380

117 N.M. 284

Sydney Morris DOUGHTY, Plaintiff-Appellee, v. William W. MORRIS, Defendant-Appellant.

No. 13256.

Court of Appeals of New Mexico.

Feb. 2, 1994.

[117 N.M. 286] Charles E. Hawthorne, Hawthorne & Hawthorne, P.A., Ruidoso, for plaintiff-appellee.

Mel B. O'Reilly, Law Offices of Mel B. O'Reilly, Albuquerque, for defendant-appellant.

OPINION

CHAVEZ, Judge.

This case involves a suit by a sister (Sydney) against her brother (Bill) for tortious interference with an expected inheritance from their mother (Emily). At issue are Emily's inter vivos transfers of most of her property to Bill shortly before her death so that no property remained in her estate to divide equally between Bill and Sydney, as specified in her Will. Bill challenges whether there was substantial evidence to support the trial court's judgment. We hold that a claim for intentional interference with an inheritance is actionable in New Mexico and affirm the trial court's award to Sydney in part and reverse in part.

FACTS

Bill and Sydney are Emily's only children. At trial, Emily was characterized as someone who very much cared for her children. Although Emily was hindered with poor health during the last year of her life, neither party challenges her competency during her lifetime. In fact, almost until her death, Emily conducted her own business affairs, hired her own employees, balanced her own checkbooks, and was very alert. As of February 1989, Emily owned her house and its contents, three certificates of deposit in the amount of $10,000 each with Bill as joint tenant, three certificates of deposit in the amount of $10,000 each with Sydney as joint tenant, a savings account in the amount of $18,000 with Bill as joint tenant, a savings account in the amount of $19,000 with Sydney as joint tenant, and approximately $240,000 worth of Chevron stock. Emily's Will devised her estate equally between Bill and Sydney.

In February 1989 Emily became severely ill. When Sydney arrived to see Emily, Bill told Sydney that Emily wanted them to share the house in Ruidoso after her death. Sydney did not want to share the house with Bill and told him that he could have the house if he would pay her for one-half of its value. When Sydney returned to Albuquerque, Bill told Emily that Sydney refused to share the house with him. Bill testified that this news upset Emily. In May of 1989, Emily transferred title to her home and all of the furniture to Bill.

In June of 1989, Sydney returned to Ruidoso to visit Emily. Sydney told Emily that it would be more convenient to make Bill the personal representative of the Will since Bill lived with Emily. Emily agreed and a codicil to the Will was prepared and executed by Emily. Despite the change of personal representative, the Will remained the same and called for Emily's estate to be divided equally between Sydney and Bill. On the last day of Sydney's visit, Emily told Sydney that she had conveyed the house and furniture to Bill. Emily did not provide an explanation for the conveyance and Bill never mentioned the matter to Sydney.

During Sydney's visit to Emily the following month, Emily asked Sydney to change ownership of the Chevron stock from herself to Sydney and Bill. Despite the change of ownership, Emily informed them that she wanted to continue to receive the dividends during the term of her life. Upon discussing this transfer with a Chevron representative, Sydney's husband was informed that under this arrangement Sydney and Bill would be liable for the income taxes on the dividends. Sydney called Bill and told him that she did not want to be liable for the income taxes on her share of the stock and suggested that the income tax liability be paid from the dividends. Bill conveyed Sydney's suggestion to Emily, which according to Bill, upset Emily. Neither Bill nor Emily mentioned Emily's anger to Sydney.

On September 8, 1989, Emily called Sydney in a panicked state, because Bill had told her that, "he just could not cope any longer, that he needed to be alone, and that he was moving out of her house." Emily became so distraught about Bill's statement that she entered the hospital that same day.

Five days later Bill spoke with an employee and the president of the Bank of Ruidoso about transferring the three certificates of deposit and the savings account, which were in the name of Emily and Sydney as joint tenants, to Emily and himself. At Bill's request, the Bank of Ruidoso prepared a letter to be signed by Emily authorizing the transfer of the certificates of deposit and savings account to Bill. Bill took this letter to the hospital. The next day a hospital employee, outside Bill's presence, went to Emily to notarize the letter. The hospital employee testified that it took forty-five minutes for Emily to sign the letter, because the letter had to be read aloud to Emily who repeatedly told the hospital employee, "I don't know why I have to sign this." Eventually, Emily signed the letter. The certificates of deposit and the savings account were transferred to Bill and Emily that same day.

Emily died approximately one month later. After Emily's death, Sydney tried to contact Bill to discuss their mother's estate, however, Bill never returned her calls. On Thanksgiving Day of 1989, Sydney called a close friend of Bill's and informed her that she was going to come to Ruidoso the next day. The next morning Bill called Sydney and told her not to come to Ruidoso because he owned everything in their mother's estate and the property Sydney received from Emily's estate depended on how well she treated him.

STANDARD OF REVIEW

This Court does not reweigh the evidence on appeal and is "bound by the trial court's findings of fact unless they are demonstrated to be clearly erroneous or not supported by substantial evidence." Roybal v. Morris, 100 N.M. 305, 311, 669 P.2d 1100, 1106 (Ct.App.1983). The duty to weigh the credibility of witnesses and to resolve conflicts in the evidence lies with the trial court, not the appellate court. Williams v. Williams, 109 N.M. 92, 95, 781 P.2d 1170, 1173 (Ct.App.), cert. denied, 109 N.M. 54, 781 P.2d 782 (1989). We consider the evidence in the light most favorable to the prevailing party and disregard any inferences and evidence to the contrary. Montoya v. Torres, 113 N.M. 105, 109, 823 P.2d 905, 909 (1991). Furthermore, findings of the trial court should receive a construction which will uphold, rather than defeat, the judgment below. Roybal, 100 N.M. at 311, 669 P.2d at 1106.

DISCUSSION

New Mexico has not recognized a cause of action for tortious interference with a prospective inheritance. Despite this fact, Sydney plead in her complaint the elements necessary to sustain this cause of action. The trial court took evidence regarding Sydney's claim and eventually ruled in her favor. Additionally, the trial court adopted Sydney's proposed conclusion of law which stated that New Mexico recognized this cause of action. Although the trial court erred in this regard, we see no reason for not recognizing this new tort. Today, we extend the line of New Mexico cases acknowledging tortious interference causes of action to include a cause of action against those who intentionally and tortiously interfere with an expected inheritance.

In a different but in a related context, New Mexico has upheld claims of tortious interference with an existing contract, Wolf v. Perry, 65 N.M. 457, 339 P.2d 679 (1959), and with prospective contractual relations, M & M Rental Tools, Inc., v. Milchem, Inc., 94 N.M. 449, 612 P.2d 241 (Ct.App.1980). The Restatement (Second) of Torts 774B (1979) embraces the cause of action for tortious interference with an inheritance and states, "[o]ne who by fraud, duress or other tortious means intentionally prevents another from receiving from a third person an inheritance or gift that he would otherwise have received is subject to liability to the other for loss of the inheritance or gift." In addition, numerous other states have recognized this cause of action. See, e.g., Firestone v. Galbreath, 67 Ohio St.3d 87, 88, 616 N.E.2d 202, 203 (1993); In re Estate of Knowlson, 204 Ill.App.3d 454, 149 Ill.Dec. 813, 816, 562 N.E.2d 277, 280 (1990); Hammons v. Eisert, 745 S.W.2d 253, 256-58 (Mo.Ct.App.1988) (surveying state jurisdictions that recognize the tort).

To recover for tortious interference with an expected inheritance, a plaintiff must prove the following elements: (1) the existence of an expectancy; (2) a reasonable certainty that the expectancy would have been realized, but for the interference; (3) intentional interference with that expectancy; (4) tortious conduct involved with interference, such as fraud, duress, or undue influence; and (5) damages. See Knowlson, 149 Ill.Dec. at 816, 562 N.E.2d at 280. In this case, since the transfer of the house and its contents occurred at a different time than did the transfer of the certificates of deposits and joint savings account, we must determine whether the elements of the cause of action were fulfilled as to each transfer. In doing so, we hold that there was an expectancy that Sydney and Bill would share equally in Emily's estate after her death, that this expectancy was reasonably certain and that Sydney was damaged as to both transfers. The evidence supports the judgment that Bill intentionally and tortiously interfered with Emily's transfer of the certificates of deposits and joint savings account, but does not support the same for the transfer of the house and its contents.

EXISTENCE OF EXPECTANCY

As to the existence of an expectancy, Emily had a substantial estate of $200,000 and Sydney and Bill were the only two children of Emily. There was testimony that Emily expressed great care and devotion towards both her children and had stated in her lifetime that she wanted her children to share her estate equally. Additionally, Emily's previous inter vivos gifts were to both Sydney...