Youngblut v. Youngblut

• Decision Date: 12 June 2020
• Docket Number: No. 18-1416,18-1416
• Citation: 945 N.W.2d 25
• Parties: Harold YOUNGBLUT, Appellee, v. Leonard YOUNGBLUT, Appellant.
• Court: Iowa Supreme Court

945 N.W.2d 25

Harold YOUNGBLUT, Appellee,

v.Leonard YOUNGBLUT, Appellant.

No. 18-1416

Supreme Court of Iowa.

Filed June 12, 2020

Rehearing Denied July 17, 2020

Philip A. Burian and Robert S. Hatala of Simmons Perrine Moyer Bergman, PLC, Cedar Rapids, for appellant.

David J. Dutton and Nathan J. Schroeder of Dutton, Daniels, Hines, Kalkhoff, Cook & Swanson, P.L.C., Waterloo, for appellee.

MANSFIELD, Justice.

I. Introduction.

This case presents the question whether a disappointed heir can decline to pursue a will contest and instead bring a later, separate lawsuit against one or more favored heirs for wrongfully inducing the testator to execute that will. After careful review of the Iowa Probate Code, recent authority, and underlying policy considerations, we conclude that such a "probate bypass" should not be permitted. Accordingly, we hold that a claim alleging that the decedent's will resulted from tortious interference by a beneficiary must be joined with a timely will contest; otherwise, it is barred. For this reason, we reverse the judgment in favor of the plaintiff in this case and remand for further proceedings.

II. Facts and Procedural Background.

As the caption might suggest, this case involves an intrafamily dispute. The parties are two brothers, Harold and Leonard Youngblut. Their parents, Earl and Agnes Youngblut, were successful farmers in Black Hawk and Tama Counties for many years until they died a day apart from each other in 2014.

During their lifetime, Earl and Agnes accumulated approximately 385 acres of farmland in Black Hawk County. These included the 155-acre "Peters Farm," and another farm comprising some 230 acres that contained the acreage where they lived. Earl and Agnes also owned about 150 acres of farmland in Tama County. In addition to the 535 acres owned outright, Earl and Agnes also rented other land for farming purposes; altogether their annual farming operation typically covered 1500 to 1800 acres.

Earl and Agnes parented twelve children, three of whom predeceased them. Plaintiff Harold and defendant Leonard were the only two surviving sons. From a young age, both Harold and Leonard were involved in working the family farm.

In 1980, Earl and Agnes formed a corporation, Youngblut Farmland Ltd. (YFL) and transferred most of their farm-related assets into it. These included the Black Hawk County farmland and their farm equipment. Earl and Agnes retained in their own names the Tama County farmland, dubbed the "South Farm."

Both Harold and Leonard continued to work on the Youngblut family farm as adults. Harold participated continuously except for about seven or eight years during the farm crisis of the 1980s when he moved out of state and took on other work. Upon his return to Iowa in 1992 or 1993, he resumed farming on the family farm.

Leonard worked on the family farm through the 1980s and most of the 1990s. In 1998, he left over a dispute with Harold. Thereafter he turned to other employment in Black Hawk and Tama Counties and did not return to farming.

Beginning in the 1980s, as a form of estate planning, Earl and Agnes regularly transferred shares in YFL to their children. By 2002, Harold was actually managing YFL and the family farming operation; he became the president of YFL in 2006. Earl and Agnes anticipated that Harold would ultimately control YFL, while the other children would have their shares redeemed in cash. Meanwhile, with Harold as president, YFL pledged assets and loaned money to support Harold's personal business ventures, including land development and a Gold's Gym.

In 2010, one of Earl and Agnes's daughters died, and her YFL shares were redeemed by the corporation. In 2011, Earl and Agnes executed new mirror wills. In the 2011 wills they left their property to each other, but upon the last of them to die, their YFL shares and the South Farm passed to Harold, while the rest and residue of the estate would be divided equally among Leonard and the other children. By this time, Earl was approaching ninety years old and totally retired from farming; Harold later recalled that 2011 or 2012 was the last time Earl drove the combine at harvest.

In March 2013, Leonard sent an email to his siblings that he labeled, inaptly, as a "Family Togetherness Plan." This email criticized the manner in which YFL had been run, accused Earl of sexism, and attacked Harold over his religion. Leonard proposed a new distribution of the family assets among the siblings. Under it, Harold would receive the Peters Farm, Leonard would receive the South Farm, and the daughters would receive everything else. Leonard's email also threatened litigation.

Later that year, arrangements were made to redeem the YFL shares owned by the remaining seven daughters. Accordingly, two of the daughters were cashed out for $250,000 each; the other five received $50,000 down with the $200,000 balance to be paid in installments over ten years. Following these redemptions, Earl owned 30.28% of YFL, Agnes owned 30.28%, Harold owned 15.21%, Leonard owned 13.15%, and other relatives owned the remaining 11.08%.

In January 2014, Earl and Agnes moved into an assisted living home with the help of Harold and Harold's family. A scene arose when Leonard showed up on moving day; he threatened to have Harold arrested. On February 5, Leonard sent an email to the siblings disparaging Harold and threatening legal action. After Earl and Agnes moved into the assisted living home, Earl suffered a stroke. Agnes, meanwhile, was enduring the effects of terminal cancer. Harold recalls "there were times where both of them had difficulty understanding things."

On February 22, Harold had his parents sign a four-year lease for him to rent the South Farm. On March 5, Earl and Agnes also deeded the house they had recently vacated to Harold.

Two days later, on March 7, Earl and Agnes executed new mirror wills. Like the 2011 mirror wills, the 2014 mirror wills provided that Harold would receive his parents’ YFL shares. However, the South Farm would now go to Leonard provided he tendered his YFL stock to Harold for one dollar. The rest and residue of the estate would be divided among the seven daughters. Finally, each of the new wills contained an in terrorem clause:

Should any person contest the validity of this Last Will and Testament, any provisions made for said person under the terms of this Last Will and Testament shall lapse, and said person shall be treated as if he or she had predeceased me, leaving no issue him or her surviving me.

Harold found out in March that his parents were contemplating changing their wills:

Q. Did you know what changes your parents were going to make in that will change in March of 2014? A. The only thing that was ever circulated was about Leonard getting the South Farm.

Q. Did your parents ever say specifically that that was the change they were going to make? A. And I don't remember if it was before or after, but yes.

Q. And tell us what you were told and by whom. A. That, you know, the girls and Leonard all felt that he should get the farm and that I was just a greedy SOB if I didn't just say "okay," and that, you know, they just -- at one point Mom said to me, "I just want them to shut up and go away," is how she phrased it.

By May, Harold was aware of the actual terms of the new will and believed Leonard and his sisters had improperly influenced their parents.

On June 1, Earl passed away. Agnes died the following day. Their 2014 mirror wills were probated.

The statutory deadline for contesting the will of Agnes (the last to die) was October 20. Prior to that time, Harold consulted an attorney about contesting the will. He decided not to, in part because of a concern that he could end up being disinherited under the in terrorem clause if the contest failed.

In March 2015, Leonard tendered his YFL shares to Harold for $1 and received title to the South Farm. Harold estimated that YFL at that time might be worth between $5.6 million and $6 million and the shares he received from Leonard were worth $400,000.

Eight days after receiving Leonard's YFL shares on March 25, Harold sued Leonard and three of his sisters on April 2 in the Iowa District Court for Black Hawk County for tortious interference with an inheritance. The suit alleged that the defendants "engaged in conduct designed to defeat their parents’ Estate Plan and to substitute their own plan which would inure to their own benefit." It alleged that they "exert[ed] undue influence on their parents to change their Estate Plan." It further alleged that they "intentionally, improperly and maliciously interfered with the Wills and bequests of their parents, Earl and Agnes Youngblut, and ... substituted their own testamentary plan for their own benefit."

The three sisters reached settlements with Harold totaling $80,000 and were dismissed before trial. Meanwhile, Leonard moved for summary judgment. He asserted that Harold was barred from seeking tortious-interference damages based on the change of estate plan reflected in the 2014 wills because he had failed to file a timely will contest. Leonard also asserted that Harold was estopped from claiming the 2014 wills were the product of tortious interference after accepting the benefits thereunder, specifically the opportunity to obtain Leonard's YFL shares for $1. Leonard's motion was denied, and the case against Leonard proceeded to a jury trial.

At the close of evidence, Leonard moved unsuccessfully for a directed verdict on the same grounds he had previously urged for summary judgment. 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

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