Case Result: Court of Appeals Affirms $2M Interference with Inheritance Verdict
on 6/20/2017 by Nathan Schroeder
The Iowa Court of Appeals upheld a jury verdict awarding DBSH client more than $2 million in damages against his two sisters. The court found that substantial evidence supported the jury’s finding that the sisters exerted undue influence over their father, causing him to execute a will that disinherited the brother. The court agreed that the evidence supported a finding that the sisters had tortiously interfered with the brother’s inheritance. Finally, the court upheld the jury’s finding that the brother was entitled to punitive damages.
The case involved a lawsuit brought by a brother, DBSH's client, against his two sister's relating to their parents estate. The brother farmed with his father for most of his adult life. The sisters, who grew up on the farm, married and moved elsewhere. In 1997, the parents executed a revocable living trust under which the brother and one of the sisters were to ultimately split the parents’ assets. The other sister had disclaimed any share in the trust at that time, believing that she was “sufficiently provided for by her husband.”
Conflict began between the siblings around the time the price of Iowa farmland was reaching record heights. As the parents aged, the father began suffering from dementia and the mother encountered serious health problems. The brother continued to operate the farm with his father, and he assisted his parents with medical and business decisions. In 2008, the sisters joined the brother as joint attorneys in fact for their parents. The executing documents provided that the decision of any two of the siblings was binding. The sisters made the decision to move the parents to an assisted living center 110 miles from the farm. The sisters then assumed the role of helping their parents with the bills and making decisions about their care.
From 2008 through 2011, the relationship between the brother and his sisters and parents deteriorated substantially. The sisters accused the brother of stealing his father's machinery, of being a freeloader, and of using drugs. The sisters did not speak to the brother from 2008 forward. During that time, they also encouraged the parents to modify the trust several times, each time reducing the value of the brother's inheritance, ultimately culminating in its revocation in 2011. During the time changes were made, the sisters were involved with communications and meetings with the parents attorney. At that time, the parents executed mutual wills leaving their property to the sisters and disinheriting the brother completely. The mother died in 2012, and the father died in 2013. The sisters kept the father’s death “completely confidential,” and the brother did not hear of it until after a private funeral.
The will was admitted to probate nine days after the funeral, and the brother sought to have it invalidated on the grounds of undue influence and lack of testamentary capacity. He also sought damages for tortious interference with inheritance. After an eight-day trial, the jury returned a verdict in the brother’s favor. The jury found that the will should be set aside on the grounds of undue influence and lack of testamentary capacity. The jury also found in favor of the brother on his tort claim, awarding him $1,183, 430.50 (or one-half of his parents’ gross estate) in actual damages, $295,857.62 in consequential damages, $118,343.05 in punitive damages from one sister, and $59,171.53 in punitive damages from the other sister. The jury also found in the brother’s favor on a conversion counterclaim filed against him by one of the sisters. Finally, the court awarded the brother $445,454.75 in attorney fees on top of the jury award.
On appeal, the Iowa Court of Appeals upheld the judgment. Although the court found that the evidence did not support the jury’s finding of lack of testamentary capacity, the court found the will was properly set aside on the grounds of undue influence. While the brother proved his father’s gradual mental deterioration over time, he did not present evidence sufficient to show a lack of testamentary capacity on the day the father executed the will in 2011. Even so, the court found “ample evidence” of undue influence, facts the court detailed more fully when analyzing the tortious interference with inheritance claim.
Intentional Interference with an Inheritance
The court found substantial evidence to support the required elements of that tort:
- The brother expected to receive an inheritance from his father upon his father’s death.
- The sisters knew of the brother’s expected inheritance.
- The brother's sisters intentionally and improperly interfered with the brother’s expectancy by way of defamation and undue influence.
- There was reasonable certainty that the brother would have received an inheritance, but for his sisters’ interference.
- The brother suffered damages as a result of his loss of inheritance.
In reviewing the evidence, the court found that a reasonable jury could have concluded that the sisters sought to obtain a power of attorney and move the parents away from the brother to increase their influence over their parents. The court also found that the jurors, who were responsible for assessing the credibility of the witnesses, believed that the sisters did not act in good faith when they made regular reports to the parents about their brother. The sisters reported that the brother was again using illegal drugs, that he had stolen his parent’s machinery, and that he had taken advantage of his parents financially and emotionally. The sisters did not speak to the brother during this time and did not attempt to acquire solid facts regarding their disparaging remarks. The court ruled that substantial evidence supported the jury’s conclusion that the parents had clearly disinherited the brother because of the sister’s interference.
Finally, the court found that the brother had shown “actual malice” on the part of his sisters, so as to support punitive damages. The court noted the sisters’ “callous, intentional decision” to keep the father’s death a secret from the brother--even though the brother had farmed with his father for more than 30 years—thereby preventing the brother from attending his father’s funeral.
After the Court of Appeals decision, the sisters sought further review from the Iowa Supreme Court, which was denied.
DBSH attorneys David Dutton and Nate Schroeder were the attorneys who handled the trial and appeal of the case.
The case is Boman v. Cramer, No. 16-0110 (Iowa Ct. App. Feb. 8, 2017).
- david dutton
- dbsh general
- nathan j schroeder