In Archer v. Anderson, Jack, who had no children, executed a will leaving his estate to his brother and his brother’s children, the Archers. No. 16-0256, 2018 Tex. LEXIS 611 (Tex. June 22, 2018). Later, Jack had a stroke and was mentally incompetent. Jack’s friend Anderson, an attorney, drafted durable and medical powers of attorney appointing himself as Jack’s attorney-in-fact. Jack signed the documents, but his medical records showed that the day he signed them he was delusional and appeared confused. Anderson also tried to have Jack change his estate plan. Anderson proposed that Jack sell his ranch and transfer the proceeds into a charitable remainder trust with the 12 charities as beneficiaries so that Jack’s entire estate would go to the charities and the Archers would be disinherited. At Anderson’s request, Jack sign new wills and trust documents, all disinheriting the Archers and leaving Jack’s entire estate to the charities. With Jack still alive, the Archers sued for a declaratory judgment that Jack had lacked the mental capacity to execute the wills and trust documents. The charities were defendants, and the parties settled with the Archers agreeing to give the charities Jack’s coin collection and pay their attorney fees, which totaled $588,054.
After Jack’s death, the Archers sued Anderson’s estate, who had also died, for intentional interference with their inheritance. Anderson never profited personally from his efforts, and the Archers received all that Jack left them in his earlier will, but they claimed the $588,054 they gave the charities in settlement, plus $2,865,928 in attorney fees and litigation expenses they incurred avoiding Jack’s post-1991 wills and trusts. The jury found in favor of the Archers, and the trial court rendered judgment for them for well over $2 million dollars. Anderson’s estate appealed. The court of appeals reversed and rendered for Anderson’s estate, holding that there was no tortious interference with inheritance claim in Texas.
The Texas Supreme Court affirmed the court of appeals’s holding. The Court noted that there was a split in the courts of appeals regarding whether such a claim existed and noted its recent opinion in Kinsel v. Lindsey, 526 S.W.3d 411, 423 (Tex. 2017), where the Court held that the it and the Texas Legislature had never expressly recognized such a claim. The Court stated:
A tort of intentional interference with inheritance is needed, it is argued, as a gap-filler when probate and other law do not provide an adequate remedy. Texas law thoroughly governs inheritance through probate and restitution and, as we noted in Kinsel, provides remedies for unfairness, such as a constructive trust. If these remedies are inadequate, it is because of legislative choice or inaction, and filling them is work better suited for further legislation than judicial adventurism.
Id. at *17-18. Ultimately, the Court held that a new tort is not needed in Texas even if other remedies would not be complete. The Court concluded: “The fundamental question is why tort law should provide a remedy in disregard of the limits of statutory probate law. We think here it should not. The tort of intentional interference with inheritance is not recognized in Texas. The decisions of the courts of appeals to the contrary are overruled.” Id. at *25-26.
The majority of the court affirmed the court of appeals and held that there was never going to be a claim for tortious interference with inheritance, at least not until the Texas Legislature created such a cause of action. There were four justices of the nine member Court, however, that only agreed in the result in this case. They would hold that the Court should not have held that such a claim could never be recognized in Texas. The dissenting justices stated:
The Court concludes that the Archers had an adequate remedy because they ultimately received their inheritance, albeit minus attorney’s fees and a settlement with the charities. But rather than leaving open the issue of whether to recognize the cause of action as we did in Kinsel, the Court changes course and closes that door. It does so even though that door might, in some instances, provide the only avenue to relief for parties who suffer loss at the hands of actors who intentionally—not merely negligently—caused the loss.
The Court says that a judicially recognized gap-filler cause of action is unnecessary because statutory probate law provides adequate remedies. My overriding concern is that neither we nor the courts of appeals have considered a sufficient spectrum of factual circumstances for us to confidently conclude that foreclosing the cause of action will not leave parties without any avenue of relief against those whose actions intentionally and wrongfully divest an elderly person with diminished capacity of assets and thus interfere with that person’s last-expressed true intentions about the disposition of his or her property.
The Court recognizes that a constructive trust can provide a remedy for unfairness. But the typical remedy of imposing a constructive trust resulting from a successful restitution action is not always available or may not provide an adequate remedy, as this Court has recognized. While we have stated that “[t]he specific instances in which equity impresses a constructive trust are numberless,” we have also acknowledged that “the reach of a constructive trust is not unlimited.” The imposition of a constructive trust generally requires the requesting party to establish (1) a breach of a special trust or fiduciary relationship or actual or constructive fraud, (2) unjust enrichment of the wrongdoer, and (3) an identifiable res that can be traced back to the original property. As applied in the inheritance context, the would-be beneficiary must trace the fraudulently obtained property to funds received by the wrongdoer. However, if the property has been dissipated or traceable funds have been depleted, there will be nothing remaining upon which to impose a constructive trust. A judgment obtained from a tort action, on the other hand, would provide the expectant beneficiary with at least potential redress.
Id. *42-44. In the end, the majority of the Court abdicated its role as a common-law court and placed all responsibility on the Legislature to create causes of action. The concurring and dissenting justices would have held that a tortious interference with inheritance rights claim may be permissible under the right circumstances (where a constructive trust claim is not a remedy because the ill-gotten gains have been dissipated) and would not have closed the door at this time.
So, at this point, plaintiffs will have to rely on other causes of action to vindicate their rights when the elderly and infirm are taken advantage of by bad people. It appears that the Court believes that a constructive trust is the principal claim in this situation. For example, in Kinsel v. Lindsey, 526 S.W.3d 411, 423 (Tex. 2017), family members and an attorney convinced an elderly woman, who did not have mental capacity, to execute new estate planning documents and sell a ranch. The ranch would have gone to other family members, but since the ranch was sold, its proceeds (cash) went to the bad individuals. The Court held that a constructive trust, based on a mental incapacity finding, provided an adequate remedy and there was no need to recognize the tort of tortious interference with inheritance rights. Id.
Regarding a constructive trust, the defendants had several arguments for why the trial court abused its discretion in creating a constructive trust in this case. Id. at *31-35. The Court disagreed and held that there does not have to be a breach of a fiduciary duty by the defendants owed to the plaintiffs. Id. There was no duty owed by the defendants to the plaintiff. Id. Citing to an earlier opinion, the Court held: “It is true that we recently recognized that a ‘breach of a special trust or fiduciary relationship or actual or constructive fraud’ is ‘generally’ necessary to support a constructive trust. But in that same case we reaffirmed our statement in Pope that ‘[t]he specific instances in which equity impresses a constructive trust are numberless—as numberless as the modes by which property may be obtained through bad faith and unconscientious acts.’” Id. Even though the defendants did not breach any duty owed to the plaintiffs, the Court concluded that the trial court acted within its discretion in imposing a constructive trust: “We hold the mental-incapacity finding, coupled with the undue-influence finding, provided a more than adequate basis for the trial court to impose a constructive trust.” Id.
But, the issue remains, what if the ranch proceeds had been dissipated? How would the plaintiffs recover what was due to them?
The Court’s opinion in Archer is good news for parties who regularly deal with the elderly and infirm. Trusted advisors have been at risk for tortious interference claims. Attorneys that draft wills and trusts, financial advisors, financial institutions, broker/dealers, insurance agents, accountants, and others who provide advice have been at risk for tortious interference claims. For example, the Archers sued Anderson, who was an attorney. The Kinsels sued Jackson Walker, who were attorneys, for tortious interference. The risk of such a claim is now gone. Of course, creative plaintiffs may think of other claims and theories to bring trusted advisors into litigation against the “bad guy” that influenced an elderly or infirm person. Claims such as conspiracy, aiding and abetting breach of fiduciary duty, and knowing participation in breach of fiduciary duty, may be raised under the correct circumstances.