Opinion ID: 157370
Heading Depth: 2
Heading Rank: 3

Heading: Applying the Probate Exception

Text: 14 Our Circuit has twice before explored the relationship between the tort at issue here-intentional interference with inheritance-and the probate exception. See id. at 1525; Beren, 24 F.3d at 1226. The McKibben opinion is particularly helpful to the instant issue. The question there presented was whether the probate exception prevented federal jurisdiction over two tortious interference with inheritance claims. The first claim challenged property transfers under a will, and the second challenged inter vivos property transfers. As to the will transfers, we affirmed the district court's refusal to accept jurisdiction because a claim of undue influence in the execution of a will is ancillary to a will challenge and belongs in state probate court. See McKibben, 840 F.2d at 1530. Although the probate court had already denied his will contest, had the plaintiff succeeded in the state proceedings  'he could have obtained [in the probate court] all the relief he could receive as damages in [his tort] case [in federal court].'  Id. (quoting Maxwell v. Southwest Nat'l Bank, 593 F.Supp. 250 (D.Kan.1984)). In contrast, we accepted federal jurisdiction over the challenged inter vivos transfers of the decedent's property because (1) a will contest was not an adequate remedy for property that was transferred before the testator died and thus was not part of the testator's estate and (2) Kansas law gave courts of general jurisdiction power to hear actions to bring property into an estate. See id. at 1531. 15 Mr. Rienhardt's federal suit may similarly be separated into distinct claims. Although he pled a single claim for tortious interference with inheritance, his claim ultimately rested upon three allegations of undue influence on the part of Hilda and Tom Kelly: (1) that the 1990 wills and the 1992 testamentary agreement, which replaced the 1987 wills favoring plaintiff, were the product of undue influence on the part of the Kellys ([Mr. and Mrs. Kelly] causing [Arch and Fay] to replace wills favoring him ); (2) that the Kellys exerted undue influence on plaintiff's parents to prevent them from executing new wills more favorable to plaintiff ([Mr. and Mrs. Kelly] causing [Arch and Fay] ... not to make wills leaving him the ranch); and (3) that the Kellys exerted undue influence on plaintiff's father to purchase the ranch (unduly profiting by procuring the transfer of the family ranch and other assets to themselves for little or no consideration). 16 1. The First Allegation.--Alleging tortious interference with an expected inheritance by [Mr. and Mrs. Kelly] causing [Arch and Fay] to replace wills favoring him, Mr. Rienhardt has alleged that the wills and testamentary agreement subject to ongoing probate proceedings are the result of undue influence. The elements of the tort are (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. Doughty v. Morris, 117 N.M. 284, 871 P.2d 380, 384 (N.M.Ct.App.1994) (emphasis added). On the first allegation, the expectancy stems from the 1987 will favoring Mr. Rienhardt, the alleged interference is the replacement of that will with the 1990 wills and 1992 testamentary agreement, and the tortious conduct required for element four amounts to an allegation that those 1990 wills and the 1992 testamentary agreement are the result of such tortious conduct. Necessary to resolution of Mr. Rienhardt's first allegation is a resolution of the very issue presented in probate proceedings, whether the 1990 and 1992 wills and testamentary agreement are the result of undue influence. 17 Applying McKibben and Beren, we hold that the first allegation is ancillary to the probate proceedings and thus jurisdiction by the federal district court is precluded by the probate exception. It can and should be challenged only in the ongoing state probate proceedings. See, e.g., In re Estate of Kerr, 121 N.M. 854, 918 P.2d 1354, 1355 (N.M.App.1996) (allowing undue influence issue to be raised in probate proceedings); In re Estate of Strozzi, 120 N.M. 541, 903 P.2d 852, 853 (N.M.App.1995) (same); Lucero v. Lucero, 118 N.M. 636, 884 P.2d 527, 532 (N.M.App.1994) (contestants of will have burden of establishing undue influence); N.M. Stat. Ann. § 45-3-407 (1978) (same); see also Dragan v. Miller, 679 F.2d 712, 717 (7th Cir.1982) (where ... the interference consists of having procured a will that disinherits the plaintiff, it appears that the tort action must be brought as an ancillary proceeding ... to the original [probate] proceeding). Indeed, it appears plaintiff is currently attempting to challenge his mother's 1990 will and his father's 1992 testamentary agreement on those precise grounds in the state probate proceedings. See Socorro County Dist. Ct. No. PB-91-04, and Socorro County Dist. Ct. No. PB-93-02. 18 In Doughty v. Morris, New Mexico recognized the tort of intentional interference with inheritance. See 871 P.2d at 384. Mr. Rienhardt has pled his case under the rubric of this tort. However, the Doughty case recognized the tort with regard to an inter vivos transfer of property that would have been subject of the will. See id. at 382. Mr. Rienhardt, via his first allegation, would have us recognize the tort with regard to interference with a will. To do so would be to expand the tort in a manner inconsistent with the rationale for recognizing the tort in the first place. The Doughty case recognized the tort where a brother used undue influence to cause his mother to transfer him most of her property inter vivos. The mother's will specified that her estate should be divided equally between the brother and the sister, but due to the inter vivos transfers, her estate was negligible at the time of her death. See id. Thus, the brother effectively circumvented the intent of the will without interfering with the will. No challenge to this behavior could be brought in probate proceedings, because the will remained valid and executable according to its language. Thus, to remedy this seemingly remedy-less situation, the New Mexico court recognized the tort. 19 Mr. Rienhardt's first allegation, that the 1990 wills and the 1992 testamentary agreement, which replaced the 1987 wills favoring plaintiff, were the product of undue influence on the part of the Kellys, is precisely the type of claim that is presentable in probate proceedings. See, e.g., In re Estate of Kerr, 121 N.M. 854, 918 P.2d 1354 (N.M.App.1996). As such, we do not believe it is the type of claim the New Mexico courts meant to recognize at law. Where the issue is properly within the jurisdiction of the probate court, the tort may not be used to circumvent the jurisdiction of that court. 20 The first allegation is within the probate court's exclusive jurisdiction, and therefore, federal courts are precluded from hearing the claim. See McKibben, 840 F.2d at 1529. 21 2. The Second and Third Allegations.--Mr. Rienhardt's second and third allegations, however, are more akin to the allegation in the Doughty case. On these charges, Mr. Rienhardt seeks damages from the Kellys for their alleged wrongs. This suit, rather than being cognizable only by a probate court, is enforceable in a state court of general jurisdiction. To paraphrase Markham, 326 U.S. at 494, 66 S.Ct. 296 in hearing the tort claim based on these two allegations, the federal district court did not interfere with the probate proceedings, assume general jurisdiction of the probate, or take control of the property in the custody of the state court. Therefore, the probate exception does not apply to deprive federal diversity jurisdiction over these allegations. 22 3. The Non-Severability of the Jury Verdict. We do not know on what ground the jury reached its verdict. The jury may have done so at least in part on a cause of action over which the district court had no jurisdiction: that is, the tort claim based on the first allegation. Therefore, the verdict must be vacated and the latter two allegations remanded for retrial.