Opinion
NOT TO BE PUBLISHED
Monterey County Super. Ct. No. M73885
ELIA, J.James F. Jones sought to bring an action for tortious interference with inheritance and inter vivos gift against Cheryl Welchner. She allegedly interfered with gifts that her father Colonel Carl Welchner sought to make, before his death, to Jones who had befriended him. According to the complaint, Colonel Welchner intended to give appellant a 49 percent interest in a Carmel property held in trust and the money held in two bank accounts to facilitate the purchase of the remaining interest in that Carmel property. It alleged that Colonel Welcher suffered a stroke and was hospitalized and then admitted to Monterey Hospice. It further alleged on information and belief that Colonel Welchner was taken "against his wishes to Santa Barbara" and placed in an institution. The complaint averred that Cheryl Welchner isolated her father, "beset[] him verbally, coerced him to sign a document or documents prepared by an attorney at her direction, [and ]. . . caused the inheritance promised Plaintiff not to occur." It also averred that Cheryl Welchner "willfully interfered with her father's gift to Plaintiff by exerting undue influence, and duress on her father, and through fraud and misrepresentation."
The court sustained a demurrer without leave to amend on the ground that California does not recognize a cause of action for interference with inheritance or inter vivos gift. On appeal, Jones asks this court to recognize the tort of interference with prospective inheritance or inter vivos gift and to find that his complaint sets out facts sufficient to state a cause of action. We affirm the court below since we find no reasonable possibility that the pleading's defects can be cured by amendment. (See Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)
In the interests of justice, we deem that the nonappealable order sustaining the demurrer without leave to amend (see Code Civ. Proc. 904.1, subd. (a); Youngblood v. Board of Supervisors (1978) 22 Cal.3d 644, 651) incorporates a judgment of dismissal and treat the notice of appeal as applying to that judgment. (See Kendall v. Ernest Pestana, Inc. (1985) 40 Cal.3d 488, 493, fn. 3; Beazell v. Schrader (1963) 59 Cal.2d 577, 579; see also Griset v. Fair Political Practices Com'n (2001) 25 Cal.4th 688, 700.)
Appellant is unable to cite any California case explicitly recognizing a tort of interference with prospective inheritance or inter vivos gift. Rather, he argues that such tort would be a logical extension of the torts of interference with prospective economic advantage and interference with contract, which California recognizes as valid causes of action. He points out that the Restatement Second of Torts (Restatement) outlines a tort for intentional interference with inheritance or gift. (See Rest.2d Torts, § 774B, p. 58.) He invites us to follow other states such as Oregon which have concluded such interference may be actionable.
In discussing the historical development of the tort of intentional interference with prospective contractual relation, the Restatement notes that early English cases imposed liability for "interference with business expectancies," not only interference with actual contracts. (Rest.2d Torts, § 766B, com. b., p. 21.) The Restatement states that the tort of intentional interference with inheritance or gift described in section 774B "represents an extension to a type of noncontractual relation of the principle found in the liability for intentional interference with prospective contracts . . . ." (Rest.2d Torts, § 774B, com. a., p. 58.)
Section 774B of the Restatement provides: "One 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." Under this section, liability is "limited to cases in which the actor has interfered with the inheritance or gift by means that are independently tortious in character." (Rest.2d Torts, § 774B, com. c., p. 58.) Usually, the failure to make a bequest or gift is the result of "fraud, duress, defamation or tortious abuse of fiduciary duty" or the result of "forge[ry], alter[ation] or suppress[ion] [of] a will or document making a gift." (Rest.2d Torts, § 774B, com. c., pp. 58-59.)
In Allen v. Hall (1999) 328 Or. 276 (974 P.2d 199), the Oregon Supreme Court determined that "an expectancy of inheritance is an interest that fits by logical extension within the concept underlying the tort of intentional interference with prospective economic advantage and, absent some legitimate reason for excluding it, may be deemed to be covered by that theory of recovery." (Id. at pp. 202-203.) It explained: "Although an expectancy of inheritance is, by definition, purely prospective, so are many of the commercial interests that have been associated with and are protected by the tort. [Citation.] Moreover, prospects of inheritance long have been recognized as interests that are worthy of common-law protection. See, e.g., Hale v. Groce, 304 Or. 281, 744 P.2d 1289 (1987) (permitting intended beneficiary of will to sue lawyer for failing to include gift to intended beneficiary in will as directed by testator); Brown v. Hilleary, 133 Or. 26, 286 P. 593 (1930) (decedent's heirs could sue to set aside deed that was procured by undue influence); Groesbeck v. Groesbeck, 49 Or. 113, 88 P. 870 1907) (decedent's heirs permitted to set aside sale of property that was procured from testator before his death by fraud and undue influence)." (Id. at p. 202.) The court concluded that "a clear prospect of an inheritance can qualify as a protected economic relationship." (Id. at p. 204.) It held that the complaint in the case before it stated "a claim under a reasonable extension of the scope of the tort of intentional interference with economic relations" but declined to resolve whether Oregon recognized "a separate and distinct claim for intentional interference with prospective inheritance." (Id. at p. 206; see Allen v. Hall, supra, 974 P.2d at pp. 200-201.)
Some state courts have determined that interference with expected inheritance or interference with inter vivos gift is actionable while others have not. (See Annot. Liability in Damages for Interference with Expected Inheritance or Gift (1983) 22 A.L.R.4th 1229.) To date, California courts have not formally recognized such a cause of action. Neither has the California Legislature established such cause of action.
In California, interference torts have focused on the protection of economic relationships rather than familial or other personal relationships. "It has long been held that a stranger to a contract may be liable in tort for intentionally interfering with the performance of the contract. (Lumley v. Gye (1853) 2 El. & Bl. 216 [118 Eng. Rep. 749]; Imperial Ice v. Rossier (1941) 18 Cal.2d 33 [112 P.2d 631], and cases cited.)" (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.) "The tort of interference with prospective economic advantage protects the same interest in stable economic relationships as does the tort of interference with contract" but it "does not require proof of a legally binding contract. (Buckaloo v. Johnson, supra, 14 Cal.3d 815, 823.)" (Ibid.)
In California, the tort of intentional interference with prospective economic advantage is also known as interference with "prospective contractual relations" or "prospective economic relations." (See Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 378.) "The wrong consists of intentional and improper methods of diverting or taking business from another that are not within the privilege of fair competition. [Citations.]" (5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 741, p. 1070.) The tort requires proof of the following elements: (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.)
As to the third element, "a plaintiff must plead and prove that the defendant's acts are wrongful apart from the interference itself." (Id. at p. 1154.) The California Supreme Court found that this requirement of a "wrongful act" "sensibly redresses the balance between providing a remedy for predatory economic behavior and keeping legitimate business competition outside litigative bounds." (Della Penna v. Toyota Motor Sales, U.S.A., Inc., supra, 11 Cal.4th 376, 378.) The court also observed that "[a]n act is not independently wrongful merely because defendant acted with an improper motive." (Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal.4th at p. 1158.) It clarified that "an act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard. [Citations.]" (Id. at p. 1159, fn. omitted.)
For example, the complaint in Korea Supply Co. v. Lockheed Martin Corp., supra,29 Cal.4th 1134, alleged that defendant Kim "engaged in bribery and offered sexual favors to key Korean officials in order to obtain the contract from the Republic of Korea," which was unlawful under the Foreign Corrupt Practices Act. (Id. at p. 1159.) The complaint also alleged Kim received commissions exceeding "the maximum allowable amounts established by the Foreign Corrupt Practices Act. [Citation.]" (Ibid.) The California Supreme Court concluded that the complaint "sufficiently alleged that defendants' acts, in addition to interfering with KSC's business expectancy, were wrongful in and of themselves." (Ibid.)
The third element of the tort also requires that the "wrongful acts on the part of the defendant designed to disrupt the relationship" be "intentional." (Korea Supply Co. v. Lockheed Martin Corp., supra,29 Cal.4th at p. 1154.) In stating a cause of action, the intent requirement is satisfied "by pleading specific intent, i.e., that the defendant desired to interfere with the plaintiff's prospective economic advantage" (ibid.) or by pleading that the defendant knew that the interference was certain or substantially certain to occur as a result of defendant's action. (Id. at pp. 1154, 1156-1157.)
As appellant implicitly concedes, his complaint does not state a cause of action for the tort of intentional interference with economic advantage under current California law. California's tort of interference with prospective economic advantage, like the tort of interference with contract, quintessentially involves business, commercial, or economic relationships and expectancies. (See Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal.4th at p. 1157 [torts of intentional interference with contract and intentional interference with prospective economic advantage involve two different kinds of business contexts]; Della Penna v. Toyota Motor Sales, U.S.A., Inc., supra, 11 Cal.4th at pp. 381-391.) Judicial sanction of a legally cognizable cause of action for intentional interference with inheritance or intervivos gift would be a dramatic departure from the type of interest historically protected by interference torts in this state.
In order to determine whether a new tort cause of action for interference with inheritance or intervivos gift should be recognized, courts may examine the relevant policy considerations and weigh the benefits of recognizing the new cause of action against the potential burdens and costs. (Cf. Temple Community Hospital v. Superior Court (1999) 20 Cal.4th 464, 471-478 [no tort remedy for intentional spoliation of evidence by third parties]; Cedars-Sinai Medical Center v. Superior Court (1998) 18 Cal.4th 1, 8-18 [no tort remedy for intentional spoliation of evidence by first parties]; cf. also Youst v. Longo (1987) 43 Cal.3d 64, 78-80 [no tort remedy for intentional interference with prospective economic advantage by competitors in sporting competition].) California law states that that "[f]or every wrong there is a remedy" (Civ. Code, § 3523). Recognition of a new tort of interference with inheritance or gift modeled on the Restatement Second of Torts might be consistent with this basic principle. Under a number of scenarios, such a cause of action might be the only recourse for an intended beneficiary or donee who has been deprived of expected inheritance or gift by the wrongful actions of a third party.
Civil Code section 3523, however, "does not create substantive rights." (County of San Luis Obispo v. Abalone Alliance (1986) 178 Cal.App.3d 848, 865.) It applies only to " '. . . legal wrongs or those wrongs for which the law authorizes or sanctions redress.' (Finch v. Western Nat. Bank (1914) 24 Cal.App. 331, 338 [141 P. 261]; see also Fortenbury v. Superior Court (1940) 16 Cal.2d 405, 410 [106 P.2d 411] ('[T]he law does not invariably give relief against damage, because in some circumstances the infliction of damage, though intentional, is without legal remedy').)" (Ibid.)
One factor to consider in deciding whether to recognize the new interference tort advocated by appellant is that "a gift is not ordinarily treated as a bargain." (Rest.2d Contracts, § 71, com. c., p.174.) "One of the functions of the doctrine of consideration is to deny enforcement to a promise to make a gift." (Rest.2d Contracts, § 90, com. f., p. 246.) Absent an estoppel, an unexecuted voluntary promise, unsupported by consideration, to make a future gift of money is legally unenforceable. (See Coon v. Shry (1930) 209 Cal. 612, 614-615; see also Wisler v. Tomb (1915) 169 Cal. 382, 386 [a promissory note intended as a gift is merely an unenforceable promise to make a gift in the future]; Beebe v. Coffin (1908) 153 Cal. 174, 176-177 [prospective donor's retention of dominion and control over purported gift rendered it "no more than an unexecuted and unenforceable promise to make a future gift"]; see also Civ. Code, §§ 1146 ["gift" defined]; 1147 [verbal gift not valid unless actual or constructive delivery occurs and "the means of obtaining possession and control of the thing are given"].) Thus, a prospective donor is generally free to change his or her mind for any reason, even a bad one, or no reason. Likewise, a will is generally revocable at the whim of the testator prior to death. (See Crail v. Blakely (1973) 8 Cal.3d 744, 747; Cook v. Cook (1941) 17 Cal.2d 639, 646.) A gratuitous promise to devise real property is not enforceable. (See Burke v. Bank of America Nat. Trust & Sav. Ass'n (1939) 34 Cal.App.2d 594, 598.) There would be a logical inconsistency in allowing a prospective recipient of a contemplated gift to recover tort damages against a third party for intentional interference with a gift or inheritance when a prospective recipient ordinarily cannot legally enforce a gratuitous promise to make a gift where the giving was not completed.
In addition, in cases where the prospective giver has died, the decedent is no longer around to clarify his or her intentions. We query whether recognizing a tort action for interference with inheritance would disrupt the orderly administration of estates, probate of wills, or enforcement of intestate succession under California law.
While "the judiciary has the responsibility for legal doctrine which it has created" (People v. Drew (1978) 22 Cal.3d 333, 347, fn. omitted) and has the power "to reshape judicial doctrine" (ibid.), we decline appellant's invitation to recognize a new interference tort applicable to inheritance or inter vivos gifts. Such a significant development should come from our Supreme Court.
The judgment is affirmed.
WE CONCUR: RUSHING, P. J., PREMO, J.