In re Estate of D.A. Osguthorpe , 2021 UT 23 ( 2021 )

2021 UT 23IN THE
SUPREME COURT OF THE STATE OF UTAH
In the matter of THE ESTATE OF D.A. OSGUTHORPE, D.V.M.
STEPHEN A. OSGUTHORPE, THE DR. D.A. OSGUTHORPE TRUST,
JERRY S. OSGUTHORPE, SUE ANN LARSEN, and KAREN BROWN,
Appellants,
v.
DAVID R. RUDD and BALLARD SPAHR, LLP,
Appellees.
No. 20180686
Heard October 13, 2020
Filed July 1, 2021
On Direct Appeal
Third District, Salt Lake
The Honorable Paul B. Parker
The Honorable Robin Reese
Nos. 093901114, 130902503
Attorneys:
Peggy A. Tomsic, James E. Magleby, Christine T. Greenwood,
Jennifer Fraser Parrish, Salt Lake City, for appellants
Mark R. Gaylord, Jonathan O. Hafen, Jenifer L. Tomchak,
Salt Lake City, for appellees
JUSTICE PEARCE authored the opinion of the Court in which
CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE LEE,
JUSTICE HIMONAS, and JUSTICE PETERSEN joined.
JUSTICE PEARCE, opinion of the Court:
INTRODUCTION
¶1 Dr. D.A. Osguthorpe (Dr. Osguthorpe) passed away in 2009,
leaving behind significant assets. Dr. Osguthorpe also left behind
multiple versions of his will and trust documents. A dozen years
after his death, his now-adult children (Osguthorpe Children or
OSGUTHORPE v. RUDD
Opinion of the Court
Children) are embroiled in a legal battle with David R. Rudd—the
nephew of Dr. Osguthorpe’s second wife (June). Rudd is an attorney
who had represented June and Dr. Osguthorpe in various matters.
The Osguthorpe Children also assert claims against Ballard Spahr,
LLP (Ballard), the law firm where Rudd was a partner.
¶2 At the heart of this dispute are the Osguthorpe Children’s
allegations that Rudd and Ballard (Rudd/Ballard) improperly
influenced Dr. Osguthorpe to amend his will and trust in a manner
that shifted a portion of the Children’s expected inheritance to June
and to Dr. Osguthorpe’s alma mater. The Osguthorpe Children also
allege that Rudd/Ballard engaged in improper and/or misleading
conduct which resulted in one of Dr. Osguthorpe’s sons losing co-
ownership of the land on which his house stood. The Osguthorpe
Children further allege that, following Dr. Osguthorpe’s death,
Rudd/Ballard mishandled estate assets. And they claim that Rudd
and June improperly removed assets from Dr. Osguthorpe’s estate
(Estate).
¶3 After years of litigation, three of the district court’s orders are
before us. The Osguthorpe Children first appeal the district court’s
order granting Rudd/Ballard’s motion to dismiss the Children’s
claim for intentional interference with inheritance. The Osguthorpe
Children contend the district court erred by declining to recognize
the tort and by dismissing their claim on the alternative ground that,
even if the tort were a valid cause of action in Utah, the probate
proceeding would resolve all of their complaints.
¶4 The Osguthorpe Children next maintain that the district
court erroneously granted summary judgment on several other tort
claims they wanted to assert on behalf of Dr. Osguthorpe’s Estate.
The Osguthorpe Children assert that the district court erroneously
denied their motion to have the Estate’s claims assigned to them
after the Estate’s court-appointed special fiduciary declined to
pursue the claims on behalf of the Estate.
¶5 The Osguthorpe Children lastly aver that the district court
improperly granted a motion in limine that prevented them from
impeaching Rudd with statements Rudd had made in support of his
motion to set aside a settlement agreement. The district court
excluded those statements as a “reference to the parties’ mediation,”
which the court concluded was inadmissible under rules 401, 402,
403, and 408 of the Utah Rules of Evidence and Utah Code section
78B-10-104.
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¶6 We first conclude that, under certain circumstances, a party
can assert a claim for intentional interference with inheritance and
we therefore reverse the district court’s dismissal of that claim. We
affirm the district court’s decision to not assign the Estate’s claims to
the Osguthorpe Children. But we take the opportunity to clarify the
law that underlies the district court’s decision. Finally, we reverse
the district court’s grant of the motion in limine. We remand for
additional proceedings.
BACKGROUND1
Dr. Osguthorpe’s Family and Property History
¶7 Dr. Osguthorpe passed away in 2009. He was survived by his
four adult children from his first marriage: Stephen A. Osguthorpe
(Stephen), Jerry S. Osguthorpe (Jerry), Sue Ann Larsen (Sue Ann),
and Karen Brown (Karen) (collectively, Osguthorpe Children or
Children). His second wife of nearly two decades, June Osguthorpe
(June), also outlived him.
¶8 Dr. Osguthorpe was a veterinarian, educated at Colorado
State University (CSU). Dr. Osguthorpe and his first wife, Afton,
acquired significant assets, including hundreds of acres of land
throughout Utah. The Osguthorpe’s used much of this land for
ranching and agricultural businesses. Dr. Osguthorpe held some of
these properties directly, while some of his business entities owned
others. A trust established in Afton’s name (Afton Trust) held a
number of other properties.
¶9 The Osguthorpe’s held extensive acreage in Summit County,
including a 19-acre parcel in Park City (19 Acres) that was primarily
used for crop cultivation. Stephen’s home sits on part of the 19
Acres.
¶10 The Osguthorpe Children claim that from an early age they
contributed their efforts at “well below market rates” to the family
ranching and agricultural businesses, as well as to Dr. Osguthorpe’s
veterinary practice. The Osguthorpe Children allege Dr. Osguthorpe
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1 We are asked to review three district court decisions, first on a
motion to dismiss, next on a motion for summary judgment, and
third on a motion in limine. To review the first two, we view the facts
in the light most favorable to the non-moving party. See Oakwood
Vill. LLC v. Albertsons, Inc., 2004 UT 101, ¶ 9, 104 P.3d 1226; McBroom
v. Child, 2016 UT 38, ¶ 18, 392 P.3d 835. For the purposes of this
opinion, we recite the facts in that light as well.
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Opinion of the Court
“repeatedly assured” them that, upon his death, he would give them
the family businesses and real property upon which those businesses
operate, to reward the Children’s “extensive efforts and
contributions.”
¶11 Afton passed away in 1989. Dr. Osguthorpe married June in
1992. They signed a prenuptial agreement that acknowledged their
individual assets and agreed to keep separate their current and
future properties. June’s nephew-by-marriage, Rudd, represented
June in the prenuptial negotiations. June has three adult children
from a previous marriage.
Dr. Osguthorpe’s 1998 Estate Plan
¶12 Dr. Osguthorpe amended his will and trust documents
multiple times. Central to this dispute are amendments made in
1998, 2006, and 2008.
¶13 The Osguthorpe Children allege that, even after September
2008, their father continued to assure them that “his and June’s
assets remained separate and that his estate plan provided that June
would not receive any significant assets of [his] upon his death.” The
estate plan that the Osguthorpe Children contend reflects Dr.
Osguthorpe’s “intentions and his oft-repeated promises to [Stephen]
and Jerry” is the plan from 1998. This plan involved a will (1998
Will) and trust entitled “the Dr. D.A. Osguthorpe Trust” (1998 Trust)
(collectively, 1998 Estate Plan).
¶14 The 1998 Estate Plan designates the Osguthorpe Children as
joint personal representatives under the 1998 Will and joint
successor-trustees under the 1998 Trust. The 1998 Will devised to the
Osguthorpe Children Dr. Osguthorpe’s tangible personal property
that was not otherwise used in a business or trade. The 1998 Will
also devised Dr. Osguthorpe’s residual property to the Trust. As for
June, she was “not to receive any assets under [the 1998] Will but
shall receive assets pursuant to . . . [the 1998] Trust.”
¶15 The 1998 Trust was revocable. It existed for the “primary
benefit” of Dr. Osguthorpe during his lifetime, and designated June
and the Osguthorpe Children as the beneficiaries upon Dr.
Osguthorpe’s death. The 1998 Trust entitled June to annual
payments of up to $50,000.
¶16 The 1998 Trust divided shares of its remaining property to
the Osguthorpe Children. The 1998 Trust also provided that “[t]he
Trustees shall hold, in Trust, all ranch and agricultural property
located in Summit County . . . owned by the Trust . . ., to be used by
[the Osguthorpe Children] for their benefit in the same manner and
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to the same extent as the property has been used in the past.”
Further, the 1998 Trust specifically gave Stephen and Jerry “the right
to continue to use the agricultural property to raise and maintain
cattle and to operate a ranch on the agricultural property in the same
manner as they have in the past.” The 1998 Trust also provided that
Stephen’s share would include the two acres upon which his current
residence is located.
The 2006 and 2008 Estate Plan Amendments
¶17 In 2006, Dr. Osguthorpe amended his will (2006 Will) and
trust (2006 Trust) (collectively, 2006 Estate Plan). Among the changes
the Osguthorpe Children highlight are that the 2006 Trust changed
the gift to June from an annual $50,000 distribution to a one-time
$1 million gift, to be paid to June in cash or other assets from the
Trust’s Summit County properties.2 The 2006 Trust also added a
$12 million cash gift to CSU Foundation (CSUF),3 to be paid by
liquidating properties in Summit County.
¶18 The 2006 Trust expressly permits Stephen and Jerry to
continue farming, ranching, and practicing veterinary medicine on
the Summit County properties “in the same manner as they have in
the past,” though only “[t]o the extent that property in the Summit
County Trust is held directly or indirectly for ranch, agricultural, or
veterinary medicine uses or purposes.” The same provision applies
to the Trust’s properties outside of Summit County. The 2006 Trust
also gives June up to five acres of property in Summit County. And
it provides for June’s children to receive shares of certain properties
outside of Summit County following the deaths of Stephen and
Jerry.
¶19 In 2008, Dr. Osguthorpe amended his will and trust again
(2008 Will and 2008 Trust, or collectively, 2008 Estate Plan). The 2008
Will largely mirrors the 2006 Will, but it made Stephen and Rudd the
personal representatives. The 2008 Will also nominated Stephen’s
siblings as successor personal representatives.4 The 2008 Trust
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2 The 2006 Trust subdivided its properties into two trusts, a
“Family Trust” and a “Summit County Trust.” The latter contained
the real properties in Summit County.
3Rudd/Ballard state that a 1993 version of Dr. Osguthorpe’s will
had contained a $1 million gift to CSUF.
4 Rudd/Ballard assert that the addition of Rudd as co-personal
representative and co-trustee of the 2008 Estate Plan was designed to
(continued . . .)
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OSGUTHORPE v. RUDD
Opinion of the Court
largely resembles the 2006 Trust, but made Stephen and Rudd
successor co-trustees and provided for Rudd to “receive as
compensation for acting as a successor trustee an amount equal to
five percent (5%) of the fair market value of the trust assets.”
Alleged Improper Conduct of Rudd/Ballard
¶20 The Osguthorpe Children allege that Rudd/Ballard took a
variety of actions that constitute breaches of fiduciary duty, fraud,
conversion, unjust enrichment, and undue influence over Dr.
Osguthorpe. They allege that these actions were part of Rudd’s plan
to benefit himself and his family. According to the Osguthorpe
Children, this plan began when, sometime in the years following Dr.
Osguthorpe’s marriage to June, Rudd and Dr. Osguthorpe became
acquainted through their family ties. Rudd/Ballard describe the
relationship between Rudd and Dr. Osguthorpe as one built on
“mutual respect for each other’s business acumen” and their “shared
farming background.” And they say Dr. Osguthorpe was “fully
competent to execute” the 2006 and 2008 Estate Plans. The
Osguthorpe Children, on the other hand, describe their father’s
“close relationship” with Rudd as one developed largely while Dr.
Osguthorpe’s “mental and physical health was failing.”
¶21 The Osguthorpe Children allege that the attorney-client
relationship that existed between Rudd and June at the time of the
prenuptial agreement continued afterwards. They also allege that
June enjoyed an attorney-client relationship with Ballard Spahr, the
law firm where Rudd was a partner. In 2004 or 2005, Rudd/Ballard
also formed an attorney-client relationship with Dr. Osguthorpe “on
a variety of matters.”
¶22 The Osguthorpe Children allege that Rudd/Ballard were
involved in, among other things, the preparation of the 2006 and
2008 Estate Plan amendments. The Osguthorpe Children allege that
Rudd/Ballard deceived Dr. Osguthorpe into believing his sons
would be able to continue farming, ranching, and practicing
veterinary medicine in Summit County because the 2006 and 2008
Trusts expressly stated that Stephen and Jerry would be able to do so
“in the same manner as they have in the past.” See supra ¶ 18. The
Osguthorpe Children contend that Rudd/Ballard structured the
changes to the Trust in a fashion that undermined the protections for
Stephen and Jerry. That is, they assert that the gifts to June and CSUF
address Dr. Osguthorpe’s concerns that “Stephen would not carry
out his testamentary desires.”
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would be paid by liquidating the Trust’s Summit County properties,
leaving insufficient assets to make good on the promises to Stephen
and Jerry.5
¶23 The Osguthorpe Children allege that the decision to fund
the gifts to June and CSUF via sale of the Summit County properties
was not Dr. Osguthorpe’s. They claim that Rudd and the attorneys
who drafted the Estate Plan amendments concocted that plan. And
the Osguthorpe Children allege that neither Rudd nor the other
attorneys fully explained the potential impacts that these
amendments could have on Dr. Osguthorpe’s promises to his
children regarding their inheritance and the Summit County
properties.6
¶24 The Osguthorpe Children further allege that the 2006 and
2008 Estate Plan amendments were made at a time when Dr.
Osguthorpe had become “increasingly confused about . . . the value
of his property” and the various debts that encumbered them. The
Osguthorpe Children contend that Rudd “knew” Dr. Osguthorpe’s
high valuations of his Summit County properties “couldn’t be true.”
Therefore, the Osguthorpe Children imply, Rudd must have
understood the practical implications of funding the Trust’s gifts to
June and CSUF out of the Summit County properties.
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5 The Osguthorpe Children explain that, because the gifts to June
and CSUF in the 2006 Trust were to be funded by selling Summit
County properties and “were to be made before any others,” the
Osguthorpe Children would not inherit the Trust’s Summit County
properties “until sufficient property was sold to cover the millions of
dollars in debts of [Dr. Osguthorpe’s] estate and the $13 million in
gifts to June and CSU.” The Osguthorpe Children further aver that,
given the value of the Summit County property in 2006, “any sales
proceeds from the Summit County property would not be enough
even to pay the debts and the specific gifts, which would leave no
property to continue the farm and ranch.” Rudd/Ballard contest this
point by arguing that Dr. Osguthorpe “believed the value of his
estate was worth at least tens of millions of dollars, more than
sufficient to fulfill his bequests to CSUF and June, and to allow his
children to continue farming operations on the parcels settled in the
Afton Trust.”
6 The Osguthorpe Children also contend the 2006 and 2008 Trust
amendments were deceptive by stating that they were “[i]n all
respects . . . the same as” the 1998 Trust.
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OSGUTHORPE v. RUDD
Opinion of the Court
¶25 The Osguthorpe Children allege that Rudd orchestrated the
Estate Plan amendments so his aunt June could receive a larger
inheritance and so Rudd could receive five percent of the Trust
assets as compensation for serving as trustee. The Osguthorpe
Children also allege that Rudd improperly received $100,000 from
Dr. Osguthorpe in 2008 for acting as his attorney.
¶26 To support their tort claims, the Osguthorpe Children not
only reference Rudd’s role in the Estate Plan amendments, but also
Rudd’s participation in multiple other development and loan deals.
For example, the Complaint points to Rudd’s involvement in
negotiating a deal to develop part of the 19 Acres upon which
Stephen’s house sits, and which Dr. Osguthorpe and Stephen had
jointly owned. The Complaint alleges that Rudd directed Stephen to
sign documents which transferred title of the 19 Acres to Osguthorpe
Properties, LLC, “in which Stephen had no ownership interest.” The
Complaint further alleges that Stephen directly asked Rudd, before
signing, whether the deal would maintain Stephen’s ownership of at
least the five acres of land upon which his house sits. And, according
to the Complaint, Rudd told Stephen that the deal would indeed
maintain his ownership because he was an owner of Osguthorpe
Properties. In other words, Stephen alleges that Rudd’s
representations misled Stephen into losing co-ownership of the land
under his home.
¶27 The Osguthorpe Children further allege that Rudd behaved
improperly after Dr. Osguthorpe’s death. They allege that Zions
Bank contacted Rudd about a loan that encumbered part of Dr.
Osguthorpe’s estate, which was at risk of default. According to the
Complaint, the Bank asked Rudd to use funds from a checking
account named “Osguthorpe Bros. Farms,” and Rudd refused to
release the funds, asserting that June needed funds from the account
“to live on.” The Complaint also describes various other loan
defaults occurring after Dr. Osguthorpe’s death that have “never
been cured.”
Alleged Improper Conduct by June and Rudd/Ballard
¶28 Finally, the Osguthorpe Children contend that June
improperly depleted Trust assets by withdrawing $400,000 from a
“business checking account” (the Osguthorpe Bros. Farms account)
they allege did not belong to her.7 The Complaint further alleges that
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7We note that the ownership of the bank account is in dispute.
The district court rejected Rudd/Ballard’s summary judgment
(continued . . .)
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Rudd/Ballard did “nothing to obtain the return of these funds.” The
Complaint also contends that June retained possession of some of
Dr. Osguthorpe’s personal property and “refused to permit the
Osguthorpe children to access much of the personal property for
distribution among themselves.”
The Probate Action and Mediations
¶29 Two months after Dr. Osguthorpe’s death, Rudd filed a
petition to probate the 2008 Will in the Third District Court (Probate
Action). The petition also sought to appoint Rudd and Karen (one of
Dr. Osguthorpe’s daughters) as co-personal representatives. The
petition averred that, although the 1998 Will nominated Stephen as a
co-representative, Stephen had not responded to Rudd’s attempts to
communicate with him and, therefore, Karen should be appointed as
co-personal representative instead of Stephen. Rudd also filed a
petition to remove Stephen as co-trustee of the 2008 Trust.
¶30 The Osguthorpe Children objected to Rudd’s petitions. The
Osguthorpe Children also objected to the removal of Stephen as co-
trustee, contesting the allegations about Stephen’s purported lack of
response to Rudd’s communications. These filings assert that the
2008 Will and the 2008 Trust were the product of Rudd’s undue
influence. At the same time, Stephen filed a counter-petition to
probate the 1998 Will, declare the 2008 and 2006 Wills and Trusts
invalid, and to appoint the Osguthorpe Children as personal
representatives.
¶31 The Probate Action court ordered the parties to mediate.
The mediation appeared to have been a success when the
Osguthorpe Children, June, and Rudd inked a settlement agreement
(First Settlement Agreement). However, CSUF had not been notified
of the Osguthorpe Children’s objection to the 2008 Will and Trust
nor the Children’s petition to probate the 1998 Will and Trust. And
they were not parties to the mediation. As a result, Rudd and CSUF
objected to the settlement.
motion on the conversion and unjust enrichment claims pertaining
to this account because there was a genuine dispute of material fact
“related to whether or not the bank account at issue is a joint account
with right of survivorship.” But the court said, “frankly, I think
counsel [for Rudd] is correct in 90 percent of his argument,” and the
court’s “only concern” was that a page was missing from the bank
account documents before the court, which created a “material
issue” as to ownership of the account.
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Opinion of the Court
¶32 The court vacated the First Settlement Agreement. CSUF
then moved to intervene in the Probate Action, filed petitions in
support of probating the 2008 Estate Plan, and filed objections to the
Osguthorpe Children’s various counter-petitions and objections. A
second attempt at mediation between all of the beneficiaries failed.
The Tort Action
¶33 While the probate action was pending, Stephen,
individually and also on behalf of the 1998 Trust and Estate, filed an
action in the Third District Court against Rudd, Ballard, and June.
¶34 The Complaint alleges that Rudd/Ballard breached their
fiduciary duties as attorneys for Dr. Osguthorpe, Stephen, and the
Trust. The Complaint also alleges that Rudd breached the fiduciary
duties he owed as trustee of the 2008 Estate Plan.8 The Complaint
avers that June aided and abetted these breaches of fiduciary duties,
and that she is liable for Rudd/Ballard’s actions under an agent-
principal theory.
¶35 In addition, the Complaint alleges that Rudd/Ballard and
June improperly converted the $400,000 June withdrew from the
Osguthorpe Bros. Farm bank account. See supra ¶ 28. The Complaint
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8 Specifically, the Complaint alleges that Rudd/Ballard breached
fiduciary duties because they: (a) had an attorney-client relationship
with June that conflicted with the interests of Dr. Osguthorpe,
Stephen, and the Trust; (b) “direct[ed] Zions Bank not to use funds in
the Osguthorpe Bros. Farms [bank] account” to make loan payments;
(c) “fail[ed] to take any action” to recover the $400,000 June removed
from the Osguthorpe Bros. Farms bank account; (d) “coordinat[ed]
and engineer[ed] the re-drafting” of the 2006 and 2008 Estate Plans
in a way that “contravened” the prenuptial agreement between June
and Dr. Osguthorpe, personally benefitted Rudd by compensating
him as a trustee, and benefitted Rudd/Ballard’s other client, June,
contrary to the “actual testamentary intent” of Dr. Osguthorpe;
(e) attempted to “induce” Dr. Osguthorpe to “violate his own
fiduciary duties” owed to the Afton Trust; (f) “misrepresent[ed] to
Stephen the contents of the documents . . . which resulted in Stephen
losing his ownership interest in the 19 Acres;” (g) “fail[ed] to take
actions to protect” the Trust from defaults on various loan
agreements; and (h) “receiv[ed] and retain[ed] compensation for
legal services rendered in violation of their fiduciary duties,
including but not limited to the $100,000 paid” to Rudd.
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also brings unjust enrichment claims against Rudd/Ballard and June
related to June’s $400,000 bank withdrawal and Rudd’s receipt of
$100,000 from Dr. Osguthorpe. See supra ¶ 25.
¶36 Finally, the Complaint alleges Rudd/Ballard and June
intentionally interfered with the plaintiffs’ “valid expectancy” of
inheritance by asserting undue influence over Dr. Osguthorpe,
engaging in fraud, and breaching their fiduciary duties. The
Complaint contends that this conduct constitutes intentional
interference with inheritance (Inheritance Tort Claim).9
Consolidated Tort and Probate Actions
¶37 The district court consolidated the Probate Action and the
Tort Action.
The District Court Dismisses the Intentional Interference with
Inheritance Claim, but Denies Dismissal of Other Claims
¶38 In 2014, the district court granted Rudd/Ballard’s motion to
dismiss the tortious interference with inheritance claim on two
grounds. First, the court concluded that “no Utah appellate court has
expressly stated that Utah recognizes a claim for tortious
interference with inheritance. Absent further guidance from the
appellate courts, the Court declines to recognize the claim.” Second,
the court concluded that “even if such a cause of action were
recognized by an appellate court in Utah, the Court also considers
dismissal appropriate because the issues raised by this cause of
action will be resolved in their entire[t]y by the Probate Action.”
¶39 The district court denied Rudd/Ballard’s motion to dismiss
the claims for breach of fiduciary duty, conversion, and unjust
enrichment. Further, the court denied in part and granted in part
Rudd/Ballard’s motion to stay those claims until after resolution of
the Probate Action. The court denied Rudd/Ballard’s motion to stay
the conversion claims and Stephen’s individual breach of fiduciary
duty claim because the court concluded such claims were “separate
and distinct from the issues raised in the Probate Action.” However,
the court granted Rudd/Ballard’s motion to stay the claims for
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9 The Complaint does not distinguish whether the claim for
intentional interference with inheritance belongs to all plaintiffs or to
Stephen alone, nor to what extent it belongs to Stephen’s siblings,
who are listed as “non-parties.” For the sake of simplicity, we will
refer to this as a claim of the Osguthorpe Children, but we express
no opinion on which of them purport to assert the claims.
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Opinion of the Court
breach of fiduciary duty owed to Dr. Osguthorpe and the Trust and
the claims for unjust enrichment, because the court found that
success on those causes of action depended on “whether the
amendments to the . . . Trust were validly entered into,” which
would be resolved in the Probate Action.
The District Court Removes Stephen and Rudd as Co-Trustees, and
Declines to Appoint Stephen’s Siblings as Estate Representatives
¶40 A few months later, the district court removed Stephen and
Rudd as co-trustees. The court removed Stephen because it found he
had a “number of alleged conflicts of interest”10 and had committed
a “serious breach of trust,” and the court was “concerned about
other breaches that may occur.” The breach of trust included the
“wholly undisputed” fact that “Stephen, as trustee, failed to provide
CSUF with proper notice” of the Probate Action. The court further
reasoned that, “given the number of alleged conflicts of interest,
Stephen may not be capable of carrying out his duty of loyalty and
acting as a neutral fiduciary.” Therefore, the court concluded,
“removal best serves the interests of the beneficiaries.”
¶41 The court also barred Stephen’s siblings from becoming
personal representatives for the Estate “because they too have a
number of conflicts of interest, including a significant financial
interest in seeing that the 2006 and 2008 [Estate Plan] Amendments
are declared invalid.”
The District Court Appoints a Special Fiduciary
¶42 The court then appointed a special fiduciary to manage the
affairs of the Trust and Estate. After the first fiduciary resigned, the
court appointed a replacement (Special Fiduciary). The court
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10 Specifically, the court stated: “Those alleged conflicts include
alleging and stating that the 2006 and 2008 Amendments to the Trust
are invalid and unenforceable; failing to cooperate with beneficiaries
identified in the 2008 Amendment; instituting litigation in both his
individual and fiduciary capacities against June as a beneficiary of
the 2008 Amendment and against his co-trustee of the 2008
Amendment; and assisting and participating in the Afton Trust
transaction. Because of the disputed facts, the Court will not
comment on all of these allegations. However, the Court is
convinced that, given the number of alleged conflicts of interest,
Stephen may not be capable of carrying out his duty of loyalty and
acting as a neutral fiduciary.”
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appointed the replacement Special Fiduciary in the face of Stephen’s
attempt to persuade the court to have himself reappointed as trustee.
In a bid to convince the district court to reappoint him, Stephen had
orchestrated offers from third parties to whom the Estate owed
money. These third parties would reduce the Estate’s debts if and
only if the court declined to appoint a special fiduciary and instead
put Stephen in charge. The court observed that Stephen’s “proposed
agreement appears almost to be an attempt at extortion and raises
serious concerns.” The court then ruled it would not “engage in any
bargaining for such an end with [Stephen and the creditors].”
The District Court Determines that Only the
Special Fiduciary May Pursue the Estate’s Claims
¶43 In 2016, Rudd/Ballard moved for summary judgment on
the claims Stephen asserted on behalf of the Estate. Rudd/Ballard
argued that Stephen lacked standing to pursue the claims because he
had been removed as trustee and Estate representative. The district
court agreed, ruling that under rule 17 of the Utah Rules of Civil
Procedure, the Special Fiduciary was the “real party in interest” for
the Estate’s claims and, therefore, Stephen lacked standing to bring
the claims on behalf of the Estate.11
¶44 Rather than immediately granting summary judgment on
the Estate Claims, the court stated that “if the [Estate] Claims are to
be pursued, the Special Fiduciary must be a party to this action and
he must be the one to fund and direct the [Estate] Claims.” The court
directed the Special Fiduciary to “either move to substitute or join
the action” by a specific deadline, noting that if the Special Fiduciary
did not do so, “the Court will dismiss” the claims.
The Special Fiduciary Declines to Pursue the Estate Claims
¶45 The Special Fiduciary declined to have the Estate pursue the
claims. The Special Fiduciary explained that he “assessed the Claims
(and the question of whether he believes those should be pursued)”
in light of the duties and standards of care prescribed by statute. He
considered the “damages that are being sought through the Claims,
and the likelihood of success in prevailing on the Claims or
recovering the asserted damages.” He noted “significant legal and
factual impediments that may impact the viability of the Claims.” He
_____________________________________________________________
11 The claims at issue included claims for breaches of fiduciary
duty allegedly owed to Dr. Osguthorpe and the Trust, conversion,
and unjust enrichment. The district court referred to these claims as
the “Derivative Claims.” We refer to them as the “Estate Claims.”
13
OSGUTHORPE v. RUDD
Opinion of the Court
also considered the Estate’s “very limited liquid assets.” And he
ultimately determined that pursuing the claims would not be in the
Estate’s best interest, as the “cost of pursuing the Claims could
ultimately outweigh the likely recovery even if the Estate or the
Trust prevail on some or all of the Claims.”
The Osguthorpe Children Propose Assigning the Estate Claims to
Themselves, and the Special Fiduciary Defers to the District Court
¶46 While the Special Fiduciary was considering whether to
pursue the Estate Claims, the Osguthorpe Children proposed to him
that the Estate assign to Stephen the right to pursue and fund
litigation of the Estate Claims. Stephen promised that he would
return to the Estate any financial recovery on the claims. The Special
Fiduciary responded to the Osguthorpe Children’s assignment
proposal at the same time he declined to pursue the Estate Claims.
The Special Fiduciary stated he was “not necessarily opposed to the
Claims being assigned to Stephen” but he was “also cognizant of the
conflicts of interest that resulted in Stephen’s removal [and] the
Court’s instructions during the . . . hearing.” “As such, the Special
Fiduciary would only be inclined to assign the Claims to Stephen
with the Court’s approval.” The Special Fiduciary also clarified that
he “was not requesting or proposing or suggesting that [assignment]
was an appropriate way to go.” He also noted that both “parties feel
very strongly in support of their position[s]” and “people are
looking for someone to blame.” The Special Fiduciary then asked the
court to “enter an order approving the Special Fiduciary’s foregoing
determination”—declining to pursue the Estate Claims.
¶47 That is, the Special Fiduciary asked the court to decide in the
first instance whether the Estate Claims should be assigned to
Stephen. And, for good measure, the Special Fiduciary asked the
court to “enter an order releasing him of any potential liability.” The
Special Fiduciary referenced Utah Code section 75-3-704, which
provides that a personal representative “may invoke the jurisdiction
of the court in proceedings authorized by this code to resolve
questions concerning the estate or its administration,” even on
matters which ordinarily would not require court approval. The
Special Fiduciary also made clear that that it would be the court’s
decision, not his own, as to whether or not to assign or dismiss the
claims.
14
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¶48 The Osguthorpe Children then moved to permit partial
assignment of the Estate Claims to Stephen’s siblings, not Stephen.12
The District Court Grants Summary Judgment to
Rudd/Ballard on the Estate Claims and Rejects Assignment
of the Estate Claims to the Osguthorpe Children
¶49 The district court affirmed the Special Fiduciary’s
determination not to pursue the Estate Claims, finding the Special
Fiduciary’s decision was “well thought out, well considered,
deliberately and intelligently made, and squarely within the Special
Fiduciary’s powers under the terms of the Court’s appointment, the
terms of the Trust, and applicable law.” As a result, the court entered
judgment to “enforce its prior ruling and dismiss the [Estate] Claims
with prejudice.”
¶50 The court also denied the Osguthorpe Children’s motion to
assign the Estate Claims to Jerry, Sue Ann, and Karen. The court
offered four “equally dispositive reasons” for this denial. The district
court concluded that: (A) the requested assignment would
“circumvent the Court’s prior rulings removing Stephen as Trustee”
and barring the other Osguthorpe Children from becoming trustees;
(B) assignment of legal malpractice claims and other “claims arising
out of the performance of personal services” is impermissible;
(C) assignment of a Trust’s claims to a beneficiary is impermissible
unless the trustee has “improperly refuse[d] or neglect[ed] to bring
[the] action”; and (D) the assignment would violate “the Special
Fiduciary’s duties to the Trust and to the other beneficiaries.”
The District Court Excludes Evidence of
Certain Statements by Rudd
¶51 In the midst of these motions, hearings, and rulings,
Rudd/Ballard moved in limine to prevent the Osguthorpe Children
from impeaching Rudd with certain statements Rudd had made in
an affidavit. Rudd had filed the affidavit in support of a motion to
set aside the First Settlement Agreement.
_____________________________________________________________
12 This “partial assignment” is the same basic structure as what
the Osguthorpe Children had proposed directly to the Special
Fiduciary, except the assignees would be Sue Ann, Jerry, and Karen.
That is, the would-be assignees wanted to control litigation of the
Estate Claims and would provide up-front funding to do so but
would seek reimbursement for litigation costs if any recovery was
obtained and would give any remaining financial recovery to the
Estate.
15
OSGUTHORPE v. RUDD
Opinion of the Court
¶52 The district court granted Rudd/Ballard’s motion to exclude
the affidavit—even a redacted version—on the grounds that it
constituted a “reference to the parties’ mediation or the mediation
agreement”13 and “[s]uch evidence is excluded pursuant to rule 401–
403 and 408 of the Utah Rules of Evidence and Utah Code § 78B-10-
104.”
¶53 The parties eventually settled their remaining claims, and
parts of their settlement were read into the record in January 2017
(Second Settlement Agreement). Under the Second Settlement
Agreement, the parties agreed to: probate the 1998 Estate Plan in lieu
of the 2006/2008 Plans; remove Rudd/Ballard and June from
participating in the probate proceeding moving forward; dismiss the
“Osguthorpe Children’s claims that the 2006 and 2008 wills and
trusts are invalid due to [Dr. Osguthorpe’s] lack of testamentary
capacity . . . or undue influence by Rudd”; and dismiss the
Osguthorpe Children’s claims against June from the Tort Action.
That Second Settlement Agreement also reserved the Osguthorpe’s
Children’s ability to appeal certain orders.14
ISSUES AND STANDARDS OF REVIEW
I. Dismissal of the Claim for Intentional
Interference with Inheritance
¶54 The Osguthorpe Children15 first ask us to review the district
court’s 2014 dismissal of their tort claim for intentional interference
_____________________________________________________________
13 The district court refers to the settlement agreement the parties
struck during mediation as the “mediation agreement.” We prefer
the term “First Settlement Agreement.” However, when we quote
the district court, we keep the district court’s terminology for the
sake of readability.
14 The parties have not included a copy of the settlement
agreement in the appellate record. What limited visibility we have
into its terms comes from parts that were read into the record before
the district court and representations the parties made in their briefs.
15 The Osguthorpe Children also list the Dr. D.A. Osguthorpe
Trust (Trust) as one of the appellants. Rudd/Ballard note that other
counsel and a special fiduciary represented the Trust and Estate
during the litigation of the claims before us and therefore do not list
the Trust or Estate as one of the appellants. We note that the district
court determined that Stephen lacked standing to bring the claims of
Dr. Osguthorpe’s Trust and Estate—a determination which has not
(continued . . .)
16
Cite as: 2021 UT 23Opinion of the Court
with inheritance. “A trial court’s decision granting a rule 12(b)(6)
motion to dismiss a complaint for lack of a remedy is a question of
law that we review for correctness, giving no deference to the trial
court’s ruling.” Oakwood Vill. LLC v. Albertsons, Inc., 2004 UT 101, ¶ 9,
104 P.3d 1226. “In reviewing the trial court’s decision, we accept the
factual allegations in the complaint as true and interpret those facts
and all inferences drawn from them in the light most favorable to the
plaintiff as the non-moving party.” Id. “A district court should grant
a motion to dismiss only when, assuming the truth of the allegations
in the complaint and drawing all reasonable inferences therefrom in
the light most favorable to the plaintiff, it is clear that the plaintiff is
not entitled to relief.” Brown v. Div. of Water Rights of Dep’t of Nat.
Res., 2010 UT 14, ¶ 10, 228 P.3d 747.
II. Rejection of the Osguthorpe Children’s
Proposed Assignment of Estate Claims
¶55 The Osguthorpe Children next ask us to review the district
court’s denial of their motion to permit partial assignment of the
Estate claims to Sue Ann, Jerry, and Karen. Although the court
wrapped its denial of the Osguthorpe Children’s motion into its
summary judgment order disposing of the Estate Claims, we need to
look beyond the motion’s label and examine what the court did.
¶56 The district court offered four “equally dispositive” reasons
for denying the Osguthorpe Children’s requested assignment of the
Estate Claims. See supra ¶ 50. The Osguthorpe Children assert that
the entire assignment question is a “mixed question of fact and law
that is ‘law-like’ and subject to de novo review.” Rudd/Ballard, on
the other hand, assert that different standards of review apply to
different aspects of the district court’s decision. Rudd/Ballard argue
that the question of whether legal malpractice claims are assignable
is a “question of law subject to plenary review.” Rudd/Ballard assert
that the district court’s other three grounds are “mixed questions of
law and fact subject to a deferential standard of review.” We
disagree with both parties’ descriptions of the standard of review on
this issue.
¶57 Ordinarily, a decision to assign a trust’s or estate’s claims is
one within the general discretion of a special fiduciary, pursuant to
powers and limitations prescribed in the Trust and Probate Codes,
the terms of the will and trust, and the court order appointing the
been appealed. We therefore move forward with the understanding
that Dr. Osguthorpe’s Trust and Estate are not parties to this appeal.
17
OSGUTHORPE v. RUDD
Opinion of the Court
special fiduciary. See infra ¶¶ 133–34; see also Murray v. Utah Labor
Comm’n, 2013 UT 38, ¶ 30, 308 P.3d 461 (“[A] discretionary decision
involves a question with a range of ‘acceptable’ answers, some better
than others, and the agency or trial court is free to choose from
among this range without regard to what an appellate court thinks is
the ‘best’ answer.”). Here, the Special Fiduciary punted that
discretionary decision to the district court. See supra ¶¶ 46–47.
Therefore, we review the district court’s denial of the proposed
assignment for an abuse of discretion, and we will overturn that
decision only if it fell outside of “the bounds of reasonableness and
rationality.” Murray, 2013 UT 38, ¶ 32. However, “when a legal
conclusion is embedded in a district court’s discretionary
determination, we peel back the abuse of discretion standard and
look to make sure that the court applied the correct law.” State v.
Boyden, 2019 UT 11, ¶ 21, 441 P.3d 737. And the question of whether
the court properly applied the law to reach its decision presents a
question of law we review for correctness. Rodriguez v. Kroger Co.,
2018 UT 25, ¶ 11, 422 P.3d 815.
III. Exclusion of Evidence
¶58 The final issue concerns the Osguthorpe Children’s
contention that the district court erred when it precluded any use of
the affidavit Rudd submitted in support of setting aside the parties’
First Settlement Agreement. “Two different standards of review
apply to [the Osguthorpe Children’s] claims regarding the
admissibility of evidence. The first standard of review, correctness,
applies to ‘the legal questions underlying the admissibility of
evidence.’ The second standard of review, abuse of discretion,
applies to the trial court’s decision to admit or exclude
evidence . . . .” State v. Griffin, 2016 UT 33, ¶ 14, 384 P.3d 186(citations omitted).
ANALYSIS
I. THE DISTRICT COURT ERRED IN DISMISSING
THE TORT CLAIM FOR INTENTIONAL INTERFERENCE
WITH INHERITANCE
¶59 The Osguthorpe Children argue that the district court erred
when it granted Rudd/Ballard’s motion to dismiss their claim for
tortious interference with inheritance. The district court reasoned
that Utah does not recognize such a tort and, even if it did,
“dismissal [is] appropriate because the issues raised by this cause of
action will be resolved in their entire[t]y by the Probate Action.”
18
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¶60 The Osguthorpe Children challenge both parts of the district
court’s decision. First, the Osguthorpe Children assert that tortious
interference with inheritance is a valid common law cause of action
in Utah, at least insofar as Utah’s probate statutes do not provide a
remedy for the same claim. Second, the Osguthorpe Children assert
that the Probate Action would not have resolved their specific
claims. Rudd/Ballard, on the other hand, urge us to either
completely reject this tort or limit recognition to only “circumstances
where probate relief is not available.” Rudd/Ballard also argue that
the Probate Action was the proper avenue for addressing the
Osguthorpe Children’s claims.
¶61 We largely agree with the Osguthorpe Children on this
issue, and we reverse and remand. We recognize the tort of
intentional interference with inheritance (Inheritance Tort). But we
hold that an Inheritance Tort claim is available only to the extent the
Utah Uniform Probate Code (Probate Code), UTAH CODE §§ 75-1-101
to 75-12-118, does not provide a remedy for the specific claims
alleged. Thus, we conclude that any portions of the Osguthorpe
Children’s Inheritance Tort Claim which lack Probate Code remedies
should have survived the motion to dismiss. We remand to the
district court with instructions to analyze the specific allegations
underlying the Osguthorpe Children’s Inheritance Tort Claim that
may have survived the parties’ Second Settlement Agreement and
determine which of those issues could have been resolved as part of
the Probate Action. To the extent there are live issues that the
Probate Action could not have disposed of, the Osguthorpe Children
can litigate them.
A. The Utah Probate Code Does Not Wholly
Displace the Inheritance Tort
¶62 This appeal requires us to examine the interaction between
Utah’s Probate Code and the common law, because common law
causes of action must yield when they have been preempted by a
validly enacted statute. See, e.g., Hill v. Nakai (In re Est. of Hannifin),
2013 UT 46, ¶ 10, 311 P.3d 1016; Graham v. Albertson’s LLC, 2020 UT
15, ¶ 10, 462 P.3d 367. When we analyze the interaction between a
common law cause of action and a statute, ordinarily “we first begin
by ‘determining [whether] there was a valid claim at common law’”
and, if there was, we then examine whether or to what extent the
statute preempts or saves the common law claim. See Graham, 2020
UT 15, ¶¶ 10–11 (citations omitted) (emphasis added).
¶63 The situation before us does not neatly follow that
framework, however. The common law Inheritance Tort has evolved
19
OSGUTHORPE v. RUDD
Opinion of the Court
over time, in part in reaction to the particulars of a state’s probate
code. Further, the parties’ arguments here largely depend on the
reach of Utah’s Uniform Probate Code. We therefore begin by
analyzing whether and to what extent Utah’s Probate Code leaves
room for the Inheritance Tort to exist before we turn to whether our
common law embraces the Tort.
1. The Utah Probate Code Expressly Allows Common Law to
“Supplement” the Code, Unless “Particular Provisions” of the
Code “Displace” the Particular Common Law Principle
¶64 Statutes may implicitly or expressly preempt or save a
common law claim. See Graham, 2020 UT 15, ¶¶ 10–14, 21–27.
Statutes can implicitly preempt common law by occupying the field
with a regulatory scheme that is “so pervasive” that it leaves no
room for common law, or by creating an irreconcilable conflict with
common law. See, e.g., In re Est. of Hannifin, 2013 UT 46, ¶ 10 (citation
omitted); Graham, 2020 UT 15, ¶ 14 (citation omitted). Alternatively,
statutes can expressly preempt or save common law claims. See
Graham, 2020 UT 15, ¶¶ 10–13, 23–27.
¶65 For example, we have noted that an “exclusive remedy
provision” would expressly preempt common law remedies. Id. ¶ 13
& n.5 (citing e.g., UTAH CODE § 34A-5-107(15) (“The procedures
contained in this section are the exclusive remedy under state law for
employment discrimination . . . .”)). By contrast, a savings clause can
expressly preserve common law remedies or other statutory
remedies. See id. ¶¶ 21–23 (holding Utah’s OSHA statute saved
common law remedies, where it provided: “Nothing in this chapter
is deemed to limit or repeal requirements . . . otherwise recognized
by law,” nor shall it “in any manner . . . enlarge or diminish or affect
the common-law . . . rights, duties, or liabilities of employers and
employees . . . .”).
¶66 Utah’s Probate Code does not contain an “exclusive
remedy” provision.16 See UTAH CODE §§ 75-1-101 to 75-12-118.17 But it
_____________________________________________________________
16 Rudd/Ballard imply that two subject matter jurisdiction
provisions in the Trust and Probate Codes operate as exclusive
remedy provisions to preempt the Osguthorpe Children’s
Inheritance Tort Claim. We disagree. The Trust Code’s grant of
“exclusive jurisdiction” to “[t]he court” over “proceedings initiated
by interested parties concerning the internal affairs of trusts,” see
UTAH CODE § 75-7-201(1), is not the same thing as an “exclusive
remedy” provision. Cf. id. § 34A-5-107(15). Further, the “court” refers
(continued . . .)
20
Cite as: 2021 UT 23Opinion of the Court
does contain a savings clause. See In re Est. of Hannifin, 2013 UT 46,
¶ 12 (examining UTAH CODE § 75-1-103). Specifically, Utah’s Probate
Code expressly saves “principles of law and equity,” but only to the
extent they are not “displaced by the particular provisions of this
code.” See UTAH CODE § 75-1-103. Utah’s Trust Code similarly
provides: “The common law of trusts and principles of equity
supplement this chapter, except to the extent modified by this
chapter or laws of this state.” Id. § 75-7-106. In other words, the
default is that common law “supplements” the Code and, therefore,
the question we must examine is whether any particular provisions
of the Code would “displace” or “modify” the Inheritance Tort.
¶67 In In re Estate of Hannifin, we interpreted the general savings
and specific displacement clause of Utah Code section 75-1-103 as
requiring a “conflict preemption” analysis. See 2013 UT 46, ¶ 12.
to “any of the courts of record in this state having jurisdiction in
matters relating to the affairs of decedents.” Id. § 75-1-201(8). And
“courts of record” include Utah’s supreme court, court of appeals,
district courts, and juvenile courts, but not the justice courts. See id.
§ 78A-1-101.
Nor does the Probate Code create an “exclusive remedy” when it
provides that “[t]he court may hear and determine formal
proceedings involving administration and distribution of decedents’
estates,” which “shall include proceedings to determine the heirs of a
decedent and proceedings to construe a duly probated will of a
decedent.” See id. § 75-3-105. In fact, this is expressly a “[j]urisdiction
of subject matter” provision. Id. Nor are other subject matter
jurisdiction provisions of the Trust and Probate Codes “exclusive
remedy provisions.” See id. § 75-7-203; id. § 75-1-302(1). Such
provisions granting subject matter jurisdiction or original
jurisdiction over certain subjects to certain state courts, to the
exclusion of other state or federal courts, do not generally operate to
have a statute preempt common law. However, our conclusion that
these provisions do not preempt all common law claims pertaining
to wills and trusts does not preclude a conclusion that other
provisions of the Probate and Trust Codes may preempt or displace
certain common law claims.
17 The Utah Uniform Probate Code is all of Title 75 of the Utah
Code. The Utah Uniform Trust Code is Chapter 7 of Title 75. We
refer to the Probate Code when discussing any provision in Title 75.
We refer to the Trust Code when referring to a provision in Chapter
7.
21
OSGUTHORPE v. RUDD
Opinion of the Court
Specifically, we held that the Probate Code displaced a common law
claim that would have operated outside of “clear and detailed”
provisions of the Code that “leave no room for common-law
adaptation” on the type of issues raised in that claim, see id. ¶ 12 n.2,
and where allowing that common law claim would “stand[] as an
obstacle to the accomplishment and execution of the full purposes
and objectives” of the Code. Id. ¶ 32 (citation omitted). But at the
same time, we recognized in In re Estate of Hannifin that there may be
other “provision[s] of the Probate Code [which are] amenable to
supplementation” by other common law claims. Id. ¶ 12 n.2.
2. The Probate and Trust Codes Displace Some Forms of the
Inheritance Tort, Including Those Seeking to Interpret or
Invalidate Wills or Interfere with Efficient Distribution of
Estate Assets
¶68 The Probate Code aims to strike a balance between honoring
“the intent of a decedent in distribution of his property” and the
sometimes competing goals of “promot[ing] a speedy and efficient”
estate administration and distribution system, “simplify[ing] and
clarify[ing] the law concerning the affairs of decedents,” and
“mak[ing] uniform the law among the various jurisdictions.” See
UTAH CODE § 75-1-102. The Probate Code gives effect to its many
goals in several ways, delineating a web of standards and
procedures for executing, amending, recognizing, and challenging
wills and trusts.
¶69 We agree with Rudd/Ballard that Utah’s Probate and Trust
Codes embrace the notion of the “testator’s freedom of disposition.”
Any “individual 18 or more years of age who is of sound mind may
make a will” or create a trust. See id. § 75-2-501 (wills); id. § 75-7-
402(1)(a) (trusts); id. § 75-7-604 (revocable trusts). Further, as this
court has observed, “a testator has complete control to amend,
modify, or revoke his will during his lifetime.” Patterson v. Patterson,
2011 UT 68, ¶ 35, 266 P.3d 828. In addition, Utah Code sections 75-7-
605(3) and 75-7-606(1) give wide latitude for a settlor to voluntarily
revoke, modify, and control a revocable trust. But these particular
provisions and concepts do not speak directly to the issues the
Inheritance Tort aims to address: improper interference with the
testator’s or settlor’s intent.
¶70 The Probate Code provides that “[p]ersons interested in
decedents’ estates . . . may petition the court for orders in formal
proceedings within the court’s jurisdiction, including, but not
22
Cite as: 2021 UT 23Opinion of the Court
limited to those described in this chapter.” UTAH CODE § 75-3-
105(1);18 see also id. § 75-3-402(1) (“Petitions for formal probate of a
will . . . shall be directed to the court, request a judicial order after
notice and hearing, and contain further statements as indicated in
this section.”); id. §§ 75-3-401–406 (describing additional
requirements for formal testacy proceedings).
¶71 The Probate Code also describes the burdens parties will
face in a probate proceeding construing a will. “Proponents of a will
have the burden of establishing prima facie proof of due execution”
of the will.19 Id. § 75-3-407(1). “Contestants of a will have the burden
of establishing lack of testamentary intent or capacity, undue
influence, fraud, duress, mistake, or revocation.” Id. Likewise, the
Trust Code provides that “[a] trust is void to the extent its creation
was induced by fraud, duress, or undue influence.” Id. § 75-7-406.20
These provisions—allowing a will or trust to be overturned but
placing the burden on those seeking the invalidation—effectuate a
balancing of the Probate Code’s competing goals of expediency and
honoring a testator’s intent.
¶72 That balancing is also reflected in the duties of estate
“personal representative[s],” who must “settle and distribute the
estate” both “in accordance with the terms of any probated and
effective will” and also “as expeditiously and efficiently as is
_____________________________________________________________
18 “[F]ormal proceedings involving administration and
distribution of decedent[]s[’] estates shall include proceedings to
determine the heirs of a decedent and proceedings to construe a duly
probated will of a decedent, whether or not the estate of the
decedent is being, or previously has been, administered or
distributed.” UTAH CODE § 75-3-105(2).
19 However, we also note that “[a] testator is presumed competent
to make a will.” In re Est. of Kesler, 702 P.2d 86, 88 (Utah 1985)
(citation omitted).
20 Notably, Utah Code sections 75-3-407 and 75-7-406 enumerate
closed lists of specific causes of action which, if proven, void a will
or trust; they leave no room for other causes of action in this context.
Therefore, where someone seeks to challenge the validity of a will or
trust based on a theory that it does not reflect the testator’s true
intent, that person must do so in a manner consistent with the
framework of the Probate Code—by proving one of the following:
fraud, duress, undue influence, or (if a will) mistake, revocation, or
lack of testamentary intent or capacity.
23
OSGUTHORPE v. RUDD
Opinion of the Court
consistent with the best interests of the estate.” See id. § 75-3-703(1).
Likewise, a trustee must “administer the trust expeditiously and in
good faith, in accordance with its terms and purposes and the
interests of the beneficiaries.” Id. § 75-7-801; see also id. § 75-7-
201(2)(b) (“The management and distribution of a trust estate . . .
shall proceed expeditiously consistent with the terms of the trust.”).
¶73 The Probate Code also reflects its goal of expediency in tight
deadlines for various aspects of estate administration and claims by
and against estates. See, e.g., id. §§ 75-3-107, 75-3-108, 75-3-802, 75-3-
803, 75-3-1005, 75-3-1006, 75-7-509, 75-7-607. The Probate Code
further reflects the goal of efficiency in provisions that give finality
to certain court decisions pertaining to estate administration and
distribution. Utah Code section 75-3-105 provides that if a person is
notified of “formal proceedings involving administration and
distribution of decedents’ estates,” including “proceedings to
determine the heirs of a decedent and proceedings to construe a duly
probated will of a decedent,” such “[p]ersons notified are bound
though less than all interested persons may have been given notice.”
Similarly, Utah Code section 75-3-412(1) provides that, subject to
appeal and certain statutory exceptions, “a formal testacy order . . . is
final as to all persons with respect to all issues concerning the
decedent’s estate that the court considered or might have considered
incident to its rendition relevant to the question of whether the
decedent left a valid will, and to the determination of heirs . . . .”
¶74 Reading these provisions together, we begin to see where
the Probate Code displaces some forms of the Inheritance Tort. No
person can circumvent the statutory deadlines and limitations by
bringing an untimely claim in tort that seeks to address the same
issues or achieve the same ends as those covered in the Probate or
Trust Code. See RESTATEMENT (THIRD) OF TORTS: LIAB. FOR ECON.
HARM § 19 cmt. c (AM. L. INST. 2020). An Inheritance Tort claim also
may not seek to collaterally attack or effectively overturn a court’s
prior decision in a formal proceeding interpreting or administering a
will, trust, or estate, if the person bringing the Tort had notice of
such proceeding. See UTAH CODE § 75-3-105. Nor may any person
bring an Inheritance Tort claim that seeks to litigate or relitigate
issues pertaining to a will’s validity or determination of heirs which
were “considered or might have [been] considered” in a formal
testacy order. See id. § 75-3-412(1).
24
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3. The Probate Code Leaves Room for Some Forms of the
Inheritance Tort
¶75 Contrary to Rudd/Ballard’s assertions, not all forms of the
Inheritance Tort “run[] counter to existing Utah law” or collaterally
attack probate proceedings.21 On this point, we agree with the
Oregon Supreme Court:
[I]t is true that [the Probate Code] strictly controls the
kinds of issues that can be litigated in a proceeding to
probate a will, and presumably requires plaintiffs to
pursue those issues in the probate system where
possible, [but] that fact does not necessarily translate
into a broader legislative purpose to deny legal
significance to any other issue that might arise out of a
decedent’s making of, or failure to make, a will.
Whether or not the probate code is or may be a
“complete” legislative scheme, it is complete only
within the confines of its subject matter, i.e., will
_____________________________________________________________
21 Rudd/Ballard cite DeWitt v. Duce, 408 So. 2d 216, 218 (Fla.
1981), which Rudd/Ballard assert “survey[ed] cases to conclude that
tortious interference actions are ‘impermissible collateral attacks [sic]
on the probate proceedings.’” DeWitt did not conclude the
Inheritance Tort is always an impermissible collateral attack on
probate proceedings, though it did survey other jurisdictions who
came to that conclusion. Rather, DeWitt held that the particular
claims brought by the plaintiff-appellants in that case—contesting
the validity of a will and seeking conveyance of the testator’s
house—could not proceed in tort because they “had an adequate
remedy in the probate proceedings,” yet they had willingly failed to
exhaust that option. DeWitt, 408 So. 2d at 220. “The rule is that if
adequate relief is available in a probate proceeding, then that
remedy must be exhausted before a tortious interference claim may
be pursued.” Id. at 218. At the same time, the court acknowledged
that “a cause of action for wrongful interference with a testamentary
expectancy has been recognized in this state.” Id. And the court
delineated examples of when the tort might be available and
appropriate, including where a defendant’s tortious conduct “caused
the testator to make an inter vivos conveyance to [the] defendant of
assets that would otherwise have been part of the estate,” id. at 219,
or caused the testator to “omit a gift to the aggrieved party,” where
no prior will including that intended gift existed. Id. at 219 n.7
(citations omitted).
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OSGUTHORPE v. RUDD
Opinion of the Court
contests. A tort claim does not become a will contest
simply because it arises out of facts relating to the
making or unmaking of a will.
Allen v. Hall, 974 P.2d 199, 204 (Or. 1999) (en banc).
¶76 The Third Restatement of Torts and other courts outline a
number of circumstances where a plaintiff may lack a remedy in a
probate proceeding. For example, a probate proceeding might not
remedy a claim that “the decedent intended to create a different
will” which would have added a gift to the plaintiff, yet the decedent
“was prevented from doing so by the defendant.” RESTATEMENT
(THIRD) OF TORTS: LIAB. FOR ECON. HARM § 19 cmt. c. The Oregon case
of Allen v. Hall illustrates this. There, the plaintiffs alleged that a
testator intended to create a new will which would have gifted a
house to them, but the defendants prevented the testator from
finalizing the new will by involuntarily hospitalizing the testator,
telling the testator’s attorney he could not execute the new will, and
falsely claiming power of attorney over the testator to prevent the
hospital from giving life support. Allen, 974 P.2d at 204–06. The
Oregon Supreme Court held the plaintiffs had a valid tort claim for
damages. Id. at 201.
¶77 The Florida Supreme Court has similarly recognized that, in
such situations, an “action at law for damages against the defrauder”
may be appropriate. See DeWitt v. Duce, 408 So. 2d 216, 219 n.7 (Fla.
1981) (citation omitted). As the Florida court explained, “[p]robate
can strike from the will something that is in it as a result of fraud but
cannot add to the will a provision that is not there nor can the
probate court bring into being a will which the testator was
prevented from making and executing by fraud.” Id. (citation
omitted).
¶78 The Third Restatement and other courts also recognize that
claims related to gifts a plaintiff expects to receive outside of a will,
such as a life insurance policy, may not be addressed in a probate
proceeding construing a will, and an Inheritance Tort claim may be
available. See RESTATEMENT (THIRD) OF TORTS: LIAB. FOR ECON. HARM
§ 19 cmt. e; see also id. § 19 illus. 6. Similarly, a plaintiff might not find
relief in probate court to remedy “wrongful conduct in relation to a
nonprobate transfer, such as a transfer by inter vivos trust.” Id. § 19
cmt. c. If a “defendant’s tortious conduct had caused the testator to
make an inter vivos conveyance . . . of assets that would otherwise
have been part of the estate, setting aside the will [through a probate
proceeding] would be inappropriate redress[,] and consequently a
tort action is properly allowed.” DeWitt, 408 So. 2d at 219 (citing
26
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Hegarty v. Hegarty, 52 F.Supp. 296 (D. Mass. 1943); Cyr v. Cote, 396
A.2d 1013 (Me. 1979)); see also Harmon v. Harmon, 404 A.2d 1020, 1021
(Me. 1979) (holding that the Inheritance Tort was available to a
plaintiff who alleged that the defendant induced the testator by
fraud and undue influence to transfer valuable assets to the
defendant while he was alive, which “effectively disinherited the
Plaintiff”).22
¶79 There are likely other claims that fall into the Inheritance
Tort which also would not be remedied in probate. Our examples
here are not intended to be a definitive list. But they demonstrate
that Utah’s Probate Code leaves room for the Inheritance Tort.
¶80 In sum, we conclude that the Probate Code has a
preemptive effect on some claims that seek to invalidate a will,
interfere with distribution of estate assets, or relitigate issues or
remedies which were or could have been considered in a formal
probate proceeding. See supra ¶ 74. But we also conclude there are
claims that seek to remedy other types of harms and thus are not
displaced by the Probate and Trust Code.
B. The Tort of Intentional Interference with Inheritance Is a Valid
Common Law Claim, Subject to the Probate Code’s Limitations
¶81 The district court dismissed the Osguthorpe Children’s
Inheritance Tort Claim in part because the court concluded that Utah
did not recognize the tort of intentional interference with
inheritance.
¶82 The Osguthorpe Children urge us to explicitly recognize the
Inheritance Tort for several reasons. First, the Osguthorpe Children
note that the Inheritance Tort is related to the tort of intentional
interference with prospective economic relations, which has long
been a part of Utah law. Second, the Osguthorpe Children highlight
that the Second and Third Restatements of Torts recognize the
Inheritance Tort. Third, other jurisdictions have adopted the
Inheritance Tort using persuasive reasoning.
_____________________________________________________________
22 However, we also acknowledge, as the Restatements do, that
such a claim alleging wrongful depletion of assets might belong with
the executor of the estate, but an Inheritance Tort claim by the
beneficiary would “remain[] available if a probate court, for
whatever reason, lacks the power to provide redress.” RESTATEMENT
(THIRD) OF TORTS: LIAB. FOR ECON. HARM § 19 cmt. c (AM. L. INST.
2020).
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Opinion of the Court
1. Utah Has Long-Recognized Torts for Interference with
Economic Relations
¶83 The Osguthorpe Children note that Utah has, for nearly four
decades, expressly recognized a tort similar to the Inheritance Tort—
the tort of intentional interference with prospective economic
relations. See Leigh Furniture & Carpet Co. v. Isom, 657 P.2d 293, 302–
04 (Utah 1982), overruled in part by Eldridge v. Johndrow, 2015 UT 21,
¶ 70, 345 P.3d 553 (requiring improper means, not merely improper
purpose, to serve as the basis of liability for tortious interference
with prospective economic relations, but otherwise leaving Utah’s
recognition of the tort intact). Further, Utah has recognized
additional similar torts for even longer. In Leigh Furniture, we
adopted the tort of intentional interference with prospective
economic relations, in part because of its close relationship to the tort
of interference with contractual relations, which Utah had
recognized since the early 1960s. See 657 P.2d at 303.
¶84 In Leigh Furniture, we noted that there are multiple
variations of similar torts falling into the “total class[] of protections
against wrongful interference with advantageous economic
relations.” Id. at 301 (citations omitted). And we acknowledged the
lengthy history of the tort of intentional interference with
prospective economic relations, as reflected in the “plethora” of case
law from other jurisdictions, the “abundant literature,” and the
Restatements. See id. at 302.23
¶85 The centuries-long history of courts on both sides of the
pond recognizing various forms of torts for intentional interference
with economic expectations—alongside Utah’s express recognition
of those torts since the early 1960s—is notable for our analysis
because such torts fall into the same category as the Inheritance Tort.
See RESTATEMENT (SECOND) OF TORTS § 774B cmt. a (AM. L. INST.
_____________________________________________________________
23 In fact, the Second Restatement dates express recognition of the
tort of interference with prospective contracts or business
expectations to as “early as 1621 [in] the court of King’s Bench.”
RESTATEMENT (SECOND) OF TORTS § 766B cmt. b (AM. L. INST. 1979); see
also RESTATEMENT (THIRD) OF TORTS: LIAB. FOR ECON. HARM § 18
cmt. a (listing varying names of that tort). The Second Restatement
further explains that “[p]recedent for these decisions is found as
early as the fifteenth century, and even earlier,” citing cases as far
back as 1356. RESTATEMENT (SECOND) OF TORTS § 766B cmt. b.
28
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1979); RESTATEMENT (THIRD) OF TORTS: LIAB. FOR ECON. HARM § 19
cmt. a (AM. L. INST. 2020).
¶86 Other courts have used this logic to recognize the
Inheritance Tort. See Harmon v. Harmon, 404 A.2d 1020, 1023 (Me.
1979) (“If the law protects a person from interference with an
opportunity to receive a benefit by entering into contractual relations
in the future, the same protection should be accorded to a person’s
opportunity to receive a benefit as a prospective legatee.”); see also
Ross v. Wright, 190 N.E. 514, 517 (Mass. 1934) (“The view of the law
most favorable to the plaintiff would be that her alleged expectancy
of receiving property by gift . . . is entitled to as complete protection
against intentional interference as rights under existing contracts or
the ‘right to carry on business, that is, to make contracts without
interference.’”), cited by Labonte v. Giordano, 687 N.E.2d 1253, 1255
(Mass. 1997) (proclaiming that Massachusetts had “long recognized
a cause of action for tortious interference with the expectancy of
receiving a gift”).
¶87 In addition, at least one other court, the Oregon Supreme
Court, found the tort of intentional interference with prospective
economic relations to be so related to the Inheritance Tort that the
court deemed it unnecessary to recognize the latter as a standalone
vehicle to provide relief to plaintiffs who sought to recover the value
of their expected inheritance that had been lost as a result of the
defendants’ tortious conduct. See Allen, 974 P.2d at 202. The Oregon
court held it could provide relief under the already “well-
established” tort of “intentional interference with economic
relations.” Id. The court explained that although it had previously
“applied that tort only to contractual and business relationships and
prospects, we are persuaded that the tort also may, by a reasonable
and principled extension, be made applicable to some noncommercial
relationships and prospects, such as the one alleged by plaintiffs in
the present case.” Id. We find the parallels the Oregon court draws to
be instructive, though we ultimately find utility in recognizing
intentional interference with inheritance as a standalone tort with its
own elements, in order to expressly confront what the Restatements
call potential “complications” with probate. See RESTATEMENT
(THIRD) OF TORTS: LIAB. FOR ECON. HARM § 19 cmt. a.
¶88 In sum, we agree with the Osguthorpe Children that our
prior recognition of the tort of intentional interference with
prospective economic relations supports a decision to adopt the
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OSGUTHORPE v. RUDD
Opinion of the Court
Inheritance Tort. It should not be considered a great change or
surprise for Utah to expressly recognize the Inheritance Tort, when it
is a variant of other torts we have long embraced.24
2. The Second and Third Restatements Recognize the
Inheritance Tort
¶89 The Osguthorpe Children next highlight that both the
Second and Third Restatements of Torts recognize the Inheritance
Tort. We have, at times, consulted the Restatements when deciding
whether Utah should adopt a cause of action. See, e.g., Leigh
Furniture, 657 P.2d at 302–04 (examining the definition used in the
Second Restatement for the tort of interference with prospective
economic relations, though ultimately adopting Oregon’s definition).
¶90 Here too, we find the Restatements instructive. The general
rationale behind the Inheritance Tort is, as the Third Restatement
comments explain, to address situations where a defendant
intentionally wronged a third party (e.g., the testator), yet the person
most injured is the plaintiff (who has now lost their economic or
inheritance expectancy). See RESTATEMENT (THIRD) OF TORTS: LIAB.
FOR ECON. HARM § 19 cmt. a. Absent the Inheritance Tort, the
plaintiff there would ordinarily not have been able to recover against
the defendant because the third party was the direct victim of the
wrong. The Inheritance Tort provides an avenue for relief in some of
these situations. See id.
¶91 The Second Restatement expressly recognized the
Inheritance Tort in 1979, see RESTATEMENT (SECOND) OF TORTS § 774B,
though the origins of the Tort are much older.25 Since then, as
_____________________________________________________________
24 The Osguthorpe Children also contend that Utah has
“implicitly recognized” the Inheritance Tort, in McBroom v. Child,
2016 UT 38, 392 P.3d 835, and in Biesele v. Mattena, 2019 UT 30, 449
P.3d 1. The persuasive value of those cases is limited, however,
because in neither were we asked to opine on whether Utah
recognized the Inheritance Tort.
25 As discussed above, the Inheritance Tort evolved out of torts
proscribing intentional interference with various forms of economic
expectancies—torts which date back several centuries. See supra
¶¶83–85. Estimates vary as to precisely when these torts began to be
recognized and applied in the context of an expected inheritance or
gift, but it is safe to say the Inheritance Tort in the United States
traces back to at least the 1930s, if not the early 1900s. See John C.P.
(continued . . .)
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probate laws have evolved and as courts have weighed more specific
applications of the Inheritance Tort, the Restatements have
recognized that evolution. Notably, the recently adopted Third
Restatement continues to recognize the Inheritance Tort, but in a
form that now expressly accounts for the potential tension with
probate statutes. It provides that an Inheritance Tort claim “is not
available to a plaintiff who had the right to seek a remedy for the
same claim in a probate court.” RESTATEMENT (THIRD) OF TORTS: LIAB.
FOR ECON. HARM § 19(2).
3. Other Jurisdictions’ Rationales Persuade Us of the Validity
of the Inheritance Tort under Certain Conditions
¶92 Both sides here assert that the “majority” of courts of other
jurisdictions have adopted their respective positions. Cases and
secondary sources the parties cite reflect the abundance of law and
scholarship on the issue, with varying takes across the country. We
note that our colleagues on the South Dakota Supreme Court
recently published an excellent survey of decisions on the
Inheritance Tort from the highest state courts across the country, and
we see little value in including a full-scale repetition of their effort in
this already stuffed opinion. See In re Certification of Question of Law
from the U.S. Dist. Ct. (Briggs v. Briggs), 931 N.W.2d 510, 513 (S.D.
2019). As the South Dakota Supreme Court noted, it appears that
roughly equal numbers of states’ highest courts have rejected and
recognized the Inheritance Tort—with a narrow lead for the Tort’s
recognition, albeit with limitations requiring the unavailability or
exhaustion of probate remedies. See id. at 513–16 (citing inter alia
DeWitt, 408 So. 2d at 218; and Bjork v. O’Meara, 986 N.E.2d 626, 633
(Ill. 2013)).
¶93 For example, Maine has adopted the Inheritance Tort
largely because it had already adopted the similar tort of prospective
contractual relations. See Harmon, 404 A.2d. at 1023 (“If the law
Goldberg & Robert H. Sitkoff, Torts and Estates: Remedying Wrongful
Interference with Inheritance, 65 STAN. L. REV. 335, 366 (2013)
(explaining that Bohannon v. Wachovia Bank & Trust Co., 188 S.E. 390(N.C. 1936), is “perhaps the first case formally to recognize the
interference-with-inheritance tort”); see also Labonte v. Giordano, 687
N.E.2d 1253, 1255 (Mass. 1997) (proclaiming that Massachusetts had
“long recognized a cause of action for tortious interference with the
expectancy of receiving a gift in certain limited conditions,” citing
cases from 1907, 1934, and 1943).
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OSGUTHORPE v. RUDD
Opinion of the Court
protects a person from interference with an opportunity to receive a
benefit by entering into contractual relations in the future, the same
protection should be accorded to a person’s opportunity to receive a
benefit as a prospective legatee.”); see also Allen, 974 P.2d at 202
(holding that the tort of intentional interference with prospective
economic relations may be “applicable to some noncommercial
relationships,” including the plaintiff’s claim for tortious interference
with their expectancy in inheriting a house). As we noted above, we
find this logic persuasive, given that Utah has long recognized
multiple types of tortious interference with economic relations. See
supra ¶¶ 83–88.
¶94 We are also persuaded by courts that have undertaken an
examination of the interaction between their state’s probate code and
the types of claims that may fall under the Inheritance Tort, and have
concluded that, although probate may provide remedies and
displace the Tort in some situations, the Tort should be available for
situations that probate cannot address.
¶95 For example, the Illinois Supreme Court reaffirmed the
Inheritance Tort as a “widely recognized cause of action” and also
declared that the Tort is unavailable where plaintiffs have “an
opportunity to contest a probated will but choose not to do so,” or
where the tort remedy “would have the practical effect of
invalidating a will that had been validated through the Probate Act”
or would give the plaintiffs “a second bite of the apple.” Bjork, 986
N.E.2d at 631–33 (citing inter alia Robinson v. First State Bank of
Monticello, 454 N.E.2d 288 (1983); In re Est. of Ellis, 923 N.E.2d 237 (Ill.
2009); and RESTATEMENT (SECOND) OF TORTS § 774B). Similarly, the
Florida Supreme Court in DeWitt v. Duce reaffirmed Florida’s
recognition of the “cause of action for wrongful interference with a
testamentary expectancy,” but also held that “if adequate relief is
available in a probate proceeding, then that remedy must be
exhausted before a tortious interference claim may be pursued.” 408
So. 2d at 218. The court reasoned that an Inheritance Tort claim
would be considered an “impermissible collateral attack” on a
probate action when the plaintiff seeks to set aside a will but
willingly fails to bring or participate in a probate action. Id. at 218–
21.26
_____________________________________________________________
26 Specifically, in DeWitt, the plaintiffs alleged the defendant
exercised undue influence which caused the testator to make
changes to his will that reduced the plaintiffs’ expected inheritance.
(continued . . .)
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¶96 The Iowa Supreme Court dealt with similar concerns in
Youngblut v. Youngblut, 945 N.W.2d 25 (Iowa 2020). The plaintiff-
appellants in Youngblut brought an Inheritance Tort claim that
“challenged [a] will and nothing but the will,” based on allegations
that the defendant used wrongful means, including fraud, duress,
and defamation to induce the decedents into amending their wills.
Id. at 38–39. Further, the plaintiffs “deliberately bypassed
challenging the will in probate proceedings” and even “accepted that
will in the probate proceedings.” Id. at 39. The Iowa Supreme Court
barred the plaintiff-appellants’ claim and held that “a party alleging
a decedent’s will was procured in whole or in part by tortious
interference must join such claim together with a timely will
contest.” Id. at 37. The court reasoned that its holding would “honor
the legislature’s goal of prompt and effective estate administration,”
adhere to the probate code’s higher burden of proof requirements for
determining the validity of a will, and respect the statutory
requirement “that the distribution coming out of probate should be a
final and conclusive distribution unless a specific exception . . .
applies.” Id.¶97 But the court carefully emphasized that its requirement that
a claim be brought as part of the probate proceeding would apply
solely to claims seeking to be a “de facto substitute for a will
408 So. 2d at 217. The plaintiffs had the opportunity to contest the
allegedly invalid will in probate proceeding and offer the earlier will
they claimed was valid. Id. In fact, they initially did so, but then
“voluntarily dismissed the petition . . . choosing to take under the
[amended] will.” Id. The plaintiffs later made those same allegations
in the tort action and “sought conveyance of [the decedent’s]
residence and an accounting for residuary amounts, both of which
they would have received under the earlier will. They also sought
punitive damages.” Id. at 217–18. The court held that because the
plaintiffs “had an adequate remedy in the probate proceedings,” yet
they had willingly failed to exhaust that option, they were barred
from bringing their tort action. Id. at 220. The court also noted that
the probate remedy was adequate because, “[f]or purposes of
adequacy of relief we do not consider punitive damages as a valid
expectation. Adequacy is predicated on what the probate court can
give as compared to what the plaintiff reasonably expected from the
testator prior to interference.” Id. at 220 n.11. We agree with the
Florida Supreme Court that this is an example of a situation in which
the Probate Code would displace the Inheritance Tort.
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OSGUTHORPE v. RUDD
Opinion of the Court
contest”—i.e., “claims that a party tortiously interfered with an
inheritance by inducing the decedent to execute a will through
wrongful means”—and not to claims seeking to address other
wrongs. Id. at 35, 37. The Iowa court explained: “[W]e are not
persuaded by those courts and commentators who see no role for the
tort of intentional interference with an inheritance. The tort has value
in circumstances when a probate proceeding cannot provide an adequate
remedy.” Id. at 35 (second emphasis added). The court added:
“Generally speaking, we agree with the authors of the Third
Restatement that where no claim is available in probate court for the
conduct in question, then the claim cannot be precluded by failure to
bring the claim in probate court.” Id. at 37 n.3 (citing RESTATEMENT
(THIRD) OF TORTS: LIAB. FOR ECON. HARM § 19 cmt. c).
¶98 Rudd/Ballard argue that many courts have reached the
contrary result. Both South Dakota and Texas, for example, appear to
reject the Inheritance Tort in all its forms. In Briggs v. Briggs, the
South Dakota Supreme Court refused to recognize the Tort because
it found that South Dakota’s trust and probate statutes provided
adequate remedies not only for the plaintiff’s claim challenging a
will and trust, but also for other hypothetical situations. See 931
N.W.2d at 518. In Archer v. Anderson, the Texas Supreme Court
rejected the Inheritance Tort after reasoning that “existing law
affords adequate remedies for the wrongs the tort would redress,
and . . . the tort would conflict with Texas probate law.” 556 S.W.3d
228, 229 (Tex. 2018).
¶99 We agree with the response of the four justices in Archer
who concurred in the judgment but dissented from the majority’s
rejection of the Inheritance Tort: “[We] disagree that the Court can
realistically predict that the law in its current state affords adequate
remedies for all situations that might arise in the future where bad
actors wrongfully relieve elderly persons of assets intended for
others.” Id. at 240 (Johnson, J., concurring). Further, we “do not
dispute that probate law will be applicable and provide an adequate
remedy in many situations. Nevertheless, under certain
circumstances probate proceedings may not be a viable option for
relief to a would-be beneficiary.” Id. at 244. Making the Inheritance
Tort available in those situations “would not conflict with probate
law but would augment it when properly cabined in.” Id. at 240.
Finally, “[e]ven if [another tort] remedy other than tortious
interference with expectancy of inheritance was viable in such a
situation, then having the tortious interference remedy as a backup
would do no harm.” Id. at 243. In short, there may be wrongs that
probate cannot remedy, and we think it unwise to foreclose the
34
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ability of Utah plaintiffs to avail themselves of the Inheritance Tort
as a means to address what probate cannot.
¶100 In sum, based on our review of the Inheritance Tort’s
lengthy history, Utah’s long-time recognition of similar torts, the
Restatements, other jurisdictions’ rationales, and Utah’s Probate
Code, we conclude there is a valid claim at common law for the tort
of intentional interference with inheritance and that our Probate
Code leaves room for supplementation by some forms of the Tort,
while displacing others. Therefore, the district court erred in
dismissing the Osguthorpe Children’s Inheritance Tort Claim when
it reasoned that Utah does not recognize this cause of action at all.
¶101 We hold that Utah recognizes a claim at common law for
intentional interference with inheritance, consistent with the
elements the Third Restatement of Torts describes:
(1) A defendant is subject to liability for interference
with an inheritance or gift if:
(a) the plaintiff had a reasonable expectation of
receiving an inheritance or gift;
(b) the defendant committed an intentional and
independent legal wrong;
(c) the defendant’s purpose was to interfere with
the plaintiff’s expectancy;
(d) the defendant’s conduct caused the expectancy
to fail; and
(e) the plaintiff suffered economic loss as a result.
RESTATEMENT (THIRD) OF TORTS: LIAB. FOR ECON. HARM § 19.
¶102 But we also hold that the Inheritance Tort “is not available
to a plaintiff who had the right to seek a remedy for the same claim”
under Utah’s Probate Code. Id. § 19(2). Utah’s Probate Code
displaces applications of the Inheritance Tort that seek to: invalidate
a will; interfere with distribution of estate assets; relitigate issues or
remedies which were or could have been considered in a formal
probate proceeding; otherwise circumvent the Code’s express
limitations, procedures, limited causes of action for challenging
wills; or conflict with any other relevant provision of the Probate
Code. See supra ¶¶ 74, 80. Whether a particular Inheritance Tort
claim conflicts with the Code is a case-by-case determination that
depends on the nature of the claim, the allegedly wrongful conduct,
the nature of the inheritance or gift, and—putting those together—
whether the Probate Code could provide a remedy for the same
claim. We stress however, that the inquiry turns on the availability,
and not the adequacy, of the remedy the Probate Code offers. See
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Opinion of the Court
RESTATEMENT (THIRD) TORTS: LIAB. FOR ECON. HARM § 19, Reporter’s
Note cmt. c (“[C]laims in tort are foreclosed by the availability of
probate, not by the ‘adequacy’ of probate.”); see also id. § 19 cmt. c
(“A proceeding in probate is considered available, for purposes of
this Section, even if it offers less generous relief than would be
attainable in tort.”).
C. The District Court Erred in Dismissing the Inheritance Tort Claim
on the Grounds that “the issues raised by this cause of action will be
resolved in their entire[t]y by the Probate Action”
¶103 The district court concluded that even if Utah recognized
the Inheritance Tort, the Osguthorpe Children could not assert it
because the Probate Action would resolve all “the issues raised by
this cause of action.” The district court’s succinct decision offers little
insight into its reasoning, and our own analysis causes us to not
share the district court’s confidence.
¶104 Rudd/Ballard contend that the Osguthorpe Children’s
Inheritance Tort Claim “is premised on the same allegations in the
Probate Action that the 2006 and 2008 Trust Documents were the
product of undue influence exercised by Rudd on [Dr. Osguthorpe]
who allegedly lacked capacity to resist that influence.”
Rudd/Ballard also assert that “[i]f those allegations were proven, the
appropriate remedy would be to invalidate the challenged
instruments” in the probate proceeding, not award damages. If
Rudd/Ballard were correct in their contention that the Osguthorpe
Children’s Inheritance Tort Claim had simply and solely sought “a
ruling invalidating [Dr. Osguthorpe’s] estate plan under the guise of
a tort claim against [Dr. Osguthorpe’s] lawyers,” then we would
agree with Rudd/Ballard and the district court that a probate
proceeding was the only avenue for relief.
¶105 But the Osguthorpe Children’s Inheritance Tort Claim is
not so simple. The issues raised in the Osguthorpe Children’s
Inheritance Tort Claim do not appear to be entirely co-extensive with
the issues the Probate Code may remedy. The Osguthorpe
Children’s claim for intentional interference with inheritance is
premised on the following allegations:
110. Plaintiffs had a valid expectancy that each would
receive property through inheritance upon the death of
Dr. D.A. Osguthorpe.
111. Rudd, Ballard Spahr and June intentionally
interfered with that expectancy through independently
tortious conduct, including but not limited to, undue
influence, fraud, and breaches of fiduciary duties.
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112. Absent the tortious interference, Plaintiffs would
have received the expectancy and have been directly
and proximately injured as a result of the tortious
interference, in an amount to be proven at trial,
including interest, costs, and attorney fees as allowed
by law.
113. The actions by Rudd, Ballard Spahr and June
constitute willful and malicious or intentionally
fraudulent conduct, or conduct that manifests a
knowing and reckless indifference toward, and
disregard of, the rights of Plaintiffs. Thus, Plaintiffs are
entitled to an award of punitive damages against
Rudd, Ballard Spahr and June.
(Emphasis added.)
¶106 The Complaint also alleges eight different ways that
Rudd/Ballard “violated and failed to perform their fiduciary
duties.”27 See supra ¶ 34 n.8. Although the Complaint is not a model
of clarity, these allegations appear to both support the breach of
fiduciary duty cause of action and constitute the “independently
tortious conduct” the Inheritance Tort requires. While some of these
allegations may raise the same issues as those which were or could
have been litigated in the Probate Action, some may not.
¶107 To the extent the Complaint alleges that Rudd improperly
“coordinat[ed] and engineer[ed] the re-drafting” of the Estate Plan in
a way that conflicted with “actual testamentary intent of Dr. D.A.
Osguthorpe,” such allegations could be addressed and remedied in
the Probate Action. In that action, the Osguthorpe Children would
have the opportunity to prove that the 2008 Estate Plan documents
were the product of Rudd’s undue influence, fraud, duress, mistake,
or Dr. Osguthorpe’s “lack of testamentary intent or capacity.” See
UTAH CODE § 75-3-407(1); id. § 75-7-406. And if they could make that
showing, they could then attempt to probate the 1998 Estate Plan. See
id. § 75-3-407(1). In fact, that’s the avenue the Osguthorpe Children
started to take before filing their Tort Action. See supra ¶¶ 29–33.28
_____________________________________________________________
27 The Complaint does not delineate which of the alleged
breaches fall under Rudd/Ballard’s role as attorney and which fall
under Rudd’s role as trustee of the 2008 Trust.
28We reject the Osguthorpe Children’s argument that putting a
breach of fiduciary duty label on their cause of action automatically
exempts it from inclusion in a probate action. The Osguthorpe
(continued . . .)
37
OSGUTHORPE v. RUDD
Opinion of the Court
¶108 But it is not apparent that the Probate Code would
displace all aspects of the Osguthorpe Children’s Claim. To the
extent that other allegations underlying the Osguthorpe Children’s
Inheritance Tort Claim do not contest the redrafting of the Estate
Plan, neither the district court nor Rudd/Ballard explain how the
Probate Action would provide the Osguthorpe Children a remedy.
For example, neither the district court nor Rudd/Ballard explain
Children arrive at this conclusion because their probate action
alleged undue influence, not breach of fiduciary duty, and because
the Probate Code does not list breach of fiduciary duty as one of the
available legal theories for contesting a will or voiding a trust. See
UTAH CODE § 75-3-407(1); id. § 75-7-406. The Osguthorpe Children
contend they should be able to pursue their breach of fiduciary claim
in tort because it has different elements from the undue influence
claim available in probate. We reject this argument because it would
circumvent the limitations of the Probate Code, which provides the
avenues and remedies for contesting wills and trusts that do not
reflect the true intent of the testator and enumerates the types of
wrongs that may serve as the basis for declaring a will or trust
invalid. See supra ¶ 71 n.20; see also UTAH CODE § 75-3-407(1); id. § 75-
7-406. As such, even if the Osguthorpe Children slap a “breach of
fiduciary duty” label on an allegation that Rudd improperly
“coordinat[ed] and engineer[ed] the re-drafting” of the Estate Plan in
a way that conflicted with the “actual testamentary intent” of Dr.
Osguthorpe, the Osguthorpe Children may not seek to remedy this
particular allegation through an Inheritance Tort claim, because
questions of Dr. Osguthorpe’s testamentary intent can and should be
litigated in the Probate Action.
We also reject the Osguthorpe Children’s argument that, because
the remedy they seek here is damages and legal fees, not a different
will or trust, their allegation pertaining to the redrafting of the Estate
Plan should be allowed to escape the grip of the Probate Code. That
argument misses the mark. The Inheritance Tort “is not available to a
plaintiff who had a right to seek a remedy for the same claim” under
Utah’s Probate Code, even if not the same remedy. See RESTATEMENT
(THIRD) TORTS: LIAB. FOR ECON. HARM § 19(2) (emphasis added); see
also id. § 19 cmt. c (“A proceeding in probate is considered available,
for purposes of this Section, even if it offers less generous relief than
would be attainable in tort.”); id. § 19, Reporter’s Note cmt. c
(“[C]laims in tort are foreclosed by the availability of probate, not by
the ‘adequacy’ of probate.”).
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how the Probate Action would remedy the claim that Rudd caused
Stephen to lose his co-ownership interest in the 19 Acres upon which
Stephen’s house was located. By way of reminder, Stephen
contended that Rudd procured that outcome by making deliberate
misrepresentations that caused him to transfer title of the property
on which his house sits to an entity in which he had no ownership.29
¶109 To be clear, we are not concluding that the Probate Code
does or does not provide remedies for the Osguthorpe Children’s
Inheritance Tort Claim. The Probate Code may provide remedies for
some of the allegations underlying their Claim, while leaving the
Tort available for other allegations. We are simply concluding that
the district court’s blanket dismissal of the Osguthorpe Children’s
Inheritance Tort Claim does not provide us with sufficient
information to make that determination. This ambiguity is
compounded by the fact that the parties have entered into an
agreement that apparently settles some of the claims the Osguthorpe
Children brought. But that settlement agreement is not in the record
before us. See supra ¶ 53 n.14. Therefore, we are unable to sort out the
entire universe of claims that are currently in play. We accordingly
remand to the district court to make specific determinations on
_____________________________________________________________
29 In fact, the district court’s 2014 ruling recognized that this
particular breach of fiduciary duty allegation is “separate and
distinct from issues raised in the Probate Action.” The district court
therefore allowed that claim to evade the motion to dismiss and to
move forward. See supra ¶ 39. The court also denied Rudd/Ballard’s
motion to stay the conversion claim, which is premised on one of the
same factual allegations underlying the breach of fiduciary duty
claim—that Rudd/Ballard failed to take action to recover the
$400,000 June removed from the Osguthorpe Bros. Farms bank
account. See supra ¶ 34 n.8. The court “conclude[d] that a stay of this
claim is not appropriate because the issues presented are separate
and distinct from the issues presented in the Probate Action.”
Because the court concluded that at least some of the Osguthorpe
Children’s allegations were distinct enough from the Probate Action
to move forward, it is difficult to reconcile the court’s simultaneous
conclusion that these allegations, when characterized as the tortious
conduct underlying the Inheritance Tort, would be entirely resolved
in the Probate Action.
39
OSGUTHORPE v. RUDD
Opinion of the Court
whether the Probate Code provides remedies for the wrongs the
Osguthorpe Children allege.30
II. WE UPHOLD THE DISTRICT COURT’S DISMISSAL AND
REJECTION OF ASSIGNMENT OF THE ESTATE CLAIMS
¶110 The Osguthorpe Children also ask us to review the district
court’s order disposing of the Estate Claims.31 The district court
entered judgment to “enforce its prior ruling and dismiss all of the
[Estate] Claims[,] based on the Special Fiduciary’s determination that
it is not prudent [for the Estate] to pursue those claims.” The court
then denied the Osguthorpe Children’s motion to, in lieu of
dismissal, assign the claims to them so they could pursue the claims.
The Osguthorpe Children do not contest the Special Fiduciary’s
determination that it would be imprudent for him to pursue the
claims on behalf of the Estate. They only appeal the district court’s
decision to not assign the Estate Claims to them.
¶111 The district court offered four “equally dispositive
reasons” for denying the Osguthorpe Children’s motion to assign the
Estate Claims to them, including that: (A) the requested assignment
would “circumvent the Court’s prior rulings removing Stephen as
Trustee” and barring Stephen’s siblings from becoming trustees;
(B) assignment of legal malpractice claims and other “claims arising
out of the performance of personal services” is impermissible;
(C) assignment of a Trust’s claims to a beneficiary is impermissible
unless the trustee has improperly refused or neglected to bring the
_____________________________________________________________
30 Our decision offers no judgment on the ultimate merits of the
claims. Oakwood Vill. LLC v. Albertsons, Inc., 2004 UT 101, ¶ 8, 104
P.3d 1226. Because the district court’s decision was based on a rule
12(b)(6) motion, our decision is based solely on the Complaint’s
allegations that we must assume are true and draw “all reasonable
inferences therefrom in the light most favorable to the plaintiff.”
Brown v. Div. of Water Rights of Dep’t of Nat. Res., 2010 UT 14, ¶ 10,
228 P.3d 747.
31 The claims at issue in the district court’s order were claims
brought by Stephen, purportedly on behalf of Dr. Osguthorpe, his
Estate, and the Trust, against Rudd/Ballard and June. The claims
were for conversion, unjust enrichment, and breaches of fiduciary
duty allegedly owed to Dr. Osguthorpe and the Trust. Pursuant to a
settlement agreement executed after the district court’s ruling, the
Osguthorpe Children no longer seek to pursue claims against June.
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action; and (D) the assignment would violate “the Special
Fiduciary’s duties to the Trust and to the other beneficiaries.”
¶112 The Osguthorpe Children contest all four of the district
court’s reasons for denying the assignment, but it is only necessary
to uphold the district court on one of them for us to affirm the
district court’s order.
A. The District Court Did Not Abuse Its Discretion in Determining
that the Assignment Would Impermissibly Circumvent Its Prior Rulings
¶113 The Osguthorpe Children disagree with the district court’s
determination that their proposed assignment of the Estate Claims to
themselves would “circumvent the court’s prior rulings.” One of the
district court’s prior orders had removed Stephen as trustee and
barred the other Osguthorpe Children from acting as the Estate’s
personal representatives due to their “conflicts of interest.”32 We
note that the Osguthorpe Children do not directly challenge the
district court’s determination that the Osguthorpe Children’s
financial interest in invalidating the 2008 Estate Plan is a conflict of
interest that disqualifies them from serving as the Estate’s personal
representatives.
¶114 Nor do the Osguthorpe Children directly challenge the
court’s other order determining that Stephen lacked standing to
pursue the Estate Claims because the Special Fiduciary is “the real
party in interest.” That order concluded that, because of Utah Rule of
Civil Procedure 17(a), “if the [Estate] Claims are to be pursued, the
Special Fiduciary must be a party to this action and he must be the
one to fund and direct the [Estate] Claims.” The court then gave the
Special Fiduciary a deadline to “either move to substitute or join the
action as the real party in interest.” And the court instructed that
_____________________________________________________________
32 Rudd/Ballard assert that the Osguthorpe Children failed to
address this issue in their opening brief and therefore waived their
right to address it. This is incorrect. The district court’s
determination that the assignment would “circumvent its prior
rulings” was partially based on its earlier findings that the
Osguthorpe Children held “conflicts of interest” with other
beneficiaries. The Osguthorpe Children cited this portion of the
district court’s ruling when they contested the district court’s
“conflicts of interest” rationale. Therefore, we understand the
argument as contesting the foundation of the district court’s
“circumvention of its prior rulings” rationale, and they did not
waive this issue.
41
OSGUTHORPE v. RUDD
Opinion of the Court
“[i]f the Special Fiduciary does not move to substitute or join the
action by [the deadline], the Court will dismiss the [Estate] Claims.”
In other words, this order never gave assignment as an option. The
order told the Special Fiduciary to decide whether or not to pursue
the claims, and it informed everyone that if the Special Fiduciary
opted not to pursue the claims, that would be the end of the line for
those claims.
¶115 The Osguthorpe Children’s argument on appeal focuses
on their assertion that the requested Assignees—Sue Ann, Jerry, and
Karen (but not Stephen)—had no “impermissible conflict of interest
with any beneficiary of the Estate” which would preclude
assignment of the claims against Rudd/Ballard. The Osguthorpe
Children further assert that “June’s desire that the [Estate] Claims
not be pursued against her nephew is insufficient to generate a
conflict of interest,” and that any potential conflict related to claims
against June are no longer at issue because those claims were
subsequently settled. We disagree.
¶116 First, it is patently unfair to claim the district court erred
because its ruling did not account for the effect of a yet-to-exist
settlement agreement. We therefore reject the Osguthorpe Children’s
contention that a settlement with June subsequent to the district
court’s decision translates into a ground to reverse the district court’s
decision to deny assignment based upon its determination that a
conflict of interest existed at that time.
¶117 Further, as noted above, the district court previously
determined that the Osguthorpe Children have a “significant
financial interest” in invalidating the 2008 Estate Plan, and that this
constitutes a conflict of interest which disqualifies them from serving
as the Estate’s personal representative. See supra ¶ 113. This makes
sense because the 2008 Estate Plan—as the plan created later-in-time
and probated first—was presumptively valid under the Trust and
Probate Codes upon the establishment of prima facie proof of due
execution. See UTAH CODE § 75-3-407; see also Schramm v. Tracy-Collins
Bank & Trust Co. (In re Holten’s Est.), 404 P.2d 27, 29–30 (Utah 1965)
(holding that the testatrix’s most recent will was presumptively valid
and “it is presumed that the testatrix was competent and was acting
of her own free will and not under duress or undue influence”).
¶118 The Osguthorpe Children’s financial interest in
invalidating that presumptively valid 2008 Estate Plan is, therefore,
inherently in conflict with that Plan. Further, full success on the
42
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breach of fiduciary duty and unjust enrichment claims against Rudd
would require proving the invalidity of the 2008 Estate Plan.33
Therefore, there is a conflict between the 2008 Estate Plan, which is
presumed to reflect Dr. Osguthorpe’s testamentary intent, and the
personal interests of the Osguthorpe Children who wanted to
invalidate the 2008 Estate Plan. Moreover, the Probate Code
generally forbids trustees and estate representatives from
performing “transaction[s] involving the . . . management of trust
property” that would involve a “conflict between the trustee’s
fiduciary and personal interests.” UTAH CODE § 75-7-802(2) (emphasis
added).34 It was therefore reasonable for the district court to
determine that the conflict between the Estate’s interests and the
Osguthorpe Children’s interests disqualified them from serving as
estate representatives to prosecute that claim.
¶119 And again, the Osguthorpe Children do not directly
contest the district court’s ruling that their conflicts of interest
disqualified them from serving as estate representatives. Instead, the
Osguthorpe Children argue that these conflicts are irrelevant to their
proposal to assign the Estate Claims back to them. We agree with the
district court that assigning the Estate Claims back to the
Osguthorpe Children would “circumvent” the entire reason why the
court had removed them from their roles in administering the Estate
and had appointed a neutral Special Fiduciary. As the district court
explained in denying the assignment, the court “appointed a Special
Fiduciary to make these types of decisions on behalf of the Trust and
Estate because of numerous conflicts of interest . . . that extended to
all of the Osguthorpe Children.” (Emphasis added.) It was therefore
_____________________________________________________________
33 This is because the breach of fiduciary duty claim alleges, in
part, that Rudd improperly “coordinat[ed] and engineer[ed] the
redrafting” of the Estate Plan in a way that conflicted with the
“actual testamentary intent of Dr. D.A. Osguthorpe,” and that
Rudd/Ballard “receiv[ed] and retain[ed] compensation for legal
services rendered in violation of their fiduciary duties.” And the
unjust enrichment claim appears to be a repetition of the same
allegation under a different legal theory. See supra ¶¶ 34–35.
34We cite the fiduciary duties and standards of care for personal
representatives, special administrators, and trustees interchangeably
here because a “special administrator . . . has the power of a general
personal representative,” UTAH CODE § 75-3-617, and a “personal
representative is a fiduciary who shall observe the standard of care
applicable to trustees . . . .” Id. § 75-3-703(1).
43
OSGUTHORPE v. RUDD
Opinion of the Court
within the district court’s discretion to determine that assignment of
the claims would circumvent its prior ruling which precluded the
Osguthorpe Children from representing or administering the Trust
and Estate.
¶120 We also agree with the district court that permitting the
Osguthorpe Children to fund, direct, and pursue the Estate Claims
via assignment in lieu of dismissal would circumvent the court’s
order that the claims would be dismissed unless the Special
Fiduciary determined that pursuit of the claims would be in the
Estate’s interest and the Special Fiduciary was a “a party to this
action” and was “the one to fund and direct” it. See supra ¶ 114. The
Special Fiduciary recommended against direct pursuit of the claims.
See supra ¶ 45. And, under the Osguthorpe Children’s assignment
proposal, the Special Fiduciary would not have been the person to
“fund and direct” the litigation. It was therefore within the district
court’s discretion to determine that the proposed assignment of the
Estate Claims would impermissibly circumvent this prior ruling, in
addition to its other prior ruling precluding the Osguthorpe
Children from serving as estate representatives or trustees. In other
words, the district court did not abuse its considerable discretion in
concluding that the best path forward was to leave the Special
Fiduciary in charge of any potential litigation and to respect the
Special Fiduciary’s assessment that pursuing the Estate Claims was
not in the Estate’s best interest.
¶121 Because we uphold at least one of the district court’s
rationales for denying the Osguthorpe Children’s motion to assign
the Estate Claims to them, we need not reach the district court’s
other three grounds. We nevertheless take the opportunity to clarify
the law underlying two of the district court’s other rationales.
B. Utah Law Permits Assignment of Legal Malpractice Claims
Absent Policy Concerns Not Present Here
¶122 The district court concluded that, because “[m]ost of the
[Estate] Claims in this action arise from the performance of legal
services for Dr. Osguthorpe,” and “[c]laims arising from . . . legal
services are simply not assignable under Utah law,” the Estate
Claims are categorically unassignable as a matter of law.35 The
_____________________________________________________________
35We agree with the district court that the Osguthorpe Children’s
claims against Rudd/Ballard for breach of fiduciary duty, unjust
enrichment, and conversion all arise out of the allegedly improper
performance of legal services, and we therefore analyze them as
(continued . . .)
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Osguthorpe Children contend the district court erred because, under
Eagle Mountain City v. Parsons Kinghorn & Harris, P.C., legal
malpractice claims are voluntarily assignable under Utah law in the
absence of “clear and compelling public policy” reasons to bar the
assignment. 2017 UT 31, ¶ 15, 408 P.3d 322. The Osguthorpe
Children further contend that Rudd/Ballard have the burden of
demonstrating such policy reasons exist and apply here to bar the
assignment, and that Rudd has not met that burden here. We agree
with the Osguthorpe Children on this issue and take this
opportunity to clarify the law.36
1. Legal Malpractice Claims Are Presumptively Assignable After
Eagle Mountain
¶123 We held in Eagle Mountain that “there is a strong
presumption that legal malpractice claims are voluntarily
assignable,” but certain contexts may “present such strong public
policy concerns” that assignment of the claims “will be invalidated.”
2017 UT 31, ¶¶ 3, 48. The rationale behind this rule is rooted in a
“strong presumption of freedom of contract,” which also allows
contracts to be voided if the contract “violates a clear and compelling
public policy” or a “well-defined and dominant policy.” Id. ¶ 15 &
n.7 (citations omitted).
¶124 In definitively holding that legal malpractice claims are
presumed voluntarily assignable absent circumstances that clearly
violate public policy, we noted that Snow, Nuffer, Engstrom & Drake v.
Tanasse had “already recognized that the involuntary assignment of
[legal malpractice] claims . . . does not violate public policy.” Eagle
Mountain, 2017 UT 31, ¶ 16 (citing Snow, Nuffer, Engstrom & Drake v.
Tanasse, 1999 UT 49, ¶ 13, 980 P.2d 208). We also reiterated that there
legal malpractice claims. See Christensen & Jensen, P.C. v. Barrett &
Daines, 2008 UT 64, ¶ 21, 194 P.3d 931 (“Legal malpractice is a
general term used to describe a lawyer’s wrongful action or omission
that causes injury to a client. ‘Clients wronged by their lawyers may
sue for damages based on breach of contract, breach of fiduciary
duty, or negligence.’” (citations omitted)).
36 We nevertheless affirm the district court’s decision to deny the
Osguthorpe Children’s proposal to assign the Estate Claims to them,
based on the rationale discussed in the prior section. Because we
affirm the district court on those other grounds, we need not reach
Rudd/Ballard’s argument against retroactive application of Eagle
Mountain.
45
OSGUTHORPE v. RUDD
Opinion of the Court
are strong “public policy interest[s] in allowing access to our courts.”
Id. And we noted that “[o]ur decision in Snow, Nuffer, Engstrom &
Drake v. Tanasse to uphold the involuntary assignment of legal
malpractice claims represents one illustration of a broader
movement away from unduly protecting attorneys at the expense of
their clients’ ability to access the courts.” Id. ¶ 26. We concluded,
“[w]e continue to adhere to that view today.” Id.
¶125 Therefore, under Eagle Mountain, the Osguthorpe
Children’s claims against Rudd stemming from his allegedly
improper legal services were presumptively assignable.
2. “Public Policy Concerns” Do Not Categorically Bar
Assignment of a Decedent’s Legal Malpractice Claims
¶126 Rudd/Ballard next contend that legal malpractice claims
in cases such as this—after the potential claimant’s death—should be
deemed unassignable, based on the public policy grounds discussed
in Eagle Mountain. Specifically, Rudd/Ballard argue that assignment
could cause attorneys to temper their “zealous advocacy” for their
client. They also contend that assignment could interfere with
attorney-client privilege. See Eagle Mountain, 2017 UT 31, ¶ 27.
¶127 With respect to the “zealous advocacy” concern,
Rudd/Ballard argue that allowing assignment of a decedent’s legal
malpractice claims will make lawyers “reluctant” to represent
elderly clients in executing or changing estate plans that might
“adversely impact” the estate’s potential beneficiaries, who are “the
very people likely to be assigned the claims against the lawyer after
the client’s death.” We addressed and rejected a similar argument in
Eagle Mountain. There, we concluded the fears of deterring “zealous
advocacy” was “farfetched” and “tenuous,” for two reasons. Id. ¶ 29
(citation omitted). First, declining to “zealously pursue a client’s
claims” or interests “out of fear of assignment” of a legal malpractice
claim would, in and of itself, “likely be giving the client grounds for
bringing a malpractice claim,” because it would be an abdication of
the requirement in rule 1.3 of the Utah Rules of Professional Conduct
to act “with zeal in advocacy upon the client’s behalf.” Id. ¶ 29 (citing
UTAH R. PROF’L CONDUCT 1.3 cmt. 1). Second, we concluded that rule
11 of the Utah Rules of Civil Procedure would effectively deter other
attorneys from unmeritorious malpractice lawsuits. Id.
Rudd/Ballard leave us unconvinced that an attorney’s relationship
with a client who is an elderly testator presents any concern beyond
what we rejected in Eagle Mountain.
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¶128 With respect to attorney-client privilege, Rudd/Ballard
acknowledge that, under Eagle Mountain, this concern may not be
implicated in assignments where it was the client who voluntarily
assigned the claim. See id. ¶¶ 27, 33. But Rudd/Ballard argue that in
circumstances where the client does not assign the claim, a client
may find her privileged communications discovered without her
consent. Although we understand the policy concerns that
Rudd/Ballard advance, they are concerns that we have already
balanced and decided did not weigh against the assignment of legal
malpractice claims. In Eagle Mountain, we noted that attorney-client
concerns “are just as likely to be implicated when a legal malpractice
claim is involuntarily assigned . . . but we have concluded such
transfers do not violate public policy as a general matter.” Id. ¶ 33
(citing Tanasse, 1999 UT 49, ¶ 13). We find Rudd/Ballard’s
arguments no more persuasive than the similar arguments we
rejected in Eagle Mountain.37
C. Assignment of a Trust’s Claims to a Beneficiary
May Be Permissible
¶129 The district court also refused to permit assignment of the
Estate’s claims to the Osguthorpe Children because it understood
that Utah law “does not permit a [trust] beneficiary to pursue the
Trust’s claims—either directly or via assignment—absent
extraordinary circumstances that do not exist here.” (Emphases
added.) The court further asserted that a trust beneficiary may only
pursue a trust’s claims if the trustee has improperly refused or
neglected to bring the action, and that here, the Special Fiduciary
properly refused to bring the action, thereby precluding an
assignment to the Osguthorpe Children.
¶130 Before turning to the merits of this determination, we must
first address Rudd/Ballard’s argument that the Osguthorpe
Children failed to raise this issue in their opening brief and therefore
waived their right to appellate review. Ordinarily, if a party fails to
raise an issue in the trial court and/or in their opening appellate
brief, an appellate court will not reach that issue. See State v. Johnson,
2017 UT 76, ¶ 14, 416 P.3d 443.
_____________________________________________________________
37 Because of this determination, we need not address the
Osguthorpe Children’s alternative argument that, even if the claims
were unassignable against Rudd in his role as attorney, they should
be assignable in his role as a trustee of the 2008 Trust.
47
OSGUTHORPE v. RUDD
Opinion of the Court
¶131 We agree with Rudd/Ballard that the Osguthorpe
Children failed to specifically raise this issue in their opening brief.
However, because our preservation and waiver doctrines are “self-
imposed,” we retain “‘wide discretion when deciding whether to
entertain or reject’ issues that are unpreserved at trial or waived on
appeal.” Id. ¶ 12 (citation omitted). “We retain this discretion to
‘balance the need for procedural regularity with the demands of
fairness.’” Id. (citation omitted). Appellate courts may address a
waived issue when:
1) the issue was preserved below or if a valid exception
to preservation exists, 2) the issue is “astonishingly
erroneous but undetected,” 3) the losing party would
be subject to “great and manifest injustice,” and
4) neither party is unfairly prejudiced by raising the
issue at that point in the litigation or neither party
argues they are unfairly prejudiced.
Id. ¶ 49 (citations omitted).
¶132 Even though we agree with the Osguthorpe Children that
the district court clearly erred on this sub-issue, Rudd/Ballard will
not be subject to any injustice, as we ultimately agree with
Rudd/Ballard that the district court did not abuse its discretion in
denying the assignment. Further, the Osguthorpe Children
preserved this argument below by raising it to the district court
during the hearing on their motion to assign the Estate Claims to
them,38 and this issue was part of the district court’s decision.
Moreover, Rudd/Ballard fully address the issue in their own brief.
We also note that the district court’s error here is a “purely legal”
one that is likely to arise in future cases. See id. ¶ 51. We therefore
find it prudent to correct the district court’s error on this issue.
¶133 The district court held that a trust’s claims are
categorically unassignable to trust beneficiaries. We disagree. The
Trust Code gives trustees discretion to assign claims, so long as that
assignment would not violate or circumvent the trustee’s duties
under the terms of the trust or the Trust Code.
_____________________________________________________________
38The Osguthorpe Children’s counsel stated at the hearing: “The
law cited by Rudd and Ballard as to whether the assignment would
be—should be permitted is [in]apposite because it deals with
circumstances in which a beneficiary may pursue a claim directly as
opposed to by an assignment.”
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¶134 The Trust Code provides that “[a] trustee may delegate
investment and management functions that a prudent trustee of
comparable skills could properly delegate under the circumstances.”
UTAH CODE § 75-7-814(2). The Trust Code also permits trustees to
“sell property. . .;” “release, in whole or in part, a claim belonging to
the trust;” and “sign and deliver contracts and other instruments
that are useful to achieve or facilitate the exercise of the trustee’s
powers.” Id. § 75-7-814(1)(b),(n),(y). Finally, the Trust Code provides
that a trustee “may exercise” broad general powers “without
authorization by the court,” including “powers conferred by the
terms of the trust,” as well as “all powers over the trust property
which an unmarried competent owner has over individually owned
property,” and “any other powers appropriate to achieve the proper
investment, management, and distribution of the trust property,”
though such powers are “limited by the terms of the trust”39 and by
the “fiduciary duties prescribed by” the Trust Code. Id. § 75-7-813.
¶135 We agree with the Osguthorpe Children that the legal
authority the district court and Rudd/Ballard cite applies only to
situations where the beneficiaries sought to bring a trust’s claims
without permission of a trustee, and therefore, such authority does not
control a trustee’s assignment of claims to a beneficiary. See Hillcrest
Inv. Co., v. Utah Dep’t. of Transp., 2012 UT App 256, ¶¶ 22–26, 287
P.3d 427; Anderson v. Dean Witter Reynolds, Inc., 841 P.2d 742, 745
(Utah Ct. App. 1992); In re Voorhees’ Est., 332 P.2d 670, 672 (Utah
1958); In re XTO Energy Inc., 471 S.W.3d 126, 131–36 (Tex. Ct. App.
2015); see also RESTATEMENT (SECOND) OF TRUSTS § 282(1) (AM. L. INST.
1959); RESTATEMENT (THIRD) OF TRUSTS § 107(2)(b) (AM. L. INST. 2012).
_____________________________________________________________
39 Here, the terms of the Trusts give the Special Fiduciary
authority and discretion to assign claims. The 1998 Trust gives the
Trustee “power to . . . assign . . . claims held by . . . the Trust Estate.”
(Emphasis added.) The 2008 Trust provides that the trustee “may,”
where “reasonably necessary to administer the trust estate,”
“convey, deliver, assign, transfer” property, and “release powers.”
(Emphases added.) In addition, the court order appointing this
Special Fiduciary had granted him “plenary powers [to] evaluate, to
manage, and to take care of the Trust and Estate, including all
property and assets in the Trust and Estate, so that the Trust and
Estate are not wasted. . . . includ[ing] all power and authority
granted to a fiduciary under the Trust, the Will of Dr. D.A.
Osguthorpe, and the Utah Uniform Probate Code.”
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OSGUTHORPE v. RUDD
Opinion of the Court
¶136 None of these authorities address the question of whether
a trustee may voluntarily assign claims to a beneficiary. And, as
discussed above, the Trust Code grants trustees discretion to assign a
trust’s claims so long as that decision would not be otherwise
inconsistent with the terms of the trust or trustee’s fiduciary duties.
Therefore, the district court erred by concluding that a trust’s claims
are categorically unassignable to trust beneficiaries.
¶137 In sum, even though the district court erred in two of its
legal conclusions, the district court nevertheless could properly
conclude that assignment of the Estate Claims here was improper.
We therefore affirm the district court’s determination to deny the
Osguthorpe Children’s motion to assign the Estate claims to them.
III. THE DISTRICT COURT ERRED IN EXCLUDING A
REDACTED VERSION OF RUDD’S AFFIDAVIT
¶138 The district court granted Rudd’s motion in limine to
prevent the admission of an affidavit Rudd provided in connection
with a motion to set aside the First Settlement Agreement. The
parties inked that agreement after participating in mediation.
¶139 The Osguthorpe Children sought to impeach Rudd’s
credibility with what they contend are “patently false” statements in
the affidavit. The district court granted Rudd’s motion to exclude the
affidavit—even a redacted version—on the grounds that it was
“related to” or a “reference to the parties’ mediation or the
mediation agreement.” The district court therefore excluded any use
of the affidavit because “[s]uch evidence is excluded pursuant to
Rule 401–403 and 408 of the Utah Rules of Evidence and Utah Code
§ 78B-10-104.” At the hearing on this matter, the court reasoned that
“[t]his seems to be in defense of the mediation agreement and,
therefore, I will accept the representation [by Rudd/Ballard’s
counsel] that to allow this in would open up . . . further mediation
evidence.”
¶140 We agree with the Osguthorpe Children that the district
court exceeded its discretion by barring the affidavit under Utah
Code section 78B-10-104 of the Utah Uniform Mediation Act
(“Mediation Act”) and rule 408 of the Utah Rules of Evidence.
¶141 First, Section 104 of the Mediation Act does not provide a
basis to exclude the entire affidavit. Section 104 provides, in
pertinent part, that “a mediation communication is privileged . . .
and is not . . . admissible in evidence in a proceeding . . . .” UTAH
CODE § 78B-10-104(1). The Mediation Act defines “mediation
communication” as “a statement . . . that occurs during a mediation
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Cite as: 2021 UT 23Opinion of the Court
or is made for purposes of considering, conducting, participating in,
initiating, continuing, or reconvening a mediation or retaining a
mediator.” Id. § 78B-10-102(2). As the Osguthorpe Children note, the
affidavit was not made “during a mediation,” nor was it made “for
purposes of considering, conducting, participating in, initiating,
continuing, or reconvening a mediation or retaining a mediator.” See
id. (emphases added). Rather, the Affidavit was filed in support of
setting aside an agreement from a previously concluded mediation.
Therefore, the affidavit itself was not a filing subject to section 104.
¶142 To the extent the affidavit reflected the substance of
mediation communications, the Osguthorpe Children proposed
offering a redacted version that only revealed the statements they
wanted to use. Specifically, the Osguthorpe Children sought to use
at trial the following statements: (i) “I have never represented the
Osguthorpe Parties, including Stephen Osguthorpe or Jerry
Osguthorpe”; (ii) “I was not involved in D.A. Osguthorpe’s decision
to amend and/or restate the 2008 Restated Trust, and, therefore, did
not write myself into D.A. Osguthorpe’s estate plan”; (iii) “I was not
involved in any discussions or negotiations related to any deal
and/or a gift to CSU or CSUF. Prior to the death of D.A.
Osguthorpe, I was unaware of any such gift and unaware of where
the funds for such a gift would come from. . . . As previously stated,
I was not involved in D.A. Osguthorpe’s estate plan . . . I did not,
however, draft any of the terms of the estate plan or terms contained
in the trust and/or employ straw-men scriveners to do so”; and
(iv) “I also affirmatively deny . . . that I attempted to benefit myself
financially.” None of those statements fall within the Mediation
Act’s definition of a mediation statement. See UTAH CODE § 78B-10-
102(2). The district court erred in granting the motion in limine on
that basis.
¶143 Utah Rule of Evidence 408 also does not provide a basis to
exclude the affidavit. Rule 408 provides that “[e]vidence of”
“conduct or a statement made in compromise negotiations” “is not
admissible either to prove or disprove liability for or the validity or
amount of a disputed claim.” UTAH R. EVID. 408(a)(2). But the portion
of Rudd’s affidavit that the Osguthorpe Children sought to use did
not reveal statements made “in compromise negotiations.” Id.
(emphasis added). Further, even if the Affidavit were made “in
compromise negotiations,” rule 408 permits a court to admit such
evidence if its use is not to “prove or disprove liability” but rather is
“for another purpose, such as proving a witness’s bias or prejudice,
negating a contention of undue delay, or proving an effort to
obstruct a criminal investigation or prosecution.” Id. 408(a), (b)(1).
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OSGUTHORPE v. RUDD
Opinion of the Court
The Osguthorpe Children sought to use the statements in the
affidavit for another purpose: impeaching Rudd’s testimony.40
Simply stated, the district court erred by concluding that rule 408
dictated the grant of the motion in limine.
¶144 We also disagree with Rudd/Ballard’s alternative
argument that admission of the affidavit should be barred under
section 208 of the Utah Alternative Dispute Act, which provides that
“[n]o evidence concerning the fact, conduct, or result of an ADR
[Alternative Dispute Resolution] proceeding may be . . . admissible
at any subsequent trial of the same case or same issues between the
same parties.” UTAH CODE § 78B-6-208(2). The portions of the
redacted affidavit that the Osguthorpe Children seek to admit do not
concern the “fact, conduct, or result” of the mediation, but instead,
as the Osguthorpe Children note, only “reference factual events
occurring years before the litigation” and the mediation. Cf. supra
¶ 142. We agree with the Osguthorpe Children that these statements
in their redacted form “stand alone,” and Rudd would have the
opportunity to respond without referring to the mediation.
Therefore, to the extent the district court considered and agreed with
this Utah Alternative Dispute Act argument as a basis for its
exclusion of the Affidavit, that decision would be erroneous and an
abuse of discretion.41
_____________________________________________________________
40 We note that the federal analog to this rule expressly prohibits
the use of a “statement made during compromise negotiations” if the
purpose is to “impeach by a prior inconsistent statement or a
contradiction.” FED. R. EVID. 408(a)(2). Our rule 408 does not contain
that prohibition.
41 Rudd/Ballard also urge us not to rule on this issue at all
because, they contend, the trial “may never occur” and therefore the
issue is not ripe. We disagree. As we explained in Bodell Const. Co. v.
Robbins,
A dispute is ripe “when ‘a conflict over the application
of a legal provision [has] sharpened into an actual or
imminent clash of legal rights and obligations between
the parties thereto.’” An issue is not ripe for appeal if
“there exists no more than a difference of opinion
regarding the hypothetical application of [a provision]
to a situation in which the parties might, at some
future time, find themselves.”
(continued . . .)
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¶145 Finally, the district court also abused its discretion in
excluding the affidavit in its entirety under rules 401, 402, and 403 of
the Utah Rules of Evidence. “Relevant evidence is presumptively
admissible” under rule 402. State v. Richardson, 2013 UT 50, ¶ 24, 308
P.3d 526. Rule 402 provides that “[r]elevant evidence is admissible”
unless otherwise excluded under a statute, rules applicable in courts
of this state, or the constitutions of the United States or Utah. UTAH
R. EVID. 402. Rule 401 broadly defines “relevant” evidence as
evidence that “has any tendency to make a fact [of consequence] more
or less probable than it would be without the evidence.” Id. 401
(emphasis added). “Together these rules establish a ‘very low’ bar
that deems ‘even evidence with the slightest probative value’
relevant and presumptively admissible.” Richardson, 2013 UT 50,
¶ 24 (quoting State v. Martin, 2002 UT 34, ¶ 34, 44 P.3d 805).
¶146 We agree with the Osguthorpe Children that the affidavit
was relevant under rule 401. The statements in the affidavit that the
Osguthorpe Children seek to use are relevant both to the substance
of the claims and the credibility of Rudd, who was expected to be a
key witness at trial on those claims. The statements pertain to
whether Rudd had represented the Osguthorpe Children, had been
involved in Dr. Osguthorpe’s decision to amend his trust in 2008, or
had been involved in discussions relating to gifts to CSU or CSUF.
See supra ¶ 142. These statements relate to facts of consequence
underlying both the Estate Claims and the Osguthorpe Children’
Inheritance Tort Claim, which are premised on allegations that Rudd
played an improper role as attorney and trustee in the drafting of the
2008 Estate Plan and in handling other Estate-related matters.
¶147 Further, Rudd’s credibility, and the affidavit’s potential to
undermine Rudd’s credibility, would be important in establishing or
disproving those facts of consequence because Rudd’s testimony at
trial was expected to be key to his defense. “Evidence that is not
directly relevant to the issues in the case, but that may shed light on
the credibility of a witness, does have probative value.” State v.
Miranda, 2017 UT App 203, ¶ 35, 407 P.3d 1033 (citing State v.
2009 UT 52, ¶ 29, 215 P.3d 933 (alteration in original) (citation
omitted). Here, because we reverse and remand the district court’s
dismissal of the Osguthorpe Children’s tortious interference with
inheritance claim, there is a potential for trial on these issues. The
Osguthorpe Children are entitled to have us review a decision that
could impact the litigation on remand. See id. ¶ 33.
53
OSGUTHORPE v. RUDD
Opinion of the Court
Fairbourn, 2017 UT App 158, ¶ 44, 405 P.3d 789; State v. Calliham, 2002
UT 87, ¶ 38, 57 P.3d 220 (stating that “[w]hether or not these
witnesses were credible was a fact of consequence in considering
whether [the defendant] was guilty”)). The affidavit therefore met
our broad standards for relevance, and the district court erred in
concluding that rule 401 supported exclusion of the affidavit.
¶148 The district court also unreasonably determined that rule
403 supported wholesale exclusion of the affidavit. As an initial
matter, although the parties briefed the rule 403 question, it appears
that the court was not focused on that argument. At the hearing on
Rudd’s motion in limine on this matter, the court said: “The real issue
here is[,] is it part of this mediation or not.” The court later
concluded, “[t]his seems to be in defense of the mediation agreement
and, therefore, I will accept the representation [by Rudd/Ballard’s
counsel] that to allow this in would open up . . . further mediation
evidence.” And while we ordinarily allow trial courts “considerable
freedom in applying [rule 403] to the facts,” we may reverse the trial
court’s ruling if we find it was “beyond the limits of
[reasonableness].” State v. Boyd, 2001 UT 30, ¶ 40, 25 P.3d 985(alterations in original) (citations omitted).
¶149 Rule 403 permits the court to “exclude relevant evidence if
its probative value is substantially outweighed by a danger of one or
more of the following: unfair prejudice, confusing the issues,
misleading the jury, undue delay, wasting time, or needlessly
presenting cumulative evidence.” UTAH R. EVID. 403. The court
offered no insight in its written decision as to the rationale behind its
ruling. As such, to the extent the court’s decision was premised on
rule 403, we reverse it because we have no visibility into the basis for
that decision. We leave open, however, the possibility that it could
revisit its rule 403 decision on remand.
¶150 Because the district court’s decision to exclude the
affidavit centered on erroneous interpretations of rules and statutes,
we reverse the district court’s grant of the motion in limine.
CONCLUSION
¶151 The district court erred in concluding that a plaintiff in
Utah may never assert a claim for intentional interference with
inheritance. We therefore reverse the district court’s dismissal of the
claim. We uphold the district court’s decision to not assign the Estate
Claims to the Osguthorpe Children. And we reverse the district
court’s grant of the motion in limine preventing the use of a redacted
version of Rudd’s affidavit.
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