As a matter of first impression SCOVT recognizes tort of intentional interference with expectation of inheritance, but a Divided Court holds the claims in this case of IIEI, constructive fraud and unjust enrichment involve trust administration within the exclusive jurisdiction of probate.

 Dewdney v. Duncan, 2025 VT 26 [5/23/2025]

COHEN, J.   Plaintiffs Berol and Cordelia Dewdney appeal the civil division’s decision granting summary judgment to defendant Ralph Duncan, IV on plaintiffs’ claims for intentional interference with expectation of inheritance (IIEI), breach of contract, promissory estoppel, unjust enrichment, and constructive fraud.  We affirm.

In October 2011, Anna created a revocable inter vivos trust to receive the royalty income from her books.  Anna designated plaintiffs and defendant as beneficiaries of the trust with 40% of the income assigned to each plaintiff and 20% assigned to defendant.  At the same time, defendant executed his last will and testament in which he designated plaintiffs as his sole heirs if Anna predeceased defendant. Thereafter, Anna amended the trust and changed the distribution of the trust income to 25% for each plaintiff and 50% to defendant.  Plaintiff’s complaint in the civil division sought the creation of a constructive trust entitling them to all distributions exceeding defendant’s original 20% share and restitution of any amounts previously distributed to defendant that exceeded 20%.

 

The trial court ruled that IIEI was a cognizable cause of action in Vermont but that plaintiffs were required to first seek a remedy in the probate division.  The court determined that plaintiffs failed to establish their remaining claims

 

 Intentional Interference with Expectation of Inheritance

 

The Third Restatement, states that a defendant is liable for IIEI when: (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(1) (2020).  The Third Restatement, however, also provides that an IIEI claim “is not available to a plaintiff who had the right to seek a remedy for the same claim in a probate court,”  Id. § 19(2) (the probate exhaustion rule.)

 

While we have not previously recognized the tort of IIEI, we conclude that the Third Restatement definition of IIEI, with its probate exhaustion requirement, is the appropriate definition to adopt.

 

Plaintiffs argue that the Third Restatement and cases from other jurisdictions distinguish between wills and inter vivos trusts for purposes of the probate-exhaustion rule.

 

Under Vermont law, the probate division is vested with exclusive jurisdiction over claims brought by a trustee or beneficiary concerning trust administration.  14A V.S.A. § 203(a)(“ The Probate Division of the Superior Court has exclusive jurisdiction of proceedings in this State brought by a trustee or beneficiary concerning the administration of a trust”); 4 V.S.A. § 35 (“The Probate Division shall have jurisdiction of . . .(3) the administration of trusts pursuant to Title 14A”)

 

Other jurisdictions do not have statutory mandates vesting the probate division with exclusive jurisdiction over the administration of trusts as we do in Vermont. Accordingly, we hold that an IIEI claim is not available to a plaintiff who had the right to seek a remedy for the same claim in probate court.

 

Plaintiffs argue that they did not have the right to make their claim in the probate division because their claim does not concern the administration of the trust, but instead seeks a remedy for defendant’s undue influence, duress, and fraud in inducing Anna to amend the trust. In Collins v. Collins. 2017 VT 70, we held that the was the probate division was the proper forum for challenging the settlor’s capacity to make a trust Challenging the settlor’s ability to change the beneficiary necessarily implicates the administration of the trust because the trustee must know to whom to administer the trust property.  Collins, 2017 VT 70, ¶ 15. Similarly, plaintiffs challenge whether Anna was unduly or fraudulently influenced to change the trust distributions between beneficiaries involves the administration of the trust and therefore falls within the exclusive jurisdiction of the probate division.

 

Plaintiffs were barred from bringing their IIEI claim in the civil division because they did not first pursue it in the probate division.  We therefore affirm the court’s decision to grant summary judgment for defendant on this claim.

 

 Unjust Enrichment

 

We conclude that plaintiffs were required to bring their unjust enrichment claim in the probate division. 

 

To succeed on a claim for unjust enrichment, a plaintiff must prove three things: "(1) a benefit was conferred on defendant; (2) defendant accepted the benefit; and (3) defendant retained the benefit under such circumstances that it would be inequitable for defendant not to compensate plaintiff for its value." Beldock v. VWSD, LLC, 2023 VT 35, ¶ 68. A recipient of a donative transfer may be liable to a claimant for unjust enrichment if the recipient diverted the donative transfer by fraud, duress, or undue influence; this includes a transfer through an inter vivos trust. See Restatement (Third) of Restitution and Unjust Enrichment § 46 (2011)

Plaintiffs asserted their claim for unjust enrichment under the theory that defendant induced Anna to amend the trust and increase his share of trust distributions through fraud and undue influence, thus reducing their expected shares and making it inequitable for defendant not to compensate them.

 

Like plaintiffs’ IIEI claim, this claim challenges the administration of the trust because plaintiffs, the trust’s beneficiaries, seek to challenge the amended distribution of the trust property, and the distribution of the trust is a main function of trust administration.  Therefore, plaintiffs were required to bring their claim in the probate division.  14A V.S.A. § 203(a); Collins, 2017 VT 70, ¶ 15.  Our holding should not be interpreted to mean that claims of unjust enrichment relating to trusts will always be under probate jurisdiction.  Here, however, plaintiffs’ underlying allegations of fraud and undue influence over the amendment to the trust distributions fall within the probate’s exclusive jurisdiction over administration of trusts

 

 Constructive Fraud

 

Similarly. Plaintiffs’ constructive fraud claim implicates the administration of the trust, which the Legislature has placed in the exclusive jurisdiction of the probate division.  Our holding should not be interpreted to mean that claims of unjust enrichment relating to trusts will always be under probate jurisdiction.  Here, the underlying allegations of fraud and undue influence over the amendment to the trust distributions fall within the probate’s exclusive jurisdiction over administration of trusts.   

 

 Plaintiffs’ argument that they should be allowed to amend their complaint to plead actual fraud based on these same facts is moot because plaintiffs were required to seek a remedy in the probate division in the first instance for this type of challenge.   

 

Promissory Estoppel

 

  A plaintiff must show the following for a promissory estoppel claim: “(1) defendant made a promise to [the promisee] that defendant should have reasonably expected to induce action or forbearance; (2) [the promisee] relied on the promise to [the promisee’s] detriment; and (3) injustice can be avoided only by enforcement of the promise.”  Pettersen v. MonaghanSafar Ducham PLLC, 2021 VT 16, ¶ 11. Implicit to a promissory estoppel claim is a showing that the defendant breached a promise.  See Dillon v. Champion Jogbra, Inc., 175 Vt. 1, 9 (2002).

 

Here, a reasonable jury could conclude from the evidence that defendant made a promise to Anna to make plaintiffs his sole heirs. However, defendant did not break this promise because defendant has not positively and unequivocally revoked his promise, nor has he removed plaintiffs from his will.  Accordingly, plaintiffs cannot show detrimental reliance, because Anna was not harmed by any breach of the promise.  We therefore affirm the court’s decision to grant defendant summary judgment on this claim.

 

 

WAPLES, J., dissenting.   I agree with the majority that Vermont should recognize claims for intentional interference with an expectation of inheritance (IIEI) and adopt the definition of such claims from the Restatement (Third) of Torts: Liability for Economic Harm § 19 (2020).  I disagree, however, that defendant was entitled to summary judgment on this claim.  The undisputed facts do not establish that plaintiffs “had the right to seek a remedy for the same claim in a probate court.”  Id. § 19(2).  I would reverse the trial court’s decision on the IIEI claim and remand for additional proceedings.  I therefore respectfully dissent. 

 

 I do not find Collins persuasive on the question of whether plaintiffs’ claim here “implicates the administration of the trust.” The Restatement’s explicitly recognizes that a probate court “is unable to provide a remedy for wrongful conduct in relation to a nonprobate transfer, such as a transfer by inter vivos trust.”  Id. § 19 cmt. c.    In a similar vein, the UTC’s reference to the probate division’s “exclusive jurisdiction of proceedings . . . brought by a trustee or beneficiary concerning the administration of a trust” in 14A V.S.A. § 203(a) should not be read to conflict with the UTC’s express direction that “[a]n action against a beneficiary or other person for intentional interference with an inheritance or gift” is not a trust contest.  Id. § 604, official cmt. 

 

It is not clear from the undisputed facts that plaintiffs’ “challenge to the trust amendment implicates the administration of the trust,”  as opposed to falling into the category of “other proceedings involving a trust” for which the probate court “has concurrent jurisdiction with other courts of this State,” 14A V.S.A. § 203(b).  As plaintiffs explain, they are not seeking to hold a trustee liable for misconduct or mishandling of trust assets in their capacity as a trustee.

 

I believe we should draw a distinction between trusts and wills for purposes of determining the viability of an IIEI claim.  I would reverse the trial court’s summary judgment decision in defendant’s favor and I therefore respectfully dissent.  

How cited

Appeals. Attorney's fees. SCOVT vacates civil division order in attempted appeal from a probate order that was not appealable because question of attorney’s fees remained to be decided in probate court; Supreme Court has no jurisdiction where there was no jurisdiction below.

 In re Estate of Miriam Thomas, 2022 VT 59 (filed 11/11/2022)

CARROLL, J. Estate appeals the civil division’s order granting former guardian’s motion to dismiss a decision of the probate division. The probate division ordered guardian to reimburse his mother’s estate for what it described as damages incurred during his tenure as her financial guardian. However, the civil division did not have subject-matter jurisdiction because the probate division’s order was not a final order. Accordingly, we vacate the civil division’s order and remand to the probate division for further proceedings.

A necessary predicate for appellate jurisdiction is the order appealed from must be a final order. An order is final if the decree or judgment disposed of all matters that should or could properly be settled at the time and in the proceeding then before the court.

Here, the probate division in ordering reimbursement expressly did not issue a final judgment order, but provided that one would follow its final determination of fees and costs against the Guardian. It set a two-month schedule for the parties to produce evidence on the matter.

We have held that an appeal from an order that resolves attorney’s fees is an appeal from final judgment that brings up on appeal all d substantive issues in the case that were earlier decided. O’Rourke v. Lunde, 2014 VT 88, ¶¶ 13-15, 197 Vt. 360, 104 A.3d 92 (earlier order confirming an arbitration award was properly before the Court on appeal because the later order was “a final judgment [that] it resolved all issues in the case, including the amounts of attorney’s fees” ) Here the order appealed was not a final, appealable order because it expressly left issues to be decided before issuing a final judgment order; it did not dispose “of all matters that should or could” have been properly settled “at the time and in the proceeding then before the court.”

No exception applies. This Court has “frequently treated probate orders as final even where they did not dispose of the entire probate proceeding,” because the “proceedings are frequently lengthy and involve a series of decisions on discrete issues that may be appropriate for immediate review.” Palmer Trust, 2018 VT 134. Palmer held that a probate order that determined whether a particular individual 6 was an heir and beneficiary to a trust was a final, appealable order. Palmer and cases collect in Palmer are distinguishable. These cases Involved a “discreet issue[]”“ or ‘controlling, intermediate decisions’ that where immediate review could correct an error that “‘can harm later phases of the proceeding,’ ” No harm is done to any party by requiring the probate division to determine fees and costs and issue a final judgment order.

Subject-matter jurisdiction either exists or it does not, and where it does not, we must proceed no further. Vermont Rule of Appellate Procedure does not provide an alternative path to reach matters over which this Court has no subject-matter jurisdiction.

The order granting Thomas’s motion to dismiss is vacated and the matter is remanded to the probate division to determine reasonable attorney’s fees and costs and issue a final judgment order.

How cited

SCOVT NOTE Probate Rules 54 and 58, unlike the Vermont and federal civil rules, contain no provision expressly addressing the effect of a request for attroney’s fees on the appealability of a judgment on the merits. See VRCP 58(c) (“when a timely motion for attorneys' fees is made under Rule 54(d)(2), the court, before a notice of appeal has been filed and has become effective, may order that the motion have the same effect under Rule 4 of the Vermont Rules of Appellate Procedure as a timely motion under Rule 59).

Probate proceedings involve a “series of decisions on discrete issues” that must be appealed, if ever, when the decision is made, not when the whole case is over.

In re Marjorie T. Palmer Trust,       2018 VT 134 [filed 12/21/2018]

SKOGLUND, J. This appeal stems from a probate order approving a special master’s proposed division of real property owned by a trust. The trustees of the Marjorie T. Palmer Trust appealed the probate order to the civil division, which granted summary judgment in favor of appellee David C. Palmer, a beneficiary of the trust. On appeal to this Court, the trustees claim the civil division erred in denying their motion for appellee to undergo genetic testing. The civil division denied the trustees' motion for genetic testing on the ground that the probate division had entered a final decision on that issue in October 2014, which the trustees had failed to appeal.We conclude the trustees' failure to appeal a probate order within thirty days deprived the civil division of jurisdiction to review it.

The trustees argue that the probate division's October 2014 decision on that issue was an interlocutory rather than a final order, and did not prevent them from raising the issue again in the civil division. We disagree.

An interested party may take an appeal from the probate division to the civil division "if the order appealed from is final as to the subject matter before the court." In re Estate of Seward, 139 Vt. 623, 624, 433 A.2d 274, 274 (1981); 12 V.S.A. § 2555.

An order is final if "the decree or judgment disposed of all matters that should or could properly be settled at the time and in the proceeding then before the court." In re Webster's Estate, 117 Vt. 550, 552, 96 A.2d 816, 817 (1953).

If a final order of the probate division is not timely appealed, the civil division lacks jurisdiction to review it.

Vermont has no statute or rule defining what specific types of probate orders are final and appealable.

A review of our decisions in this area reveals that we have frequently treated probate orders as final even where they did not dispose of the entire probate proceeding. See In re Tr. Estate of Flynn, 158 Vt. 268, 270-71, 609 A.2d 984, 986 (1992) (taking jurisdiction of appeal from probate court orders granting motions to intervene and replace trustee of estate); In re Cary's Estate, 81 Vt. 112, 121, 69 A. 736, 739 (1908) (holding that probate court order denying remaindermen's petition to compel accounting by trustee of life estate "was final as to the petitioners, and one from which they could appeal"); In re Bellows' Estate, 60 Vt. 224, 227, 14 A. 697, 699 (1888) (holding superior court erred in dismissing appeal from probate court order removing executor); State v. McKown, 21 Vt. 503, 507 (1849) (holding that guardian had right to immediately appeal probate court order removing him as guardian and appointing another).These decisions implicitly recognize that probate proceedings involve a series of decisions on discrete issues that may be appropriate for immediate review.

Courts in other jurisdictions have recognized that probate court decisions regarding whether particular individuals are heirs are final appealable orders.

It makes sense to treat an order of this type as final and appealable because the identity of heirs and beneficiaries is fundamental to a probate proceeding and resolving disputes regarding who is entitled to distribution from an estate early in the proceeding is in everyone's best interests.

For these reasons, we agree with the civil division that the October 2014 decision of the probate division was a final appealable order because it conclusively determined a discrete issue then before the court: The order left nothing to be decided with regard to the issue of whether David C. Palmer was entitled to distribution under the trust. Accordingly, the trustees' failure to appeal that order within thirty days deprived the civil division of jurisdiction to review it.

SCOVT NOTE:Palmer distinguished in In re Estate of Miriam Thomas, 2022 VT 59 (filed 11/11/2022)(probate order not appealable when attorney's fees were undecided)

Probate procedure. A known codicil is part of the will and must be allowed, if at all, at same time as the will.

In re Estate of Perry, 2012 VT 9 (mem.)

This case presents a purported agreement to bifurcate the allowance of a will from the future allowance of a codicil. The superior court found that the purported agreement controls, notwithstanding the final probate court order allowing the will that did not reflect the agreement. We reverse.

Probate law generally treats a will and all valid codicils thereto as a single testamentary instrument.  An order allowing a will normally includes any known codicils, and any later effort to allow a codicil is an impermissible collateral attack on a final order.  After allowance of the will, sons petitioned the probate court to allow a codicil.   The probate court denied daughters motion to dismiss, based on a finding there was an understanding that allowance of the codicil would be held in abeyance.  On appeal from the denial, the superior court remanded the case to address the merits of whether the codicil should be allowed   Daughter now appeals from this decision, arguing there was never an agreement to bifurcate the proceedings, and that probate court’s order admitting the will was final, notwithstanding any such agreement.

A codicil is regarded as a part of the will; and the will and codicil are to be construed as one instrument.  Because the will and codicils are a single instrument, the order allowing the will and codicils is a final order, and any later petitions to allow a codicil are impermissible collateral attacks. Assuming arguendo there was an agreement to bifurcate the proceedings, the probate court’s order allowing the will did not reflect such an agreement and was final.