SUMMARY OF POINTS OF APPEAL TO THE 9th CIRCUIT - I

MOTION TO CERTIFY THE QUESTION OF TEXAS LAW TO THE TEXAS SUPREME COURT

 

September 29, 2002

 

I.          BASIS OF APPEAL:

 

A.  This matter arises out of the bankruptcy of appellee Vickie Lynn Marshall, a/k/a Anna Nicole Smith (“Vickie”).  On March 7, 2002, the California Federal District Court, sitting in bankruptcy, entered a judgment awarding Vickie $88 million on her alleged Texas claim that Pierce tortiously interfered with her expectancy of receiving a gift from Pierce’s father, J. Howard Marshall, II (“J. Howard”) prior to his death in August, 1995.  The unspecified “gift” was to be in some form of undefined “trust” created and donated prior to J. Howard’s death but to take effect after his death.  In reaching this conclusion after 15 days of hearings with no jury, the California District Court predicted that the Texas Supreme Court would recognize a cause of action for tortious interference with an expectancy of a gift.

B.  No Texas court has ever recognized a cause of action for tortious interference with an expectancy of a gift.  Similarly, no Texas court has ever specified the elements of such a cause of action. 

C.  The intermediate Texas appellate courts have uniformly held that Texas law does not  permit a litigant such as Vickie to assert a tort claim based on an expectancy of receiving property contrary to an estate plan that has been validated by a probate court.  On August 15, 2001, following a 5 month jury trial, the Texas Probate Court entered a final judgment validating J. Howard’s estate plan, which left all of his assets to persons other than Vickie, and rejecting Vickie’s claim that J. Howard ever intended to give her a gift.  Also, the Court found that all of J. Howard’s Wills and Trusts were drafted and executed free from undue influence from any person.

D.  Accordingly, under applicable Texas law, Vickie has no legitimate expectancy upon which to base her claim of alleged interference.  Permitting such a claim would, in this Court’s opinion in another case, present significant dangers to “the enforcement of a decedent’s desires” and to “the orderly operation of the probate system”.  Significant issues of Public Policy are raised by this appeal.

E.  Pierce respectfully requests that the 9th Circuit Court of Appeals certify the following questions to the Texas Supreme Court:

1.  Does Texas recognize a cause of action for tortious interference with an expectancy of a gift?

2.      If Texas recognizes this cause of action, what are its elements?

 

3.      If Texas recognizes this cause of action, does it apply to an expectancy of a gift that is contrary to the terms of a decedent’s estate plan that a probate court has determined to be valid and that leaves all of the decedent’s property to persons other than the plaintiff?

F.  The resolution of the existence, elements and relevant limits of Vickie’s cause of action may be dispositive of this case.  If the Texas Supreme Court determines that Vickie’s cause of action does not exist, then Vickie’s claim against Pierce must be dismissed.  The Texas Supreme Court may find that there is such a cause of action, but the elements differ from those used by the California District Court.  Lastly, the Texas Court may confirm that such a cause of action may exist, but it must be raised in Texas Probate Court (which Vickie did before attempting to drop her claim in that Court) and not in the Federal District Court of another State.

 

II.        ARGUMENT:

 

Certification is a “particularly appropriate” procedure to resolve unsettled and important legal questions arising under the law of a “distant State”.  Because the existence and parameters of Vickie’s alleged tort cause of action is an important and unsettled question of Texas law with profound implications for the administration of the Texas probate system, the matter should be certified to the Texas Supreme Court.

 

A.  Certification is warranted because the Existence, Elements and Limits of Vickie’s alleged cause of action are Unsettled and Controversial Questions of Texas Law.

1.         No Texas Court has ever recognized a cause of action for tortious interference with the expectancy of a gift.

2.         The intermediate Texas appellate courts have steadfastly refused to permit a litigant to pursue an independent tort action to sidestep the probate court proceedings.

3.         Vickie’s theory is flatly inconsistent with these prior decisions. 

4.         Vickie contends that, notwithstanding the adjudged validity of J. Howard’s estate plan, she is entitled to bring a separate tort claim to establish exactly what the Probate Court rejected -- that J. Howard really intended to give much of his assets to her.

5.         For the above reasons, the existence of Vickie’s cause of action is appropriate for certification to the Texas Supreme Court.

 

B.  There is no reason to believe that the Texas Supreme Court would embrace Vickie’s theory.

1.         Vickie does not seek to enforce any vested property interest under any valid testamentary instrument.  Nor does she seek to enforce any other legal “inheritance right.”

2.         Vickie seeks in tort to overturn Pierce’s vested inheritance right on the basis of her expectancy that J. Howard would give much of his property to her.

3.         No Texas Court has recognized this theory, and the (King v. Acker) case does not suggest that the Texas Supreme Court would do so contrary to J. Howard’s validated estate plan.

4.         In further support of its prediction that Texas would embrace its cause of action, the California District Court recited the Second Restatement of Torts.  However, reference to the Restatement does not establish how the Texas Court would resolve this matter.

5.         Neither the King case nor the Restatement spell out the elements of Vickie’s cause of action.  Recognizing this, the California District Court looked to a lower court decision from New Mexico to fill the void.

6.         Because Vickie’s cause of action is neither widely recognized not well developed outside of Texas, its existence, elements, and relevant limits are appropriate for certification.

 

C.  The existence and scope of Vickie’s Cause of Action are important questions of Texas Law with profound implications for the Administration of the Texas Probate System.

1.         Texas has granted its Probate Courts exclusive jurisdiction over all claims arising from, and incident to, a decedent’s estate including claims involving a decedent’s trust providing for the distribution of the decedent’s property upon death.

2.         Beginning long before J. Howard even met Vickie, J. Howard placed all of his assets in a Separate Property Living Trust.  Accordingly, the Living Trust was J. Howard’s principal estate planning instrument, not his Will.  J. Howard intended and provided that the terms of the trust would govern the disposition of all of his property upon his death.

3.         Under the terms of the Living Trust, J. Howard left all of his property to persons other than Vickie and at no time was Vickie ever named as a beneficiary under either the Living Trust or the Will.

4.         Beginning prior to J. Howard’s death, Vickie aggressively challenged his written estate plan in the Texas Probate Court.  Vickie contended that J. Howard’s estate plan did not reflect his true intentions regarding the disposition of his assets, apart from the approximately $6 million in property that he actually gave her during his lifetime, and that Pierce tortiously interfered with J. Howard’s intentions for a post-death distribution to Vickie.

5.         Allowing Vickie to pursue her tort claim in a different forum would create an exception to the exclusive nature of Texas probate jurisdiction at odds with Texas law.

6.         In order to make Probate Proceedings truly final, Texas provides that all interested persons are thereafter bound by the probate judgment.  The Probate Court found that both J. Howard’s Will and his Living Trust are valid and binding upon all parties, including Vickie, and that they were not products of undue influence by any person, including Pierce.

7.         As this Court has observed in a prior opinion, these (probate) rules of finality serve to “avoid fraud, mistake, and a great deal of second guessing about what the decedent really meant to do or what he really might have done.”

8.         This case is no different, and certification is warranted.

D.  Recognizing Vickie’s Tort Claim would undermine existing Texas Remedies.

1.         An adequate remedy for interference in the probate court already exists under Texas law.

2.         A Will or Trust can be set aside if the instrument is the product of undue influence. Texas Law provides that undue influence involving the will or trust of a decedent (after the person has died) must be brought in Probate Court.

3.         The doctrine of undue influence has well defined elements, requirements and limitations that are not met in the California District Court’s opinion.

4.         Allowing Vickie to pursue her independent tort action would not only undermine the finality of the probate proceeding, but would also effectively replace the well-defined parameters of an existing remedy with an ill-defined tort theory.

5.         If Texas is to recognize this arrangement, it should be addressed first by the Texas Courts.

 

E.  Vickie’s tort theory is inconsistent with the Texas Law of Gifts and Trusts.

1.         The mere intention to make a gift does not convey any enforceable rights because a gift does not occur unless there is immediately a delivery constituting an unconditional transfer to the donee.

2.         The purported recipient of the gift must prove each element by clear and convincing evidence.

3.         The courts regard purported gifts with particular suspicion of they are asserted for the first time after the death of the donor.

4.         The California District Court ruled that J. Howard intended that Vickie have the benefit of a gift of some portion of his property at some point in the future following his death.  Under Texas law, this is patently insufficient to establish a “gift”.

5.         Texas law treats gifts and trusts in quite distinct ways, and a “gift” under Texas law cannot include a “trust”.

6.         The California District Court found that Vickie stated a claim for interference with a “gift” because J. Howard intended to establish some form of “trust” for her benefit.  Under Texas law, this is a legal impossibility.

7.         The legal requirements for “gifts” and “trusts” under Texas law have not been satisfied in this case.  If  Texas law is to recognize an exception to the current requirements, that is a matter for the Texas Courts to decide.

 

III.       CONCLUSION:

 

For the foregoing reasons, Pierce respectfully requests that this Court certify the questions of the existence, elements and relevant limits of Vickie’s alleged cause of action to the Texas Supreme Court.