In the Matter of the Estate of Rosalyn J. Schaul

IN THE COURT OF APPEALS OF IOWA
No. 19-1394
Filed November 4, 2020
IN THE MATTER OF THE ESTATE OF ROSALYN J. SCHAUL, Deceased.
MARK SCHAUL, JOAN CLARK, DALE SCHAUL, and MARY ANN
KNABENBAUER,
Plaintiffs-Appellees/Cross-Appellants,
and
JANET GLYNN,
Plaintiff-Appellee,
vs.
DENNIS SCHAUL, Individually and as executor, and DEAN SCHAUL,
Defendants-Appellants/Cross-Appellees.
________________________________________________________________
Appeal from the Iowa District Court for Delaware County, Thomas A. Bitter,
Judge.
Defendants appeal from the jury verdict finding in favor of plaintiffs on their
will contest and claim of intentional interference with inheritance and the court
order granting plaintiffs additur or new trial. AFFIRMED IN PART, REVERSED IN
PART, AND REMANDED ON APPEAL; AFFIRMED ON CROSS-APPEAL.
David J. Dutton and Nathan J. Schroeder of Dutton, Daniel, Hines, Kalkhoff,
Cook & Swanson, P.L.C., Waterloo, for appellants.
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William S. Vernon and Robert S. Hatala of Simmons Perrine Moyer
Bergman, PLC, Cedar Rapids, for appellee Janet Glynn.
Matthew D. Gardner of Gardner Law Firm, P.C., Urbandale, for appellees
Mark Schaul, Joan Clark, Dale Schaul, and Mary Ann Knabenbauer.
Heard by Doyle, P.J., and Tabor and Ahlers, JJ.
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AHLERS, Judge.
This case involves a dispute between seven siblings regarding the estate
of their mother, Rosalyn Schaul. The siblings are aligned such that the five middle
children sued the oldest and youngest of the siblings. The five middle children—
plaintiffs Mark Schaul, Joan Clark, Dale Schaul, Mary Ann Knabenbauer, and
Janet Glynn1 (Plaintiffs)—brought suit challenging their mother’s will that favored
the oldest and youngest of the siblings, respectively, defendants Dennis and Dean
Schaul (Defendants).2 The Plaintiffs also asserted a claim for intentional
interference with inheritance.
Following a jury trial, the jury returned a verdict in favor of the Plaintiffs both
on their will contest and their claim of intentional interference with inheritance. The
jury awarded no damages on the intentional-interference-with-inheritance claim,
but the district court ordered an additur or new trial on the issue of damages.
The Defendants appeal, claiming the jury instructions were erroneous, the
trial proceedings were unfair, evidence was insufficient to support the verdict,
evidence in the form of a memo by a former attorney was improperly admitted, and
attorney fees should not have been awarded.3
1 Mark, Joan, Dale, and Mary Ann began this action by filing a petition naming
themselves as plaintiffs, Dennis and Dean as defendants, and Janet as an “other
defendant.” Janet later joined Mark, Joan, Dale, and Mary Ann as plaintiffs. Janet
retained separate counsel throughout the district court and appellate proceedings.
2 The seven named parties are the adult children of Ambrose and Rosalyn Schaul.
When necessary, we will refer to the family members by their first names.
3 The Plaintiffs also filed a cross-appeal. Janet voluntarily dismissed her cross-
appeal, and the remaining Plaintiffs do not make any arguments or identify any
issues for cross-appeal. We find the cross-appeal waived. See Iowa R. App.
P. 6.903(5) (requiring the cross-appellant to file a brief “address[ing] the issues
raised in the cross-appeal”).
4
I. Background Facts and Proceedings.
Ambrose and Rosalyn Schaul married in 1941 and soon purchased a 240-
acre farm near Manchester. Their marriage produced seven children: from oldest
to youngest, Dennis, Janet, Dale, Mary Ann, Mark, Joan, and Dean.
In 1994, Rosalyn executed a will that left her estate to the children in equal
shares if Ambrose did not survive her. In 2005, Rosalyn executed a new will.
Under the 2005 will, if Ambrose did not survive her, the Defendants had an option
to purchase the farm for $240,000.00 with the remaining assets divided evenly
between the Plaintiffs; or if the Defendants did not exercise this option, the entire
estate was to be divided evenly among the seven children. On March 23, 2009,
Rosalyn executed a new will that divided her entire estate equally among her
children if Ambrose did not survive her. On June 30, 2009, Ambrose passed away.
On April 6, 2012, Rosalyn executed yet another new will revoking all prior wills
and, this time, leaving her “tangible personal property” to the Plaintiffs in equal
shares and the residue—notably the farm—to the Defendants in equal shares.
On January 29, 2017, Rosalyn passed away. Dennis sought to probate her
estate under the 2012 will as an executor named in the will. Mark, Joan, Dale, and
Mary Ann filed a petition seeking to set aside the 2012 will due to undue influence
and lack of testamentary capacity and claiming the Defendants intentionally
interfered with their inheritance. Although initially brought into the suit designated
as an “other defendant,” Janet joined the other Plaintiffs in making the same claims
against Dennis and Dean. The matter proceeded to jury trial. The jury determined
the 2012 will should be set aside, finding Rosalyn lacked the mental ability to make
the will and the will was the result of undue influence by the Defendants. The jury
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also found Dennis, but not Dean, interfered with the inheritance for all five Plaintiffs
but awarded no damages.
The Defendants filed a motion seeking judgment notwithstanding the verdict
or new trial, and the Plaintiffs filed motions seeking an additur or new trial plus
attorney fees. Ruling on post-trial motions, the district court concluded “[w]ithout
any doubt” the jury’s award of no damages on the intentional-interference-with-
inheritance claim was because the jury “simply wanted to restore the siblings to a
one-seventh position” that they would have had under their mother’s most recent
prior will, which the jury presumably believed would occur based on its verdict on
the will contest count. Due to the fact the siblings had not agreed to proceed under
their mother’s most recent prior will, the district court ordered an additur to each of
the Plaintiffs equal to the amount each would have received under their mother’s
most recent prior will–$319,860.88—with the judgment to be reduced by any
amounts each Plaintiff receives under their mother’s most recent prior will if the
Defendants agree to probate that will. The court also awarded attorney fees in the
amount of $146,025.32 and costs of $3233.94 to Janet, and attorney fees of
$86,838.27 and costs of $7603.77 to the remaining Plaintiffs. The Defendants
appeal.
II. Standard of Review.
We review an action to set aside a will for correction of errors at law. In re
Estate of Bayer, 574 N.W.2d 667, 670 (Iowa 1998). We review matters of trial
administration within the court’s discretion for abuse of that discretion.
Weyerhauser Co v. Thermogas Co., 620 N.W.2d 819, 823 (Iowa 2000). While we
normally review the admissibility of evidence for abuse of discretion, we review
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hearsay rulings for correction of errors at law. GE Money Bank v. Morales, 773
N.W.2d 533, 536 (Iowa 2009). We review an award of attorney fees for abuse of
discretion. Landals v. George A. Rolfes Co., 454 N.W.2d 891, 897 (Iowa 1990).
We will affirm the denial of a motion for judgment notwithstanding the verdict
“if there is substantial evidence to support the claim.” Bayer, 574 N.W.2d at 670.
“Evidence is substantial when a reasonable mind would accept it as adequate to
reach a conclusion.” Id. (quoting Johnson v. Dodgen, 451 N.W.2d 168, 171 (Iowa
1990)). “Evidence is not insubstantial simply because it may support contrary
inferences.” Id.
III. Intentional Interference with Inheritance—Jury Instruction.
“We review jury instructions to decide if they are a correct statement of the
law and are supported by substantial evidence.” Bride v. Heckart, 556 N.W.2d
449, 452 (Iowa 1996). The defendants claim error in Instruction No. 19, which
stated the Plaintiffs must prove all of the following elements to prevail on their claim
of intentional interference with inheritance:
1. Plaintiffs were to inherit under a prior Will of Rosalyn
Schaul;
2. Defendants acting in concert or individually knew of
Rosalyn Schaul’s prior Will;
3. Defendants acting individually or in concert intentionally
and improperly interfered with Plaintiffs’ inheritance in one or more
of the following wrongful means:
a. coercing Rosalyn to change her Will;
b. causing Rosalyn to change her Will through duress;
c. using deceit to change Rosalyn’s Will;
d. misusing confidential information to change Rosalyn’s Will;
4. There was a reasonable certainty that Plaintiffs would have
received an inheritance but for the interference; and
5. The interference was a cause of harm or damages to one
or more of the Plaintiffs.
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A. Statement of Law.
Iowa recognized the tort of intentional interference with inheritance in
Frohwein v. Haesemeyer, 264 N.W.2d 792, 795 (Iowa 1978), overruled in part by
Youngblut v. Youngblut, 945 N.W.2d 25, 37 (Iowa 2020). Our supreme court later
clarified the application of the tort in Huffey v. Lea, 491 N.W.2d 518, 520 (Iowa
1992), overruled in part by Youngblut, 945 N.W.2d at 37. In doing so, the court
approved language from the Restatement (Second) of Torts § 774B (Am. Law Inst.
1979). Recently, the supreme court questioned the continuing viability of
intentional interference with inheritance as a recognized tort. See Youngblut, 945
N.W.2d at 32–35 (collecting cases that reject the tort and commentaries that
criticize the tort). However, the court declined the appellant’s invitation to entirely
disallow the tort, instead overruling Frohwein and Huffey only to the extent they
allow an intentional-interference-with-inheritance claim to be brought separately
from a will contest. Id. at 37. The court emphasized an intentional-interference-
with-inheritance claim “has value in circumstances when a probate proceeding
cannot provide an adequate remedy.” Id. at 35.
When the supreme court adopted language from the Restatement, it
described intentional interference with inheritance as occurring when “[o]ne who
by fraud or other tortious means intentionally prevents another from receiving from
a third person an inheritance.” Huffey, 491 N.W.2d at 520 (quoting Restatement
(Second) of Torts § 774B). The Defendants point to the use of “other tortious
means” in this description. The Restatement provides the following comment on
this language:
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Unlike the liability stated in § 766B [(Intentional Interference with
Prospective Contractual Relation)], the liability stated in this Section
is limited to cases in which the actor has interfered with the
inheritance or gift by means that are independently tortious in
character. The usual case is that in which the third person has been
induced to make or not to make a bequest or a gift by fraud, duress,
defamation or tortious abuse of fiduciary duty, or has forged, altered
or suppressed a will or a document making a gift. In the absence of
conduct independently tortious, the cases to date have not imposed
liability under the rule stated in this Section. Thus one who by
legitimate means merely persuades a person to disinherit a child and
to leave the estate to the persuader instead is not liable to the child.
Restatement (Second) of Torts § 774B cmt. c.
The Defendants argue this language requires the Plaintiffs to prove they
committed an “independently tortious” act as part of the elements for their
intentional-interference-with-inheritance claim. According to the Defendants, this
requirement is not contained in the jury instructions. We agree that, as stated in
Huffey, the Plaintiffs must show the Defendants engaged in “fraud or other tortious
means.” 491 N.W.2d at 520 (quoting Restatement (Second) of Torts § 774B).
However, we disagree that this requirement was not included in the instructions.
This requirement is reflected in element three of Instruction No. 19, which required
the Plaintiffs to prove the Defendants acted “in one or more of the following
wrongful means:” fraud, duress, coercion, or misusing confidential information.
While the Restatement (Second) of Torts section 774B notes “[t]he usual case”
involves a tortfeasor who has committed “fraud, duress, defamation or tortious
abuse of fiduciary duty, or has forged, altered or suppressed a will,” neither the
Restatement nor Iowa precedent requires a tortfeasor to commit one of these
enumerated acts for liability to attach. We find Instruction No. 19 accurately
9
presented a jury question as to whether the Defendants engaged in the required
tortious means, and we find no misstatement of law.
B. Sufficient Evidence.
Instruction No. 19 required the Plaintiffs to prove one or both Defendants
engaged in at least one of the specified wrongful means: fraud,4 duress,5
coercion,6 or misusing confidential information. The Defendants claim there was
insufficient evidence to submit any of these theories of wrongful acts to the jury.
1. Fraud, Duress, and Coercion
With regard to the alleged wrongful means of fraud, duress, and coercion,
the lengthy trial record contains ample evidence supporting those theories of
wrongdoing. The witnesses testified to Rosalyn’s severe mental decline due to
Alzheimer’s disease. For example, Joan testified Rosalyn was mostly unable to
carry a conversation after Ambrose died in 2009. Medical records submitted into
evidence supported the witnesses’ observations of Rosalyn’s condition. After
reviewing some of these records, David Tracey—Rosalyn’s longtime attorney—
wrote a letter on December 28, 2010, stating he did “not feel [Rosalyn] is able to
competently sign a new will.”
Nevertheless, the witnesses described Dennis making numerous attempts
over the years to convince his parents to leave the farm to the Defendants. Mark
4 The jury instructions defined “coercion” as “compulsion, constraint, compelling by
force of arms or threat, or pressure by which the testator’s action is restrained
against her free will in the execution of her Will.”
5 The jury instructions defined “duress” as “subjecting a person to improper
pressure which overcomes his or her will and coerces him or her to comply with
demands to which he or she would not yield if acting as a free agent.”
6 The jury instructions defined “deceit” as “the act of representing as true what is
known to be false; deceiving or lying, a dishonest action or trick, fraud or lie.”
10
testified to a 2005 family meeting when Dennis “was dictating to [the parents] how
he thought things should be handled” and Ambrose “stated clearly” the parents
would not leave the farm to the Defendants. This meeting led to the 2005 will that
provided an option for the Defendants to purchase the farm. According to a
March 23, 2009 memo attorney Tracey prepared, the Defendants met with Tracey
alone and told Tracey the parents wanted new wills that left the farm to the
Defendants. When Tracey presented the new wills to the parents, they rejected
the wills and directed Tracey to prepare the 2009 wills that left their estate to the
children in equal shares. On March 16, 2012, Tracey sent a letter to Dennis stating
Rosalyn declared “she definitely was not going to change her will” and requesting
that Dennis “and Dean cease and desist trying to talk her into changing it.” Dennis
acknowledged he contacted another attorney, rather than Rosalyn’s longtime
attorney (Tracey), to arrange for the drafting and execution of the 2012 will that left
the farm to the Defendants. Dennis also acknowledged he did not involve the
Plaintiffs in drafting this will, he did not inform this other lawyer of his parents’ prior
refusal to leave the farm to the Plaintiffs, and he personally paid the other attorney
for the will.7 Joan testified she only learned about the 2012 will in 2014 after Dennis
told her, “If [the Plaintiffs] think they’re going to get one-seventh [of the estate],
they’ve got another thing coming, I’ve got it all taken care of.” She further testified
the Plaintiffs then obtained a conservatorship for Rosalyn, with Joan and Mark
7Besides calling into question on whose behalf the new attorney was working, the
direct payment by Dennis from his own funds was sneaky in the sense that his
payment bypassed the usual procedure for paying Rosalyn’s bills. The usual
procedure for paying Rosalyn’s bills was to run them through Joan, who paid them
on Rosalyn’s behalf.
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serving as co-conservators, “to protect [Rosalyn] and her assets.” This evidence
is sufficient to prove the Defendants engaged in fraud, duress, and coercion in
procuring the 2012 will. We find no error in the jury instructions with regard to
these three theories of wrongful conduct.
2. Misuse of Confidential Information
The submission of the theory of misuse of confidential information is more
problematic. To begin, the parties raise an issue over whether misuse of
confidential information is a viable theory of recovery within the context of a claim
for intentional interference with inheritance. The Defendants argue misuse of
confidential information applies only in the context of claims for interference with
prospective business advantage, where confidential information includes trade
secrets, customer lists, or other proprietary business information. The Defendants
argue misuse of confidential information has no place in the context of an
intentional-interference-with-inheritance claim.
In contrast, the Plaintiffs argue that the tort of intentional interference with
inheritance is based on the tort of intentional interference with prospective
business advantage. They argue intentional-interference-with-prospective-
business-advantage claims recognize misuse of confidential information as a
viable theory for committing that tort, so the same should apply regarding
intentional interference with inheritance.
We need not decide whether misuse of confidential information is a viable
theory for committing the tort of intentional interference with inheritance. For the
sake of argument, we will assume it applies. Even with that assumption, however,
there was insufficient evidence supporting that theory of committing the tort. While
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there is ample evidence of various forms of skullduggery and other wrongful
conduct engaged in by the Defendants, including attempting to trick attorney
Tracey into divulging the distribution scheme of Rosalyn’s 2009 will, there was
insufficient evidence that the information obtained was confidential and was
misused. This problem is exacerbated by the fact that none of the parties
submitted proposed instructions, and the district court gave no instructions,
defining “confidential information” or explaining what constituted “misuse” of the
information.8 With no jury instructions explaining the scope and meaning, the jury
was left to speculate as to what information was confidential and whether it was
misused. Like the jury, we too are left to speculate what those terms mean in the
context of this suit. The Plaintiffs claim the confidential information received by the
Defendants that forms the basis for this theory of recovery was the information
supplied by attorney Tracey about the distribution scheme of Rosalyn’s 2009 will.
However, the evidence showed that one or more of the Plaintiffs already had that
information, which calls into question whether there was sufficient evidence that it
was confidential. Furthermore, even if we assume the information was
confidential, there is insufficient evidence that it was “misused.” The fact that
obtaining the information about the distribution scheme of Rosalyn’s 2009 will may
have been the motivating force that compelled the Plaintiffs to spring back into
action to try to get Rosalyn to change her will is not misuse of the underlying
information itself. Perhaps if the jury instructions had included some parameters
8 In contrast, as previously noted, the jury was instructed about the scope and
meaning of the other three theories of committing the tort, even though those three
theories may have been more easily understood by a lay person than “misusing
confidential information.”
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of what the terms “confidential information” and “misuse” mean, we could be
persuaded there was sufficient evidence supporting this theory of recovery.
However, given the fact that the jury was given no guidance as to the scope and
meaning of those terms, we cannot say there was sufficient evidence to support
this theory of recovery. Therefore, misuse of confidential information should not
have been submitted as a theory of how the Defendants committed the tort of
intentional interference with inheritance.
Having determined that it was error to submit misuse of confidential
information as a theory of commission of the tort at hand, we must now determine
the remedy. In making that determination we note that, in spite of a request by the
Plaintiffs for a special jury verdict question to state whether the jury based its
decision on the misuse-of-confidential-information theory, no such special verdict
was submitted to the jury. Instead, the verdict forms only called for the jury to
make a finding in favor of one party over the other, making it a general verdict.
See Clinton Physical Therapy Servs., P.C. v. John Deere Health Care, Inc., 714
N.W.2d 603, 610 (Iowa 2006) (defining a general verdict as “a verdict in which the
jury only makes a finding in favor of one party over the other party”). Due to a
general verdict being used, we have no way of knowing which theory the jury relied
upon in finding in favor of the Plaintiffs in their claim for intentional interference with
inheritance. Since one of the theories submitted was submitted in error, the
Defendants are entitled to a new trial on this claim. See Erickson v. Wright Welding
Supply, Inc., 485 N.W.2d 82, 86 (Iowa 1992) (“In civil cases, ‘when a trial court errs
in submitting even one of several theories of recovery and the jury returns only a
14
general verdict for the plaintiff the verdict cannot stand and the defendant is entitled
to a new trial.’” (quoting Gordon v. Noel, 356 N.W.2d 559, 565 (Iowa 1984))).
IV. Participation by Both Plaintiffs’ Attorneys.
As previously noted, four of the Plaintiffs were represented by one attorney,
and Janet, the remaining Plaintiff, hired her own attorney. Before the start of trial,
the Defendants sought to prevent the Plaintiffs’ attorneys from separately
participating in each phase of the trial, arguing the Plaintiffs should have to choose
which of their attorneys would handle each phase but be limited to only one. The
district court denied the Defendants’ request but permitted the Defendants to make
a standing objection to the separate participation of both counsel throughout the
trial. The Defendants raised this issue again in a motion for mistrial and their
motion for new trial, both of which were denied.
Trial judges have a great deal of discretion in “all matters which relate to the
orderly conduct of trial, or are necessary to the proper administration of justice in
a court, and which are not regulated by precise statute or rule.” State v. Harris,
222 N.W.2d 462, 464–65 (Iowa 1974) (quoting 88 C.J.S. Trial § 36 at 91–93).
“When the motion and the ruling are based on discretionary grounds, we review
the district court's ruling for an abuse of discretion.” Weyerhauser, 620 N.W.2d at
823. “An abuse of discretion occurs when ‘the court exercise[s] [its] discretion on
grounds or for reasons clearly untenable or to an extent clearly unreasonable.’”
Eisenhauer ex rel. T.D. v. Henry Cnty. Health Ctr., 935 N.W.2d 1, 9 (Iowa 2019)
(quoting Graber v. City of Ankeny, 616 N.W.2d 633, 638 (Iowa 2000)). “Grounds
or reasons are clearly untenable if they are not supported by substantial evidence
or if they are based on an erroneous application of law.” Id.
15
The Defendants argue the district court’s decision to allow counsel for both
groups of Plaintiffs to participate in the trial was prejudicial because counsels’
“duplicative” opening and closing arguments “gave [the Plaintiffs] two bites at the
same apple and diluted any burden of proof” the Plaintiffs had at trial. The
Defendants further maintain that they were similarly harmed by the district court’s
decision to allow both counsel to examine witnesses.
We first note that the Defendants do not cite—nor can we find—any
authority supporting the position that it is an abuse of discretion for the district court
to permit two attorneys representing separate plaintiffs to give opening and closing
arguments and to separately examine and cross-examine witnesses. The reasons
separate parties are not required to have only one co-party’s attorney perform a
specific part of the trial are apparent. Such a rule would require one party’s counsel
to essentially litigate a co-party’s claims, despite the fact that attorney does not
represent the co-party, and would significantly harm an attorney’s ability to
effectively represent the attorney’s own client’s interests and to develop trial
strategy. In this very case, the two groups of counsel engaged different expert
witnesses and took different positions on several issues. Furthermore, even if the
Defendants’ request had been granted, it would have most likely just resulted in
one attorney whispering with the other attorney during each phase of the trial (e.g.,
to make sure no more questions should be asked of prospective jurors, whether
additional questions should be asked of a witness, etc.), which would have been
just as time-consuming and disruptive, if not more so, than simply permitting the
second attorney to act independently. If there were concerns about duplication of
questions or creating confusion for witnesses, none of which concerns were raised
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here, those concerns could be addressed by specific objections during trial. While
we are not saying the district court was required to rule as it did, we find no abuse
of discretion in the district court’s decision to permit both attorneys representing
the separate Plaintiffs from fully participating in the trial.
The Defendants further claim the district court’s ruling denied them their
right to cross-examine witnesses and that having multiple attorneys ask questions
“gave the jury the impression that [the Plaintiffs’] case was insurmountable” and
“effectively eliminated [the Plaintiffs’] burden of proof.” This argument is similarly
unpersuasive. The district court was confronted with a situation where co-parties
had similar causes of action and at times relied on the same witnesses, but
ultimately did not have precisely the same claims. The court thus permitted
counsel for both groups of Plaintiffs to give arguments and examine and cross-
examine witnesses, but the court admonished counsel against duplicative
questioning. The Defendants do not cite any instances where the counsel asked
witnesses questions the co-party’s counsel had already asked, and they do not
explain how permitting both attorneys to ask witnesses questions denied them the
ability to cross-examine witnesses or otherwise shifted the Plaintiffs’ burdens of
proof at trial. We cannot say the district court abused its discretion based on these
facts.
V. Will Contest.
The jury set aside the 2012 will because it found Rosalyn lacked the mental
ability to make the will and the will was the result of undue influence. The
Defendants argue these findings lack substantial evidentiary support.
17
Instruction No. 13 stated Rosalyn had the mental ability required to make
the 2012 will if, at the time she made the will, she:
1. Knows a will is being made.
2. Knows the kind and extent of her property.
3. Is able to identify and remember those persons she would
naturally give her property to.
4. Knows how she wants to distribute her property.
Instruction No. 15 set forth the elements of undue influence:
1. At the time the Will was made, Rosalyn Schaul was
susceptible to undue influence.
2. Dennis Schaul and/or Dean Schaul had the opportunity to
exercise such influence and carry out the wrongful purpose.
3. Dennis Schaul and/or Dean Schaul was inclined to
influence Rosalyn Schaul unduly for the purpose of getting an
improper favor.
4. The result was clearly brought about by undue influence.
As explained above in section III.B, evidence in the record—including
witness testimony and medical records—thoroughly described Rosalyn’s
diminished mental state at the time she signed the 2012 will. This evidence also
showed the Defendants had the opportunity and inclination to unduly influence
Rosalyn when they arranged for a new attorney to draft and execute the 2012 will.
Nevertheless, the Defendants argue the Plaintiffs failed to meet their high
burden to prove lack of mental ability and undue influence. See Bayer, 574 N.W.2d
at 671 (“For influence to be considered undue, it must be the ‘equivalent to moral
coercion.’” (quoting Estate of Hollis, 12 NW.2d 576, 581 (Iowa 1944)); Gillette v.
Cable, 79 N.W.2d 195, 199 (Iowa 1956) (“[T]he law is slow to deny the right of any
person to dispose of [her] property by will as [she] sees fit. No mere impairment
of [her] mental or physical powers is enough so long as [she] retains mind and
comprehension sufficient to meet the tests we have itemized.”). The Defendants
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assert Rosalyn’s mental ability, while diminished, was sufficient to execute a will in
2012. They point to evidence in the record, including testimony from the attorney
who prepared and oversaw the execution of the 2012 will and witnesses to that
execution who did not have concerns about Rosalyn’s mental state when she
signed the will. This contradictory evidence merely presents a question for the
jury. See Bayer, 574 N.W.2d at 670–71 (“In a will contest, weight and credibility
of the evidence are questions for a jury.”). We find substantial evidence to support
the jury verdict setting aside the will due to lack of mental ability and undue
influence.
VI. Attorney Tracey’s March 23, 2009 Memorandum.
Attorney Tracey9 prepared a March 23, 2009 memorandum that described
Rosalyn rejecting the will draft that left the farm to the Defendants outright and
executing the 2009 will that left her estate to the children in equal shares. The
district court admitted the memo over the Defendants’ hearsay objection, finding it
met a hearsay exception as a business record.10 The Defendants argue the court
erred in admitting the memo.
A business record that would otherwise be inadmissible hearsay is
admissible if:
(A) The record was made at or near the time by—or from
information transmitted by—someone with knowledge;
9 Tracey died in January 2017, before the trial in this case.
10 The exception at issue, found in Iowa Rule of Evidence 5.803(6), is actually
referenced as an exception for “[r]ecords of a regularly conducted activity,” and, by
its terms, would apply to more than just business records. However, the exception
is commonly referred to as “the business record exception” and we will refer to it
as such.
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(B) The record was kept in the course of a regularly
conducted activity of a business, organization, occupation, or calling,
whether or not for profit;
(C) Making the record was a regular practice of that activity;
(D) All these conditions are shown by the testimony of the
custodian or another qualified witness . . . ; and
(E) The opponent does not show that the source of
information or the method or circumstances of preparation indicate a
lack of trustworthiness.
Iowa R. Evid. 5.803(6); see also GE Money Bank, 773 N.W.2d at 538.
Janice Russ, Tracey’s longtime secretary, provided foundation for the
memo. According to her testimony, Tracey dictated the memo, Russ transcribed
it, and they both signed it. Tracey typically prepared memoranda or notes for client
files. Russ testified “the only thing that’s not typical about that particular
memorandum from other memorandums that Mr. Tracey might have done is that
[Tracey] had [Russ] sign it and [Tracey] signed it.” The district court found this
evidence met the foundational requirements for the business-record exception and
admitted the evidence. The Defendants claim this was error, arguing the
foundational requirements for the business records exception were not met
because preparation of the memo was not a regularly-conducted activity by
attorney Tracey and the memo was prepared in anticipation of litigation.
The claimed error implicates Iowa Rule of Evidence 5.104(a), which
provides “the court must decide any preliminary question about whether . . .
evidence is admissible.” State v. Veverka, 938 N.W.2d 197, 202 (Iowa 2020). In
making that decision, the court is not bound by the rules of evidence. Id. Our
review of the district court’s ruling on the preliminary question of whether the facts
met the foundational requirements for a hearsay exception is for the correction of
legal error. Id. “When the preliminary question is one of fact, ‘we give deference
20
to the district court’s factual findings and uphold such findings if they are supported
by substantial evidence.’” Id. (quoting State v. Long, 628 N.W.2d 440, 447 (Iowa
2001). Here, Russ’s testimony constituted substantial evidence that the
foundational requirements for the business-record exception were met. See Iowa
R. Evid. 5.803(6). Her testimony also established that the memo—written more
than eight years prior to the filing of the petition here—was not prepared in
anticipation of litigation so as to exclude it from rule 5.803(6). See Timberlake
Constr. Co. v. U.S. Fid. & Guar. Co., 71 F.3d 335, 342 (10th Cir. 1995) (“[O]ne who
prepares a document in anticipation of litigation is not acting in the regular course
of business.”). We find no error in admitting Tracey’s March 23, 2009
memorandum pursuant to the business-record exception to the hearsay rule.
VII. Attorney Fees.
The Plaintiffs were awarded attorney fees, which award the Defendants
challenge on appeal. Our supreme court has found “attorney fees are proper
consequential damages” in an intentional-interference-with-inheritance claim.
Huffey, 491 N.W.2d at 522. The only basis for the attorney fee award was as
damages regarding the Plaintiffs’ intentional-interference-with-inheritance claim.
Due to the fact we are setting aside the judgment on the intentional-interference-
with-inheritance claim and remanding for a new trial on that claim, the attorney fee
award is set aside as well, making it unnecessary to otherwise address the
Defendants’ challenges to the award.
VIII. Conclusion.
There having been insufficient evidence submitted in support of the
Plaintiffs’ claim for intentional interference with inheritance based on the theory of
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misuse of confidential information, the Defendants are entitled to a new trial on
liability and damages on that claim. Therefore, the judgment in favor of the
Plaintiffs on the claim of intentional interference with inheritance is hereby vacated
and the case is remanded for a new trial on that claim. The judgment in favor of
the Plaintiffs and against the Defendants on the will contest claim is affirmed.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED ON
APPEAL; AFFIRMED ON CROSS-APPEAL.