Fraud

Fraud is an extreme type of mistake resulting from misconduct of a more egregious nature than mere negligence.  Fraud is mistake induced by the intentional misrepresentation or misconduct of a person other than the testator.  Without deceit there cannot be fraud; fraud is active and tortious.  It consists of either:

• A material misrepresentation of fact known by the declarer to be false, or made with reckless disregard for the truth of the statement made, or
• False concealment of fact, or
• An unprivileged nondisclosure by a person with a duty to disclose who intends as a result of the nondisclosure to cause decedent, acting upon the fraudulently induced mistake, to do and not to do a testamentary act that otherwise would not have been done.

The false statement, concealment, or unprivileged nondisclosure must have induced the other person to have acted in his/her detriment.

In many cases, allegations of fraud and undue influence are commingled.  The grounds, however, are different.  Fraud is not the overcoming of the testator’s free will as in the case of undue influence.  In fraud, the decedent’s free agency remains but deceit misleads the testator into doing an act that he/she otherwise would not have done.

The fraudulent act can be either:

• In the execution of the Will itself:  The Testator is deceived as to the character, nature, identity, or contents of the Will:
  • The Deceiver intentionally misrepresents the document to be something besides a Will or the Will of the Testator, and based on that misrepresentation, the Testator does not understand that what he/she is signing is a Will.
  • The Deceiver intentionally misrepresents the document to be the Will of the Testator, as the Testator desires, but fraudulently substitutes a different Will or the same Will with different, substituted pages, and based on that misrepresentation, the Testator does not understand that what he/she is signing is not “his/her Will.”

  Washington case example: Estate of Ganjian, 55 Wn.2d 360 (1959) — Testator’s son had his attorney prepare a Will for the son’s mother (whose native language was Armenian), giving the son the majority of her estate, despite a record that showed the Testator to have a history of wanting to divide her property equally among her children and grandchildren.  He and the attorney took the Will to the hospital where his mother, over 70 years old, had been admitted and was on heavy sedation and at least partially comatose.  The son removed everyone from the room but his mother, his attorney who was named in the Will as attorney for the estate, and the minister of a church that received $1,000 in the Will.  She couldn’t read the Will, so the son and his attorney paraphrased parts of it for her, leaving out critical portions.  She was too  weak to sign her name, so she made an “X” on the Will.  Held: The facts are of such a suspicious nature as to shift the burden of proof to the son, who was unable to prove the Will to be what his mother intended.  See also Estate of Jaaska, 27 Wn.2d 433 (1947).

• In the inducement to make a Will: Unlike fraud in execution, fraud in the inducement relates not to the Will or its contents but to some deceit regarding a material fact behind the document that induces the testator to make a Will that he/she otherwise would not have made; examples:
  • The Testator knows that what he/she is signing is a Will but is signing it based on another’s misrepresenting the circumstances to induce the Testator to sign the Will — the Testator’s signature was obtained by deceit, such as:
    • The testator is married to a bigamous spouse who fails to disclose the bigamy.
    • A beneficiary poisons the testator’s mind against the natural objects of his/her bounty.
    • A beneficiary falsely reports the death of a Testator’s apparent heir to the testator.

  Washington case examples:

  • Estate of Lint, 135 Wn.2d 518 (1998):  Christian, 18 years her junior, met Estelle, a wealthy widow, at a Seattle charity function.  He continued to see other women.  She expressed no desire to remarry.  She was diagnosed with cancer, which metastasized and became progressively worse, eventually causing her to lose her speech and engage in bizarre behaviors.  Christian took her to Las Vegas, where they were married.  Christian got Estelle to dismiss her longtime attorney, and they went to see his attorney, who prepared a Will that she signed, making Christian her primary beneficiary.

    The Court opined:

    • A Will may be set aside if it was induced by the fraudulent representation of a person who would benefit from it.
    • The elements of fraud are:
      1. Representation of an existing fact;
      2. Materiality of the representation;
      3. Falsity of the representation;
      4. Knowledge of the falsity or reckless disregard as to its truth;
      5. Intent to induce reliance on the representation;
      6. Ignorance of the falsity;
      7. Reliance on the truth of the representation;
      8. Justifiable reliance; and
      9. Damages.  Farrell v. Score, 67 Wn.2d 957 (1966).

      The trial Court had found that Christian falsely represented to Estelle that “he loved her and was the one person who would care for her because her family only want to put her in a convalescent home and get their share of her estate.”  The Supreme Court, however, was unwilling to conclude, without more, that Christian fraudulently represented that he loved Estelle — for example, absent his being overheard admitting that he lied about his feelings towards her — and concluded that without “evidence of a compelling nature,” “fraud cannot rest on allegedly false representations of love.”  The Supreme Court did conclude, however, that Christian had “isolated Estelle from her family and friends and thereafter falsely represented to Esttelle that her family wanted to put her in a home … to get their hands on her estate.” And that he made these representations to induce her reliance on him, and that as a result of these representations, she signed a Will that damaged her by radically altering plans for the distribution of her estate from her plans made before she met him.  The Supreme Court upheld the invalidation of both the marriage and the Will due to fraudulent representation (as well as undue influence).

    • Estate of Mumby, 97 Wn. App. 385 (1999) — Appellate Court upheld the trial Court’s rejection of the Will Contest.
    • Estate of Kessler, 95 Wn. App. 358 (1999) — Appellate Court upheld the trial Court’s rejection of the Will Contest.
    • Estate of Bottger, 14 Wn.2d 676 (1942) — “Where a will is attacked because allegedly induced by fraud, it may be avoided, not because the testator’s mind was coerced, but because his mind was deceived.”  At page 701.

  Proof of fraud requires what is known as “scienter” — the fraudulent misrepresentation must be made knowingly.  The deceiver must know that the representation does not accord with the true facts.

  Proof of due execution of a will raises the presumption of lack of fraud in its execution or procurement.  The burden then shifts to the contestant to prove all the elements of fraud by clear and convincing evidence.