Four Nines Gold, Inc. v. 71 Const., Inc.
1991 WY 49
809 P.2d 236
Case Number: 90-227
Decided: 04/12/1991
Supreme Court of Wyoming
FOUR NINES GOLD, INC., a Colorado corporation registered to do business in Wyoming, Appellant (Plaintiff),
v.
71
CONSTRUCTION, INC., a Wyoming corporation, Appellee
(Defendant)
Appeal from the District Court of
Natrona County, the Honorable Dan Spangler,
Judge.
Thomas
A. Fasse of Miller and Fasse, Riverton, for appellant.
Thomas
F. Reese of Brown & Drew, Casper, for appellee.
Before Urbigkit, C.J., and Thomas, Cardine,
Macy and Golden, JJ. Urbigkit, C.J., filed a dissenting
opinion.
CARDINE,
Justice.
[1.] Four Nines Gold, Inc.
(Four Nines) brought this action against 71 Construction, Inc. to recover
damages for wrongful interference with contractual relationship, for breach of
contract, and for breach of a covenant of good faith and fair dealing. The trial
court granted summary judgment in favor of 71 Construction,
Inc.
[2.] Four Nines brings this
appeal presenting the following issues:
"1.
Did the court err in ruling that there was no genuine issue of material fact in
dismissing plaintiff/appellant's claim for intentional interference with a
prospective contractual relationship and that the defendant/appellee was
entitled to judgment as a matter of law?
"2.
Did the court err in ruling that there was no genuine issue of material fact in
dismissing plaintiff/appellant's claim for breach of contract and that the
defendant/appellee was entitled to judgment as a matter of
law?
"3.
Did the court err in ruling that there was no genuine issue of material fact in
dismissing plaintiff/appellant's claim for breach of the implied covenant of
good faith and fair dealing, and that the defendant/appellee was entitled to
judgment as a matter of law?"
[3.] We
affirm.
[4.] On July 12, 1989, the
city of Riverton
advertised for bids for a street construction project. The deadline for
submitting bids was July 28, 1989, at 2 p.m. After reviewing the plans for the
project, Bill DeLapp, president of Four Nines, contacted Steve Loftin, president
of 71 Construction, informed Loftin that Four Nines would bid on the project as
general contractor, and asked Loftin to supply a subcontractor bid for aggregate
bituminous surfacing.
[5.] On the morning of July
28th, Loftin submitted 71 Construction's subcontractor bid by telephone. 71
Construction's bid totaled $ 88,316. Four Nines incorporated 71 Construction's
bid into its bid which it submitted to the city of Riverton before the 2 p.m.
deadline. That day, the city of Riverton engineer informed Four Nines that it
had submitted the lowest bId.
[6.] The Riverton city
council was scheduled to consider the bids on August 1. Before any action was
taken on the bids, Loftin realized he had made a mistake on 71 Construction's
bid. Loftin had neglected to include the cost of asphalt oil in computing the
bid, which resulted in the bid being about $ 30,000 lower than it should have
been. Loftin first attempted to contact Four Nines to alert the company to the
problem. He was unsuccessful, so he called the project engineer, the city
engineer, and the city attorney. The city engineer and attorney determined that,
as a result of 71 Construction's error, a substantial material defect had been
made in the bids. The city engineer sent a memorandum alerting the city council
to the problem and recommending that all bids be rejected. The council rejected
all bids. The bid information sheet provided that the city could reject any and
all bids. Wyoming Statute 15-1-113(c) provides that a city can reject all bids
for a public improvement contract if none serve the public interest. When the
project was rebid, Four Nines was not the low bidder and did not receive the
contract.
[7.] Four Nines filed suit
against 71 Construction in the Ninth District Court in Fremont County on December 29, 1989. The suit
alleged that 71 Construction intentionally interfered with a prospective
contractual relationship, breached a contract with Four Nines and breached an
implied covenant of good faith and faith dealing. 71 Construction's answer was a
general denial and objection to improper venue. Pursuant to stipulation between
the parties, venue was moved to Natrona County. 71 Construction was granted
summary judgment on August 6, 1990. The trial court held that 71 Construction
was attempting to protect its own interest and, therefore, did nothing improper
by informing the city of the mistake. The trial court held that 71 Construction
did not breach a contract because it was not bound to perform a contract until
the city accepted Four Nines' bid. It also held that 71 Construction did not
violate a covenant of good faith and fair dealing because it did not act
dishonestly.
[8.] Summary judgment is
proper only when there are no genuine issues of material fact and the prevailing
party is entitled to judgment as a matter of law. W.R.C.P. 56(c). We review a
summary judgment in the same light as the district court, using the same
materials and following the same standards. We examine the record from the
vantage point most favorable to the party opposing the motion, and we give that
party the benefit of all favorable inferences which may fairly be drawn from the
record. Wagner v. First Wyoming Bank,
N.A. Laramie, 784 P.2d 224, 226 (Wyo. 1989).
[9.] This court recognizes
intentional interference with a prospective contractual relationship as a cause
of action in tort. Martin v. Wing,
667 P.2d 1159 (Wyo. 1983). In Martin, at 1162, we adopted Restatement,
Second, Torts 766B, which states:
"One
who intentionally and improperly interferes with another's prospective
contractual relation (except a contract to marry) is subject to liability to the
other for the pecuniary harm resulting from loss of the benefits of the
relation, whether the interference consists of
"(a)
inducing or otherwise causing a third person not to enter into or continue the
prospective relation or
"(b)
preventing the other from acquiring or continuing the prospective
relation."
[10.] Malice motivating the interference need
not be shown. Toltec Watershed
Improvement District v. Johnston, 717 P.2d
808, 814 (Wyo.
1986). However, if the interference is not improper, a necessary element of the tort is lacking. Allen v. Safeway Stores, 699 P.2d 277,
280 (Wyo.
1985). 71 Construction's interference in this case was not improper for two
reasons.
[11.] First, truthful
statements, whether solicited or volunteered, are not actionable as intentional
interference with prospective contractual relations. Prazma v. Kaehne, 768 P.2d 586, 590
(Wyo. 1989).
See also Restatement, Second, Torts 772(a) (1979), which
states:
"One
who intentionally causes a third person not to perform a contract or not to
enter into a prospective contractual relation with another does not interfere
improperly with the other's contractual relation, by giving the third
person
"(a)
truthful information * * *."
In
its brief, Four Nines discusses the possible consequences had the city of
Riverton
accepted its bid. These possible consequences included binding 71 Construction
to its low bid or having the city bear the added costs. Four Nines does not
dispute that 71 Construction made an error in submitting its subcontractor bid.
It does not allege that 71 Construction's report of the mistake nor the manner
in which 71 Construction reported the mistake was untrue.
[12.] Second, interference
is permitted when the actor interferes in good faith to protect an economic
interest. Toltec, 717 P.2d at 814.
The interference must have been in good faith which requires a belief on the
actor's part that "his interest may otherwise be impaired or destroyed by the
performance of the contract or transaction." Toltec at 814, quoting Restatement,
Second, Torts 773. We can find no inference in the record to indicate that 71
Construction did not act in good faith. 71
Construction's economic interests motivated it to contact the city. The
company stood to lose a substantial amount of money if it were to be bound by
its bid. Before contacting the city, 71 Construction attempted to contact Four
Nines to bring the error to the general contractor's attention. The city
engineer's affidavit, filed by Four Nines in opposition to the motion for
summary judgment, states that Loftin, 71 Construction's president, informed him
that there had been lawsuits where subcontractors had made errors. Loftin states
in his affidavit and deposition that he does not remember making such
statements. However, for summary judgment purposes, we assume the statement was
made and give Four Nines every favorable inference that flows
therefrom.
[13.] That statement alone is not such bad
faith as results in improper interference. The engineer explained in his
affidavit that Loftin told him about the lawsuits to suggest that 71
Construction may be entitled to some relief for its mistake. Loftin told the
engineer that in some of these lawsuits either the subcontractor was let out of
the contract or the owner was required to bear the increased costs. The
engineer's affidavit does not state that Loftin threatened to bring a lawsuit
against the city nor are we able to draw that inference. We can only conclude
from the affidavit that the statement was one layman's attempt to explain his
perception of the law in this area to another layman. Thus, the making of the
statement does not negate the good faith showing necessary to justify the
interference. Because the information furnished by 71 Construction to the city
of Riverton was
true, correct and furnished in good faith to protect its interest which might
otherwise be impaired or destroyed, it was not improper.
[14.] In its second issue, Four Nines claims 71
Construction breached its contract with Four Nines. Four Nines argues that a
contract existed for 71 Construction to provide aggregate bituminous surfacing
subject to a condition precedent of the award of the contract to Four Nines. We
disagree.
[15.] The authority Four Nines cites to support
this issue allows recovery under a theory of promissory estoppel, not breach of
contract.
Subcontractor bids can become irrevocable under this theory in absence of
an enforceable contract. Drennan v. Star
Paving Co., 51 Cal.2d 409, 333 P.2d 757, 759 (1958). Thus, a promise is
enforceable under promissory estoppel without a valid contract if the injured
party justifiably relied on the promise to his detriment. Id.; see Tremblay v. Reid, 700 P.2d 391,
395 (Wyo.
1985) and Restatement, Second, Contracts 90(1) (1981). The cases upon which
Four Nines relies allows recovery on this theory when the general contractor's
bid is accepted. E.g., Drennan, and Mead Associates, Inc. v. Antonsen, 677
P.2d 434 (Colo.App. 1984). Four Nines' use of 71 Construction's bid in its bid
to the city does not create a binding contract between the two. N. Litterio & Co. v. Glassman
Construction Co., 115 App. D.C. 335, 319 F.2d 736, 739 (D.C. Cir. 1963). See generally, J. Sweet, Legal Aspects of Architecture,
Engineering and the Construction Process 32.02 (3rd ed. 1985). In this case,
Four Nines' bid was never accepted by the city of Riverton. Therefore, there was no contract
between any of the parties and no breach of contract. The trial court correctly
granted summary judgment in 71 Construction's favor on this issue because no
contract existed.
[16.] Four Nines' final issue asks whether 71
Construction violated an implied covenant of good faith and fair dealing. Its
argument is dependant on the existence of a contract. Since no contract was
formed between Four Nines and 71 Construction, we cannot say such a covenant
existed in the dealing between the parties. This implied
covenant does not deal with the formation of a contract. Restatement, Second,
Contracts 205, comment c (1981). Furthermore, as we stated in our discussion
concerning the intentional interference allegation, 71 Construction's attempt to
alert Four Nines and the city of Riverton to its mistake were acts undertaken in
good faith.
[17.] Affirmed.
URBIGKIT,
C.J., filed a dissenting opinion.
URBIGKIT, Chief Justice, dissenting.
I.
INTRODUCTION
[18.] We create by this decision a new way for
a subcontractor-bidder to escape from an inopportunely priced street
construction bid. The way now paved
is for the subcontractor to go to the owner to get the general contractor's bid
cancelled -- no general contract and no subcontract responsibility to meet the
terms of its bid. Lacking conviction that this "easy" way out is appropriate for
the bidding subcontractor to default and still pass the transactional loss on to
the general contractor, I respectfully dissent.
II.
EVENTS ABOUT WHICH WE WRITE
[19.] This is the "good old boy" process of
public contract management. The subcontractor, 71 Construction, Inc., claims to
have underbid its asphalt supply paving subcontract supplied to the general
contractor, appellant Four Nines Gold, Inc., for street utility work in the City
of Riverton, Wyoming. After the bids were opened on July 28, 1989, it was
determined that Four Nines was low and 71 Construction was advised of its
successful subcontract bid and low price for street surfacing
material.
[20.] On July 31, 71 Construction as
subcontractor was informed by Four Nines that its bid was successful and would
be given the subcontract in accord with the bid then accepted. A city council
meeting was then scheduled for August 1, 1989 to provide for the formal contract
award.
[21.] On the morning of August 1, 71
Construction's president called the city engineer to relate that it had underbid
its subcontract to Four Nines and wanted out. The admitted purpose of the call
by 71 Construction to the city engineer was to secure a denial of Four Nines'
bid so that 71 Construction could escape from its claimed mistake in bidding to
supply 25,130 square yards of asphalt material at a price of $ 3.20 per square
yard plus $ 7,900 mobilization expense reimbursement.1 n1 Lawsuits were mentioned by 71
Construction in the telephone call with the city engineer as a justification or
explanation why Four Nines' bid should not be accepted since 71 Construction had
made a mistake and might choose to do an insufficient job.2
[22.] It worked. To avoid litigation, the city
rejected all bids and rebid the contract with a few minor changes. With its
bidding hand exposed, Four Nines was unsuccessful on second bid and subsequently
sued 71 Construction for damages in loss of profits resulting from 71
Construction's activities in successfully defeating the award of the general
contract to Four Nines. 71 Construction escaped further responsibility for its
improvident bid which had beer used by the general contractor in pricing its
general contract bid. The claimed loss in profits totalled about $ 50,000 to
Four Nines which provides the substance of this
litigation.
[23.] On the complaint for recovery of the
profits by Four Nines and against 71 Construction, summary judgment was granted
to 71 Construction to relieve it as a matter of law from liability when it
undertook to have its principal's contract vacated or invalidated in order to
release its separate responsibility for performance on the supply bId.
III.
SUBSTANCE OF ISSUES PRESENTED
[24.] Broadly portrayed, the issue in this case
determined that there is a liability free ride of the agent to manipulate nonconsummation of the
principal's general contract so that the agent is relieved of its prospective
obligations to perform on a subcontract. The scope of this concept of harm
causing immunized default in construction cases is self-evident. The rule in
this case will pervade any supply or contributory service contract where the
agent as a subcontractor wants out after its bid has been made and is accepted
by the principal.
[25.] In this subcontractor bid reneging, owner
contract rejection, and immunized scenario, the majority rejects potential
liability for intentional interference with a prospective contract, breach of
contract and burden of a covenant
of good faith and fair dealing. The principal basis adopted is absence of bad
faith when 71 Construction set out to deliberately injure Four Nines for its own
benefit, namely immunized default in performance. It is in essence, kill the
obligee in order for obligor to escape from agreement to supply
food.
[26.] I reject the preclusive adaptation in
legal synopsis that the interference was not improper since justified by
truthful statements and self-interest to either provide a sufficiently confined
and determinative record or an appropriate legal thesis for this summary
judgment disposition. 71 Construction was not a disassociated third-party
stranger to this transaction. That entity was a companion and co-performer in
the economic wagon. It arranged to have the horses shot so it was no longer
obligated to assist in driving to the conclusion of the journey. 71 Construction
escaped scot-free and Four Nines lost opportunity for any reward after journey
completion.3
IV.
ANALYSIS OF THE CASE
[27.] We have here an almost classical,
intentional interference situation. See Martin v. Wing, 667 P.2d 1159
(Wyo. 1983);
Carpenter, Interference with Contract
Relations, 41 Harv. L. Rev. 728 (1928); Restatement (Second) of Torts 766B
(1979); Annotation, Liability of Third
Party for Interference With Prospective Contractual Relationship Between Two
Other Parties, 6 A.L.R.4th 195 (1981).
[28.] 1. Four Nines had a valid expectancy as
low bidder for award of the construction contract. Wartensleben v. Willey, 415 P.2d 613
(Wyo.
1966).
[29.] 2. 71 Construction, as a prospective
participant, was aware of the proposed contract which, if executed, would create
duties and opportunity for its own financial benefit. First Wyoming Bank, Casper v. Mudge, 748 P.2d 713 (Wyo.
1988).
[30.] 3. 71 Construction perceived a more
immediate economic benefit by assuring the contract did not come into existence
in order that its obligation for performance under the contract would be
voided.
[31.] 4. Acting in the interest of its own
economic benefit with intent to harm its bidding principal, 71 Construction
managed to have the successful general contract bid rejected and the contractual
expectancy of its principal eviscerated.
[32.] This sequence of events is similar to the
conduct of the Martins in Martin, 667
P.2d 1159, where the action of the defendant was directed to dissuade the
anticipated buyer from completion of a house purchase contract. The threat of
litigation here has no greater ring of validity than did the suggested flooding
in Martin. In any event, whether 71
Construction actually underbid and whether, even if underbid, it would have
constituted a problem to anyone but the bidder is no less a question of fact for
trial resolution than was the question of flooding in Martin.
[33.] The real legal principle at stake here is
whether the bidding subcontractor or supplier or performing sub-agent has a privilege as a matter of law to attempt
by whatever means to effect avoidance of the principal's contract in order to
secure vacation of its own responsibilities under its separate bid. I remain
convinced that Toltec Watershed Imp.
Dist. v. Johnston, 717 P.2d 808 (Wyo. 1986) was an
improvident (and erroneous) decision, but its text provides no authority on this
situation where an agent sets out to harm its principal for economic benefit
from its separately eliminated responsibility. Allen v. Safeway Stores, Inc., 699 P.2d
277 (Wyo.
1985) also provides no authority since the state worker derived no personal
advantage in reporting the "bad attitude" of the plaintiffs as store employees.
Likewise, the dicta in Prazma v.
Kaehne, 768 P.2d 586 (Wyo. 1989), relating to access easement
litigation, is not persuasive.
V.
TORT ELEMENTS
[34.] The Arizona court in Snow v. Western
Sav. & Loan Ass'n, 152 Ariz. 27, 730 P.2d 204, 211-12 (1986) carefully considered
the principle involved in applying the five elements of tort, Cf. Mudge, 748 P.2d 713 (using four element
test), which in some jurisdictions subdivide intention and impropriety as
separate elements:
The
tort is intentional in the sense that Western must have intended to interfere
with the Snows' contract or have known that this result was substantially
certain to be produced by its conduct. Restatement 8(A) and 766 comment j;
accord 2 F. HARPER, F. JAMES & O.
GRAY, [THE LAW OF TORTS] supra 6.8
[2d ed. 1986], at 321-22. The question of intent ordinarily is for the finder of
fact. * * *
* *
*
The
final element -- whether a defendant has acted improperly -- generally is
determined by weighing the social importance of the interest the defendant seeks
to advance against the interest invaded. 2 F. HARPER, F. JAMES & O. GRAY, supra 6.12, at 350-51; Restatement
767 comment b; H & M Associates v.
City of El Centro, 109 Cal.App.3d 399, 409, 167 Cal.Rptr. 392, 398-99 (1980)
(question of justification "comprises a factual issue which should properly be
placed before the trier of fact"). To be "improper," an interference must be
"wrongful by some measure beyond the fact of the interference itself." Top Service Body Shop, Inc. v. Allstate
Insurance Co., 283 Or. 201, 209, 582 P.2d 1365, 1371 (1978), quoted in 2 F. HARPER, F. JAMES &
O. GRAY, supra 6.6, at 306-07; see also Restatement
767.
That
court, in reversing summary judgment, concluded that triable issues of fact
existed on the due-on-sale intentional interference case on both questions of
good faith and privilege.
[35.] This court has also assessed the
relationship of the three terms -- privilege, justification and "not improper"
-- in the same fashion in Basin Elec.
Power Co-op.-Missouri Basin Power Project v. Howton, 603 P.2d 402, 405 (Wyo.
1979), where, in speaking to the changes in terminology from First Restatement
to Second Restatement to use "improperly" rather than "privilege", we
said:
Section
766, Restatement of the Law of Torts (1939), cited in Wartensleben, stated that liability for
purposeful interference with a contract will not arise if there was a privilege
to act. A cause of action will arise if "one who, without a privilege to do so,"
induces another not to perform a contract. The authors of the second edition of
Restatement of the Law of Torts (see introductory note to Ch. 37, p. 4, et seq.,
Vol. 4 (1979)) chose not to use the word privilege or justification in the
revised 766. They considered these terms to lack clarity and therefore not
meaningful. Section 766 of the Second Restatement of the Law of Torts (1979)
states that "one who intentionally and improperly interferes with the
performance of a contract * * * is subject to liability * * *." While we do not
find this change of language particularly helpful in our inquiry, it still is
consistent with the view that however the tort of interference is expressed --
whether as conduct "without justification," "without privilege," or merely
"improper" -- the question is one of fact rather than one of
law.
[36.] The subcontractor bonding case of Morrow v. FBS Ins. Montana-Hoiness LaBar,
Inc., 230 Mont. 262, 749 P.2d 1073, 1076 (1988) provides the same authority
requiring resolution of intent and whether "improper" is a factual
decision:
We
cannot say that interference motivated to gain business advantage among the
relationships between bonding agents, general contractors, and subcontractors is
necessarily proper. And when there is
"room
for different views, the determination of whether the interference was improper
or not is ordinarily left to the jury, to obtain its common feel for the state
of community mores and for the manner in which they would operate upon the facts
in question."
Restatement
(Second) of Torts 767 at 38-39 (1977).
First,
in questioning whether the interference was intentional, the Montana court observed that it certainly was not
accidental. After Restatement (Second) of Torts, supra, 767 is cited, the Montana court analyzed
the relationship of decision to summary judgment. That consideration is
explicitly appropriate here.
Other
Courts have emphasized the impropriety of granting summary judgment where the
credibility of an affiant may be crucial to decision of a material fact. See Durant v. Stahlin (Mich.1965), 375
Mich. 628, 135
N.W.2d 392, 398; Arnstein v. Porter
(2d Cir. 1946), 154 F.2d 464, 469-70.
Morrow, 749 P.2d at 1075. The same
factual concept reappeared by
another reversal in this same case which came after remand by a directed
verdict in Phillip R. Morrow, Inc. v. FBS
Ins. Montana-Hoiness Lebar, Inc., 236 Mont. 394, 770 P.2d 859 (1989).
Justification, e.g. privilege or not improper, is a question of fact. Northside Mercury Sales & Service, Inc.
v. Ford Motor Co., 871 F.2d 758 (8th Cir. 1989); Phil Crowley Steel Corp. v. Sharon Steel
Corp., 782 F.2d 781 (8th Cir. 1986); In re Scallywags, Inc., 84 B.R. 303
(Bkrtcy.D.Mass. 1988); Alyeska Pipeline
Service Co. v. Aurora Air Service, Inc., 604 P.2d 1090, 1094 (Alaska 1979);
Irwin & Leighton, Inc. v. W.M.
Anderson Co., 532 A.2d 983 (Del. 1987); and Larocco v. Bakwin, 108 Ill.App.3d 723,
64 Ill.Dec. 286, 439 N.E.2d 537 (1982).
VI.
AFFIRMATIVE DEFENSE
[37.] The clear rule explicitly defined
furthermore determines that justification-privilege-not improper, all being the
same concept, are the affirmative burden for the defendant to demonstrate when
the criteria for basic interference has been established. Haupt v. International Harvester Co.,
582 F.Supp. 545 (N.D.Ill. 1984).
The rule generally followed is:
"Whether
an intentional interference by a third party is justifiable depends upon a
balancing of the importance, social and private, of the objective advanced by
the interference against the importance of the interest interfered with,
considering all circumstances including the nature of the actor's conduct and
the relationship between the parties. * * * Justification is an affirmative
defense and may not be considered as supporting the trial court's action in
sustaining a demurrer unless it appears on the face of the complaint. * *
*"
Winn v. McCulloch Corp., 60 Cal.App.3d
663, 131 Cal.Rptr. 597, 602 (1976) (quoting Herron v. State Farm Mutual Ins. Co., 56
Cal. 2d 202,
206-07, 14 Cal.Rptr. 294, 296, 363 P.2d 310, 312 (1961)). See likewise Kinco, Inc. v. Schueck Steel,
Inc., 283 Ark. 72, 671 S.W.2d 178 (1984); Gianelli Distributing Co. v. Beck &
Co., 172 Cal.App.3d 1020, 219 Cal.Rptr. 203, 222 (1985); and Boyles v. Thompson, 585 S.W.2d 821
(Tex.Civ.App. 1979). Although not specifically defined, the assumptive nature of
justification as an affirmative defense appears in Wartensleben, 415 P.2d at 614 and
Annotation, Liability for Procuring
Breach of Contract, 26 A.L.R.2d 1227, 1263-64 (1952) (and later case
service).
[38.] The principle is stated appropriately for
our review here in H & M Associates
v. City of El
Centro, 109 Cal.App.3d 399, 167 Cal.Rptr. 392, 396
(1980):
Privilege
or justification for the interference is an affirmative defense, not an element
of plaintiff's cause of action, and thus may not be considered in support of the
trial court's action in sustaining a demurrer unless apparent upon the face of
the complaint.
See also Federal Pants, Inc. v.
Stocking, 762 F.2d 561 (7th Cir. 1985); Lowell v. Mother's Cake & Cookie
Co., 79 Cal.App.3d 13, 144 Cal.Rptr. 664 (1978); and Calbom v. Knudtzon, 65 Wash.2d 157, 396
P.2d 148 (1964).4 The factual issue is purposeful
conduct of the actor which results in contract loss. Ronald M. Sharrow, Chartered v. State Farm Mut. Auto. Ins.
Co., 306 Md. 754, 511 A.2d 492 (1986). We should take
heed from what the Maryland court said:
There
is, of course, a big difference between that which is necessary to prove the
commission of the tort and that which is necessary merely to allege its
commission.
Id. at 500. The
source of the justification defense is said to be derived from Holmes, Privilege, Malice, and Intent, 8 Harv.
L. Rev. 1 (1894).
In
using the label "wrongful interference" the courts have apparently applied to
the protection of business relations the rule which Holmes contended was (or
ought to be) a general principle of the common law: that "when a responsible
defendant seeks to escape from liability for an act which he had notice was
likely to cause temporal damage to another, and which has caused such damage in
fact, he must show a justification." A justification arises when other
considerations of public policy are stronger than the policy of protecting
business enterprise.
Note,
Tortious Interference with Conduct of a
Business, 56 Yale L.J. 885, 888 (1947) (quoting Holmes, supra, 8 Harv. L. Rev. at
9).
[39.] We are presented here with a summary
judgment disposition and not given the benefit of a trial resolution. There is a
remarkable similarity between the insurance company case directed to remove an
attorney from claimant representation, Thompson v. Allstate Ins. Co., 476 F.2d
746 (5th Cir. 1973), and this case where the action was directed to remove the
general contractor as a player to provide economic advantage for the actor. Bankers Multiple Line Ins. Co. v.
Farish, 464 So.2d 530 (Fla. 1985); Alberts v. Devine, 395 Mass. 59, 479 N.E.2d 113, cert. denied 474 U.S.
1013, 106 S.Ct. 546, 88 L.Ed.2d 475 (1985) (induced disclosure of confidential
information contrary to the physician-patient relationship); Annotation, Liability in Tort for Interference with
Attorney-Client or Physician-Patient Relationship, 26 A.L.R.3d 679 (1969).
Similarly, in employment cases, see Davenport v. Epperly, 744 P.2d 1110
(Wyo. 1987)
and Yaindl v. Ingersoll-Rand Co. Standard
Pump-Aldrich Div., 281 Pa.Super. 560, 422 A.2d 611 (1980). Cf. Annotation, Liability of One Who Induces Termination of
Employment of Another by Threatening to End Own Contractual Relationship with
Employer, 79 A.L.R.3d 672 (1977).
VII.
EVALUATIVE FACTORS
[40.] The evaluative factors which test whether
the conduct was "privileged", "justified", or "not improper" envision intent
consideration by categories provided in Restatement (Second) of Torts, supra, 767. Mudge, 748 P.2d 713. One of the mistakes
made by the majority in analysis and conclusion is applying Restatement (Second)
of Torts, supra, 772(a) without
relation to Restatement (Second) of Torts, supra, 772(b) or in the context of
whether improper by the Restatement (Second) of Torts, supra, 767 evaluative
factors.
Section
767 of the Restatement catalogues the factors considered in evaluating the
propriety of interference with contractual relations. The section
reads:
In
determining whether an actor's conduct in intentionally interfering with a
contract or a prospective contractual relation of another is improper or not,
consideration is given to the following factors:
(a)
the nature of the actor's conduct,
(b)
the actor's motive,
(c)
the interests of the other with which the actor's conduct
interferes,
(d)
the interests sought to be advanced by the actor,
(e)
the social interests in protecting the freedom of action of the actor and the
contractual interests of the other,
(f)
the proximity or remoteness of the actor's conduct to the interference
and
(g)
the relations between the parties.
Zilg v. Prentice-Hall, Inc., 717 F.2d
671, 677 (2nd Cir. 1983), cert.
denied 466 U.S. 938, 104 S.Ct. 1911, 80 L.Ed.2d 460 (1984). See likewise Northside Mercury Sales &
Service, Inc., 871 F.2d 758; Irwin
& Leighton, Inc., 532 A.2d
at 993; La Rocco, 64 Ill.Dec. 286, 439 N.E.2d 537; and Bolz v. Myers, 200 Mont. 286, 651 P.2d 606
(1982). We specifically adopted those factors in Mudge, 748 P.2d at
717.
VIII.
COMPARABLE PRECEDENT: TRUTHFULNESS AS A DISPOSITIVE
CONCEPT
[41.] In the myriad of present intentional
interference with contract cases, none is found in which a subcontractor went to
the owner to entice non-award so that the subcontractor could escape a
contractually inopportune bId.5 A case involving similar aspects is
Leek v. Brasfield, 226 Ark. 316, 290 S.W.2d 632
(1956), where the defendant's land was upstream from plaintiff. Someone cut a
dam above plaintiff's location in the water course which reduced ponding of
water out onto defendant's land. Plaintiff further wanted the dam repaired to
protect from downstream flooding. The county commissioners agreed and hired a
contractor to repair the dam. The defendant reciprocated from his upstream
landowner status by running the contractor off the construction site by threat
of an expensive lawsuit. When the flood came, plaintiff was damaged down below
the damaged dam and he sued defendant for scaring the contractor through
suggestion of litigation not to take the county contract which had been
presented to repair the dam.
[42.] Following jury consideration, the damaged
landowner plaintiff won. The Arkansas Supreme Court recognized that the wrongful
conduct in preventing repair was just as injurious to appellee (plaintiff) as
the wrongful act committed by whomever of cutting the dam originally. Words
caused action and precisely that result also occurs here where the subcontractor
went to the city with the unquestioned purpose of stopping the award of Four
Nines' contract on the basis of the bid in order to be relieved of performance
responsibility on its own contract. Here, as in Leek, the issue was properly presented
for jury decision. Furthermore, it is apparent that the so-called truth defense
of Restatement (Second) of Torts, supra, 772(a) is subject to content
and circumstances. One of those circumstances can be Restatement (Second) of
Torts, supra, 772(b) -- whether
solicited -- which is not in any regard discussed in the majority
opinion.
[43.] The historic case of Knickerbocker Ice Co. of Baltimore City v.
Gardiner Dairy Co. of Baltimore City, 107 Md. 556, 69 A. 405 (1908) has some
similarities where a supplier of ice stated that it would cease deliveries to
the dairy unless the dairy's customer discontinued business with the plaintiff.
The resulting damage verdict was sustained.
[44.] Perhaps the principal circumstance is the
inquiry regarding intent with which the action is taken. Williams v. Chittenden Trust Co., 145
Vt. 76, 484
A.2d 911 (1984).
Intent
to interfere with a contractual relationship exists if "the actor acts for the
primary purpose of interfering with the performance of the contract, and also if
he [or she] desires to interfere, even though he [or she] acts for some other
purpose in addition." Restatement (Second) of Torts 766 comment j (1979).
Intent also exists if the actor does not act with the desire to interfere with
the contract but knows that interference will be substantially certain to occur as a
result of his or her action. Id.
Id. at 914. That
court considered the advice and suggestions where the offending actor offered to
do the work for less in architectural planning. True enough, the advice simply
indicated that the architect would do the work for less. The court
said:
The
defendant also argues that its interference was not improper because it merely
rendered "honest advice" to the owner, which, if argues, is allowed under 772 of the
Restatement (Second) of Torts. We think, however, that the plaintiff presented
sufficient evidence for the jury to find that the defendant's actions went
beyond mere "advice," and instead constituted architectural services. The
defendant prepared sketches, plans and detailed drawings for the project.
Therefore, we reject the defendant's argument.
Id. at 915
(footnote omitted).
[45.] The subject is similarly addressed in Scussel v. Balter, 386 So.2d 1227,
1228-29 (Fla.App. 1980) (footnote omitted):
Scussel
secondly suggests that his actions were protected by the privilege afforded an
agent who, upon request, gives "honest advice" that it is in his principal's
best interests to breach an existing relationship. See 4 Restatement (Second) of
Torts 772(b) (1979). We find, however, that the showings in the record of
Scussel's active involvement in Wolf's affairs and of his personal motivations
and ulterior purposes for securing Wolf's withdrawal from his undertaking with
Balter demonstrate the inapplicability of this principle. See London Guarantee & Accident Co. v.
Horn, 206 Ill. 493, 69 N.E. 526
(1903); Morgan v. Andrews, 107 Mich. 33, 64 N.W. 869
(1895); W. Prosser, Law of Torts 129 test and authorities at 944, nn. 5-7 (4th
ed. 1971).
[46.] The relationship of the truth defense to
an affirmed judgment for tortious interference was also recognized in Pony Exp. Cab & Bus, Inc. v. Ward,
841 F.2d 207, 209, aff'd 845 F.2d
1025 (8th Cir. 1988) (quoting Pony
Express Cab & Bus, Inc. v. Ward, 662 F.Supp. 85, 89 (D.Neb. 1987)), were
the actor's statement to the third-party customer was "'a primary reason for the
denial of the contract * * *.'" The court recognized in footnote that the theory
of defamation or business slander overlapped intentional interference with a
business expectancy, and truth, as an absolute defense in defamation, did not
have the same effectiveness in tortious interference defense. See likewise Walsh v. Glendale Federal Sav.
& Loan Ass'n, 1 Cal.App.3d 578, 81 Cal.Rptr. 804 (1969), which
recognized that in regard to furnishing credit information, tortious action also
falls more completely within Restatement (Second) of Torts, supra, 772(b).
[47.] The court in Chaves v. Johnson, 230 Va. 112, 335 S.E.2d 97,
103 (1985) was unpersuaded by a
freedom-of-speech argument as a defense to the intentional
interference:
The
tort complained of here is an intentional wrong to the property rights of
another, accomplished by words, not defamatory in themselves, but employed in
pursuance of a scheme designed wrongfully to enrich the speaker at the expense
of the victim. The law provides a remedy in such cases, and the constitutional
guarantees of free speech afford no more protection to the speaker than they do
to any other tortfeasor who employs words to commit a criminal or a civil
wrong.
[48.] The Chaves case has some similarity to our
present situation where, involving contracting with a city, the defendant
competitor as an architect advised the city that the plaintiff's charges were
excessive and his experience insufficient. The court found a written
communication on the subject not to be defamatory in consideration of free
speech and truth, but rejected the defense of truth and taxpayer privilege in
reversing an appellate court decision which had reversed the original verdict in
favor of the plaintiff.
[49.] Truthfulness under Restatement (Second)
of Torts, supra, 772(a) is not
alone the test since the actual communication involved at least a questionably
valid "underbid" statement and then included general advice and opinion, including comments
about litigation.6 Consequently, the requirements and
function of Restatement (Second) of Torts, supra, 772(a) and (b) and the
intrinsic function of Restatement (Second) of Torts, supra, 766B are called into analysis.
Reliance on Restatement (Second) of Torts, supra, 772(a) alone is inappropriate
and certainly Restatement (Second) of Torts, supra, 772(b) would be irrelevant
under the circumstances because of the failure to meet the first requirement
"that [the] advice be requested, * * *". Restatement (Second) of Torts, supra, 772(c). "The privilege [of
truth] is conditional and if the occasion were used not to give bona fide advice, but to injure the
plaintiff for any ulterior reason, the defendant should lose his privilege and
therefore fail in his defense." Carpenter, supra, 41 Harv. L. Rev. at 749-50
(citing Northern Wisconsin Co-op. Tobacco
Pool v. Bekkedal, 182 Wis. 571, 197 N.W. 936 (1923) and Holmes, supra, 8 Harv. L. Rev. at
6).
[50.] This difference is of the essence in this
case. The city did not go to 71 Construction. We have unsolicited conduct of 71
Construction in going to the city to raise the specter of litigation and bad
workmanship that provided the atmosphere upon which the intentional interference
complaint existed and the contractual loss occurred. None of the three criteria
for application of Restatement (Second) of Torts, supra, 772(c) exists in this case:
"(1) that advice be requested," -- it was not; "(2) that the advice given be
within the scope of the request" -- it was not; "and (3) that the advice be
honest" -- at best, we have a factual decision based upon exactly what the
representative of 71 Construction said in order to secure a rebid decision by
the city and a release of the subcontractor from the onerous burden of its
subcontract proposal.
[51.] In Basin Elec. Power Co-op.-Missouri Basin
Power Project, 603 P.2d at 404, we set the parameters of the cause of
action: "(1) the existence of the contract; (2) defendant's knowledge of the
contract; (3) intentional interference with plaintiff's contract without
justification; and (4) resulting damages." In that case the issue was justification, and we
said:
In
considering the question of interference with a contract this court has never
attempted to define as a matter of law what constitutes reasonable justification
for interference with a contract.
Id. (citing Wartensleben, 415 P.2d 613; Board of Trustees of Weston County School
Dist. No. 1, Weston County v. Holso, 584 P.2d 1009, reh. denied 587 P.2d 203 (Wyo. 1978);
and Kvenild v. Taylor, 594 P.2d 972
(Wyo. 1979)). Furthermore, we then said:
Nor
will we attempt to formulate any hard and fast definitions for the term in the
case at bar. The term justification is broad and the question of whether there
was an unjustified interference depends upon the facts of each
case.
Basin Elec. Power
Co-op.-Missouri Basin Power Project, 603 P.2d at 404. And
then we quoted with approval the general rule from Carnes v. St. Paul Union Stock-Yards
Co., 164 Minn. 457, 205 N.W. 630, 632, rehg denied 164 Minn. 457, 206 N.W. 396
(1925):
"The
courts have not attempted to formulate a rule by which justification or lack of
justification may be determined, but have said that in general the issue is
largely one of fact for the jury; the standard being reasonable conduct under
all the circumstances of the case."
Basin Elec. Power
Co-op.-Missouri Basin Power Project, 603 P.2d at 405. We
further quoted from Royal Realty Company
v. Levin, 244 Minn. 288, 69 N.W.2d 667, 673
(1955):
"* *
* We need not here concern ourselves with what constitutes sufficient
justification. The term is not susceptible of any precise definition, and
normally it is a question of fact for the jury's determination. In any event,
the general view is that the burden of proving sufficient justification for the interference rests
on the defendants."
Basin Elec. Power
Co-op.-Missouri Basin Power Project, 603 P.2d at 405. We
further noted that the authors of the Restatement (Second) of Torts, supra, 766 lacked clarity even after
they substituted "improperly interferes". Basin Elec. Power
Co-op.-Missouri Basin Power Project, 603 P.2d at 405.7
While
we do not find this change of language particularly helpful in our inquiry, it
still is consistent with the view that however the tort of interference is
expressed -- whether as conduct "without justification," "without privilege," or
merely "improper" -- the question is one of fact rather than one of
law.
* *
* Good cause, good faith, reasonable conduct, all appear to us to involve
factual and not legal determinations. On this question of law versus fact, this
remark in 4 Restatement of the Law of Torts, 767, p. 38, comment 1 (1979), is
pertinent:
"* *
* The analogy to negligence continues to hold in the situations where no
recognized privilege has been formulated. Here [tortious interference with a
contract], as with negligence, when there is room for different views, the
determination of whether the interference was improper or not is ordinarily left
to the jury, to obtain its common feel for the state of community mores and for
the manner in which they would operate upon the facts in
question."
Id. at 405. We
again considered the function of justification in Texas West Oil and Gas Corp. v.
Fitzgerald, 726 P.2d 1056 (Wyo. 1986) (Texas West I) (majority and dissenting
opinion). See, however, Dobbs, Tortious
Interference with Contractual Relationships, 34 Ark. L. Rev. 335 (1980). Truthfulness
when said to be some kind of excuse for harmful action cannot be extracted from
propriety and justification.
IX.
CONCLUSION
[52.] I conclude the majority improvidently
applies Restatement (Second) of Torts, supra, 772(a) and even more
improvidently fails to apply the criteria of Restatement (Second) of Torts, supra, 767. Clearly, we have
determined that the issue is basically one of fact, Texas West I, 726 P.2d 1056 (Thomas, J.,
specially concurring, n. 1 at 1065),8 and the burden of proof of
justification or culpability remains with the offending
party.
[53.] This court has directly addressed
intentional interference in thirteen cases, but has not clearly or consistently
delineated factual content of the issues provided nor the nature of the
affirmative defense status for privilege, justification or "not improper
decisions".9 The Wyoming cases can be categorized within groups, but the
basic principle stated in Mudge, 748
P.2d 713; Texas West I, 726 P.2d
1056; Martin, 667 P.2d 1159; and Basin Elec. Power Co-op.-Missouri Basin
Power Project, 603 P.2d at 405, can realistically be followed as the basic
Wyoming law.
First excluded are cases where a third party really does not exist: Kvenild, 594 P.2d 972 and Holso, 584 P.2d 1009; and job related
duty or right to act by virtue of relationship: Davenport, 744 P.2d 1110; Erickson v. Magill, 713 P.2d 1182
(Wyo. 1986); Dehnert v. Arrow Sprinklers, Inc., 705
P.2d 846 (Wyo.
1985); and Allen, 699 P.2d 277. In
essence, the remaining Wyoming cases addressed intent and
privilege-justification-or being not improper as a factual review under the
circumstances to either sustain a verdict or judgment or to determine that
summary judgment was proper. Wartensleben, 415 P.2d
613.
[54.] It is clearly apparent in review of the
Wyoming cases
that a defined understanding of a consistent theory for bench and bar has not
been enumerated by this court sufficient to provide certainty and process for
resolution of this field of rapidly expanding law. A defined national precedent
provides the guidance for a structured status of the law of intentional
interference. That review demonstrates the essential errors in majority decision
in this case.
[55.] 1. A clear factual issue existed which
rendered summary judgment inappropriate in any event. Kobielusz v. Wilson, 701 P.2d 559 (Wyo. 1985).
[56.] 2. Self-standing dispositive application
of an alleged truthful statement is inappropriate without consideration of the
circumstances within which the statement was made and from which the result was
adverse to the plaintiff. Scussel,
386 So.2d 1227; Bekkedal, 197 N.W.
936.
[57.] 3. "Justification", "privilege" and "not
improper" all constitute an affirmative defense to action otherwise constituting
intentional interference as a tort and creates a burden of presentation on the
defendant which normally invokes a factual resolution. Wagenseller v. Scottsdale Memorial Hosp., 147 Ariz. 370, 710 P.2d 1025 (1985); Alberts, 395 Mass. 59, 479 N.E.2d
113.
[58.] The majority opinion not only disrupts
normal contract law and agency relationships and inappropriately applies
intentional interference tort concepts, but also justifies a character of
conduct as insulated from liability which is disingenuous to the thesis of
responsibility for intentionally causing harm to another for your own
benefit.
[59.] Consequently, I
dissent.
FOOTNOTES
1The claimed mistake totalled about $ 30,000 in the subcontract bid of $ 88,316 total. The bidder explained in a confused discussion in his deposition that as a batch plant operator, he used cost of asphalt mix (aggregate) in his computed price instead of asphalt oil. While the oil was $ 118 per ton, the mix constituted only six percent of the oil and was priced at about $ 25 per ton. Consequently, the bid was $ 14.21 per ton and should have been $ 21.85 per ton. The record does not reflect how much experience the subcontractor had or how long he had been in the business. The expected job requirement was approximately 300 tons which, when computed on the $ 7.64 differential, would provide a misbid of $ 19,864 compared to the oil differential of 300 tons at the $ 81 differential per ton or $ 24,300. Obviously, none of this totalled $ 30,000 as the "purported mistake." His further calculation in deposition was that his $ 3.20 per square yard laid down price was underbid from $ 4.91 or a $ 1.71 differential. With 25,130 square yards, we would find his total bid mistake to be $ 43,000 which involved the job of approximately $ 80,416 plus mobilization of $ 7,900. Clearly by that bid the 53.5% mistake could not be attributed to using the price of mix rather than oil in computation.
2Particularly for a record limited in factual information as is this case, there are a lot of conflicts in the factual statements. Since this is a summary judgment case, Cordova v. Gosar, 719 P.2d 625 (Wyo. 1986), we consider what the disinterested witness, the city engineer Brad Nelson, and William DeLapp, president of Four Nines, factually stated in affidavits. Those statements are comparable and clearly in conflict with the deposition of Steven Loftin, officer of 71 Construction, which revealed that he as the managing officer of 71 Construction had developed a bad memory by the date his deposition was taken. The city engineer's affidavit states:
2. That in July, 1989, the City of
Riverton
advertised for bids on the Monroe Avenue Project which specifically is called
the Economic Development Administration Project No.
05-01-02356;
3. That on or about July 28, 1989,
bids for the Monroe Avenue Project contract were opened and that Four Nines Gold
was the lowest qualified responsible bidder on the contract at $ 414,790.82, and
that shortly thereafter, Four Nines Gold was notified of this
fact;
4. That the bids were presented to Jim Gores and Associates, the project engineers and that they recommended that the contract be awarded to Four Nines Gold;
5. That in the morning of August 1,
1989, I received a telephone call from Steve Loftin who identified himself as
being with 71 Construction Company and that his company was a subcontractor for
Four Nines Gold on the Monroe Avenue Project for the Bituminous Aggregate
Surfacing material;
6. That Loftin indicated that he
knew that Four Nines Gold was the low bidder on the Monroe Avenue Project and
that 71 Construction had made a $ 36,000 mistake in its bid as a subcontractor
to Four Nines Gold on the Bituminous Aggregate Surfacing material for the
project;
7. That Loftin explained in his
telephone conversation the nature of the 71 Construction mistake and that 71
Construction "could not do this job for the amount that they had bid it for",
and that Loftin used those words exactly;
8. That Loftin told me about a
number of lawsuits in which subcontractors were let out contracts [sic] when
they could show mistakes in their bids and other cases where the owner was held
responsible for increased costs change orders in the contract were [sic] it was
shown that they awarded a contract knowing that there was a mistake in the
bid;
9. That Loftin made it perfectly
clear to me that he thought that there was a mistake in his bid to Four Nines
Gold on the Bituminous Aggregate surfacing material and that he wanted me to
know of it prior to the time the contract was awarded to Four Nines
Gold;
10. That once Loftin explained the
situation to me, I was afraid that if the contract was awarded to Four Nines
Gold that 71 Construction would sacrifice the quality of its work or short
materials to make up for the mistake in its bid or that Four Nines Gold would
ask for a $ 36,000 change order to cover the mistake, and that the City, as
owner, would have to go to extra expenses to make sure that 71 Construction did
the job correctly without cutting corners or shorting
material;
11. That because of this
conversation with Loftin, I began to seriously question whether or not Four
Nines Gold could perform the contract with quality acceptable to the City and at
the bid price given the subcontractor considering the bid problem with Loftin
and 71 Construction;
12. That because of this
conversation that I had with Steve Loftin, and only for this reason, I
determined that the best course of action for the City was to reject all bids
and re-bid the project with a few minor changes;
13. That I reported all of the
previously set forth information to Don White, the city attorney, along with my
recommendations and he agreed with me and I made the same recommendation to
Mayor Albert Brown on the afternoon of August 1, 1989, before the City Council
meeting, and all bids were rejected and the project relet for bids with a few
minor changes;
14. That the bid of Four Nines Gold
had no mistake, error or ambiguity on its face, that Four Nines Gold's bid bond
was in order and that I considered Four Nines Gold to be a reputable company
cable of doing the job had the problem not come up with their
subcontractor;
15. That had Loftin not called me
with the information regarding 71 Construction's mistake in its subcontract bid
on the Bituminous Aggregate Surfacing material to Four Nines Gold and his
statement that his company "could not do this job for the amount that they had
bid it for", I would have recommended that Four Nines Gold be awarded the
contract and it probably would have been so
awarded;
16. That Loftin told me that he had
given the same bid on the Bituminous Aggregate surfacing material to other
general contractors on this bid, but I also later found out that the second low
bidder on the project, Gilpatrick Construction, used a different subcontractor
on this material and that its price was very close to the price 71 Construction
gave that supposedly contained the mistake and that any mistake in 71
Construction's bid was not so low as to call attention to the
number.
The affidavit of Mr. DeLapp states
in part:
4. That on or about July 12, 1989,
the city of Riverton, a municipality located in Fremont County, Wyoming,
published notice of an upcoming construction project to be let for bids, said
construction project and contract was officially designated as Economic
Development Administration Project No. 05-01-02356;
5. That the Monroe Avenue Project
concerned the installation of new water and sewer mains and approximately one
mile of curb, gutter, and paving on Monroe Avenue located in Riverton,
Fremont County, Wyoming;
6. That on or about July 21, 1989,
I, acting on behalf of Four Nines, contacted Loftin, an agent and employee of 71
Construction concerning a bid on item #7 in schedule 2 of the Monroe Avenue
Project bid schedule, specifically calling for the supply and application of
25,130 square yards of aggregate bituminous
surfacing;
7. That I informed Loftin that Four
Nines intended to bid on the Monroe Avenue Project with the city of Riverton,
that I wanted a bid from 71 on supplying and laying down 25,130 square yards of
the aggregate bituminous surfacing material, and that the deadline for
submitting the bids to the city of Riverton on the contract was July 28, 1989,
at 2:00 p.m.'
8. That Loftin informed me that 71
had a copy of the bid specifications on the Monroe Avenue Project and that 71
would submit a bid to me for the aggregate bituminous surfacing material and lay
down process;
9. That on July 28, 1989, at 9:45
a.m., I had a telephone conference with Loftin while Loftin was in Riverton
investigating and inspecting the site of the Monroe Avenue Project wherein
Loftin, acting for 71, submitted a bid to me in which 71 would supply 25,130
square yards of aggregate bituminous surfacing to me for $ 3.20 per square yard
plus $ 7,900 mobilization charges for the application
equipment;
10. That upon receiving 71's bid, I
informed Loftin that he was the low bidder on the aggregate, and that if Four
Nines was low bidder and was awarded the job, 71 would have the subcontract for
supplying the aggregate bituminous surfacing
material;
11. That shortly thereafter, and
before the 2:00 p.m. bid deadline on July 28, 1989, I submitted a bid to the
city of Riverton on the Monroe Avenue Project incorporating and using 71's price
at $ 3.20 per square yard on the aggregate bituminous surfacing material, and
that Four Nines relied upon the subcontract bid of 71 in submitting its general
contractor bid to the City of Riverton;
12. That on or about 2:00 p.m. on
July 28, 1989, the City Engineer, Brad Nelson, opened the bids received and that
Four Nines was the low bidder on the Monroe Avenue
Project;
13. That later in the morning of
July 31, 1989, I called 71's office and left a message that Four Nines was the
low bidder on the Monroe Avenue project and that 71 had the contract to supply
and lay down the aggregate bituminous surfacing material at $ 3.20 per square
yard, plus $ 7,900 mobilization charges when the city of Riverton awarded the
contract to Four Nines at its meeting on the evening of August 1,
1989;
14. That on Tuesday, August 1, 1989,
our low bid on the Monroe Avenue Project was to be taken to the Riverton City
Council Meeting for the formal contract award and that 71 and Loftin had
knowledge of this fact because I had told them the previous
day;
15. That I relied upon the bid given
to me by Loftin and 71 when formulating and computing Four Nines' bid as general
contractor on the Monroe Avenue Project, and I told Loftin specifically that I
was going to do the same;
16. That the bid given to me by
Loftin and 71 for the aggregate bituminous surfacing material and installation
was the low bid, but not so low as to cause me to believe that a mistake had
been made and I subsequently learned that the company that ultimately was
awarded the work on the Monroe Avenue Project utilized a bid for the aggregate
bituminous surfacing material that was very similar to the one Loftin initially
gave me;
17. That Four Nines had the ability
to perform the Monroe Avenue Project at the amount of its initial bid as general
contractor and additionally, make $ 50,000 profit on the
contract;
18. That I was informed by Brad
Nelson, City Engineer, on or about August 2, 1989, that all bids had been
rejected, the project relet for bids with certain changes, and on rebid, Four
Nines was the second lowest bidder on the project;
19. That the bid given to me by 71
on or about July 28, 1989, was not revocable and was an agreement or contract
dependent only upon Four Nines being awarded the contract by the Riverton City
Council.
3We could probably label this conduct as "Harmful Speech Type 1." D'Amato, Harmful Speech and the Culture of Indeterminacy, 32 Wm. & Mary L. Rev. 329 (1991).
4It is apparent that the Oregon Supreme Court has developed a contrary construction derived from a conclusion that the Restatement (Second) of Torts which it adopted requires an assertion of proof upon plaintiff to disprove privilege. Top Service Body Shop, Inc. v. Allstate Ins. Co., 283 Or. 201, 582 P.2d 1365 (1978). The authority of the Oregon cases has not found general adaptation in other jurisdictions and certainly does not accord with any approval to be found in the more recent Wyoming decisions.
5See, however, Perlman, Interference with Contract and Other Economic Expectancies: A Clash of Tort and Contract Doctrine, 49 U. Chi. L. Rev. 61, 99 (1982) (quoting Restatement (Second) of Torts, supra, 766B) (footnotes omitted):
The Restatement (Second) of Torts imposes
liability for intentionally and improperly preventing another person from
performing his contract or for causing his performance to be more expensive, and
for preventing another from "acquiring or continuing [a] prospective relation."
The defendant in these cases may be a stranger to the severed relationship, or
he may be a discontented promisee seeking to avoid his own contractual
obligations by preventing the plaintiff from
performing.
The author cited Fradus Contracting Co. v. Taylor, 201
A.D. 298, 194 N.Y.S. 286 (1922). The case in footnote also reflected the common
law duty to act in good faith. In Fradus
Contracting Co., performance by the contractor was prevented by a city
official who denied a dock site for contract performance. An injunctive answer
was provided.
6With the affidavits in conflict, we are required by our precedent to accept the factual statements included in the affidavits provided in resistance to the motion for summary judgment. Davenport, 744 P.2d 1110; England v. Simmons, 728 P.2d 1137 (Wyo. 1986).
7For an assertion about a lack of clarity of the entire subject of intentional interference, see Dobbs, Tortious Interference with Contractual Relationships, 34 Ark. L. Rev. 335 (1980).
8I have difficulty relating Texas West I, and specifically the special concurrence, to then be followed by Texas West II, Texas West Oil and Gas Corp. v. First Interstate Bank of Casper, 743 P.2d 857 (Wyo. 1987), reconfirmed 749 P.2d 278 (Wyo. 1988) (Thomas, J., dissenting), with the present language of this majority that here no cause of action is stated. Clearly, in this case, an official representative of 71 Construction for the self-interest of his business took action directed to deter award of the contract to Four Nines in order that it, as subcontractor, would be safe from perceived loss with a specific result which caused damage to Four Nines. 71 Construction acted contrary to the interest of Four Nines in accord with its own countervailing seal interest. Here, the conduct resulted in wrongful interference with a contract expectancy, benefit to the actor, and damage to the victimized contractor. If there is a philosophical cohesion and cogency to the Texas West cases, that is exactly the scenario played out as the determinative legal thesis of recovery against the surety and non-recovery against the assignor bank.
9Mudge, 748 P.2d 713; Davenport, 744 P.2d 1110; Texas West II, 743 P.2d 857; Texas West I, 726 P.2d 1056; Toltec Watershed Imp. Dist., 717 P.2d 808; Erickson v. Magill, 713 P.2d 1182 (Wyo. 1986); Dehnert v. Arrow Sprinklers, Inc., 705 P.2d 846 (Wyo. 1985); Allen, 699 P.2d 277; Martin, 667 P.2d 1159; Basin Elec. Power Co-op.-Missouri Basin Power Project, 603 P.2d 402; Kvenild, 594 P.2d 972; Holso, 584 P.2d 1009; Wartensleben, 415 P.2d 613.
Citationizer Summary of Documents Citing This Document
Cite | Name | Level | |
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Wyoming Supreme Court Cases | |||
Cite | Name | Level | |
1992 WY 38, 829 P.2d 809, | B & W Glass, Inc. v. Weather Shield Mfg., Inc. | Cited | |
1991 WY 98, 813 P.2d 1308, | Hatfield v. Rochelle Coal Co. | Cited | |
1991 WY 99, 814 P.2d 1267, | Klutznick v. Thulin | Cited | |
1993 WY 54, 850 P.2d 607, | Ames v. Sundance State Bank | Cited | |
1994 WY 17, 869 P.2d 125, | City of Cheyenne v. Reiman Corp. | Cited | |
1994 WY 117, 884 P.2d 30, | Mountain Cement Co. v. Johnson | Cited | |
1994 WY 7, 868 P.2d 211, | Wilder v. Cody Country Chamber of Commerce | Cited | |
1995 WY 6, 889 P.2d 509, | Meyer v. Mulligan | Cited | |
1995 WY 16, 890 P.2d 555, | Shisler v. Town of Jackson | Cited | |
1995 WY 162, 902 P.2d 725, | Bouwkamp v. McNeill | Cited | |
1997 WY 119, 946 P.2d 417, | Ahearn v. Anderson-Bishop Partnership | Cited | |
1999 WY 114, 984 P.2d 1088, | Gray v. Norwest Bank Wyoming, N.A. | Cited | |
2000 WY 169, 10 P.3d 1119, | HOVENDICK v. RUBY | Cited | |
2000 WY 79, 3 P.3d 857, | UNICORN DRILLING, INC. v. HEART MT. IRRIGATION DIST. | Cited | |
2001 WY 23, 18 P.3d 645, | SCHERER CONSTRUCTION, LLC. v. HEDQUIST CONSTRUCTION, INC. | Cited | |
2001 WY 33, 20 P.3d 521, | BEAULIEU v. FLORQUIST AND THE CITY OF RAWLINS | Cited | |
2001 WY 95, 33 P.3d 112, | HULSE v. FIRST AMERICAN TITLE COMPANY | Cited | |
2001 WY 120, 35 P.3d 1232, | SCHLESINGER v. WOODCOCK | Cited | |
2002 WY 12, 39 P.3d 409, | AHEARN v. TOWN OF WHEATLAND | Cited | |
2002 WY 65, 45 P.3d 635, | HASVOLD v. PARK COUNTY SCHOOL DISTRICT NUMBER 6 | Cited | |
2004 WY 126, 99 P.3d 999, | MELCHER v. BENSON | Cited | |
2009 WY 83, 211 P.3d 489, | KENNETH HALL V. BILL PERRY and HIDDEN CREEK OUTFITTERS | Cited | |
2011 WY 25, 248 P.3d 614, | TERRY CASH; RICHARD J. MATURI; CRAIG McCUNE and RHONDA McCUNE; and RICH NELSON and REBECCA HILLIKER v. GRANITE SPRINGS RETREAT ASSOCIATION, INC., a Wyoming Nonprofit Corporation; LYNN WILLIAMS HAAS; TED and EMMA ESQUIBEL; J.T. and AIMEE WALSH; JOHN and SYLVIA PASSEHL; MARTY and GAIL GILL; CHERYL and DOUG BROWN; JACQUE CASH; MARY MATURI; CRAIG FOLSOM and APRIL WALTON; MIKE TRENAM; BEN HILSEN and SUSAN JENNELLY; MICHAEL DUSKIN; TIM and LYNN BABBITT; MICHAEL EMERSON; SCOTT SMITH and DEB BAUMER; RICHARD W. MAGILL, Jr. and TRACY FARRELL; TED and JAN LYDIGSEN; CJ and DAVID DI PIETRA; JOE and CINDY MAREK; DARRELL and DOROTHY BAN; DON and BARBARA SULLIVAN; ROB and NICOLE FARNHAM; GARY and JO ELLEN MASS; DAVE BILSKI; BOB LICK and JOANNE STEANE; PETE and NANCY FILLION; DAVE and MELISSA BRUMBAUGH; JOHN and LESLEY ZIMMERMAN; JERRY and KRISTEN PETERSON; MIKE and CHRIS CALTAGIRONE | Cited | |
2011 WY 29, 247 P.3d 67, | DAVIDSON LAND COMPANY, LLC v. SUEELLEN L. DAVIDSON, CHARLES NOLLER DAVIDSON, and DEBORAH J. DAVIDSON | Cited | |
2011 WY 102, 255 P.3d 920, | BARBARA L. MAGIN, as a trustee of the Barbara L. Magin trust u/t/a dated June 30, 1995 v. SOLITUDE HOME OWNER'S INC., a Wyoming non-profit corporstion | Cited |
Cite | Name | Level | |
---|---|---|---|
Wyoming Supreme Court Cases | |||
Cite | Name | Level | |
1966 WY 25, 415 P.2d 613, | Wartensleben v. Willey | Discussed at Length | |
1978 WY 72, 584 P.2d 1009, | Board of Trustees of Weston County School Dist. No. 1, Weston County v. Holso | Discussed at Length | |
1978 WY 90, 587 P.2d 203, | Board of Trustees of Weston County School Dist. No. 1 v. Holso, | Cited | |
1979 WY 69, 594 P.2d 972, | Kvenild v. Taylor | Discussed at Length | |
1979 WY 149, 603 P.2d 402, | Basin Elec. Power Co-op.-Missouri Basin Power Project v. Howton | Discussed | |
1983 WY 84, 667 P.2d 1159, | Martin v. Wing | Discussed at Length | |
1985 WY 58, 699 P.2d 277, | DAVID R. ALLEN AND BARBARA ALLEN v. SAFEWAY STORES INCORPORATED, A Maryland Corporation, THE STATE OF WYOMING DEPARTMENT OF HEALTH AND SOCIAL SERVICES, G.E. ROCK, SAM URESK, DOE I and DOE II | Discussed at Length | |
1985 WY 68, 700 P.2d 391, | MICHAEL J. TREMBLAY v. GEORGE McCREIDIE "SCOTTY" REID, Individually; CHARLES H. GAREY, Individually and in his capacity as Chief of the Cheyenne Fire Department; LT. JAMES HERRIN, Individually and in his capacity as Internal Affairs Officer of the Cheyenne Fire Department; THE CITY OF CHEYENNE, A Municipal Corporation organized pursuant to the laws of the State of Wyoming; and the CIVIL SERVICE COMMISSION of the Fire Department of the City of Cheyenne | Cited | |
1985 WY 72, 701 P.2d 559, | JOE KOBIELUSZ v. WILLARD V. WILSON and WILSON HEREFORDS, A Wyoming Corporation | Cited | |
1985 WY 127, 705 P.2d 846, | Dehnert v. Arrow Sprinklers, Inc. | Cited | |
1986 WY 37, 713 P.2d 1182, | Erickson v. Magill | Discussed | |
1986 WY 86, 717 P.2d 808, | Toltec Watershed Imp. Dist. v. Johnston | Discussed at Length | |
1986 WY 118, 719 P.2d 625, | Cordova v. Gosar | Cited | |
1986 WY 190, 726 P.2d 1056, | Texas West Oil and Gas Corp. v. Fitzgerald | Discussed at Length | |
1986 WY 206, 728 P.2d 1137, | England v. Simmons | Cited | |
1987 WY 142, 744 P.2d 1110, | Davenport v. Epperly | Discussed at Length | |
1988 WY 1, 748 P.2d 713, | FIRST WYOMING BANK, CASPER v. MUDGE | Discussed at Length | |
1987 WY 133, 743 P.2d 857, | Texas West Oil and Gas Corp. v. First Interstate Bank of Casper, | Discussed | |
1988 WY 13, 749 P.2d 278, | Texas West Oil and Gas Corp. v. First Interstate Bank of Casper, | Cited | |
1989 WY 38, 768 P.2d 586, | Prazma v. Kaehne | Discussed | |
1989 WY 223, 784 P.2d 224, | ROGER L. WAGNER AND M.C. WAGNER v. FIRST WYOMING BANK, N.A. LARAMIE | Cited |