Case Title: Martin v. Wing

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1983-08-18T00:00:00Z

Document:
Martin v. Wing1983 WY 84667 P.2d 1159Case Number: 83-47Case Number: 83-47Decided: 08/18/1983Supreme Court of Wyoming
PAUL MARTIN AND CAROLYN 
MARTIN, HUSBAND AND WIFE, APPELLANTS (DEFENDANTS),

v.

GEORGE H. WING AND 
JERMINE L. WING, HUSBAND AND WIFE, APPELLEES (PLAINTIFFS).

Appeal from the District 
Court, SheridanCounty, Leonard McEwan, 
J.

Michael K. 
Shoumaker, Mark Murphy and James N. Wolfe, Sheridan, for appellants.

Rex O. Arney, 
Sheridan, for 
appellees.

Before ROONEY, C.J., and THOMAS, ROSE, BROWN and 
CARDINE, JJ.

ROONEY, Chief 
Justice.

[¶1.]     This appeal is from a 
judgment, after a trial to the court, awarding appellees damages, court costs 
and $1.00 punitive damages. The trial court found that appellants had interfered 
with appellees' prospective contractual relationship with Mr. and Mrs. Charles 
Thomson who intended to purchase appellees' property.

[¶2.]     Appellants word the 
issues on appeal as follows:

"I. Whether a Valid 
Contract Relationship or Business Expectancy Existed.

"II. Whether the Martins 
Had Sufficient Knowledge of the Contract or Business 
Expectancy.

"III. Whether There Was 
Intentional Interference Which Terminated the Business 
Expectancy.

"IV. Whether the Amount 
of Damages Awarded Was Excessive."

[¶3.]     We 
affirm.

[¶4.]     In early 1979 appellees 
had a house constructed on property they owned adjacent to appellants' property 
in Story, Wyoming. The house was built for speculative 
purposes. When the house was substantially completed a for-sale sign was posted 
on the property and the property was listed with a real estate sales 
company.

[¶5.]     In April, 1980, the 
Thomsons entered into a written offer to purchase the property contingent upon 
the sale of their home. The offer lapsed when they were unable to sell their 
home. Nevertheless, the Thomsons remained in contact with appellees, and after 
sale of other assets, the Thomsons had sufficient money for purchase of the 
property. In July, 1980, Mrs. Thomson prepared a purchase contract and she and 
Mr. Thomson traveled to Story to complete the transaction.

[¶6.]     As a final preparatory 
step to entering into the contract, the Thomsons, together with two friends, 
inspected the property on the morning of July 12, 1980. At that time, they were 
approached by the appellants. Appellant Paul Martin spoke with Mr. Thomson. 
Appellant Carolyn Martin spoke with Mrs. Thomson.

[¶7.]     Mr. Martin explained 
that he and his wife were entering the produce business and were constructing a 
40' X 60' steel building adjacent to appellants' property. Fill dirt to level 
appellants' land with the adjacent road was being dumped on the property at that 
time. Mr. Martin said that there was a great deal of flooding on appellees' 
property and that the water got as high as the bottom of the window on 
appellees' house.

[¶8.]     Mrs. Martin conveyed 
information to Mrs. Thomson concerning the construction of the produce building 
similar to that said by Mr. Martin. Mrs. Martin also told Mrs. Thomson that 
appellees' property flooded every spring; that the snow was so bad the property 
was inaccessible in winter; and that the septic system for the house had not 
been approved.

[¶9.]     Appellants did 
construct a steel building on the property. However, appellee George Wing 
testified that there had never been a problem with flooding and that the septic 
system was designed by the county engineer and had been inspected and 
tested.

[¶10.]  Because of the statements made by 
appellants to the Thomsons, the Thomsons refused to enter into the contract for 
purchase of appellees' property and this action resulted.

EXISTENCE OF A VALID 
CONTRACT RELATIONSHIP OR BUSINESS EXPECTANCY

[¶11.]  Appellants' contention that the existence 
of a valid contract is necessary for appellees to recover is not in accord with 
Wyoming law. A 
contract had not yet been entered into in this case. However, a valid contract 
is not always necessary. In Wartensleben 
v. Willey, Wyo., 
415 P.2d 613 (1966), we recognized that intentional interference with 
prospective contractual relations, without justification, creates liability for 
the harm caused thereby.

"Appropriately labeled, 
plaintiff is seeking relief for `interference with prospective advantage,' as 
opposed to `interference with contractual relations.' Prosser, Law of Torts, §§ 
129 and 130 (4th Ed. 1971). These separate causes of action tend to merge, 
except that the latter is aimed at the protection of the `probable expectancies' 
of life, such as future contractual relations. Prosser, supra, § 130, at 950. 
The Court of Appeals of Washington, in Olson v. Scholes, 17 Wn. App. 383, 563 P.2d 1275, 1279-1280, summarized the elements of such actions - while at the 
same time implicitly indicating how the actions arise from common foundations - 
as follows:

"`. . . The theory 
advanced is that stated in Restatement of Torts § 766 (1939), as 
follows:

"`. . . [O]ne who, 
without a privilege to do so, induces or otherwise purposely causes a third 
person not to

"[`](a) perform a 
contract with another, or

"[`](b) enter into or 
continue a business relation with another

"[`]is liable to the 
other for the harm caused thereby.

"[`]The tort as defined 
in the Restatement is divided into two parts: (a) dealing with the cause of 
action arising when a third person induces a breach of contract, and (b) dealing 
with the cause of action which arises when a third person induces one person not 
to enter into a contract with another. The first subsection deals with present 
relationships, and the second with future relationships. The elements of the 
tort have been stated as:

"[`](1) the existence of 
a valid contractual relationship or business expectancy;

"[`](2) knowledge of the 
relationship or expectancy on the part of the interferor;

"[`](3) intentional 
interference inducing or causing a breach or termination of the relationship or 
expectancy; and

"[`](4) resultant damage 
to the party whose relationship or expectancy has been 
disrupted.

"[`]See King v. Seattle, 84 Wn.2d 239, 525 P.2d 228 (1974); Scymanski v. Dufault, 80 Wn.2d 77, 491 P.2d 1050 (1971); Corinthian Corp. v. White & Bollard, 
Inc., 74 Wn.2d 50, 442 P.2d 950 (1968), and Calbom v. Knudtzon, 65 Wn.2d 157, 396 P.2d 148 (1964), inter alia.'

"See, also, 45 Am.Jur.2d, 
Interference, §§ 50 and 51; and 86 C.J.S. Torts § 43." Board of Trustees of Weston County School 
District No. 1, Weston County v. Holso, Wyo., 584 P.2d 1009, 1016-1017, reh. denied 
587 P.2d 203 (1978).

And see Kvenild v. Taylor, Wyo., 
594 P.2d 972 (1979).

[¶12.]  Volume 4, Restatement of Torts 2d, § 
766B, p. 20 (1979) defines the tort of intentional interference with prospective 
contractual relation as follows:

"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."

[¶13.]  In this case there was a prospective 
contractual relation based upon the dealings between appellees and the Thomsons 
concerning the purchase of appellees' property by the 
Thomsons.

[¶14.]  But appellants contend that the 
intentional interference with a prospective contractual relation cannot apply 
where real estate is involved, citing Bailey v. Banister, 200 F.2d 683 (10th 
Cir. 1952); Springer v. Singleton, 
256 Cal. App. 2d 184, 63 Cal. Rptr. 770, 27 A.L.R.3d 1220 (1967); Malevich v. Hakola, Minn., 278 N.W.2d 541 (1979); and Williams v. DeMan, 7 
Mich. App. 71, 151 N.W.2d 247 (1967). However, in each of these cases not only 
was the prospective purchaser without a valid contract to purchase the property, 
but the party alleged to have interfered with the prospective purchaser's right 
was found to be exercising an equal right to purchase the property. These cases 
are distinguishable from this case in that appellants here were outsiders, not 
interested in purchasing the property and not competing in the market place to 
purchase the property.

[¶15.]  In Martin v. Phillips Petroleum Company, 
Tex.Civ.App., 455 S.W.2d 429 (1970), this distinction was clearly drawn within 
the context of Texas law requiring that the interference be 
malicious. While we do not require that the interference be malicious, Board of Trustees of Weston County School 
District No. 1, supra, the analysis is otherwise 
valid.

"* * * Our courts have 
also recognized a cause of action for tortious and wrongful interference with 
advantageous business relationships. Cooper v. Steen, 318 S.W.2d 750, 757, 
(Tex.Civ.App.), no writ hist., and cases there cited. And see Pope v. Garrett, 147 Tex. 18, 211 S.W.2d 559. 
It need not be absolutely certain that the prospective contract would have been 
made were it not for such interference. A reasonable assurance thereof in view 
of all the circumstances, is generally sufficient. 86 C.J.S. Torts § 43, p. 959. 
But where there is no contract, as here, a party does not have a right to be 
free from competition, but instead merely has the right to be free from 
malicious interference with the right to conduct negotiations that have a 
reasonable probability of resulting in a contract. * * *" 455 S.W.2d  at 
435.

[¶16.]  In Wyoming the party has the right to be free 
from the intentional interference with the right to conduct negotiations that 
have a reasonable probability of resulting in a contract.

SUFFICIENT KNOWLEDGE OF 
THE CONTRACT OR BUSINESS EXPECTANCY ON      THE PART OF 
APPELLANTS

[¶17.]  Appellants contend that the evidence was 
not sufficient for a finding that they had knowledge of the prospective 
contractual relationship - the second element of the tort as set out in Board of Trustees of Weston County School 
District No. 1, supra. This is a factual determination. On appeal we must 
accept as true the evidence in favor of the successful party, leave out of 
consideration entirely the evidence of the unsuccessful party that conflicts 
with that of the successful party, and give the evidence of the successful party 
every favorable inference that may reasonably and fairly be drawn from it. 
Madrid v. Norton, Wyo., 
596 P.2d 1108, 1117 (1979). And "a judgment carries with it every finding of 
fact supporting the successful party that `can be reasonably and fairly drawn 
from the evidence.' Kvenild, supra, 594 P.2d  at 976." Plains Tire and Battery Company v. Plains A 
to Z Tire Co., Inc., Wyo., 622 P.2d 917, 920 (1981).

[¶18.]  Not only was there a "for-sale" sign on 
the property for over a year, but appellants approached the Thomsons to initiate 
a conversation in which the Thomsons said they were considering purchase of the 
property. There was sufficient evidence of knowledge on the part of appellants 
of the relationship between appellees and Thomsons.

THE BUSINESS EXPECTANCY 
TERMINATED BY INTENTIONAL INTERFERENCE

[¶19.]  As with appellants' last contention, this 
contention challenges the sufficiency of the evidence. Appellants contend that 
the information given by them to the Thomsons was true and that it did not 
influence the Thomsons in their decision.

[¶20.]  Although contradicted by appellants, 
there was evidence that appellants approached the Thomsons and volunteered the 
information concerning flooding, the septic system and the problem of access in 
winter. As already noted, there was evidence that this information was not 
accurate. Under the circumstances, we cannot disturb the findings of the trial 
court in this respect.

EXCESSIVE DAMAGE 
AWARD

[¶21.]  Appellees were awarded $7,015.00 "for 
their interest expense," $1.00 punitive damages and $44.82 court costs. The 
interest expense awarded by the court was the amount paid by appellees on their 
construction loans against the property between August 4, 1980 (when the sale of 
the property to the Thomsons should have closed) and October 1981 (when the 
appellees, themselves, moved into the house), less the rental payments made 
under a third-party lease with option to buy, since terminated without exercise 
of the option.

[¶22.]  Appellants contend that interest should 
be limited to the time preceding the lease-purchase agreement inasmuch as the 
property was taken off the market at that time. However, such would not 
compensate for all of the damages occasioned by the failure to complete the sale 
to the Thomsons.

"* * * In tort cases 
damages are generally awarded in order to compensate claimants for loss. The 
measure of damages is the amount which will compensate for all the detriment 
proximately caused by the breach of duty. Douglas Reservoirs Water Users Assoc. 
v. Cross, Wyo., 569 P.2d 1280 (1977). * * *" Hagar v. 
Mobley, Wyo., 638 P.2d 127, 139 
(1981).

[¶23.]  When the appellees were unable to close 
on the sale of their property to the Thomsons, their interest expense continued. 
Since appellees finally decided to use the property for their own, they did not 
lose any profit.1 However, they did incur the 
additional interest expense up until the point they moved onto the property. We 
cannot say that the award of the interest expense less the rent was improper 
under the circumstances.

[¶24.]  Affirmed.

FOOTNOTES

1 Appellee George Wing 
indicated that he was willing to sell the property to the Thomsons for what he 
had in it.