Case Title: Texas West Oil and Gas Corp. v. Fitzgerald

Citation: 

Docket Number: 86-9

State: wyoming

Court: Wyoming Supreme Court

Date: 1986-10-21T00:00:00Z

Document:
Texas West Oil and Gas Corp. v. Fitzgerald1986 WY 190726 P.2d 1056Case Number: 86-9, 86-10Decided: 10/21/1986Supreme Court of Wyoming

TEXAS WEST OIL AND GAS 
CORPORATION and Bob Johnson, Appellants (Plaintiffs),

v.

D.N. FITZGERALD, Appellee 
(Intervenor), Oil Patch Sales and Rentals of Wyoming, Inc., a Wyoming corporation, 
Appellee (Defendant).

D.N. FITZGERALD, 
Appellant (Intervenor),

v.

TEXAS WEST OIL AND GAS 
CORPORATION and Bob Johnson, Appellees (Plaintiffs), Oil Patch Sales and Rentals 
of Wyoming, Inc., a Wyoming corporation, (Defendant).

Appeal from District 
Court, NatronaCounty, William A. Taylor, 
J.

Jeffrey C. 
Gosman, Casper, for Texas West Oil and Gas Corp. and Bob 
Johnson.

Harold E. Meier 
of Schwartz, Bon, McCrary & Walker, Casper, for D.N. Fitzgerald. 

Susan Maher 
Overeem, Casper, 
for Oil Patch Sales and Rentals of 
Wyoming, Inc.

Before THOMAS, C.J., and BROWN, CARDINE, URBIGKIT 
and MACY, JJ.

MACY, Justice.

[¶1.]     These two cases have 
their origins in the same contract. We will first consider the facts relating to 
the dispute between plaintiffs Texas West Oil and Gas Corporation (Texas West) 
and Bob Johnson and defendant Oil Patch Sales and Rentals of Wyoming, Inc. (Oil 
Patch).

[¶2.]     Texas West is in the 
business of exploring for, developing, and producing oil and gas. On June 1, 
1981, Texas West agreed to purchase a drilling rig from Oil Patch. The contract 
provided for a $500,000 payment on the day of execution and four monthly 
payments of $750,000. The contract also stated that the price to be paid for the 
drilling rig was approximately $5.1 million with "exact figures to be made 
definite and certain by agreement of the parties, or if unable to be agreed 
upon, by arbitration, and is to be based upon actual costs of Seller as well as 
time involved in construction." Finally, the contract provided that it was 
anticipated that the rig would be completed in October 1981.

[¶3.]     Although Texas West 
paid the $3.5 million required by the contract, Oil Patch could not deliver the 
rig as the parties had anticipated because of problems with the delivery of the 
rig's drawworks to Oil Patch. After the parties had discussed the problems with 
the drawworks, Oil Patch sent Texas West a letter on February 19, 1982, in which 
Oil Patch requested that Texas West select substitute drawworks, pay the 
additional cost for these substitute drawworks, and advance the balance of the 
contract. At the same time, Oil Patch offered the alternative of delivering the 
rig without the drawworks in exchange for the balance of the contract price less 
the cost of the drawworks. Texas West responded by stating that the delivery 
date of "`during the first two weeks of October, 1981'" was crucial and that Oil 
Patch had failed to fulfill the contract. In addition, Texas West stated that 
the $5.1 million figure was only an approximation; that Oil Patch had not shown 
expenditures of nearly that amount; and that the contract price could be less 
than $5.1 million.

[¶4.]     Texas West filed a 
complaint against Oil Patch in October 1982 asserting that Oil Patch had 
breached the contract by failing to complete and deliver the rig. The complaint 
sought possession of the rig as well as damages allegedly caused by the breach. 
Oil Patch answered and asserted that it was impossible to complete the rig with 
the drawworks originally set out in the contract and that Texas West had refused 
to specify substitute drawworks which it would accept and had repudiated the 
contract. Oil Patch counterclaimed for the balance of the purchase price - i.e., 
$5.1 million - less any setoffs and sought incidental damages it claimed to have 
suffered from Texas West's repudiation.

[¶5.]     After Oil Patch 
requested that the issue of the purchase price be submitted to arbitration, the 
parties entered into a stipulation in which they agreed to submit all legal and 
factual issues in the dispute to an arbitration panel. After a hearing in April 
1984, the arbitration panel concluded that the contract price was $5.1 million 
with a provision in case of any overrun of costs beyond that amount. Because the 
rig was not completed, the panel awarded Oil Patch the contract price of $5.1 
million minus the cost of completing the rig, which the panel found to be 
$1,133,000, and the down payment of $3.5 million.1 The panel also found that Texas 
West should pay interest on the balance of the contract price from March 1, 
1982.

[¶6.]     Texas West moved in 
district court to vacate or modify the arbitration award, while Oil Patch asked 
for an order confirming the award. The district court determined that the award 
should not be set aside or modified (except for the $100,000 arithmetic error) 
and accordingly entered an order confirming the award and dismissing the motion 
to vacate or modify. Texas West has appealed from this order.

[¶7.]     We are also presented 
with the dispute which, although connected with the contract between Oil Patch 
and Texas West, now involves as parties D.N. Fitzgerald and Texas West. 
Fitzgerald was not named in the original complaint filed by Texas West against 
Oil Patch, but he intervened because he claimed to hold a security interest in 
the inventory of Oil Patch, which included the rig Texas West sought to possess. 
After Fitzgerald intervened, Texas West amended its complaint joining Fitzgerald 
and others as defendants. In its amended complaint, Texas West alleged that 
Fitzgerald intentionally interfered with the contract between Oil Patch and 
itself, which caused Texas West to suffer damages.

[¶8.]     Fitzgerald had been an 
original incorporator and vice president of Oil Patch. As such he agreed to 
guarantee the corporation's loans from First Interstate Bank of Casper, N.A. (Bank). 
Although he resigned as a director of Oil Patch in March 1981, the Bank did not 
release Fitzgerald from his guaranty of $500,000. In fact, in April 1982 
Fitzgerald increased the guaranty to $1.1 million. This guaranty became 
important because Oil Patch borrowed approximately $1.1 million from the Bank as 
it worked on completing the rig for Texas West. In addition to Fitzgerald's 
guaranty, in March 1982, the Bank also acquired a security interest in all of 
Oil Patch's inventory and accounts receivable, which included the rig. By 
September 1982, the loans had become past due, and the Bank asked Fitzgerald to 
honor his guaranty. Fitzgerald did so and received the note and security 
interest previously held by the Bank.

[¶9.]     Texas West asserts that 
Fitzgerald induced the Bank to take the lien on the rig. Then Fitzgerald assumed 
control over the disposition of the rig, requiring that additional money be paid 
under the contract between Oil Patch and Texas West in order to protect himself 
from liability on the guaranty. These actions induced Oil Patch to breach the 
contract by requiring more than the contract price before it would deliver the 
rig. These actions also form the basis for Texas West's claim against 
Fitzgerald.

[¶10.]  Texas West's claim against Fitzgerald was 
tried before a jury which found that Fitzgerald had interfered with the contract 
between Oil Patch and Texas West. The jury also found that as a result Texas 
West suffered damages of $4 million. Fitzgerald moved for a judgment 
notwithstanding the verdict (JNOV) or alternatively for a new trial or 
remittitur. The trial court denied the motion for JNOV but granted the motion 
for a new trial unless Texas West consented to a remittitur of $3,431,675. Texas 
West has appealed from this order, and Fitzgerald has taken a cross-appeal from 
the portion of the order denying his motion for JNOV.

ARBITRATION 
AWARD

[¶11.]  The order of the district court affirming 
the arbitration award is affirmed.

[¶12.]  The motion of Texas West merely stated 
that the arbitration award should be vacated or modified for any and all reasons 
allowed or contemplated by law.

[¶13.]  According to the brief of Texas West 
filed in the district court in support of its motion, Texas West contended that 
the award should be set aside because it is a manifest mistake of law to award 
full profit on a contract which the seller failed to perform. In the 
alternative, Texas West contended that the award should be modified (1) to 
reduce the award by $226,000, which it claims is the ratio of profit for the 
portion of the rig not completed; (2) to reduce the award to reflect the 
$100,000 arithmetic error; (3) to strike the requirement for the payment of 
interest and attorney's fees; and (4) to require Oil Patch to convey title to 
the incompleted oil rig to Texas West upon receiving payment of any unpaid 
balance owed by it.

[¶14.]  In its brief in opposition to the motion 
of Texas West, Oil Patch contended that the motion was insufficient in that it 
did not state with particularity the grounds therefor as required by Rule 
7(b)(1), W.R.C.P., which provides in part that:

"An application to the 
court for an order shall be by motion which, unless made during a hearing or 
trial, shall be made in writing, [and] shall state with particularity the grounds 
therefor * * *." (Emphasis added.)

[¶15.]  Oil Patch further contends in its brief 
that Texas West has failed to show any clear and convincing reason why the award 
should be vacated on any of the grounds enumerated in § 1-36-114(a), W.S. 1977, 
which provides that the court shall vacate an arbitration award 
where:

"(i) The award was 
procured by corruption, fraud or other undue means;

"(ii) There was evident 
partiality by an arbitrator appointed as a neutral, corruption of any of the 
arbitrators or misconduct prejudicing the rights of any party;

"(iii) The arbitrators 
exceeded their powers;

"(iv) The arbitrators 
refused to postpone the hearing upon sufficient cause being shown, refused to 
hear evidence material to the controversy or otherwise conducted the hearing as 
to prejudice substantially the rights of a party; or

"(v) There was no 
arbitration agreement, the issue was not adversely determined by a court as 
provided by law and the applicant did not participate in the arbitration hearing 
without raising the objection. The fact that the relief was such that it could 
not or would not be granted by a court of law or equity is not a ground for 
vacating or refusing to confirm the award."

[¶16.]  Although the court's order contained a 
statement recognizing that Texas West's motion did not specify the grounds for 
vacation or modification, it appears from the judge's decision letter that the 
motion was not denied for such reason and that the order is based on counsels' 
arguments tracking their briefs.

[¶17.]  Texas West presents the following issues 
relating to the arbitration award for review before this Court:

"Did the District Court 
err in refusing to vacate the arbitration award as a manifest injustice where 
the buyer under a contract for sale is forced to pay full profit on a contract 
to a defaulting seller, who has refused to complete and deliver the contract 
goods under the terms of the contract?

"Did the [D]istrict 
[C]ourt err in confirming the arbitration award of interest at 2% above the 
First Interstate Bank of Casper, N.A., prime rate on an unliquidated sum for a 
period which began to run two (2) years prior to the arbitration 
award?

"Did the District Court 
err in not vacating the award of interest as being in excess of the arbitration 
panel's authority?"

[¶18.]  Oil Patch has addressed the issues of 
Texas West by restating them as follows:

"Did the Trial Court err 
in refusing to vacate the arbitration award as a manifest injustice?

"Did the District Court 
err in confirming the arbitration award of interest?

"Did the District Court 
err in not vacating the award of interest as being in excess of the arbitration 
panel's authority?"

[¶19.]  The second and third issues were not 
presented to the district court for disposition by trial brief or otherwise. It 
is, therefore, not appropriate for this Court to now determine whether or not 
the arbitration award should be vacated for those specific reasons. Dennis v. 
Dennis, Wyo., 675 P.2d 265 (1984).

[¶20.]  In dealing with the first issue of Texas 
West, Oil Patch continues to contend that the only time an arbitration award can 
be vacated is when an applicant pleads and proves one of the grounds set out in 
§ 1-36-114(a). We do not agree. The statute merely states that the court must vacate the award if any of the 
grounds stated therein exists. The statute does not prohibit the district court 
from vacating an award on other grounds. We have said before that an award can 
also be vacated if it

"was obtained by fraud, 
corruption, behavior beyond the bounds of natural justice, excess of authority, 
or a manifest mistake of fact or law appearing upon the face of the award * * 
*." Riverton Valley Electric Association v. Pacific Power and Light Company, 
Wyo., 391 P.2d 489, 500 (1964).

[¶21.]  We have also stated that arbitration is a 
method of voluntary settlement of disputes embedded in the public policy of 
Wyoming and is favored by this Court, that this Court is reluctant to disturb 
arbitrators' just solutions to controversies, and that before we will upset a 
district court decision upholding an arbitration award, the applicant must have 
discharged its proof burden with clear and convincing evidence. Northern Supply 
Company v. Town of Greybull, Wyo., 560 P.2d 1172 (1977).

[¶22.]  We have examined the arbitration panel's 
award, and we are unable to find that Oil Patch realized any profit much less a 
profit of $226,000. To arrive at this amount we must find, as Texas West 
contends, that the $3.5 million it advanced equals the actual costs expended by 
Oil Patch to get the oil rig in the stage of construction in which it existed 
when the dispute arose. We are unable to do this any more than we could find 
that Oil Patch expended $1 million or $4 million. It may be that Oil Patch 
anticipated that it would make a profit when the rig was completed, but Texas 
West has wholly failed to draw our attention to any document or testimony which 
was before the arbitration panel indicating that Oil Patch did so. The 
contention of Texas West is based on an unwarranted assumption. For this reason 
we hold that Texas West has failed to sustain its burden and that the district 
court, therefore, did not err in entering judgment affirming the arbitration 
award.

CONTRACT 
INTERFERENCE

[¶23.]  Texas West alleged that Fitzgerald 
intentionally interfered with the contract between Oil Patch and itself. This 
action was tried before a jury which returned a $4 million verdict in favor of 
Texas West. On appeal Fitzgerald presents the following issues:

"THE COURT ERRED IN NOT 
GRANTING A JUDGMENT NOTWITHSTANDING THE VERDICT IN THAT THERE WAS NO EVIDENCE 
FROM WHICH A JURY COULD FIND:

"A. That D.N. Fitzgerald 
interfered with the contract between Texas West Oil and Gas [C]orporation and 
Oil Patch Sales and Rentals of Wyoming, Inc.; or

"B. The amount of any 
damages sustained as a result of any interference.

"THE COURT ERRED IN NOT 
GRANTING A JUDGMENT NOTWITHSTANDING THE VERDICT IN THAT THE INTERVENOR PRESENTED 
[A] DEFENSE WHICH ENTITLED HIM TO JUDGMENT AS A MATTER OF LAW."

[¶24.]  Texas West also presents the following 
issue relating to damages for contract interference:

"Did the District Court 
err in applying an incorrect legal standard in determining that the jury verdict 
against the intervenor, D.N. Fitzgerald, was excessive and shocked the 
conscience of the Court?"

[¶25.]  In order to establish the claim of 
tortious interference with a contract, the plaintiff must prove the following 
elements: (1) the existence of the contract; (2) the defendant's knowledge of 
the contract; (3) intentional interference with the plaintiff's contract without 
justification; and (4) resulting damages. Basin Electric Power 
Cooperative-Missouri Basin Power Project v. Howton, Wyo., 603 P.2d 402 
(1979).

[¶26.]  When making a determination of whether or 
not a trial court should have directed a verdict, this Court considers the 
evidence favorable to the party against whom the motion is directed and gives 
that evidence all reasonable inferences. Carey v. Jackson, Wyo., 603 P.2d 868 
(1979).

[¶27.]  There being no question that a contract 
existed and that Fitzgerald had knowledge of it, we have carefully examined the 
record on appeal to determine whether Fitzgerald unjustifiably interfered with 
the contract and, if so, whether Texas West suffered damages as a 
result.

[¶28.]  The evidence favorable to Texas West 
concerning Fitzgerald's unjustifiable interference shows that even after 
problems developed with the delivery of the drawworks, the relationship between 
Texas West and Oil Patch was amicable. On February 19, 1982, however, Gordon 
Gibson of Oil Patch sent a letter to Texas West offering it the alternative of 
either paying the $1.6 million balance of the $5.1 million purchase price, less 
the cost of the drawworks, or paying the cost of the new drawworks, along with 
advancing the balance of the purchase price for the completed rig. Gibson 
testified that this was the first time the question of additional money was 
discussed between Texas West and Oil Patch. This additional money, according to 
Gibson, was to be applied toward the $508,000 which Oil Patch owed to the Bank 
on an unsecured loan guaranteed by Fitzgerald.

[¶29.]  On February 11, 1982, John A. Milliken, 
the Bank's loan officer, contacted Fitzgerald concerning Oil Patch's obligations 
to the Bank and Fitzgerald's guaranty. Fitzgerald asked the Bank to take a lien 
on the inventory (including the rig) and accounts receivable of Oil Patch. The 
Bank took the security, and during the month of April 1982, Fitzgerald increased 
his liability on the guaranty to $1.1 million. This new guaranty was given even 
though the Bank made no commitment to loan Oil Patch additional money or extend 
the time for any existing loans.

[¶30.]  In the meantime, Texas West was 
attempting to finalize an agreement with a third party for a joint venture to 
finish the rig and put it to work. L.N. Dunnavant, president of Texas West, 
testified that on June 19, 1982, Gibson denied the existence of any lien on the 
rig which would prevent Texas West from taking the rig. Thereafter, Gibson 
admitted that a lien existed and that the matter was out of his hands. Dunnavant 
then attempted to speak with the person "`who [was] calling the shots,'" and, as 
a result of a conversation he had with Tom Harries, one of the principals of Oil 
Patch, he contacted Fitzgerald who told him that in order to take the rig Texas 
West would have to pay the Bank the $508,000 and that there was no negotiation 
on that point.

[¶31.]  We find from this evidence and the 
inferences that may be drawn therefrom that Fitzgerald intentionally and without 
justification interfered with the contract between Oil Patch and Texas 
West.

[¶32.]  Having found that there was sufficient 
evidence presented to the jury to find that Fitzgerald unjustifiably interfered 
with the contract between Oil Patch and Texas West, we must now determine 
whether or not there was sufficient evidence presented to the jury to find that 
such actions damaged Texas West.

[¶33.]  There was evidence presented to the jury 
that the market value of the rig without the drawworks was approximately $3.2 
million during the times of the interference and that the rig would have been 
worth at least $4 million if Oil Patch had completed the rig with the drawworks. 
It is possible that the jury used this measure of damage when it returned its 
verdict of $4 million.

[¶34.]  Texas West contends that it lost the rig 
as a result of Fitzgerald's interference, and its damages, therefore, should be 
the market value of the rig.

[¶35.]  The cases upon which Texas West relies 
concern market value as a measure of damage for the loss or destruction of 
personal property. Rocky Mountain Packing Co. v. Branney, Wyo., 393 P.2d 131 
(1964); Rogers v. Hansen, Wyo., 361 P.2d 676 (1961). We are unable to conclude 
or infer from the evidence presented to the jury that Texas West lost the rig. 
The inference is that Fitzgerald interfered with the delivery of the rig to 
Texas West. 

[¶36.]  We, therefore, hold that the trial judge 
did not abuse his discretion in not applying market value as the applicable 
standard of damages when he determined that the jury verdict against Fitzgerald 
was excessive and shocked the conscience of the court.

[¶37.]  We have previously held that the measure 
of damages for intentional interference is the amount which will compensate for 
all of the detriment proximately caused by the breach of duty. Martin v. Wing, 
Wyo., 667 P.2d 1159 (1983).

[¶38.]  Omer Bishop testified that he had access 
to a drawworks through one of his companies and that he and Dunnavant, on behalf 
of Texas West, attempted to negotiate a deal to complete the rig and put it to 
work. Bishop further testified that he was "dead serious" about the venture but, 
according to the testimony of Dunnavant, the deal was killed when Fitzgerald 
refused to allow the rig to be delivered before payment was made to release the 
lien on the rig.

[¶39.]  The jury could have properly found that 
Fitzgerald's interference was the proximate cause of Texas West and Bishop not 
getting together to complete and put the rig to work and that Texas West was 
damaged thereby. The jury could also have found, as Texas West contends, that 
Fitzgerald's interference was the proximate cause of the nondelivery of the rig 
and that Texas West's damage equaled the investment value of the 
rig.

[¶40.]  Although the extent and the amount of 
damages which may have resulted from Fitzgerald's interference are difficult to 
ascertain, we find that there was sufficient evidence presented to the jury for 
it to find that Texas West was damaged.

[¶41.]  Fitzgerald's defense is that "the taking 
of a Security Agreement for consideration is, as a matter of law, not 
interference of any contractual rights" and that he, therefore, should have been 
entitled to a directed verdict. It was the Bank which took the security 
agreement. Fitzgerald was the guarantor. We do not find as a matter of law that 
Fitzgerald's position as a guarantor entitled him to induce Oil Patch to 
withhold delivery of the rig until Texas West made sufficient additional 
payments to protect him from liability on his guaranty.

[¶42.]  We, therefore, hold that Fitzgerald's 
defense is untenable and that the court did not err in refusing to grant a 
judgment for Fitzgerald notwithstanding the verdict.

REMITTITUR - NEW 
TRIAL

[¶43.]  Texas West presents the following issues 
relating to a remittitur or new trial:

"Did the District Court 
abuse it's [sic] discretion in ordering a remittitur or new trial?

"Did the District Court 
abuse it's [sic] discretion in not ordering a new trial as to damages only, when 
the District Court expressly found that there was sufficient evidence to support 
the jury verdict finding liability against the intervenor D.N. Fitzgerald for 
interference with the Plaintiff's contract?"

[¶44.]  The power to order a new trial for 
excessive damages is committed to the sound discretion of the trial court. Cody 
v. Atkins, Wyo., 658 P.2d 59 (1983). The trial court also has authority to order 
a complete new trial or one limited to damages when the verdict is excessive. 11 
Wright & Miller, Federal Practice and Procedure: Civil § 2815 (1973); Smith 
v. Blair, Wyo., 521 P.2d 581 (1974). The standard for appellate review of a 
trial judge's order granting a new trial for an excessive damage verdict is 
whether the trial court abused its discretion. Taylor v. Washington Terminal 
Company, 409 F.2d 145 (D.C. Cir.), cert. denied 396 U.S. 835, 90 S. Ct. 93, 24 L. Ed. 2d 85 (1969).

[¶45.]  Texas West's contention that the court 
abused its discretion in ordering a remittitur or a new trial because it did not 
apply the market value as a standard of measuring damages is untenable. As we 
previously stated, this measure of damages is not applicable when the 
interference merely causes a delay in the delivery of personal property. 

[¶46.]  In the case at bar, the question of 
whether or not Fitzgerald interfered with the contract between Texas West and 
Oil Patch was vigorously contested and properly decided. The trial court on 
three different occasions2 found that there was sufficient 
evidence presented to the jury to find for Texas West on the issue of 
interference by Fitzgerald.

[¶47.]  We find that it would be unfair to compel 
Texas West to risk another trial on all of the issues solely because the trial 
court found damages to be excessive. To do so when, as in this case, the issues 
of liability and damages can be separated without creating confusion, 
inconvenience, or prejudice to Fitzgerald is an abuse of the trial court's 
discretion. Texas West should not be penalized for not consenting to a 
remittitur.

[¶48.]  Although Rule 59(a), W.R.C.P., pertains 
to the authority of trial courts to remand for retrial on all or part of the 
issues, this Court possesses equivalent authority to order a partial new trial. 
Wheatland Irrigation District v. McGuire, Wyo., 562 P.2d 287 (1977).

[¶49.]  The order confirming the arbitration 
award is affirmed, and the case is remanded for a new trial on the issue of 
damages only.

FOOTNOTES

1 This results in an award 
of $467,000. The arbitration panel miscalculated and stated that the award would 
be for $567,000. Neither party disputes that the panel meant 
$467,000.

2 Motion for directed 
verdict, motion for judgment notwithstanding the verdict, and the court's 
finding in its order and judgment.

THOMAS, Chief Justice, 
specially concurring.

[¶50.]  I concur in the affirmance of the 
judgment against D.N. Fitzgerald. Recognizing the significance of the problems 
which have been raised in the dissenting opinion of Justice Urbigkit, especially 
the law's requirement that there be wrongful interference which causes breach of 
an existing contract, the record does disclose that subsequent to the events 
early in 1982 Texas West Oil and Gas Corporation and Oil Patch Sales and Rentals 
of Wyoming, Inc., were discussing resolutions to their situation. A part of 
those discussions involved an adjustment to the contract in the nature of a 
novation. In this regard Instruction No. 12 advised the jury as 
follows:

"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."

It appears to 
have been arguable that the security interest held by the First Interstate Bank 
of Casper, N.A. did not extend to the work in progress, i.e., the drilling rig. 
The Bank then expended substantial effort in obtaining an amendment to the 
security agreement and financing statement, the effect of which was to make the 
drilling rig unequivocally subject to the security agreement. The record would 
justify the jury's conclusion that this was done at the insistence of 
Fitzgerald, and would also justify a conclusion that the extension of the 
security interest to the drilling rig inhibited and perhaps prevented the 
efforts of Texas West Oil and Gas Corporation and Oil Patch Sales and Rentals of 
Wyoming, Inc., to resolve their differences by substituting a different 
contractual arrangement. I am satisfied that the facts and the law do support 
the jury's determination that there was wrongful interference by D.N. 
Fitzgerald.1

[¶51.]  I must dissent from the disposition by 
this court which remands the case for a new trial on the issue of damages only. 
The district court ordered a remittitur or in the alternative a new trial. 
Whether the new trial should be a complete new trial or a limited new trial is a 
matter which I perceive to be placed within the discretion of the district judge 
and which may well depend upon his perception of how much leverage is required 
to induce the plaintiff to accept the remittitur. 

[¶52.]  The trial court has wide discretion 
concerning the propriety of granting a new trial. Cody v. Atkins, Wyo., 658 P.2d 59, 63-64 (1983). I do not read the majority opinion as reaching a conclusion 
that there was an abuse of the trial court's discretion in this regard. I do not 
think the record would justify such a conclusion. Yet, in the absence of that 
conclusion what has occurred is that this court has substituted its discretion 
for that of the district court. Since principles of jurisprudence foreclose the 
substitution of our discretion for that of the district court, I would remand 
the case for a new trial on both the issues of liability and 
damages.

FOOTNOTES

1 Whether interference is 
without justification or improper is a question of fact for the jury not one of 
law. Basin Electric Power Cooperative-Missouri Basin Power Project v. Howton, 
Wyo., 603 P.2d 402, 404-405 (1979). One in Fitzgerald's position is entitled to 
all of the Bank's rights on an obligation which he has guaranteed when he 
satisfies it, but he has no lawful basis for enhancing or creating any 
rights.

URBIGKIT, Justice, concurring in 
part and dissenting in part.

[¶53.]  I concur in the decision of this court to 
affirm the arbitration award, and respectfully and comprehensively dissent in 
the decision establishing guarantor liability by application of a tort theory of 
an intentional interference with a contract.

[¶54.]  This is a singularly important 
banking-industry decision. Principles of suretyship and law merchant invoked in 
this case are as old as Roman law, and perhaps older.1 Succinctly stated, this case 
concerns the rights retained against the principal and his assets when the 
guarantor is required to stand good on a guaranty. The contention of intentional 
interference has never been implicated in this normal lending process since 
earliest recorded history, and no case of this nature is either cited or 
presently found directly or indirectly holding that the guarantor or surety does 
not have the right to request protection from the principal in the event of a 
lender call for payment.

[¶55.]  This convoluted and controversial field 
of tort law comes to this court's consideration as significantly different than 
any other factual situation directly addressed by discovered precedent.2 Preliminarily, an intrinsically 
logical inconsistency is created in this case by affirming the arbitration 
decision which determined that no contractual breach occurred by nondelivery by 
the manufacturer in the absence of payment of the remaining amount due, and then 
approving third-party liability for causing the breach which had not 
occurred.

[¶56.]  Unfortunately, evidentiary questions and 
analysis confused discussion and decision on the legal status which by 
established law should have been determinative.

[¶57.]  The Texas West judgment and theory of 
recovery for the buyer in its claim for intentional interference should fail by 
application of three well-established legal principles:

(1) Guarantor does not 
invoke a wrongful purpose or intent by requesting that the lender obtain 
security position protection involving available assets of the debtor. Any 
claimed security position was only co-existent with any balance 
unpaid.

(2) Guarantor did not 
cause any breach of a contract since arbitration determined that a balance was 
unpaid and the principal, as the primary party in interest, would not release 
the drilling rig without payment receipt. No breach of contract 
existed.

(3) As a holder of an 
interest in the transaction as a debtor to be secured, the guarantor was 
privileged as a matter of law to seek to protect his business status in the 
normal business effort by the collateral assignment of business inventory and 
receivables.

[¶58.]  The guarantor relationship is a 
subcategory of the general field of suretyship, with the commonly noted 
difference between a surety as a category having primary liability, and the 
guarantor only subject to monetary call upon default by the principal. This is 
the primary versus secondary liability differential. This field of law is 
generally called suretyship, with the procedural aspects here involved as that 
of guaranty. Stearns, Law of Suretyship §§ 1.1, 1.5, at 1, 4 (5th ed. 
1951).

[¶59.]  This case is a business transaction 
involving Fitzgerald (guarantor), First Interstate Bank of Casper, N.A. 
(lender), Oil Patch Sales and Rentals of Wyoming (principal and manufacturer), 
and Texas West Oil and Gas Corporation (buyer-customer), wherein Texas West 
entered into the contract to purchase a constructed drilling rig. The case 
accommodates not unusual construction factors of payment on delivery, completed 
partial payment, incomplete construction, and price conflict, with the balance 
then due in dispute. Stripped of the jury-trial hyperbole involving banks and 
buyers or contested claims of factual issues, the case is left with the 
following time sequences and unquestioned events:

1. December, 1980, 
Fitzgerald and others signed a continuing guaranty to the First National Bank of 
Casper (now First Interstate Bank of Casper, N.A.) to accommodate an operational 
line of credit for Oil Patch, a newly created entity, for a guaranteed loan 
total of $500,000.

2. March 30, 1981, 
guarantor, as a previous organizer and principal, withdrew from the operational 
involvement in the corporation, except for continued guarantor 
responsibility.

3. June 1, 1981, a 
drilling rig manufacture contract was executed between Oil Patch and Texas West, 
which contract was a model for lack of clarity and term specificity.

4. Oil Patch came to have 
two loans at the Bank, one unsecured except by guaranties, with an operational 
line of credit with a balance of $508,000, and a second of $645,000, secured by 
real estate mortgage on its business property in Casper.

5. On March 11, 1982, 
both notes were due and delinquent, and the rig was incomplete and undelivered, 
with controversy as to the construction contract price.

6. As a consideration of 
note-extension negotiations, guarantor (as well as the two others being the 
officers and principals in Oil Patch) re-signed a continuing guaranty in favor 
of the Bank in the larger amount of $1,100,000.

7. Additionally, the Bank 
took a security agreement and financing statement from Oil Patch involving "Any 
and All Accounts Receivable and Inventory," File No. U-513862.

8. The obligations of the 
two notes were then renewed and extended to be due in 120 days, the one for 
$508,000 by renewal reciting a security interest, and "S/A F/S = Any and All 
Inventory and Accounts Receivable"; the one for $645,000 having been extended by 
renewal attachment for an earlier one month to March 11, 1982, was further 
extended for the same 120 days, with both notes carrying an extension-period 19 
percent interest rate.

9. The due date of July 
9, 1982 came and went, and on September 22, 1982, the Bank made written demand 
on guarantor Fitzgerald to honor his guaranty (what is known in banking as the 
"guaranty call"):

"As you know, on June 30, 
1981, the First Interstate Bank of Casper loaned Oil Patch Sales & Rental Of 
Wyoming, Inc., $645,000, secured by a first mortgage on the real estate located 
on West Yellowstone St., in Casper, Wyoming.

"We have also loaned Oil 
Patch Sales & Rental of Wyoming, Inc., operating money from time to time, 
and at the present time have a note, secured by a first mortgage on all account 
receivables and inventory in the amount of $508,000.

"When our Bank 
entertained loan requests from Oil Patch Sales and Rental of Wyoming, Inc., the 
loan request was approved based upon your financial standing and your 
guarantee.

"Both loans are past due 
since July 9, 1982, with no performance to date on either loan. Interest on the 
building loan to September 20, 1982 is $65,700.42, with a $340.42 per diem 
charge after that date. The interest due to September 20, 1982 on the inventory 
loan is $51,745.44, with a $268.11 charge each day after that date.

"Due to lack of promised 
performance on these loans, we are hereby asking you to honor your guarantee. 
Upon payment in full of these notes, we will assign to you, for your protection, 
our mortgages in the security which collatoralizes each note.

"May we hear from you no 
later than Monday, October 4, 1982."

10. October 15, 1982, the 
Bank secured a second financing statement from Oil Patch, which granted as 
security listed equipment and included by specifically itemized inclusions the 
undelivered Texas West rig, which financing statement was filed October 19, 
1982, in Natrona County and covered in detail the generalized collateral 
contained in the prior financing statement.

11. October 18, 1982, the 
lawsuit was instituted by Texas West to recover the rig from Oil Patch, raising 
the basic question of its possessory right for immediate delivery.

12. October 15, 1982, 
Slough Equipment Company (a company not then controlled by Fitzgerald) bought 
the real estate mortgage from the Bank, received an assignment of the mortgage, 
and commenced foreclosure by power of sale.

13. October 22, 1982, 
Fitzgerald, in honoring his guaranty on the line-of-credit loan, purchased the 
$508,000 note with accrued interest, and secured assignment of both filed 
financing statements.

14. This case commenced 
as a replevin action by Texas West (long since denied by the trial court), moved 
by intervention by Fitzgerald to a lien priority contest, and now comes to 
consider, after completed contract-price arbitration, the question of whether a 
guarantor "intentionally and without justification interfered" with the sales 
contract by the loan-renewal security document taken by the lender on the 
borrower's business inventory and receivables.

15. The record reflects 
an in-court stipulation that amounts due from Texas West as the unpaid balance 
are due to Fitzgerald for repayment on his guaranty payment, which amounts were 
settled by the arbitration award and subsequent court confirmation.

[¶60.]  The issue in banking terms is whether a 
lender, or a lender at the request of a guarantor, can require collateral 
security upon note renewal without being subject to a claim of intentional 
interference with a contract. Pragmatically, also, is the question of whether 
there could have been interference with a contract since the question of proof 
of breach of contract by the principal as vendor with the vendee is an issue not 
otherwise determined except by prior collateral decision in an arbitration that 
a balance remained unpaid when the contract provided for delivery upon full 
payment.3 

[¶61.]  Conceding everything at this juncture to 
either Texas West or the majority of this court, I would consider only the 
intrinsic, unquestioned banking transaction and its attributes as clearly 
dispositive under the current status and historical perspective of the 
law.

[¶62.]  Obviously, the guarantor was interested 
in protecting his guaranty exposure, the issue being whether the law constrains 
that effort as being unjustified. See Martin v. Texaco, Inc., 304 F. Supp. 498 
(S.D.Miss. 1969).

[¶63.]  Otherwise stated, can a guarantor 
properly require or request that a lender get available security at a time of 
note renewal, and if so, what then did Fitzgerald wrongly do? See § 34-21-373, 
W.S. 1977 (U.C.C. § 3-606); Baitcher v. National Industrial Bank of Miami, 
Fla.App., 368 So. 2d 439 (1979); Murray, Commercial Law, 34 Univ. of Miami L.Rev. 
527 (1979-80).

[¶64.]  There is confusion undetermined by final 
litigation and unclarified by brief or oral argument, as to the right of 
possession in 1982, clouded by contract balance issues later determined by the 
contested arbitration award which now is settled by this court's decision. Since 
the balance due as now determined was then contested, we would have question 
about the issue-determined effect of the 1982 denial of replevin as not raised 
on this appeal.4

[¶65.]  The essence of the case as a mercantile 
law question invoking suretyship precedent is defined in a quotation from the 
majority opinion:

"* * * We do not find as 
a matter of law that Fitzgerald's position as a guarantor entitled him to induce 
Oil Patch to withhold delivery of the rig until Texas West made sufficient 
additional payments to protect him from liability on his guaranty." 726 P.2d  at 
1064.

[¶66.]  Apparently the court found that the 
delinquent borrower was obligated to release the rig, and further held that 
collateral security rights held by the lender or the lender's surety constitute 
wrongful interference. This determination assumes a significant fact not 
determined as to Oil Patch's willingness or obligation to release; in fact, the 
actual record was completely to the contrary.

[¶67.]  Conceding the argument of Texas West that 
Fitzgerald asked the Bank to obtain security on the line-of-credit loan at the 
time the delinquency renewal was negotiated, and that thereafter Fitzgerald as 
the potential beneficiary requested that the purchase balance be paid before 
delivery, we have the following status:5 

(a) absolutely no 
evidence that Oil Patch agreed to release without payment, for whatever 
reason;6

(b) arbitration has now 
determined that a balance was due;

(c) Fitzgerald wanted 
money out of the rig to cover the loan balance and his guaranty;

(d) both the contract and 
the Wyoming statute provided that the vendor had the right to demand payment in 
full before release of the merchandise.

[¶68.]  In order to define the case in some 
meaningful terms, since the scenario shifts in the course of the litigation, it 
is first necessary to ascribe times, events or actions to the "intentional 
interference wrongfully." The record lacks evidence to find interference, but 
even more so to find lack of justification in the activities of the suretyship 
transaction, despite an application of the usual appellate standards of 
considering only the evidence, when in conflict, as favorable to Texas West. 
Nicholls v. Nicholls, Wyo., 721 P.2d 1103 (1986).7

[¶69.]  It would appear that Texas West contends 
wrongful interference in:

(a) "convincing" the 
lender to require the March chattel security position of inventory and 
receivables;

(b) not agreeing later to 
release of the Bank's lien and refusing to take an equity position in the rig 
(the evidence is conflicting as to whether the offer was made to Oil Patch or 
Fitzgerald, or both).

[¶70.]  It was stipulated between the parties at 
trial that any contention of wrongful conduct of Fitzgerald occurred only before 
suit was filed, and consequently his honoring the guaranty or accepting the 
collateral assignment for collection assistance in subrogation and indemnity was 
not a claimed factor for contractual interference.

[¶71.]  The majority opinion finds relevant 
evidence of interference in asking the lender to take the lien and then 
requiring payment without negotiation on the Bank's release, premised on the 
manufacturer's concurrence. This standard fails to include the improper motives, 
improper means, and effective cause of contractual breach determinations which 
are required for liability. Leigh Furniture and Carpet Co. v. Isom, Utah, 657 P.2d 293 (1982); Top Service Body Shop, Inc. v. Allstate Insurance Company, 283 
Or. 201, 582 P.2d 1365 (1978).

"* * * In summary, such a 
claim is made out when interference resulting in injury to another is wrongful 
by some measure beyond the fact of the interference itself. Defendant's 
liability may arise from improper motives or from the use of improper means. 
They may be wrongful by reason of a statute or other regulation, or a recognized 
rule of common law, or perhaps an established standard of a trade or profession. 
No question of privilege arises unless the interference would be wrongful but 
for the privilege; it becomes an issue only if the acts charged would be 
tortious on the part of an unprivileged defendant." Top Service Body Shop, Inc. 
v. Allstate Insurance Company, supra, 582 P.2d  at 1371.

[¶72.]  Texas West also finds interference in the 
draw-works negotiation, need for the principal to obtain money for a loan 
payment, surety request for the lender to obtain security for the loan renewal, 
additional guaranty to cover the total debt, and the Bank requesting and 
receiving chattel-loan security encompassing all assets, including the drill rig 
within the business inventory.

[¶73.]  Assessing all of this, the issue as a 
legal principle is whether intentional interference occurs if a surety asks a 
lender to obtain security on a loan renewal in a circumstance where the 
manufacturer claimed a right of retention until payment was made.

[¶74.]  I address the subject under the 
suretyship law principles, and lien rights of manufacturers under the Wyoming 
statutes:8

(a) Did the buyer have 
the right that the lender's guarantor not request security for an outstanding 
loan as inventory collateral?

(b) Did the seller have a 
right to refuse delivery, burdened by its bank financing 
obligations?

[¶75.]  Addressing the second question first, the 
issue is complicated, since the trial court denied replevin, which became the 
law of the case and is not now designated as error, and is further inflicted 
with the arbitration award determining that a balance remained due.

[¶76.]  However, we can address the subject on 
the issue of the manufacturer's obligation to deliver under a partial purchase 
payment where price conflicts developed. Unfortunately, the issue on appeal is 
not addressed, but is somehow intertwined as inflicted by the creation of the 
lender's lien by inventory security. The principal, Oil Patch, was the finite 
real party in interest, since inevitably any payment by the surety created a 
debt, and the contract balance claimed to be due afforded the only asset for its 
satisfaction of the prospective debt after guaranty call.

[¶77.]  Albeit in controversy somehow, there 
seems to be a blithe assumption of breach of contract by the manufacturer Oil 
Patch in nondelivery after the subsupplier for the draw works went into 
insolvency. Whether or not true, that circumstance has nothing to do with this 
case after the arbitration award was obtained and affirmed to establish a 
balance due.

[¶78.]  Both the statute and the contract require 
payment for delivery. The contract provided:

"* * * [t]he balance to 
be paid upon completion of the rig and its delivery, presently anticipated to be 
during the first two weeks of October, 1982," and

§ 34-21-259, 
W.S. 1977 (U.C.C. § 2-511), provides:

"(a) Unless otherwise 
agreed, tender of payment is a condition to the seller's duty to tender and 
complete any delivery."

See 4 Anderson 
Uniform Commercial Code § 2-511, at 7.

[¶79.]  The trial judge, on October 19, 1982, 
addressed the subject by letter to counsel for Texas West:

"Upon reviewing the file 
and some legal authorities, it appears to me that a writ of replevin cannot 
issue in this case. My understanding of the law is that a buyer of goods can 
only maintain replevin when the contract of sale is complete. The contract here 
is ambiguous as to the total price. At the very least, the plaintiff would need 
to tender the unpaid balance on the price of $5.1 million. Even then, plaintiff 
might not be entitled to replevin, depending upon claims made by the seller 
under the contract provisions for compensation in excess of that figure. I note 
also under the contract that if the exact figure is not agreed upon by the 
parties, it is to be settled by arbitration. In any event, it appears to me that 
replevin cannot be had at this time,"

and by order 
entered January 11, 1983:

"THE ABOVE MATTER coming 
before the Court on the Motion of the Plaintiff for Writ of Replevin, and the 
Court having reviewed the Affidavit filed herein, and the Stipulation of 
parties, and having heard arguments of counsel and received Briefs and argument 
in support of and in opposition to said application finds generally in favor of 
the Defendants.

"IT IS THEREFORE ORDERED 
that the Motion for Writ of Replevin be and the same is hereby denied."9

[¶80.]  The issue of contract breach seemingly 
disappeared from the litigation with the described orders and after the 
reference to arbitration and determination that a balance remained due 
sufficient to reject any contention of contractual breach for nondelivery, 
except the retained assumption now present without factual justification in this 
remaining proceeding. No breach-of-damage instruction was given in this trial, 
but that omission is not presented here as separate error.

[¶81.]  In addressing the substantive legal 
issues, and without a separate review of the hundreds if not thousands of 
intentional-interference cases, no case is found involving similar participants 
and factors.

[¶82.]  Eight Wyoming cases include varied 
factual situations, all completely removed from the suretyship transaction 
existent here. Spurlock v. Ely, Wyo., 707 P.2d 188 (1985), a school-employee 
case, was decided adversely to plaintiff on a failure to prove causation for any 
contractual breach by the district. Earlier, in Dehnert v. Arrow Sprinklers, 
Inc., Wyo., 705 P.2d 846 (1985), this court in customary fashion addressed the 
factors of intentional interference; the case devolved into a question of malice 
or bad faith, in conflict between the majority and dissent, and did not address 
a relationship such as suretyship which is existent here.

[¶83.]  Martin v. Wing, Wyo., 667 P.2d 1159 
(1983), involved a real-estate transaction wherein an outsider slandered the 
property conditions and the court found that the outsider was without business 
interest in the transaction. The plaintiff was also successful in Basin Electric 
Power Cooperative-Missouri Basin Power Project v. Howton, Wyo., 603 P.2d 402 
(1979), as a discharged employee of a subcontractor who alleged and convinced 
the jury that his termination was upon the instigation of the general 
contractor.

[¶84.]  In Kvenild v. Taylor, Wyo., 594 P.2d 972 
(1979), the court found that the intentional-interference claim did not apply, 
since the contractual dispute was between only two parties, and a like result 
was earlier found in Board of Trustees of Weston County School District No. 1 v. 
Holso, Wyo., 584 P.2d 1009, reh. denied 587 P.2d 203 (1978).

[¶85.]  Two Wyoming cases with some general 
relevancy are Allen v. Safeway Stores Incorporated, Wyo., 699 P.2d 277 (1985), 
and Wartensleben v. Willey, Wyo., 415 P.2d 613 (1966). In Allen, summary 
judgment had been granted, and then affirmed on appeal. The plaintiff employees 
were discharged for uncomplimentary comments to a state food program inspector, 
which comments had been communicated by the inspector to the employer. The court 
analyzed the restatement provision and emphasized the word "improperly" in 
determining that a proper business purpose existed for the activity pursued, 
"One who intentionally and improperly interferes."

[¶86.]  In Wartensleben, the defendant and his 
attorney contested a proposed feedlot operation. The trial court ruled against 
the plaintiffs in determining that they did not use illegal means, make false 
material representations, or resort to fraud or intimidation, and exercised what 
they believed to be their legal rights in good faith. The appellate court 
concurred.

[¶87.]  Wyoming follows the four-factor rule 
generally representative of the position adopted in the Restatement of Torts § 
770:

"We have recognized in 
prior cases the tort of intentional interference with contractual relations and 
have identified the following elements of such action:

"(1) the existence of a 
valid contractual relationship;

"(2) knowledge of the 
contractual relationship on the part of the interferor;

"(3) intentional and 
improper interference inducing or 
otherwise causing a breach or termination of the relationship; 
and

"(4) resultant damage to 
the party whose relationship has been disrupted." (Emphasis added.) Dehnert v. 
Arrow Sprinklers, Inc., supra, 705 P.2d  at 850,

and has adopted 
the Restatement of Torts § 773 defense:

"On the subject of 
justification, it is set out in 4 Restatement, Torts, § 773, p. 87 (1939), 
that:

"One is privileged 
purposely to cause another not to perform a contract, or enter into or continue 
a business relation, with a third person by in good faith asserting or 
threatening to protect properly a legally protected interest of his own which he 
believes may otherwise be impaired or destroyed by the performance of the 
contract or transaction." Wartensleben v. Willey, supra, 415 P.2d  at 
614.

See also Annot., 
26 A.L.R.2d 1227; Annot., 84 A.L.R. 43.

[¶88.]  California follows a five-part 
test:

"Under California law, 
inducing breach of contract is a tort with five basic elements:

"`(1) that a valid 
contract existed between the plaintiff and another party; (2) that the defendant 
had knowledge of the contract and intended to induce a breach thereof; (3) that 
the contract was breached; (4) as a proximate result of the defendant's wrongful 
or unjustified [unprivileged] conduct; (5) resulting in damage to the plaintiff. 
[Citations.]' Abrams & Fox, Inc. v. Briney (1974), 39 Cal. App. 3d 604, 608, 
114 Cal. Rptr. 328, 331." International Wood Processors v. Power Dry, Inc., 593 F. Supp. 710, 729 (D.S.C. 1984), aff'd 792 F.2d 416 (4th Cir. 1986).

[¶89.]  The Colorado rule is similar. Comtrol, 
Inc. v. Mountain States Telephone and Telegraph Company, 32 Colo. App. 384, 513 P.2d 1082 (1973).

[¶90.]  The Missouri rule is stated 
differently:

"(1) A contract or a 
valid business relationship or expectancy (not necessarily a 
contract);

"(2) Defendant's 
knowledge of the contract or relationship;

"(3) Intentional 
interference by the defendant inducing or causing a breach of the contract or 
relationship;

"(4) The absence of 
justification;

"(5) Damages resulting 
from defendant's conduct." Institutional Food Marketing Associates, Ltd. v. 
Golden State Strawberries, Inc., 587 F. Supp. 1105, 1111 (E.D.Mo. 1983), aff'd 
747 F.2d 448 (8th Cir. 1984).

[¶91.]  Washington follows the four-point test 
similar to the Wyoming delineation. Calbom v. Knudtzon, 65 Wn.2d 157, 396 P.2d 148 (1964).

[¶92.]  A significant number of cases from those 
jurisdictions support the position taken here.

[¶93.]  Without particularizing Wyoming precedent 
as noted, except for the general principles which follow the Restatement, we 
would consider the disabilities of the judgment in this case without the factual 
issue questions.

(1) Guarantor's request 
that security be obtained is not wrongful. See Allen v. Safeway Stores 
Incorporated, supra; Quinlivan v. Brown Oil Co., 96 Mont. 147, 29 P.2d 374 
(1934); Ford v. C.E. Wilson & Co., Inc., 129 F.2d 614 (2d Cir. 1942); Knapp 
v. Penfield, 143 Misc. 132, 256 N.Y.S. 41 (1932); Braden v. Perkins, 174 Misc. 
885, 22 N.Y.S.2d 144 (1940).

(2) No contract breach 
occurred involving conduct of the guarantor.

(3) Under Restatement of 
Torts § 773, the guarantor has a defense by virtue of the interest as a debtor 
in the transaction.

(4) Damage was lacking in 
the absence of a specific concurrent release agreement by the manufacturer. The 
conduct did not create the unlawful tort.

(1) Improper or Wrongful 
Interference

[¶94.]  The only case found of a somewhat similar 
nature is Ethyl Corporation v. Balter, Fla.App., 386 So. 2d 1220 (1980), cert. 
denied 452 U.S. 955, 101 S. Ct. 3099, 69 L. Ed. 2d 965 (1981). Ethyl Corporation 
was a guarantor, and upon default satisfied the indebtedness by payment to the 
lender. Certain subrogation efforts followed, and later transactions pursued by 
the borrower did not satisfactorily develop. Ethyl Corporation ultimately was 
sued for contractual interference for trying to maintain protection for its 
guaranty payment.

[¶95.]  Giving several reasons for the verdict 
reversal, the court said:

"There is, moreover, a 
completely separate, additional, and overriding reason which precludes Ethyl's 
liability for `interference' with any of the various contracts and relationships 
cited by Balter. Ethyl was, as a matter of law, privileged to act as it did 
throughout the entire course of events involved in this case. At all times, its 
actions were reasonably directed to the recovery of the very substantial sums it 
was owed by Pac-Craft, to the protection of its status as the co-obligor with 
the corporation on a $450,000 loan it was later required to pay, and, finally, 
as the lawful holder of 100% of its stock." 386 So. 2d 1224-1225.

[¶96.]  In Ford v. C.E. Wilson & Co., Inc., 
supra, the Bank exercised its security position and intentional interference was 
denied as to third-party creditor claimants:

"* * * In addition to all 
this the Bank had a privilege to interfere with the plaintiff's contracts and 
expectancies because it was `acting under an equal or a superior right' when 
seeking security for its own advances." 129 F.2d  at 617.

See also Feeley 
v. McAuliffe, 335 Ill. App. 99, 80 N.E.2d 373 (1948).

[¶97.]  For similar results in nonsuretyship 
cases, see Conoco Inc. v. Inman Oil Company, Inc., 774 F.2d 895 (8th Cir. 1985) 
(oil sales bidding); Landess v. Borden, Inc., 667 F.2d 628 (7th Cir. 1981) (milk 
delivery contract); International Wood Processors v. Power Dry, Inc., supra, 593 F. Supp. 710 (no prima facie evidence of abuse of justification in food 
marketing controversy); Martin v. Texaco, Inc., supra, 304 F. Supp. 498 (filling 
station leases and gasoline sales business); Geofreeze Corp. v. Hannah 
Construction Co., 588 F. Supp. 1341 (E.D. Pa. 1984) (withholding progress 
payments on construction contract); Bledsoe v. Watson, 30 Cal. App. 3d 105, 106 Cal. Rptr. 197 (1973) (letter to government body about attorney's fees); Bergfeld 
v. Stork, 7 Ill. App.3d 486, 288 N.E.2d 15 (1972) (lease reservation); Quinliven 
v. Brown Oil Co., Inc., supra; Donald G. Culp Co. v. Reliable Stores Corp., 14 
Ohio App.3d 161, 470 N.E.2d 193 (1983) (exercising control on store sublease); 
Pearse v. McDonald's Systems of Ohio, Inc., 1 Ohio Op.3d 164, 47 Ohio App.2d 20, 
351 N.E.2d 788 (1975) (valid business interest in employee managerial training); 
Wahl v. Strous, 344 Pa. 402, 25 A.2d 820 (1942) (attorney's fees, invalid 
contract); Hunt v. Coastal States Gas Producing Co., Tex.Civ.App., 570 S.W.2d 503 (1978), aff'd 583 S.W.2d 322, cert. denied 444 U.S. 992, 100 S. Ct. 523, 62 L. Ed. 2d 421 (1979), reh. denied 444 U.S. 1103, 100 S. Ct. 1071, 62 L. Ed. 2d 790 
(1980) (oil purchase after naturalization); Black Lake Pipe Line Co. v. Union 
Construction Co., Inc., Tex., 538 S.W.2d 80 (1976), (recovery rejected on 
requiring additional crews for pipeline construction); Davis v. Lewis, Tex. 
Civ.App., 487 S.W.2d 411 (1972) (auto repair finance company shop direction 
controversy). See also Sakowitz, Inc. v. Steck, Tex., 669 S.W.2d 105 (1984) 
(enforcement of noncompetition employment agreement); Calbom v. Knudtzon, supra 
(attorney's fees).

[¶98.]  Factual determinations resulting in a 
successful attack as an intentional-interference claim are illustrated in 
Alyeska Pipeline Service Co. v. Aurora Air Service, Inc., Alaska, 604 P.2d 1090 
(1979) (sub-sub terminated and bad faith and ill will of general alleged 
creating issue of fact); Bridges v. Cal-Pacific Leasing Co., 16 Cal. App. 3d 118, 
93 Cal. Rptr. 796 (1971) (complex real estate transaction, advice to third party 
not to make payments, inference could support lack of justification); Kozlowsky 
v. Westminster National Bank, 6 Cal. App. 3d 593, 86 Cal. Rptr. 52 (1970) (officer 
discharge); McEnroe v. Morgan, 106 Idaho 326, 678 P.2d 595 (1984) (justification 
for real estate transaction, involvement unproved); Barlow v. International 
Harvester Company, 95 Idaho 881, 522 P.2d 1102 (1974) (slander involvement in 
guaranty disturbance); P & F Industries v. Medallion Group, Inc., 102 A.D.2d 865, 476 N YS.2d 928 (1984) (caused diversion of trust funds); Scymanski v. 
Dufault, 80 Wn.2d 77, 491 P.2d 1050 (1971) (co-op marketing 
conflict).

[¶99.]  None of the cases involving a successful 
appeal for intentional-interference claims had to do with principles or factual 
situations affording authority to support the decision of this court or a rule 
permitting recovery in this guaranty situation.

[¶100.]            
The intrinsic status of the guaranty relationship as an aspect of the 
field of suretyship must consequently explore the claimed legitimacy of the 
business relationship of a guarantor requesting security protection upon note 
renewal.

"Suretyship may be 
defined as a contractual relation whereby one person engages to be answerable 
for the debt or default of another." Stearns, Law of Suretyship, supra, § 1.1 at 
1.

"At common law, where the 
creditor received security from the principal for the payment of the debt, the 
surety could not force the creditor to look first to such security for his 
payment. The surety could protect himself by paying the creditor and thereby 
becoming subrogated to the creditor's rights in the security." Id., § 7.22 at 
237.

"Subrogation in 
suretyship is `a mode which equity adopts to compel the ultimate discharge of 
the debt by him who in good conscience ought to pay it, and to relieve him whom 
none but the creditor could ask to pay.' The scope of the right of subrogation 
consists in the immediate transfer, by operation of law, to the promisor in 
suretyship of all the rights of the creditor against the principal whenever the 
promisor pays the debt or satisfies the obligation. This right of subrogation is 
independent of any agreement between the parties and rests upon principles of 
natural justice and equity." Id., § 11.1 at 439.

"The third great 
equitable right of a surety is his right, on payment of the principal's debt, to 
be indemnified by the principal for the loss sustained by the surety in making 
payment of the debt. This right sometimes also described as a right to 
reimbursement or exoneration, is universally recognized." Id., § 11.35 at 
505.

See also Alces, 
The Efficacy of Guaranty Contracts in Sophisticated Commercial Transactions, 61 
N.C.L.Rev. 644 (1983).

[¶101.]            
These principles seem clearly identified and established without 
significant question, evolving from suretyship, and earliest noted in Greek and 
Roman literature. See Pingrey on Suretyship and Guaranty (2d ed. 1913); I 
Brandt, Suretyship & Guaranty (3d ed. 1905); Loyd, The Surety, 66 U.Pa.L. 
Rev. 40 (1917-18).

[¶102.]            
Two Wyoming statutes have bearing on suretyship aspects and are 
applicable here.

[¶103.]            
The guarantor has the status under application of the Uniform Commercial 
Code as a debtor. See § 34-21-905, W.S. 1977, 1986 Cum.Supp. (U.C.C. § 
9-105(1)(d)). Rushton v. Shea, 423 F. Supp. 468 (D.Del. 1976); Norton v. 
National Bank of Commerce of Pine Bluff, 240 Ark. 131, 398 S.W.2d 538 (1966); 
Barnett v. Barnett Bank of Jacksonville, Fla.App., 345 So. 2d 804 (1977); Bank of 
Gering v. Glover, 192 Neb. 575, 223 N.W.2d 56 (1974); T & W Ice Cream, Inc. 
v. Carriage Barn, Inc., 107 N.J. Super. 328, 258 A.2d 162 (1969); Chase 
Manhattan Bank, N.A. v. Natarelli, 93 Misc.2d 78, 401 N YS.2d 404 (1977); Zions 
First Nat'l Bank v. Hurst, Utah, 570 P.2d 1031 (1977); Note, The Waiver of 
Defenses By Guarantors In Guaranty Contracts and the Nonwaiver Provisions of the 
Uniform Commercial Code, 5 Vermont L.Rev. 73, 84 n. 3 (1980).

[¶104.]            
Additionally, § 34-21-963, W.S. 1977, 1986 Cum.Supp. (U.C.C. § 9-504), 
provides:

"(e) A person who is 
liable to a secured party under a guaranty, indorsement, repurchase agreement or 
the like and who receives a transfer of collateral from the secured party or is 
subrogated to his rights has thereafter the rights and duties of the secured 
party. Such a transfer of collateral is not a sale or disposition of the 
collateral under this article."

See Nickles, 
Rethinking Some U.C.C. Article 9 Problems - Subrogation; Equitable Liens; Actual 
Knowledge; Waiver of Security Interests; Secured Party Liability for Conversion 
Under Part 5, 34 Ark.L. Rev. 10, 12 (1980-81); Hollabaugh, Surety's Right to 
Equitable Subrogation: Overture for an Arrow, 51 Ins.Counsel J. 547 
(1984).

[¶105.]            
No more realistic business decision from the standpoint of a guarantor 
can be found than for him to consider and request that the lender get any 
collateral available when the note renewal occurred in March, 1982. Thereafter, 
arbitration determined that in fact an unpaid balance remained on the contracts, 
which validated the release denial by the principal, the lender and the 
guarantor.

[¶106.]            
Not a scintilla of evidence of an improper business purpose is 
demonstrated by the guaranty history and the lending transaction. Intimation and 
contention by testimony, obviously persuasive to the listening jury, to suggest 
that Fitzgerald might have some control or interest in Oil Patch in no way 
affects the legal result and, in fact, relevant case law would find a 
strengthened self-interest factor justifying his separate protection if he had 
in fact been the sole stockholder and guarantor for the corporate manufacturer. 
Petit v. Cuneo, 290 Ill. App. 16, 7 N.E.2d 774 (1937). See also Coronet 
Development Company v. F.S.W., Inc., 379 Mich. 302, 150 N.W.2d 809 
(1967).

(2) Contractual Breach

[¶107.]            
The assumptive posture of Texas West appears to be that somehow a 
contractual breach existed for which the consequent liability of Fitzgerald 
could be asserted.10 It is axiomatic in contractual 
cases of this nature that a valid contract does exist and a breach is required 
for resulting liability. Denhert v. Arrow Sprinklers, Inc., supra, 705 P.2d 846; 
Bellefonte Underwriters Insurance Co. v. Brown, Tex., 663 S.W.2d 562 (1983), 
rev'd on other grounds 704 S.W.2d 742 (1986). See also Restatement of Torts § 
766.

[¶108.]            
The question of the failure of timely completion, if factually existent 
as a breach, was not in any way proximately related to Fitzgerald and if 
contended could have nothing to do with interference liability. See Spurlock v. 
Ely, supra, 707 P.2d 188; Worldwide Commerce, Inc. v. Fruehauf Corp., 84 Cal. App. 3d 803, 149 Cal. Rptr. 42 (1978). 

[¶109.]            
The breach of contract then remaining for contention would be 
nondelivery, and that issue must be evaluated both in consonance of the 
contractual provision "delivery upon payment," and § 34-21-259, W.S. 1977, 
providing that delivery is due upon payment, which accords with the contractual 
provision between the parties. The real world must be recognized in that the 
contract balance decided upon in arbitration removed any question from the later 
convened jury of contractual breach by nondelivery, since the right to 
nondelivery was then otherwise determined as the law of the case where demand 
for delivery was not accompanied by tendered requested payment. Likewise, the 
original trial court recognized this status by the quoted letter opinion and 
order denying replevin when the litigation had first been 
instituted.

[¶110.]            
Note must also be made that Fitzgerald only claimed right of possession 
after payment of the guaranty and consequent assignment of the collateral rights 
to him by the lender. At that time he became the secured lender. This event, as 
earlier noted, by stipulation was not the interference causative 
factor.

(3) Interest of Party To be Charged With Claimed 
Interference

[¶111.]            
In accord with the Restatement of Torts provision, § 773, it is hard to 
define a more specific interest in the asset value remaining due to the 
manufacturer than that held by Fitzgerald when the guaranteed indebtedness 
without payment matured into default and was then called by the lender for 
guarantor payment. Zoby v. American Fidelity Company, 242 F.2d 76 (4th Cir. 
1957) ("economic interest that is substantial"); Sakowitz, Inc. v. Steck, supra, 
669 S.W.2d 105.

[¶112.]            
Legalistically, the position of Texas West and the resulting jury verdict 
after appropriate summary-judgment motions creates an amorphous, 
malicious-prosecution concept denying the right of the surety turned lender 
after call to contest and claim for collateral rights to the delinquent 
borrower's assets. This theory is not only not within the province of any 
operational function of intentional interference but is also directly proscribed 
by the provisions of Restatement of Torts, §§ 773 and 769. Singer Credit 
Corporation v. Mercer Island Masonry, Inc., 13 Wn. App. 877, 538 P.2d 544 
(1975); Matter of Kearney Chemicals, Inc., 468 F. Supp. 1107 (D.Del. 1979); 
Babson Bros. Co. v. Allison, Fla.App., 337 So. 2d 848 (1976), cert. denied 348 So. 2d 944 (1977).

"* * * One who in good 
faith asserts a legally protected interest of his own which he believes may be 
impaired by the performance of a proposed transaction is not guilty of tortious 
interference." Singer Credit Corporation v. Mercer Island Masonry, Inc., supra, 
538 P.2d  at 549.

[¶113.]            
Significant also is the fact that the collateral security documents did 
not change the relationship between Oil Patch and Texas West, since the 
collateral assignment encumbering inventory and receivables could and did only 
encumber a receivable. If Texas West owed nothing, it was entitled to rig 
possession, and the collateral assignment afforded no interest in the rig. The 
collateral pledge in no way changed title status. If money was due and Oil Patch 
had a right to payment, likewise nothing was changed except the right of the 
lender or subordinated guarantor to receive that money upon payment of whatever 
amount remained due as derived from the contractual relationship between the 
manufacturer and buyer. Tidal Western Oil Corp. v. Shackelford, Tex.Civ.App., 
297 S.W. 279 (1927).

(4) Damage

[¶114.]            
Assumptive for determination of damage is the basic question of how 
anything Fitzgerald did adversely affected the legal relationships determined by 
the arbitration award.

[¶115.]            
To contend for liability and consequent damages, it is required to 
determine as a principle of business law that Fitzgerald, some time before his 
guaranty payment, should have forced the seller to release the equipment to the 
buyer with two direct and divisive results. First, the significant asset would 
be gone from which funds for repayment to the guarantor could have been 
expected, and for which the rights of the principal to avoid indemnification 
would have been lost. Secondly, if Fitzgerald makes demand on the borrower to 
release the collateral security, then the borrower has the right to claim an 
offset for the value against any debt due either by instrument assignment or 
subrogated right of indemnity.

[¶116.]            
No matter what construction of California, New York, Oregon, or 
Restatement rules may be utilized for the tort, this transaction was not 
appropriate to justify the verdict for $500,000, $4,000,000, or whatever later 
may be determined by the jury as a figure that suits their conclusion, as 
witnessed by a Texas jury in Texaco Inc. v. Pennzoil Company, 784 F.2d 1133 (2d 
Cir. 1986), an interference case which exceeded $11 billion.

[¶117.]            
Clearly, some elucidation should now be afforded by this court detailing 
what breach of duty devolved against the guarantor and what resulting 
compensation is justified therefrom. See Prosser and Keaton on Torts at 1004 
(5th ed.)

[¶118.]            
It is not with idle contemplation that the concern about the measure of 
damages is addressed. Where today none of the participants really want the 
stacked drilling rig, one is called to envision a morass without safety rope 
into which the trial court will be thrust in an effort to instruct the next jury 
as to their authority and responsibility. Texas West owes Fitzgerald the sum of 
$467,000, plus interest and attorney's fees totaling $678,387.17 as of March 13, 
1985, and statutory ten percent interest since that date. On payment, Texas West 
should be entitled to the drilling rig, which apparently the parties now value 
at about $250,000.11

[¶119.]            
Against the amounts presently creditable as a debt determined due, there 
would then be the damages to be derived from a jury determination of the 
contractual default instigated by Fitzgerald for which loss was sustained by 
Texas West. Unfortunately, in the present juncture of this case, the trial court 
is left to speculate as to the contractual default which constitutes the fact 
from which damages might subsequently be proved by the evidence and assessed by 
the jury. This is a complex requirement, since, in my opinion, no contract 
default has been proved.

[¶120.]            
Since the majority is determined to reverse the trial court, excise the 
remittitur and reactivate a further jury for the determination of damages, the 
court should determine the event of contract default and the measure of damages 
in order to provide some rational expectancy that this litigation pursued since 
1982 will be seasonably terminated without the probability of another jury trial 
followed by another appeal. Gulf Colorado and Santa Fe Ry. v. Deen, 
Tex.Civ.App., 306 S.W.2d 171 (1957), rev'd and remanded 158 Tex. 466, 312 S.W.2d 933, mandamus granted in Deen v. Hickman, 358 U.S. 57, 79 S. Ct. 1, 3 L. Ed. 2d 28, 
cert. denied in Deen v. Gulf, Colorado & Santa Fe Ry. Co., 358 U.S. 874, 79 S. Ct. 111, 3 L. Ed. 2d 105 (1958).

[¶121.]            
I would affirm the decision of the trial court on the arbitration, and 
would also reverse the trial court and direct the entry of a judgment in favor 
of defendant Fitzgerald on the plaintiff's counterclaim against the intervenor, 
with the expectancy that possibly the litigation without further investment in 
cost to all parties would now be concluded. I would agree with the court that 
neither the original jury award nor the reduced amount by remittitur was proven 
as a proper damage award. See majority and dissenting opinions in Petty-Ray 
Geophysical, Division of Geosource, Inc. v. Ludvik, Wyo., 718 P.2d 9 
(1986).

FOOTNOTES

1 A well-considered 
history ascribing the differing derivation of surety from Roman language and 
usage and guaranty from Teutonic history is to be found in Radin, Guaranty and 
Suretyship, 17 Cal.L.Rev. 605 (1928-29). It is contended by some authorities 
that the general principles and relationships involving suretyship can be dated 
back to the earliest history of man in a societal relationship.

2 The subject of 
intentional interference as a tort is comprehensively addressed by authorities 
and law journals which include: Note, Leigh Furniture and Carpet Co. v. Isom: 
Utah's New Tort for Interference with Prospective Economic Relations, 10 
J.Contemp.Law 227 (1984); Comment, An Analysis of the Formation of Property 
Rights Underlying Tortious Interference with Contracts and Other Economic 
Relations, 50 U.Chi.L.Rev. 1116 (1983); Hughes and Gavin, Commercial Torts and 
Deceptive Trade Practices, 39 Sw.L.J. 123 (1985); Broida and Handler, Tortious 
Interference With Contract and Prospective Advantage in Illinois, 32 De Paul 
L.Rev. 325 (1982-83); Commentary, Interference With Contractual and Business 
Relations in Alabama, 34 Ala.L.Rev. 599 (1983); Comment, Interference With 
Prospective Gain: Must There be a Contract?, 22 San Diego L.Rev. 401 (1985); 
Note, Tortious Interference With Contractual Relations in the Nineteenth 
Century: The Transformation of Property, Contract, and Tort, 93 Harvard L.Rev. 
1510 (1980); Perlman, Interference with Contract and Other Economic 
Expectancies: A Clash of Tort and Contract Doctrine, 40 U.Chi.L. Rev. 61 (1982); 
Note, Tortious Interference with Contract: A Reassertion of Society's Interest 
in Commercial Stability and Contractual Integrity, 81 Colum.L.Rev. 1491 (1981); 
Dobbs, Tortious Interference with Contractual Relationships, 34 Ark.L.Rev. 335 
(1980-81).

3 Texas West exhaustively 
briefed the issue for the trial court that Fitzgerald was constrained to rights 
of subrogation in suretyship demand compliance, and consequently that his 
payment released the collateral security. The issue was not again addressed in 
this appeal. It is the "you cannot buy out, but can only pay off" argument, with 
the corollary that the right of subrogation does not encompass right to the 
available security. Since not now argued, that contention will not be further 
addressed except to note that lack of supporting authority is found to be 
further complicated by the actual security acquisition in consonance with the 
equitable right of subrogation. Stearns, supra, §§ 11.1, 11.7, at 439, 456; 
Calhoun, Suretyship for the Iowa Lawyer, 67 Iowa L.Rev. 219 
(1981-82).

4 With present conditions 
in the oil industry it is generally assumed that the rig without draw works is 
now worth only a fraction of the original cost or contract price. Nobody really 
wants the rig very badly at this time. Apropos is a current quip circulating 
about Casper banks in the idiom of good news/bad news: the good news for new 
depositors is the availability of either a pen and pencil set or an oil well as 
a premium; the bad news is that all pen and pencil sets are gone.

5 A complete review of the 
entire record reveals little actual conflict in the evidence. Excluding 
unsustained intimations in the examination, the events of factual controversy 
essentially involved payment and balance due, all of which was determined by 
arbitration first requested by Texas West and then scheduled by stipulation 
between Texas West and Oil Patch. There is an inferred conflict as to the effect 
of what Fitzgerald said to the Bank upon note renewal, but we have assumed the 
favorable inference to Texas West that it had the effect of requesting security, 
even though the record reflects that at an earlier loan committee meeting of the 
Bank it was determined that in any event they would require security before note 
renewal.

6 In addition to the 
reimbursement and indemnity responsibilities of Oil Patch to Fitzgerald upon 
guaranty call, there was another reason for reluctance of the officers of Oil 
Patch to release assets for which a balance was claimed. Those persons, as 
principals in Oil Patch (Gibson and Harries) were co-guarantors, and as such 
have an obligation of contribution. Restatement of the Law of Security § 149 at 
420. See also Calhoun, Suretyship for the Iowa Lawyer, supra n. 3, at 278; 
Stearns, supra, § 11.18 at 478. With or without inventory security in favor of 
the Bank, ultimate liability rested with Oil Patch, and, if then insolvent, 
contributory responsibility with its principals (Gibson and Harries) as 
co-guarantors. It is a flight of fancy to say that Fitzgerald "controlled" the 
nonrelease decision of Oil Patch. Black v. O'Haver, 567 F.2d 361 (10th Cir. 
1977), cert. denied 435 U.S. 969, 98 S. Ct. 1609, 56 L. Ed. 2d 61 (1978); 
Corinthian Corporation v. White & Bollard, Inc., 74 Wn.2d 250, 442 P.2d 950 
(1968).

7 Two events are 
denominated by Texas West as causative and wrongful in the 
intentional-interference tort context. The first was upon note renewal. Texas 
West intimates what was certainly not proven but is accepted as fact for this 
opinion, that Fitzgerald asked the lender to get security. What was demonstrated 
by the evidence was that Fitzgerald "asked the bank to be sure they had their 
paperwork in order." The loan committee of the Bank had earlier determined that 
the operational loan should be collateralized before renewal.

The second event was in 
July, 1982, apparently after the note extension time had expired, when 
Fitzgerald did not agree to the lien release. The only way Fitzgerald could have 
controlled at that time was by (a) payoff of guaranty before call, and (b) 
release of his rights both as to subrogation and indemnity against Oil Patch, as 
well as to convince the co-guarantors who controlled Oil Patch to accept the 
release of the asset to the buyer.

8 An exhaustive review of 
suretyship principles, including exoneration, reimbursement and subrogation, as 
well as defenses, is found in Calhoun, Suretyship for the Iowa Lawyer, 67 Iowa 
L.Rev., supra n. 3. See also Conner, Enforcing Commercial Guaranties in 
Texas: Vanishing Limitations, Remaining 
Questions, 12 Texas Tech.L.Rev. 785 (1981).

9 Thereafter plaintiff's 
attorney removed the sitting trial judge, and substitution of other judges 
ensued.

10 Another interesting 
anomaly exists with the three co-guarantors. One of the other two, Gordon 
Gibson, signed the renewal note and the financing agreement with the approval of 
the other guarantor, W.T. Harries (these two being the shareholders and officers 
of Oil Patch). Suit was originally instituted on the intentional interference 
claim against only the outside guarantor, and not the parties with control of 
Oil Patch. An attempt during trial to add the Bank and Gibson was denied by the 
trial court, and another lawsuit is now pending in this court on that 
litigation.

11 The determination of 
amounts due Fitzgerald is derived from the judgment entered in favor of Oil 
Patch against Texas West, pursuant to the arbitration award, which amount has 
been assigned to and is collectible by Fitzgerald.