Title: Examination Management Services, Inc. v. Kirschbaum

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Examination Management Services, Inc. v. Kirschbaum1996 WY 145927 P.2d 686Case Number: 95-278Decided: 11/01/1996Supreme Court of Wyoming
EXAMINATION MANAGEMENT SERVICES, INC., a Texas Corporation,

Appellant 
(Plaintiff),

v.

Norman KIRSCHBAUM, 
individually and d/b/a Western Medical Services, Inc.,

 a Wyoming 
Corporation,

 Appellee (Defendant).

Appeal from District 
Court, Natrona County, Dan Spangler, J.

Kim D. Cannon 
and Anthony T. Wendtland of Davis & Cannon, Sheridan; Bruce Willoughby of 
Brown, Drew, Massey & Sullivan, Casper, for appellant.

Mark W. Gifford 
of Gifford & Bonner, Casper, for appellee.

Before 
GOLDEN, C.J., and THOMAS, MACY, TAYLOR*, and LEHMAN, 
JJ.

* Chief Justice effective 
July 1, 1996.

GOLDEN, Justice.

[¶1]      In this contract 
dispute, in which each party charged the other with having breached the contract 
and one party accused the other of having wrongfully interfered with the 
former's contractual relationships with third-parties, we are presented with a 
question of interpretation concerning the scope of the services to be performed 
under the contract, a question of the validity of the claim of interference with 
contractual relationships, and questions of the sufficiency of the evidence 
supporting the jury's verdict. Before trial, the district court granted a 
partial summary judgment in favor of Norman Kirschbaum, the party providing the 
services under the contract, ruling that the contract unambiguously limited the 
scope of Kirschbaum's services to services, including occupational health 
testing, for insurance company clients of Examination Management Services, Inc. 
(EMSI). At the conclusion of the trial, finding in favor of Kirschbaum on his 
claims of breach of contract and interference with contractual relationships, 
the jury awarded him substantial damages against EMSI. EMSI appeals both the 
district court's partial summary judgment order and the judgment entered on the 
jury's verdict.

[¶2]      We 
affirm.

[¶3]      EMSI presents 
these issues:

A.        Did the 
District Court Commit Reversible Error In Awarding Partial Summary Judgment to 
Kirschbaum On His Claim that OHT Services Were Outside of the Plain Meaning of 
the Parties' Contract?

B.        Were 
Kirschbaum's Damage Claims For Alleged Interference With Independent Examiner 
Contracts Valid As A Matter of Law?

C.        Were The 
Jury's Damage Awards For Intentional Interference With At Will Contracts And 
Breach of Contract Supported By Sufficient Evidence?

[¶4]      Kirschbaum 
rephrases the issues in this way:

1.         Do 
the materials submitted to the district court on motions for summary judgment 
show the existence of any genuine issue of material fact as to the scope of the 
contract?

2.         Is 
Kirschbaum's claim for intentional interference with contractual relations valid 
under Wyoming law?

3.         Is 
the jury's damage award supported by substantial evidence?

[¶5]      Although the 
specific facts surrounding the issues presented will be set forth in more detail 
as we discuss each issue below, we state the following general facts to provide 
an understanding of the procedural history of this case. On September 5, 1990, 
EMSI and Kirschbaum entered into a written contract of five years duration under 
the terms of which Kirschbaum, under EMSI's name, was to furnish what may be 
generally described at this time as medical and paramedical examination services 
to EMSI's approved customers. Without going into detail at this time about the 
parties' respective performances under the contract between September 5, 1990, 
and May 1993, we can say that in early May 1993, EMSI notified Kirschbaum that 
it was terminating the contract for cause because of certain of Kirschbaum's 
activities. EMSI believed that Kirschbaum's activities constituted a breach of 
the contract. A few days after this notification, EMSI filed suit against 
Kirschbaum, seeking enforcement of a non-competition provision in the contract, 
return of EMSI equipment and money damages for sums that Kirschbaum allegedly 
owed EMSI.

[¶6]      Kirschbaum filed 
an answer denying EMSI's claims and a counterclaim alleging that EMSI breached 
the contract and wrongfully interfered with contractual relationships existing 
between Kirschbaum and independent examiners he used in performing the services 
under the contract. The parties engaged in discovery. On March 28, 1995, EMSI 
filed a motion for summary judgment on three of Kirschbaum's counterclaims, 
viz., wrongful termination of the contract, slander and defamation, and 
intentional interference with contractual relationships. Specifically with 
respect to the wrongful termination claim, EMSI supported its motion with the 
contract and excerpts of testimony from Kirschbaum's deposition taken on 
September 22 and 23, 1993. The thrust of EMSI's motion on that particular claim 
was that Kirschbaum's deposition excerpts showed that Kirschbaum had directly 
billed some clients, instead of billing them through EMSI, in violation of one 
of the contract's provisions. EMSI reasoned that its termination of the contract 
because of Kirschbaum's "direct billing" violation was, therefore, lawful and 
not wrongful as Kirschbaum alleged.

[¶7]      On April 13, 
1995, Kirschbaum countered EMSI's summary judgment motion with his own motion 
for partial summary judgment. In support of his motion, Kirschbaum submitted 
nine exhibits, including the contract and his affidavit dated April 12, 1995. 
The thrust of Kirschbaum's motion was that the contract unambiguously applied 
only to his furnishing insurance physical examination services, not occupational 
health testing services; Kirschbaum later developed a market for occupational 
health testing services; he encountered problems with EMSI's handling of his 
occupational health testing services accounts; he began direct billing his own 
occupational health testing services accounts; EMSI terminated the subject 
contract because of his direct billing of his own occupational health testing 
services accounts; and, because those accounts were outside the scope of the 
parties' contract, EMSI's action terminating that contract was 
wrongful.

[¶8]      EMSI responded to 
Kirschbaum's motion for partial summary judgment on April 24, 1995, with a 
written memorandum which discussed certain provisions of the contract and 
certain portions of Kirschbaum's affidavit, as well as certain evidence relating 
to the parties' performances following the making of the contract. In this 
response, EMSI contended that the parties' performances after the making of the 
contract were sufficient to modify the contract to now include occupational 
health testing services. On April 27, 1995, Kirschbaum supplemented his motion 
for partial summary judgment with his second affidavit of that same 
date.

[¶9]      The district 
court heard argument on the parties' cross motions for summary judgment and also 
permitted them to amend their pleadings. Following those amendments and the 
parties' answers thereto, the district court issued its decision on the summary 
judgment motions. The district court granted Kirschbaum's motion for partial 
summary judgment, ruling that the contract unambiguously limited the scope of 
Kirschbaum's services to services, including occupational health testing, for 
EMSI's insurance company clients. The district court denied summary judgment on 
the other issues presented by the parties' motions.

[¶10]   The parties tried the remaining 
issues to a jury. The jury found against EMSI on its claim that the parties' 
performances modified the original contract to include occupational health 
testing services for non-insurance company clients. The jury found that EMSI had 
breached the contract, and awarded Kirschbaum $100,000 damages. The jury also 
found that EMSI had wrongfully interfered with Kirschbaum's contractual 
relationships with independent examiners, and awarded him $125,000 damages. 
Finally, the jury awarded Kirschbaum attorney's fees in the sum of $3,500. The 
district court entered judgment on the verdict and later denied EMSI's 
post-trial motions. EMSI appeals both the partial summary judgment and the 
judgment entered on the jury's verdict.

DISCUSSION

Partial 
Summary Judgment Issue - Scope of Services Under the Contract

1. Standard of 
Review.

[¶11]   Our cases are legion in which we 
recite our summary judgment rules. The parties here agree what those rules are. 
The parties also agree that the contract in question is unambiguous, 
i.e., it is capable of being understood in only one way, with respect to 
the scope of services that Kirschbaum was to furnish. The parties disagree, 
however, about that understanding; in other words, they disagree about the 
meaning of the contract with respect to the scope of services. We have held that 
"the parties' subsequent disagreement concerning the contract's meaning does not 
establish an ambiguity which would require resort to extrinsic evidence." 
Moncrief v. Louisiana Land & Exploration Co., 861 P.2d 516, 524 (Wyo. 1993); 
Cliff & Co., Ltd. v. Anderson, 777 P.2d 595, 599 (Wyo. 1989). The initial 
question of whether the contract is capable of being understood in only one way 
is a question of law for the court. Prudential Preferred Properties v. J and J 
Ventures, Inc., 859 P.2d 1267, 1271 (Wyo. 1993); State v. Pennzoil Co., 752 P.2d 975, 979 (Wyo. 1988). If the court determines that the contract is capable of 
being understood in only one way, then the language used in the contract 
expresses and controls the intent of the parties. Pennzoil, 752 P.2d  at 978. In 
such case, the next question, what is that understanding or meaning, is also a 
question of law. Treemont, Inc. v. Hawley, 886 P.2d 589, 592 (Wyo. 1994); Amoco 
Production Co. v. Stauffer Chemical Co. of Wyoming, 612 P.2d 463, 465 (Wyo. 
1980). When we review the district court's summary judgment decisions that a 
contract is capable of being understood in only one way and what that 
understanding is, we accord no deference to those decisions. Prudential 
Preferred Properties, 859 P.2d  at 1271. As we have said, "[w]e are . . . at 
liberty to make a determination as to the existence of ambiguity whether or not 
the parties here agree thereto one way or the other, and whether or not the 
trial court has reached a conclusion thereon one way or the other." Amoco 
Production, 612 P.2d  at 465.

[¶12]   Although we are an appellate court, 
we "must make this determination upon the basis of the same material as that 
before the trial judge." Kuehne v. Samedan Oil Corp., 626 P.2d 1035, 1039 (Wyo. 
1981). If we, too, determine, as did the district court, that no doubt exists 
about the contract's meaning, that is a determination that no genuine issue of 
material fact exists to be litigated and, therefore, summary judgment is 
appropriate. Kilmer v. Citicorp Mortgage, Inc., 860 P.2d 1165, 1167 (Wyo. 1993). 
On the other hand, if we determine that doubt exists about the contract's 
meaning, that is a determination that a genuine issue of material fact exists to 
be litigated and, therefore, summary judgment is inappropriate. 
Meuse-Rhine-Ijssel Cattle Breeders of Canada Ltd. v. Y-Tex Corp., 590 P.2d 1306, 
1311 (Wyo. 1979). Upon determining that summary judgment is inappropriate 
because the parties must litigate the meaning of the contract, we remand the 
case to the trial court for a trial in which the parties may introduce evidence 
in addition to the contract, not to vary or alter the meaning of it, but to 
prove what that meaning is. Madison v. Marlatt, 619 P.2d 708, 714 (Wyo. 
1980).

[¶13]   When we as an appellate court 
consider the same material as that before the trial judge, as we undertake to 
determine the initial question of whether the contract is capable of being 
understood in only one way, we also follow the same standards as did the trial 
judge. Moncrief, 861 P.2d  at 523. In the context of contract interpretation, 
those standards include:

- in reading a contract 
our primary purpose is to determine the true intent and understanding of the 
parties at the time and place the contract was made;

Treemont, Inc., 
886 P.2d  at 593.

- we consider the 
contract as a whole, reading each part in light of all other parts; meaning 
should be afforded to all of the language used by the parties if that can be 
done and a reasonable construction achieved; in other words, we analyze "the 
tenor" of the contract;

Moncrief, 861 
P.2d at 523-524; Mobil Coal Producing, Inc., v. Parks, 704 P.2d 702, 706 (Wyo. 
1985); Leithead v. American Colloid Co., 721 P.2d 1059, 1063 (Wyo. 
1986).

- the presumption is that 
a particular provision is placed in a contract for a purpose; therefore, we 
strive to avoid a construction which renders a provision meaningless. Similarly, 
we strive to reconcile by reasonable interpretation any provisions which 
apparently conflict before adopting a construction which would nullify any 
provision;

Moncrief, 861 P.2d  at 524; Amoco Production, 612 P.2d  at 466.

- if we identify an 
ambiguous term or portion of the contract, we strive to ascertain the meaning of 
that term or portion from other language of the contract, i.e., from the 
contract as a whole;

Amoco 
Production, 612 P.2d  at 466.

- common sense and good 
faith are the leading characteristics of contract construction;

Moncrief, 861 P.2d  at 524.

- we 
determine the parties' intent by an objective approach, i.e., intention is what 
a reasonable person in the position of the parties would conclude the 
manifestations to mean.

Wyoming Game and Fish Comm'n v. The Mills Co., 701 P.2d 819, 822 (Wyo. 1985).

[¶14]   In addition to these standards, we have 
also recognized that:

[T]he language of a contract is to be construed within the context in which it was written. In so doing, the 
court may look to the surrounding circumstances, the subject matter and the 
purpose of the contract. The purpose of examining the 
context within which the contract was drawn, however, is limited to 
ascertaining the intent of the parties at the time the agreement was made. The context cannot be invoked to contradict the clear 
meaning of the language used, and those extraneous circumstances do not justify 
a court in proceeding "to insert therein a provision other than or different 
from that which the language used clearly indicates, and thereby, in effect, 
make a contract for the parties." Snow v. Duxstad, 23 Wyo. 82, 147 P. 174, 184 
(1915).

Pennzoil, 752 P.2d  at 978 (citations omitted and emphasis 
added); and see Taylor v. State Farm Mutual Automobile Insurance Co., 175 Ariz. 
148, 854 P.2d 1134, 1138-1141 (1993), modified on other grounds, 185 Ariz. 174, 
913 P.2d 1092 (1996), and authority cited therein.

[¶15]   Keeping these standards in mind, we now 
turn to the first step in the process of determining whether the contract in 
question is capable of being understood in only one way, and that is, 
identifying the material which the parties submitted to the district court for 
consideration in connection with the summary judgment motions.

2. 
Material Considered.

[¶16]   The district court had the parties' 
contract before it and it is reproduced for this opinion in an appendix. We are 
satisfied that the district court also had before it certain extrinsic evidence. 
With respect to that extrinsic evidence, our task was to identify that evidence 
which pertained to the context in which the contract was written. Such context 
evidence would include the purpose of the contract and discussions between the 
parties before the contract was made. Although EMSI's summary judgment motion 
recited that it was based upon the pleadings, the depositions of EMSI's 
president John M. Utley and the opposing party Kirschbaum, and interrogatories 
and admissions filed in the action, our reading of EMSI's memorandum in support 
of the motion reveals that EMSI specifically referred to only a few excerpts 
from Kirschbaum's deposition, the sense of which was that he had directly billed 
some clients. None of the excerpts pertained to the context in which the 
contract was written.

[¶17]   In contrast, when Kirschbaum filed his 
counter motion for partial summary judgment, he submitted eight exhibits in 
addition to the contract. One of those eight exhibits, Kirschbaum's affidavit 
dated April 12, 1995, pertained in part to the context in which the contract was 
written. Although a large part of that affidavit describes and explains events 
occurring after the making of the contract, a discrete part describes 
circumstances occurring before and at the time of the making of the contract. In 
that discrete part he describes his background in the medical service field and 
business, including employment with ASB Meditest, one of the top five 
paramedical companies in the nation providing the services of insurance 
physicals, blood and urine collection, and "EKGs." He describes briefly the 
circumstances of his coming into contact with EMSI's vice-president Bill 
Hutchins in August 1990, the month before the contract was made. In this regard, 
he describes EMSI as a paramedical examination company; he states that Hutchins 
called him, then came to Casper, Wyoming, to meet him and spent two days 
observing his operation. He states that Hutchins offered him the contract for 
EMSI's insurance physical services in Wyoming, and eventually Montana. He states 
that at that time occupational health testing was not part of any discussion he 
had with EMSI representatives. He states that at that time EMSI was not 
providing occupational health testing services in Wyoming. He states that the 
contract was sent to him from EMSI's Dallas, Texas, office and that he signed it 
and returned it without any changes. He states that occupational health testing 
services "consist of everything from the collection of urine for the discovery 
of controlled substances in employees in occupations regulated by the Department 
of Transportation ("DOT") to physical examinations and testing for the 
protection of employees in hazardous occupations within the purview [sic] state 
and federal OSHA." He was not providing occupational health testing services at 
the time of the making of the contract, as he did not actively pursue 
development of that market until 1992, according to his affidavit.

[¶18]   On April 24, 1995, EMSI filed a 
response to Kirschbaum's motion. In that response, EMSI referred to certain 
portions of Kirschbaum's affidavit; referred to excerpts from the deposition of 
Ron Kindred, a friend of Kirschbaum's, pertaining to conversations the two had 
relating to direct billing long after the contract was made; and referred to 
excerpts from Utley's deposition not pertaining to the context in which the 
contract was written. Also in that response, EMSI contended that the parties' 
performance subsequent to the making of the contract constituted a modification 
of the contract to include occupational health testing services within the 
contract.

[¶19]   Three days later, Kirschbaum 
supplemented his motion with three additional exhibits of evidentiary material. 
Only one of those, Kirschbaum's supplemental affidavit dated April 27, 1995, 
pertains to the context in which the contract was written. With respect to that 
context, in the relevant part of the supplemental affidavit Kirschbaum states 
that his discussions with EMSI's Hutchins before entering into the contract 
"were solely with respect to insurance physicals and related services for 
insurance company clients, and there was no discussion whatsoever regarding 
occupational health testing (OHT) services." He also states, "[o]ne of the 
reasons I entered into the contract initially was that EMSI represented itself 
to have a substantial national network of insurance company clients, and 
established expertise in servicing those clients, including billing of accounts 
and other administrative functions."

[¶20]   In sum, the extrinsic evidence 
pertaining to the context in which the contract was written, which was before 
the trial court and is now before this Court, consists only of those portions of 
Kirschbaum's two affidavits identified above. Having identified the material to 
be considered for summary judgment purposes, we next examine the parties' 
contentions about the meaning of the contract.

3. 
The Parties' Contentions.

A. EMSI's Contentions.

[¶21]   EMSI contends that the contract 
unambiguously covered all business and services, including occupational health 
testing business and services as Kirschbaum defines that phrase in his 
affidavit, that Kirschbaum was conducting for the five-year period after 
September 5, 1990, for both insurance companies and companies other than 
insurance companies. In support of this interpretation, EMSI points to the 
introductory recitals of the contract and several but, curiously, not all of the 
pertinent substantive subparagraphs of the contract. In combination the five 
recitals inform us that EMSI "is presently engaged in the business of conducting 
physical examinations," "has developed . . . a very valuable clientele and 
reputation . . . on a nationwide basis," and both EMSI and Kirschbaum desire 
that Kirschbaum "engage in the business of conducting physical examinations" 
using EMSI's name and systems of operations. EMSI claims that those recitals 
evidence the parties' intent to establish a general relationship concerning all 
examination and testing services to be performed. Further, EMSI claims that 
these recitals make it clear that EMSI's main concern is to protect its national 
client base and reputation concerning services provided through 
Kirschbaum.

[¶22]   Turning to the substantive provisions 
of the contract, EMSI draws our attention to subparagraphs 3.a., 4.b., and 4.j. 
Paragraph 3 is entitled Conduct of Business by Contractor [Kirschbaum] and 
Remuneration. Subparagraph 3.a. (emphasis added) provides:

a. 
[Kirschbaum] shall conduct medical and paramedical 
examinations and surveys through authorized, approved and duly constituted 
medical authority only by physicians and/or paramedical representatives at the 
direction and approval of the Medical Director of [EMSI] in [Wyoming]. Such business shall be conducted under [EMSI's 
name].

EMSI 
maintains that the terms "medical and paramedical examinations and surveys" and 
"such business" suggest general and broad categories of activity. EMSI notes the 
absence of the word "insurance" as a modifier of these terms.

[¶23]   Paragraph 4 of the contract is entitled 
Duties and Responsibilities of Contractor 
[Kirschbaum]. Subparagraph 4.b. provides:

b. 
[Kirschbaum] shall conduct all insurance examination business, insurance 
inspection business, drug screening and pre-employment services in the name of 
[EMSI].

Referring to the types of work listed in this provision, 
EMSI claims that the adjective "all" which modifies those types stresses that 
the listed types of work carry a broad meaning. EMSI notes that the words "drug 
screening and pre-employment services" appear after the word "insurance"; from 
that word arrangement, EMSI draws the seemingly incongruous conclusion that the 
words "drug screening and pre-employment services" modify the term "insurance." 
EMSI claims that if one reads subparagraph 4.b. in the context of the entire 
contract, one must conclude that the parties intended the scope of the contract 
to embrace more than just insurance-related services. EMSI argues that the broad 
language of subparagraph 4.b. would be rendered meaningless if one limited the 
contract's scope to insurance work alone.

[¶24]   Subparagraph 4.j. of the contract 
provides:

j. 
[Kirschbaum] shall take all possible measures to render services which would 
create good will on the part of the client companies, including, but not limited 
to, performance of quality examinations, inspections, drug screens and 
pre-employment services as soon after the original request as possible and 
mailing to the locations designated by the client.

Since the language "quality examinations, inspections, drug 
screens and pre-employment services" closely matches similar language in 
subparagraph 4.b., discussed earlier, EMSI's interpretation of that language 
closely matches its interpretation of that similar language. Thus, EMSI claims 
the language suggests a broad inclusive range of services and business. EMSI 
notes, however, a slight difference between subparagraph 4.b.'s list of work 
"all insurance examination business, insurance inspection business, drug 
screening and pre-employment services" and subparagraph 4.j.'s list of work 
"quality examinations, inspections, drug screens and pre-employment services" 
and that is the absence of the word "insurance" in the latter subparagraph. 
EMSI, however, does not attribute any significance to this difference, other 
than to opine that one would ignore subparagraph 4.j's plain meaning and render 
it meaningless if one limited the scope of contract services to insurance 
work.

[¶25]   In further support of its theme of 
interpretation that the parties' contract language evidences a broad, 
all-encompassing scope of services, EMSI points to the parties' frequent use of 
the terms "exam," "survey," "services," and "business" throughout the contract, 
concluding that such words have broad connotations and refer to all business 
that Kirschbaum may perform for EMSI during the contract term.

[¶26]   Finally, EMSI characterizes 
Kirschbaum's definition of occupational health testing services in his affidavit 
as a broad description of services which includes everything from drug screening 
and testing to examinations.

B. 
Kirschbaum's Contentions.

[¶27]   Defending the trial court's 
interpretation of the scope of services to which the contract applies, 
Kirschbaum's theme of interpretation is that the meaning of the scope of 
services is to be determined by identifying in the contract the companies for 
which Kirschbaum is furnishing those services. He first observes that the 
introductory recitals naturally suggest the questions for whom does EMSI conduct 
physical examinations, for whom will Kirschbaum conduct physical examinations, 
and who comprise the "very valuable clientele" with whom EMSI has developed its 
reputation. He next identifies, in several substantive provisions of the 
contract, references to the companies or clientele for which his work will be 
performed. Specifically, he points to subparagraphs 3.b., 3.c., and 4.j. With 
respect to subparagraph 3.b., he notes that it contains an "approval" 
requirement, i.e., not to "complete or bill for any exams for companies who do 
not approve [EMSI] or companies that [EMSI] does not approve without [EMSI's] 
express written consent." With respect to subparagraph 3.c., he notes another 
reference to that "approval" requirement in that EMSI must pay him on delinquent 
accounts provided he "has followed and follows [EMSI's] written instructions as 
to approved customers and their examination requirements and published rates." 
With respect to subparagraph 4.j., he observes that he is required to "take all 
possible measures to render services which would create good will on the part of 
the client companies." Asking rhetorically who are the "companies" that must 
approve EMSI and that EMSI must approve, who are the "approved customers" as to 
whom he must follow EMSI's written instructions, and who are "the client 
companies" with which he must create good will, he discovers the answer in 
subparagraphs 4.h. and 6.a. of the contract, neither of which EMSI discussed in 
its analysis.

[¶28]   Subparagraph 4.h. provides (emphasis 
added):

h. 
[Kirschbaum] shall devote his efforts in conducting 
physical examinations for insurance companies exclusively to and for the 
benefit of the parties to this Contract and under the terms of this agreement, 
and shall not either directly or indirectly, while this agreement is in effect, 
engage in conducting physical examinations and surveys 
for insurance companies under any name or other than for the benefit of 
[EMSI], except as previously indicated. In this regard, [EMSI] shall have 
reasonable cause to terminate this Contract if [Kirschbaum] shall default in any 
of the provisions of this paragraph, or if activities of [Kirschbaum] are such 
that the favorable position or good will of [EMSI] with one or more of [EMSI's] 
clients is adversely affected.

Kirschbaum contends that this specific reference to 
"insurance companies" readily identifies the companies referred to in the 
introductory recitals and the other substantive provisions of the 
contract.

[¶29]   He repeats that contention with respect 
to subparagraph 6.a. That provision, appearing under paragraph 6 entitled 
Covenants of Company [EMSI], provides (emphasis added):

a. 
[EMSI] shall use its best efforts to secure and maintain the approval of all possible major insurance companies in 
the contracted area [Wyoming] for the furnishing of 
medical and paramedical examinations to these companies, and [EMSI] shall 
furnish [Kirschbaum] these approvals.

Kirschbaum obviously finds it significant that the parties 
singled out "insurance companies" and failed to specifically mention companies 
other than insurance companies.

[¶30]   In addition to the contract language, 
Kirschbaum directs our attention to the extrinsic evidence pertaining to the 
context in which the contract was made. As we observed earlier in this opinion, 
the pertinent and relevant context evidence is found in Kirschbaum's affidavits 
in which he describes his background in the medical service field, the 
circumstances of his contact with EMSI's Bill Hutchins, the subject of his 
discussions with Hutchins, the nature of occupational health testing services, 
and EMSI's absence from the occupational health testing business in Wyoming at 
the time of the making of the contract. According to Kirschbaum, this context 
evidence confirms the plain meaning of the contract that the scope of services 
under the contract was limited to services for EMSI's insurance company 
clients.

4. 
Our Decision.

[¶31]   Having carefully considered the 
contract, the context evidence, and the parties' contentions, we hold that the 
contract with respect to the scope of services is capable of being understood in 
only one way and that way is, services for EMSI's insurance company clients, as 
held by the trial judge. Therefore, we affirm the trial court's 
decision.

[¶32]   Having compared the parties' respective 
contentions, we readily find that their precise point of disagreement is, 
simply, for whom was Kirschbaum to provide his various services, not whether 
occupational health testing services were among those various services he was to 
provide. In his appellate brief, Kirschbaum concedes that occupational health 
testing services were among those services he was to furnish. EMSI claims that 
Kirschbaum was to provide his services, including occupational health testing, 
to both insurance company clients and all other companies. Kirschbaum claims 
that he was to provide his services, including occupational health testing, to 
only EMSI's insurance company clients. On this point of disagreement, we believe 
that Kirschbaum has the better argument.

[¶33]   Our reading of the contract begins with 
the introductory recitals. As we demonstrated in Union Pacific Resources Co. v. 
Texaco, 882 P.2d 212, 222 (Wyo. 1994), in the context of a recital in a natural 
gas operating agreement, recitals "are frequently intended to, and often do, 
shed light on the circumstances the parties wished to have considered in the 
interpretation of the contract." 2 E. ALLEN FARNSWORTH, FARNSWORTH ON CONTRACTS 
§ 7.10 at 258-59 (1990). Of the six recitals in the parties' contract, the first 
five contain language that sheds light here. Read together, these recitals 
inform us that the parties' purpose in contracting was to permit Kirschbaum, 
using EMSI's valuable name and systems of operations, to engage in EMSI's 
nationally reputable business of conducting physical examinations through 
authorized medical and paramedical personnel for a valuable national clientele. 
We agree with EMSI that these recitals make it clear that EMSI's main concern 
was to protect its national client base and reputation concerning services 
provided through Kirschbaum.

[¶34]   Turning our attention to the ten 
numbered substantive paragraphs of the contract, we agree with Kirschbaum's 
interpretive analysis that several of these substantive provisions are key in 
identifying the valuable national clientele for which Kirschbaum was to provide 
services and EMSI had appropriate concern about protecting its good will. In 
paragraph 4, in which the parties set out Kirschbaum's duties and 
responsibilities, the parties expressly provided in subparagraph 4.h. that 
Kirschbaum was to "devote his efforts in conducting physical examinations for 
insurance companies exclusively to and for the benefit of the parties to this 
Contract and under the terms of this agreement." Significantly, EMSI's 
interpretive analysis ignores this provision altogether. But this Court cannot 
ignore this provision. We presume the parties placed that provision in this 
contract for a purpose. We must read that provision in the light of the other 
provisions; we must consider the whole contract and analyze the tenor of the 
complete document. Subparagraph 4.h. is specific as to insurance companies; we 
cannot rewrite the provision to add "and all other companies" in order to 
sustain EMSI's position. Our view on this point applies with equal force to the 
parties' additional language in subparagraph 4.h. that Kirschbaum "shall not . . 
. engage in conducting physical examinations and surveys for insurance companies 
under any name or other than for the benefit of [EMSI]." Also, we find it 
significant that in this same subparagraph the parties wrote that EMSI would 
have reasonable cause to terminate the contract if Kirschbaum's "activities . . 
. are such that the favorable position or good will of [EMSI] with one or more 
of [EMSI's] clients is adversely affected." The noun "clients" obviously refers 
to "insurance companies," the subject of the same subparagraph. Moreover, we 
think this subparagraph fits harmoniously with EMSI's expressed concern in the 
introductory recitals about protecting the reputation it had developed with its 
valuable national clientele.

[¶35]   Before leaving the subject of EMSI's 
concern about protecting its good will with its valuable national insurance 
clientele, we note that the parties referred to it again in subparagraph 4.j. 
There, the parties wrote that the "good will on the part of the client 
companies" is something that Kirschbaum must take all possible measures to 
create. The plain language of that provision is capable of only one reasonable 
meaning, viz., among the measures that Kirschbaum must take to create good will 
on the part of the client companies are timely performance ("as soon after the 
original request as possible") of "quality" services and mailing to 
client-designated locations. Reading this language in the light of the language 
of the other previously noted provisions in which the parties identify insurance 
companies as the clientele for which services are to be furnished, we think the 
language "good will on the part of the client companies" refers to those 
previously identified "insurance companies."

[¶36]   Having ignored the parties' express 
identification of insurance companies in subparagraph 4.h., EMSI's interpretive 
analysis also ignores the parties' other express identification of insurance 
companies in subparagraph 6.a., which deals with EMSI's covenants. In that 
particular subparagraph, the parties wrote that EMSI shall use its best efforts 
to secure and maintain and furnish to Kirschbaum "the approval of all possible 
major insurance companies in the contracted area for the furnishing of medical 
and paramedical examinations to these companies." This language assumes key 
significance when read in light of certain language contained in subparagraphs 
3.b and 3.c. In subparagraph 3.b., the parties agree that Kirschbaum "will not 
complete or bill for any exams for companies who do not approve [EMSI] or 
companies that [EMSI] does not approve without [EMSI's] express written 
consent." In subparagraph 3.c., the parties agree that EMSI will still pay 
Kirschbaum on delinquent accounts "provided [Kirschbaum] has followed and 
follows [EMSI's] written instructions as to approved customers and their 
examination requirements and published rates." Reading these several 
subparagraph provisions in light of each other, we find that they interrelate 
with respect to the "approval" requirement feature which is an important aspect 
of the parties' contractual relationship. We think the approved customers of 
subparagraph 3.c. and the approved companies of subparagraph 3.b. clearly refer 
to the approving insurance companies of subparagraph 6.a. 

[¶37]   Having considered the contract as a 
whole, reading each part in light of the other parts, we hold that the contract 
unambiguously limited the scope of Kirschbaum's services to services, including 
occupational health testing, for EMSI's valuable national insurance company 
clientele. Our reading of the contract is only confirmed when we additionally 
consider the undisputed context evidence submitted by Kirschbaum. Although that 
context evidence is not crucial to our interpretation, it leaves no room for 
doubt.

[¶38]   We next address the question raised by 
EMSI concerning the validity of the claim of interference with contractual 
relationship.

Intentional Interference With Examiner 
Contracts

[¶39]   It was established at trial that 
through Kirschbaum's operation, EMSI billings grew from $5,000 per month to 
$60,000 per month within the next two years and the number of examiners expanded 
from twenty to over two hundred and fifty. As agreed, EMSI helped finance 
Kirschbaum's growth by providing working capital as needed and by paying him 85% 
of his billings every two weeks. Kirschbaum paid his examiners out of these 
billing revenues; and under the contract, failure to pay could constitute a 
default of the contract.

[¶40]   In 1992, Kirschbaum began performing 
occupational health testing services (OHT), testing industrial employees for 
harmful or illegal substances in their systems. Unlike drug screening in an 
insurance physical, this service is regulated by the Department of 
Transportation which requires that persons who administer such tests be 
certified. At first, Kirschbaum relied on EMSI to provide test scheduling, 
supplies, and billing, but EMSI consistently failed to properly handle its end, 
costing Kirschbaum clients and money. After numerous unsuccessful attempts to 
resolve EMSI's problems, Kirschbaum then began to direct bill his own clients 
through his corporation, Western Medical Services, Inc., although he continued 
to bill EMSI's clients through EMSI. OHT testing accounted for less than twenty 
percent of Kirschbaum's business.

[¶41]   Another series of blunders by EMSI in 
April of 1993 seriously jeopardized its contract with an OHT client and a 
laboratory client. Kirschbaum was successful in rectifying EMSI's error and used 
the incident to secure a mid-May meeting with EMSI's president, John Utley, in 
Dallas to discuss solutions to these problems. Kirschbaum expressed his 
excitement to EMSI that Utley was involved and now ready to act decisively. 
However, the incident caused Utley to fear that Kirschbaum was about to 
terminate their contract and join with another service bureau. Utley decided to 
take steps to secure Kirschbaum's network of examiners for EMSI and then 
terminate Kirschbaum's contract for cause which would activate Kirschbaum's 
covenant not to compete. On Tuesday, April 27, Utley directed EMSI's payroll 
department not to release any funds to Kirschbaum. Kirschbaum, unable to pay his 
examiners, was not told of this order when he questioned the payroll department. 
On Friday, April 30, Utley sent an associate vice president of EMSI to 
Kirschbaum's Billings, Montana, office with instructions for that office to 
contact Kirschbaum's examiners and tell them that Kirschbaum was no longer a 
part of EMSI and they should not speak with him. Kirschbaum was not informed of 
this activity. The EMSI vice president told the Billings' office managers that 
Kirschbaum's contract was going to be canceled and offered it to them. They 
accepted and began calling examiners to tell them of the new arrangement, asking 
them to stay on with them and not to return any equipment. The vice president 
faxed a message to Utley stating that virtually all examiners would work with 
EMSI because Kirschbaum owed them money. On Tuesday, May 4, Kirschbaum, 
concerned that he had not yet received his late-April check from EMSI, faxed a 
letter to EMSI's chief financial officer. He also submitted an additional $6,000 
in billings. He did not receive a response to either of these communications. 
Later that day, an examiner called Kirschbaum and told him about her phone call 
from the office managers. The managers refused to explain their actions to 
Kirschbaum, but thirty minutes after he talked with them, Kirschbaum received a 
fax from Utley, advising that his contract was being terminated for 
cause:

This 
is to advise you that your contract with Examination Management Services, Inc., 
has been terminated. Your practice of handling urine collection services through 
Western Medical Services, Inc., rather than through Examination Management 
Services, Inc., and billing for those services directly constitute a breach of 
our agreement.

[¶42]   Kirschbaum immediately laid off eight 
of his eleven office employees. Because he was without funds to pay his network 
of examiners, the majority did not stay with him; by the end of the year, 
Kirschbaum's business had failed.

[¶43]   In Wyoming, the elements for tortious 
interference with a contract are: 1) the existence of a valid contractual 
relationship or business expectancy; 2) knowledge of the relationship or 
expectancy on the part of the interferer; 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. Toltec Watershed Imp. Dist. v. Johnston, 717 P.2d 808, 813-14 (Wyo. 
1986). EMSI agrees that the jury was properly instructed at trial as 
follows:

[# 
23.]             
You are instructed that one who intentionally and improperly interferes 
with the performance of a contract between another and a third person by 
inducing or otherwise causing the third person not to perform the contract, is 
liable to the other for the loss resulting to the other from the failure of the 
third person to perform the contract.

[# 
24.]             
With respect to his claim for intentional interference with contracts, 
Defendant has the burden of proving by a preponderance of the evidence the 
following:

1. 
The existence of a valid contractual relationship between Defendant and a third 
party;

2. 
Knowledge by Plaintiff of the contractual relationship between Defendant and the 
third party;

3. 
Intentional and improper interference by Plaintiff, inducing or causing a breach 
or termination of the contractual relationship; and

4. 
Damage to Defendant as a result of the termination of the contractual 
relationship.

In 
determining whether an issue has been proved by a preponderance of the evidence, 
you should consider all of the evidence bearing upon that issue, regardless of 
who produced it. The existence of such proposition must be more probable than 
its nonexistence.

[# 
25.]             
You are instructed that a contract which may be terminated at any time 
and for any reason, by either party, is nonetheless a contract which is subject 
to interference.

[# 
26.]             
With respect to Defendant's claim for intentional interference with 
contracts, if you find for Defendant on the question of liability, you must then 
fix the amount of money which will reasonably and fairly compensate Defendant 
for those elements of damage proved by the evidence to have been caused by 
Plaintiff's interference.

The 
claimed elements of damages are:

(a) 
The pecuniary loss of the benefits of the contracts or business 
expectancies;

(b) 
The emotional distress experienced by Defendant as a result of Plaintiff's 
conduct;

(c) 
Any consequential losses caused by Plaintiff's interference.

Whether any of these elements has been proved is for you to 
determine.

[¶44]   EMSI contends that, as a matter of law, 
Kirschbaum's claim for interference with contract is barred by the facts of this 
case because EMSI's actions were, at worst, legitimate competitive activities. 
Kirschbaum contends that EMSI's fair competition argument should have been made 
to the trial judge at the instruction conference and followed up by properly 
objecting to the court's instructions to the jury. He urges that EMSI's failure 
to preserve the record with respect to the law upon which the jury was 
instructed is fatal and cites to State Farm Mutual Auto. Ins. Co. v. Shrader, 
882 P.2d 813, 831-32 (Wyo. 1994). EMSI views the instructions given as proper, 
but asserts that where two reasonable inferences can be drawn from the evidence 
presented at trial, judgment should be reversed if, as a matter of law, the 
inference in favor of the party that did not have the burden of proof was more 
or at least equally probable. EMSI relies on Murphy v. Stevens, 645 P.2d 82, 93 
(Wyo. 1982), for this statement of the law. Because Kirschbaum admitted that the 
examiners were independent contractors and free to work for anyone they chose, 
EMSI asserts the evidence supports an inference that its activities were 
competitive which is at least equally as probable as an inference that its 
activities were tortiously improper and, thus, as a matter of law, Kirschbaum 
has failed to carry his burden of proving that EMSI's interference was improper. 
Although it could have, EMSI did not offer a jury instruction on the effect of 
competition as either an absolute right, a privilege, or an affirmative defense. 
See Triton Coal Co. v. Mobil Coal Producing, Inc., 800 P.2d 505, 509 (Wyo. 
1990).

[¶45]   The RESTATEMENT (SECOND) OF TORTS lists 
a number of justifications for intentional interference with contracts for which 
liability will not attach. RESTATEMENT (SECOND) TORTS §§ 768-774 (1979). In an 
attempt to clarify when liability will attach to conduct, the Restatements were 
revised from the wording "justification" and "privilege" to "one who 
intentionally and improperly interferes." Basin Elec. Power Co-op., Etc. v. 
Howton, 603 P.2d 402, 405 (Wyo. 1979); RESTATEMENT (SECOND) OF TORTS § 766 
(1979). This Court decided that whether interference was improper was a question 
of fact for the jury and, in dicta, noted that the burden of proving sufficient 
justification for the interference rested with the party defending its conduct. 
Basin Elec., 603 P.2d  at 405. We held that the verdict would be viewed as the 
jury's acceptance of that party's version of the transaction, notwithstanding 
the evidence to the contrary, and our judgment would not be substituted for the 
jury's. Id. at 406.

[¶46]   The RESTATEMENT (SECOND) OF TORTS § 768 
sets out the requirements for establishing whether competition constitutes 
proper or improper interference. Wilder v. Cody Country Chamber of Commerce, 868 P.2d 211, 225 (Wyo. 1994). If those requirements are met by the facts and 
circumstances of the case, EMSI's competition defense theory easily avails 
itself of a request to instruct the jury that its actions were not "improper" if 
found to be legitimate competitive activities which were carried out in a proper 
manner. RESTATEMENT (SECOND) OF TORTS §§ 768, 767 cmt. c (1979); see Basin 
Elec., 603 P.2d  at 405; see Triton Coal Co., 800 P.2d  at 511 (parties have a 
right and duty to offer instructions on their theory of the case and any claim 
of error is waived by the failure to submit a proper written instruction). 
Because EMSI did not request such an instruction or object to the instructions 
as given or otherwise point to trial court error, the issue has not been 
properly preserved for appeal from the order granting judgment on the verdict. 
Triton Coal Co., 800 P.2d  at 511; Joly v. Safeway Stores, Inc., 502 P.2d 362, 365 (Wyo. 1972); WYO. R. CIV. P. 46. EMSI's appeal from the order denying its 
motions for judgment as a matter of law and for a new trial on the grounds that 
the verdict is against the great weight of the evidence requires that we apply 
our standard of review for determining whether sufficient evidence supports the 
jury verdict. Dellapenta v. Dellapenta, 838 P.2d 1153, 1163 (Wyo. 1992). We 
assume that the evidence of the prevailing party is true. We give this evidence 
every favorable inference and leave out of consideration any conflicting 
evidence of the other party. Id. The trial court's findings are presumed to be 
correct and will not be disturbed absent a showing that they are clearly 
erroneous, inconsistent, or contrary to the great weight of the evidence. 
Id.

[¶47]   Substantial evidence was presented 
enabling this jury to determine that EMSI's conduct was intentional and improper 
interference of the contracts between Kirschbaum and his network of independent 
contractors. EMSI's contract with Kirschbaum required him to hire, train, and 
pay the examiners, stated the territory was exclusively Kirschbaum's, and stated 
that Kirschbaum's failure to timely pay the examiners was cause for termination 
of the contract and would trigger his covenant not to compete. Evidence was 
presented that EMSI knew it had breached its contract with Kirschbaum and feared 
he would terminate it and sign on with another billing service. By pretext, EMSI 
intentionally withheld the funds Kirschbaum needed to pay the examiners and, 
during that time, used Kirschbaum's failure to pay to not only induce the 
examiners to work for it, but to refuse to work for Kirschbaum. The evidence 
described activities undertaken by EMSI within Kirschbaum's own Billings office 
in order to secure the network of examiners for it. The jury could also have 
concluded from the evidence that EMSI's actions also were aimed at triggering 
Kirschbaum's covenant not to compete in order to assure he could not rebuild a 
network of examiners.

[¶48]   Absent an abuse of discretion, this 
Court will not overturn the trial court's decision to deny a new trial motion. 
The trial court has broad discretion in the matter of granting a new trial, and 
its action will not be disturbed on appeal unless it is clear and conclusive 
that there was an abuse of discretion. Dellapenta, 838 P.2d  at 1163. Sufficient 
evidence supports the jury's finding on this issue. The district court exercised 
proper discretion in denying the new trial motion and upholding the jury 
verdict.

Sufficiency of Evidence to Support Jury Award for Breach of 
Contract

[¶49]   The jury awarded Kirschbaum $100,000 
for breach of contract damages. EMSI contends that Kirschbaum proved only 
$41,000 dollars in contract breach damages and reversal is required.

[¶50]   Our standard of review for questions 
concerning the sufficiency of the evidence, set out above, applies here. At the 
close of the evidence, Kirschbaum's counsel moved to amend his pleadings to 
conform to the evidence with respect to damages. The motion was granted. The 
jury was instructed that the measure of damages for a breach of contract claim 
is as follows:

If 
you find that a contract existed between the parties and that one party breached 
the contract, the non-breaching party is permitted to recover those reasonably 
foreseeable damages that directly resulted from the breach, that is, such an 
amount as would place it in the condition it would have been in if the other 
party had adequately performed the contract, less that which is saved by the 
breaching party.

[¶51]   At trial, the jury heard evidence of 
several categories of damages which it may properly have awarded for breach of 
contract under the foregoing instruction. The parties' documents calculated the 
funds wrongfully withheld by EMSI to be between $41,000 and $66,000. Kirschbaum 
testified that he lost equipment worth $35,000 and supplies worth $14,000. He 
also lost a $10,000 investment in his building because he could not keep up 
payments after the contract was terminated. Taken together, the evidence amply 
supports the $100,000 awarded by the jury.

CONCLUSION

[¶52]   We affirm the partial summary judgment 
ruling limiting the scope of the contract to EMSI's insurance company clientele. 
As the finder of fact, the jury was charged with determining whether EMSI had 
intentionally and improperly interfered with Kirschbaum's contracts with his 
network of examiners. We hold that the jury's finding for Kirschbaum on that 
claim is supported by the evidence, and we affirm. We hold that sufficient 
evidence was presented to support the jury's damage award for breach of 
contract, and we affirm that award.

APPENDIX A

CONTRACT

STATE OF TEXAS

COUNTY OF DALLAS

[¶53]   WHEREAS, Company is presently engaged 
in the business of conducting physical examinations through authorized and 
paramedical personnel and

[¶54]   WHEREAS, Company has developed through 
the conduct of its business a very valuable clientele and reputation for the 
conduct of its business on a nationwide basis, and

[¶55]   WHEREAS, Company has developed through 
the conduct of its business valuable name, symbols and trademarks associated 
with Company's business and a unique and valuable system of operations, 
and

[¶56]   WHEREAS, Contractor desires to engage 
in the business of conducting physical examinations through authorized medical 
and paramedical personnel and to use the name, symbols and trademarks associated 
with Company's name, as well as Company's systems of operations,

[¶57]   WHEREAS, Company desires for Contractor 
to engage in such business under the conditions set forth herein, 
and

[¶58]   WHEREAS, Company and Contractor each 
expect that by entering into this Contract, and by the full and faithful 
observance and performance of its duties, obligations and responsibilities, that 
a mutually satisfactory relationship between them will be established and 
maintained.

[¶59]   NOW, THEREFORE, it is mutually agreed 
as follows:

[¶60]   1. Establishment of Contractor. Company hereby grants the 
Contractor under the terms and conditions set forth herein, and for the limited 
period of this contract, the right to use the names, symbols and trademarks 
associated with the Company name, and the Company's systems of operation in the 
City of Casaer, County of Natrona, State of Wyoming, 
and additional area described as follows:

all 
of state of Wyoming (Montana at earliest available date) not to exceed January, 
1992. _____________________________________________________ 
_____________________________________________________ 
_____________________________________________________

[¶61]   2. Term and 
Renewal. The term of this contract shall be for five (5) years, commencing 
on the 5 day of Sept., 
19 90; this Contract and the terms hereof are 
subject to the rights and duties of the parties stated herein and shall be 
governed hereby. This Contract shall automatically renew at its expiration date, 
provided Contractor is not then in default hereunder, unless prior to sixty (60) 
days before the expiration date either party shall give the other party written 
notice that such party will not renew this contract. It is specifically agreed 
that this Contract not withstanding all other provisions is terminable on an 
immediate basis for cause without notice and can be terminated without cause by 
either party with a thirty day notice in writing. Cause may include failure on 
the part of Contractor to develop the specific areas assigned to 
Contractor.

[¶62]   3. Conduct of 
Business by Contractor and Remuneration.

            
a. Contractor shall conduct medical and paramedical examinations and 
surveys through authorized, approved and duly constituted medical authority only 
by physicians and/or paramedical representatives at the direction and approval 
of the Medical Director of the Company in the areas above described. Such 
business shall be conducted under the name of "Examination Management Services, 
Inc."

            
b. At the end of each business day, Contractor shall mail to Company at 
Company's Home Office in Dallas, Texas, all examination vouchers (tickets) for 
examinations completed by Contractor prior to mailing. Contractor shall not bill 
any client directly, and if Contractor should receive payment direct for any 
examination, Contractor shall immediately foreword the entire payment received 
to the Company Home Office on the day of receipt. Contractor will not complete 
or bill for any exams for companies who do not approve Company or companies that 
Company does not approve without the express written consent of 
Company.

            
c. Company and Contractor agree that Contractor's remuneration shall be 
based on the following plan: 80% of gross revenue, 
manual check every two weeks until December 31, 1990. 
_______________________________________________ 
_______________________________________________

            
Company shall make payment to Contractor on the normal pay days of the 
15th and last day of the month for all examinations and services performed by 
Contractor and Contractor representatives during the normal computer cut-off 
periods in each pay period. It is understood that the computer "cut-off date" 
will vary, but that such dates shall be established in advance and that payments 
to Contractor shall be based on the "computer cut-off date." Payments to 
Contractor shall be made on the amount billed by Company whether or not the 
Company has been paid. If Company has delinquent accounts, Contractor will still 
be paid by Company as provided in this paragraph, provided Contractor has 
followed and follows Company's written instructions as to approved customers and 
their examination requirements and published rates.

            
d. Contractor shall pay its examiners and representatives within a 
reasonable time after Contractor receives its periodic payments from Company. In 
the event that a dispute shall arise between Contractor and any examiner or 
representative which shall delay the timely payment of fees to such examiner or 
representative, then Contractor shall immediately notify Company of the 
existence of such dispute and of the withholding of payment to such examiner or 
representative. Any failure of Contractor to pay an examiner or representative 
within seven (7) days of his or her normal pay date without prior notice to 
Company shall constitute a default by Contractor under the terms of this 
Contract.

[¶63]   4. Duties and 
Responsibilities of Contractor.

            
a. Contractor may later establish a separate corporation in the state in 
which it is conducting business and cause such corporation to assume 
Contractor's obligations hereunder. However, Contractor's obligations shall not 
be excused or relieved as a result of the forming of such corporation or its 
assuming the obligations hereunder, and Contractor shall always remain primarily 
liable for all obligations set forth herein. Notwithstanding the foregoing, 
Contractor shall always contract for any liabilities in Contractor's or 
Contractor's corporation's name, and not in the name of the Company. Said 
corporation shall not utilize in its legal name the name of Examination 
Management Services, Inc., or any similar name, except with the express prior 
written consent of the Company. Contractor or Contractor's corporation may, 
however, use the Company name as an assumed name under the applicable local 
assumed name statutes. In the event Contractor causes such corporation to be 
formed, said corporation shall obtain authority to do business in all states in 
which it engages in business. Finally, if Contractor causes such a corporation 
to be formed, and to assume Contractor's obligations hereunder, Contractor shall 
first obtain approval from Company of shareholders, officers and directors of 
corporation. Said approval shall not be unreasonably withheld.

            
b. Contractor shall conduct all insurance examination business, insurance 
inspection business, drug screening and pre-employment services in the name of 
Examination Management Services, Inc.

            
c. Contractor shall pay all federal, state, county and municipal fees and 
taxes on all billings as well as other related fees, except for the percentage 
of fees belonging to the company.

            
d. Contractor shall contract for all leases and equipment, and with all 
employees and representatives, whether common law or independent contractor, in 
Contractor's own name, clearly indicating to the applicable other party the true 
separate business organization of the Contractor. Contractor shall not establish 
any accounts nor enter into any contracts whatsoever (other than with customers 
for services) in the name of Examination Management Services, Inc., and 
Contractor agrees to defend and indemnify Company and hold it harmless from any 
liability or action, or any damage resulting from same, including attorney's 
fees resulting from any contract (other than for services rendered to customers) 
executed or undertaken by Contractor.

            
e. Contractor shall be liable for his operations for the torts of its 
employees and agents and covenants to forever indemnify, hold harmless and 
defend the Company from any and all liability, costs, attorney's fees, and other 
damages to Company which stem from Contractor's operation or arise thereunder, 
whether founded in tort, contract, bankruptcy or otherwise, and Contractor 
covenants to maintain and carry at least $500,000 in comprehensive general 
liability insurance to include operations and premises coverage. Contractor 
agrees to accept professional liability coverage if provided by company, through 
company self-funding, or coverage purchased by company through an insurance 
carrier, or a combination of company self-funding and insurance company 
coverage. Contractor agrees that company may deduct monthly cost from 
Contractor's pay each month. Contractor agrees that this fee may change from 
time to time. The deductions from Contractor shall be based upon certain 
services provided by Contractor to company customers. Company agrees to provide 
Contractor with a list of those service codes which are involved, and to update 
that list as changes may occur. Contractor covenants to deliver all insurance 
certificates of policies required by this Contract to Company prior to 
commencement of operation under this Contract, and further to deliver to Company 
all renewals and such further information with regard to said required coverage 
as Company shall reasonably require. Company agrees to provide certificate of 
coverage to Contractor of professional liability coverage.

            
f. Contractor shall provide services for company only in the prescribed 
areas and only with the systems and procedures established and approved by the 
Company. Contractor agrees to register and qualify in each state in which 
Contractor provides services.

            
g. Contractor shall diligently, aggressively and continuously pursue the 
business of conducting physical examinations through authorized medical and 
paramedical personnel and shall strive to ever improve its market position by 
doing greater numbers of examinations each year. The Company is to be furnished 
an application, copies of any license, certificates or other documentation as 
required by Company to assure that personnel representatives working for 
Contractor are qualified. These items are to be furnished to the Company's Home 
Office personnel department prior to the representative commencing work for 
Contractor. The Company shall have final approval of new representatives, and if 
the Company feels a representative should not be engaged, the Contractor will 
not use that representative. Final authorization of representatives is the 
responsibility of the Company. All examinations qualifying as paramedical 
examinations shall be conducted by authorized paramedical examiners, not 
physicians. Contractor agrees to conduct and provide all services through 
qualified personnel who are approved by the company.

            
h. Contractor shall devote his efforts in conducting physical 
examinations for insurance companies exclusively to and for the benefit of the 
parties to this Contract and under the terms of this agreement, and shall not 
either directly or indirectly, while this agreement is in effect, engage in 
conducting physical examinations and surveys for insurance companies under any 
name or other than for the benefit of Examination Management Services, Inc., 
except as previously indicated. In this regard, Company shall have reasonable 
cause to terminate this Contract if Contractor shall default in any of the 
provisions of this paragraph, or if activities of the Contractor are such that 
the favorable position or good will of the Company with one or more of the 
Company's clients is adversely affected.

            
i. It is specially agreed and stipulated by the parties hereto that the 
type of operation contemplated by the parties in this agreement necessitates a 
clean, sanitary, and orderly environment at every location of the Contractor 
where examinations are conducted, and having this in mind, Contractor shall so 
maintain his or her premises. It is further specifically agreed and stipulated 
by the parties that the surveys and examinations contemplated within this 
agreement can only be conducted at the direction of licensed physicians and, 
therefore, Contractor specifically agrees and covenants that all paramedical 
personnel will be subject to and only employed after the approval of the Medical 
Director of Examination Management Services, Inc., who will pass on their 
fitness to serve. The Contractor and his or her employees specifically agree to 
perform examinations at the direction of the Medical Director of Examination 
Management Services, Inc. It is the intent of the parties here to assure 
themselves that no unqualified person shall be serving as a representative of 
the Company. To the end that these specially agreed terms may be fulfilled, the 
Company shall have the right to make inspections of the Contractor's premises 
with reasonable frequency, and may make recommendations to Contractor regarding 
environment wherein examinations are conducted.

            
j. The Contractor shall take all possible measures to render services 
which would create good will on the part of the client companies, including, but 
not limited to, performance of quality examinations, inspections, drug screens 
and pre-employment services as soon after the original request as possible and 
mailing to the locations designated by the client.

            
k. The Contractor shall do all things necessary and reasonable to 
facilitate orderly execution of the terms of this contract.

[¶64]   5. Representations of Contractor.

            
a. Contractor represents that the form of its business organization, and 
that the names and addresses of all principals and persons interested in 
Contractor's business, are correctly described and enumerated on the Form of 
Business Addendum executed by Contractor in connection with this Contract. 
Contractor covenants that it will not change the form of its business 
organization nor suffer a change in the legal or equitable ownership of 
Contractor, whether by change in partners, shareholders or otherwise, and 
whether said change is voluntary or involuntary (other than death) without 
Company's express written approval, which approval Company shall not 
unreasonably withhold.

            
b. Contractor represents that the only documents or information which it 
has filed for public record or with any governmental, state or municipal 
administrative body, in which it reserves, assumes, or uses the Company names, 
symbols and trademarks are set forth and described on the Use of Name Addendum 
which Contractor has executed in connection with this contract. In the event any 
of the information contained on said Use of Name Addendum shall change, 
Contractor covenants to notify Company of such change immediately.

            
c. Contractor represents that this Contract does not constitute a 
franchise within the meaning of any local statute which would require any local 
or state registration. Upon request, Contractor shall furnish to Company its 
attorney's opinion to such effect.

            
d. Contractor represents that as of the time of execution of this 
Contract all of the representations of Contractor contained herein are true and 
that Contractor is not in default under any of the terms or provisions, nor has 
it failed to perform any of the covenants or conditions contained in this 
Contract.

[¶65]   6. Covenants of 
Company.

            
a. The Company Shall use its best efforts to secure and maintain the 
approval of all possible major insurance companies in the contracted area for 
the furnishing of medical and paramedical examinations to these companies and 
the Company shall furnish the Contractor these approvals.

            
b. The Company shall assist Contractor with a full range of 
administrative functions, including monthly billing to clients. Company shall 
furnish two statements a month to Contractor with a breakdown of examinations by 
type and intensity as done by Company for the Company's branch 
offices.

            
c. The Company shall furnish the Contractor some printing needed in the 
operation. This will include examination voucher forms, some paramedical forms 
(forms furnished to the Company by its customers), all other forms normally 
furnished to the Company by its customers and some other forms usually furnished 
to the Company's branch offices.

            
d. The Company shall furnish some supplies without charge, except medical 
supplies such as EKG paper and dipsticks which will be made available to the 
Contractor on a chargeback basis.

            
e. The Company shall make no request of the Contractor or his employees 
which would create liability on the part of the Contractor. The Company will not 
require any activity on the part of the Contractor which would be construed as 
the practice of medicine directly or indirectly. 

            
f. The Company shall pay Contractor timely all monies due to Contractor 
under the terms of this Contract.

            
g. The Company covenants to do all things necessary and reasonable to 
facilitate the orderly execution of the terms of this Contract.

            
h. The Company agrees to indemnify and hold harmless Contractor from 
negligence on the part of the Company and its employees.

[¶66]   7. Rights of 
Contractor, Non-assignability.

            
a. Contractor understands and agrees that this Contract confers upon 
Contractor no proprietary right, title or interest in the name, symbols and 
trademarks associated with Company's name, but only the right to use the same in 
accordance with and during the term of this Contract. In the event of the 
termination of this Contract for any reason, (1) any right of Contractor to use 
said name, symbols and trademarks shall immediately terminate, (2) Contractor 
shall immediately cease to use said name, symbols and trademarks, and (3) 
Contractor shall immediately release or assign to Company any right or color of 
right which Contractor shall have or seem to have to the use or enjoyment of 
said name, symbols and trademarks, whether the same shall arise out of the 
Contract, common law, usage or otherwise.

            
b. The parties acknowledge that the Contractor's rights under this 
Contract are personal to Contractor and that Contractor may not assign, sell or 
convey this Contract or any of Contractor's rights granted herein.

[¶67]   8. Restrictive 
Covenants.

            
a. Contractor covenants that it shall not engage, directly or indirectly, 
either as an owner, employee, or agent of any other person or entity, in the 
medical examination business or other business similar to the company in the 
areas described in Paragraph 1 above, during the duration of this Contract and 
for a period of one (1) year following the termination of this Contract by 
Company for cause or as a result of the default of Contractor. The parties agree 
that the term and area set forth herein are reasonable. The area specified shall 
be within a 75-mile radius of the area proposed under this 
agreement.

            
b. The parties agree that the restrictive covenant contained in this 
Paragraph 8 shall be binding upon each party and its principals, agents, 
officers and representatives, and that any action taken by such a person, or by 
any other person who has had any legal or equitable interest in Contractor or 
Company, shall be deemed an action of such party for purpose of this Paragraph 
8.

[¶68]   9. Breach of 
Contract. The failure by either party to perform any covenant contained 
herein or the falsity of any representation contained herein shall constitute a 
default under the terms of this Contract. In addition to any other remedies 
provided by law, and in addition to any other rights of a party under this 
Contract, the default of a party hereunder (including the default of 
Contractor's corporation, which shall be attributed to Contractor) shall enable 
the other party to terminate the Contract, and such termination shall be 
consideration for cause.

[¶69]   10. Miscellaneous.

            
a. This Contract and the addenda mentioned herein constitute the entire 
agreement between the parties with regard to the subject matter. This agreement 
may not be amended except in writing executed by each party hereto. All notices 
are required to be sent by registered or certified mail addressed to the Company 
at its offices at 1111 W. Mockingbird Lane, 5th Floor, Dallas, Texas 75247, or 
at such other address as Company shall designate in writing. All notices 
required to be sent to the Contractor shall be sent by registered or certified 
mail addressed to the Contractor at 316 West Midwest 
Street, Casper, Wyoming 82601 or at such other address as the Contractor 
shall designate in writing.

            
b. Should any part of this agreement be found to be illegal, or in 
violation of public policy, or for any other reason unenforceable in law, such 
finding shall in no event invalidate the other parts of this 
agreement.

            
c. The parties specifically agree that this Contract is performable, at 
least in part, in Dallas, Dallas County, Texas, and that Texas law bears a 
reasonable relationship to the rights and duties of the parties hereto. The 
parties therefore agree that Texas law shall govern all rights and duties under 
this agreement and that venue for any action arising under or by virtue of this 
agreement and the relationship here created shall be in Dallas County, Texas. It 
is further agreed that the Uniform Commercial Code, as adopted by the State of 
Texas, shall provide definitions where applicable and where not specifically 
defined otherwise in this agreement.

            
d. This agreement shall be binding upon and inure to the benefit of the 
representatives, heirs, estates, successors, and assigns of the parties hereto, 
but this provision shall not be construed to imply consent to any assignment 
prohibited by the terms of this agreement or any documents referred to 
herein.

            
e. Contractor shall comply with all federal, state and local tax laws, 
social security acts, unemployment compensation acts, and worker's compensation 
acts insofar as applicable to the performance of this Contract. Company and 
Contractor specifically agree that Contractor is an independent contractor as 
defined by law and not an employee of the Company. Contractor shall indemnify, 
defend and hold Company harmless against any and all damages arising as a result 
of Contractor's failure to comply with any federal, local, social security, 
unemployment compensation, or worker's compensation laws, or failure to pay any 
tax relating thereto.

[¶70]   EXECUTED THIS 5TH DAY OF SEPTEMBER, 1990.

COMPANY EXAMINATION MANAGEMENT SERVICES, INC.

BY: 
/S/[Signature]

CONTRACTOR

BY: 
/S/ [Signature]

FORM 
OF BUSINESS ADDENDUM

This 
Form of Business Addendum is being completed by Contractor in connection with 
the execution of that one certain Contract by and between Examination Management 
Services, Inc., as Company and the undersigned as Contractor.

Contractor represents that the following information about 
its business organization is true and correct.

a. 
        If 
Contractor is a sole proprietorship, state the name and residence address of the 
owner.

Norman Kirschbaum 409 West Birch Glenrock, Wyoming 
82637 ___________________________________________

b. 
If Contractor is a general or limited partnership, state the name, type and 
percentage of interest and residence address of each partner.

___________________________________________ 
___________________________________________ 
___________________________________________ 
___________________________________________ 
___________________________________________ 
___________________________________________

c. 
If Contractor is a corporation, indicate the state of incorporation and names, 
percentage of stock interest and residence address of each 
shareholder.

__________________________________________ 
__________________________________________ 
__________________________________________ 
__________________________________________ 
__________________________________________ 
__________________________________________ 
__________________________________________

I 
hereby represent that the above information is true and correct.

X 
/S/ [Signature] 

USE 
OF NAME ADDENDUM

[¶71]   This Use of Name Addendum is being 
completed by Contractor in connection with the execution of that one certain 
Contract by and between Examination Management Services, Inc., as Company and 
the undersigned as Contractor.

[¶72]   Contractor represents that the only 
documents or information which have been filed for public record or with any 
governmental state or municipal administrative body in which Contractor has 
reserved, assumed or used the name Examination Management Services Inc., are as 
follows:

Secretary of State - Wyoming 
_______________________________________________ 
_______________________________________________ 
_______________________________________________ 
_______________________________________________

I 
hereby represent that the foregoing information is true and correct.

X 
/S/ [Signature] 

SEPARATE GUARANTY AGREEMENT

[¶73]   For valuable consideration, the receipt 
and sufficiency of which is hereby acknowledged, the undersigned do hereby 
guarantee all of the obligations of Contractor under that one certain Contract 
by and between Examination Management Services, Inc., as Company and Norman Kirschbaum as Contractor dated the 5 day of September, 1990.

[¶74]   Executed this 5th day of September, 1990.

X 
/S/ [Signature]