Title: JBC of Wyoming Corp. v. City of Cheyenne

State: wyoming

Issuer: Wyoming Supreme Court

Document:

JBC of Wyoming Corp. v. City of Cheyenne1992 WY 181843 P.2d 1190Case Number: 92-32Decided: 12/21/1992Supreme Court of Wyoming
JBC OF 
WYOMING CORP., a corporation, Appellant (Plaintiff),

 
 
v.

 
 
CITY OF 
CHEYENNE, Wyoming; and Cheyenne Board of Public Utilities, Appellees 
(Defendants).

 
 
Appeal from 
District Court, LaramieCounty, Edward L. Grant, 
J.

 
 
Bruce A. 
Salzburg of Herschler, Freudenthal, Salzburg, Bonds & Rideout, Cheyenne, and Stephen S. 

Dunham 
(argued), and Roxanne Jensen of Morrison & Foerster, Denver, CO, for appellant.

 
 
J. Kent 
Rutledge (argued), of Lathrop & Rutledge, Cheyenne, for appellees. 

 
 
Before MACY, C.J., and THOMAS, CARDINE, 
URBIGKIT* and GOLDEN, JJ.

 
 

* Chief 
Justice at time of oral argument.

 
 

CARDINE, 
Justice.

 
 

[¶1.]     An arbitrator awarded 
JBC consequential damages equal to thirty percent (30%) per year of the unpaid 
amounts due JBC in its contractual dispute with the defendantsCity of Cheyenne (City) and Cheyenne Board of Public 
Utilities (Board). This amount was to be paid to JBC in addition to other awards 
in its favor, and interest due on them. An appeal to the district court resulted 
in reversal of the consequential damage award. JBC of Wyoming Corporation (JBC) 
now appeals the trial court's reversal of the consequential damage 
award.

 
 

[¶2.]     Because the arbitrator 
abused his discretion in making this consequential damage award, we affirm the 
trial court's order.

 
 

[¶3.]     JBC states the issue 
before us as follows:

 
 
Did the 
district court err when it found that the neutral arbitrator exceeded his 
authority by awarding compensatory damages for appellees' failure to pay monies 
owed to appellant?

 
 

[¶4.]     This action arises out 
of the construction of the Stage II Little Snake Diversion Pipeline Project 
(Project) near Encampment, Wyoming. JBC was the general contractor for, 
and the City the owner of, the Project. The Project involved the construction of 
16 miles of roads, 103 stream diversion and collection structures, and 120,000 
feet of pipeline in the mountains of the MedicineBowNational Forest. The 
contract price was approximately $20,485,000.00. The contract contained a 
provision requiring the parties to negotiate any disputes between them under the 
contract prior to commencing any litigation.

 
 

[¶5.]     As the Project 
proceeded, problems developed with one of JBC's subcontractors, Varra Companies, 
Inc. (Varra). JBC brought suit against Varra after Varra allegedly "walked off 
the job." This suit eventually expanded to include numerous other issues and to 
engulf JBC, Varra, the Board, Banner Associates (the architect on the Project), 
and various surety companies in costly litigation in state and federal courts, 
which lasted until a settlement was reached on the eve of trial. As part of the 
settlement process, and in view of their painful and expensive experience with 
the court system, JBC and the appellees entered into an agreement to submit any 
remaining and future contractual disputes between them to binding 
arbitration.

 
 

[¶6.]     The Submission 
Agreement required the appellees and JBC each to appoint a representative with 
full settlement authority. If the representatives failed to agree on any issue, 
they were to appoint a neutral third party to decide it. Subsequent to execution 
of the Submission Agreement, numerous problems in addition to those already in 
controversy arose with the Project. The most serious of these concerned the 66- 
and 72-inch pipe installed below ground at the Project site. The pipe had become 
defective, and repairs estimated at over $4.5 million were 
needed.

 
 

[¶7.]     On July 10, 1987, JBC 
filed suit in state district court against the City, the Board, and other named 
defendants, seeking damages for the pipe design failures, structural embankment 
failures, water quality problems, and payment of retainage due from the City and 
Board under the contract. The complaint stated claims in both tort and contract. 
The City and the Board responded with a motion to dismiss and application for 
order of arbitration. On October 20, 1987, the trial court determined that JBC's 
claims against the City and the Board were subject to the previously-executed 
Submission Agreement. It stayed the suit as to the City and Board and ordered 
JBC to submit its claims against them to arbitration under the 
Agreement.

 
 

[¶8.]     Meanwhile, by the end 
of August 1987, the Board had suspended progress payments under the contract to 
JBC. The Board claimed this suspension was justified under its contractual right 
to "nullify" previous payments because of the construction defects. On September 
4, 1987, JBC responded by notifying the Board that it was terminating the 
contract for nonpayment. After this notice of termination, JBC proceeded to 
complete the Project at its own expense.

 
 

[¶9.]     On October 28, 1987, 
JBC sent the Board a list of claims it intended to submit to the arbitration 
process. These claims were divided into two categories: "Alternate A" and 
"Alternate B." Alternate A was a total cost claim under the contract for the 
expenses of the work plus a reasonable profit. JBC estimated the amount due 
under Alternate A at $14.5 million. Alternate B consisted of a number of 
individual claims totalling $8.25 million.

 
 

[¶10.]  JBC initially presented a number of the 
individual claims under Alternate B for resolution through the arbitration 
process, and some of them were resolved. However, JBC became dissatisfied with 
the Board's nonpayment of these claims after resolution and with its continued 
withholding of nullification payments, so on March 3, 1989, JBC presented its 
"total cost claim" for $19,895,133.00 to Warren Hunter, the neutral arbitrator. 
The claim was based on a provision of the contract which allowed the contractor, 
in the event of nonpayment, to terminate the agreement and to receive payment 
for "all work executed and any expense sustained plus a reasonable profit." In a 
footnote to its claim, JBC stated: "If this claim is granted and total cost 
awarded, it will cover and dispose of all JBC's other 
claims."

 
 

[¶11.]  On May 18, 1989, Hunter ruled that JBC 
was not entitled to exercise the total cost remedy provided for in the parties' 
contract. However, because of the "serious effects" of the Owner's withholding 
of funds from JBC, Hunter ruled that:

 
 
A. The 
Owner must pay JBC an additional 30% per year (over and above the interest 
allowed in Paragraph 101.16.04) on all funds found to have been improperly 
withheld from the Contractor. This ruling will also apply to any funds not 
promptly paid the Contractor because of the Owner's purported budgetary 
problems. The additional dollar amount will be calculated starting on the date 
the monies were originally due and continue until paid in 
full.

 
 
B. JBC 
retains the right to pursue any or all of their claims that have not been 
settled.

 
 

[¶12.]  In a letter to the parties dated June 28, 
1989, Hunter further explained this award as follows:

 
 
2. Even 
though I did not feel JBC was entitled to the complete Total Cost Claim * * *, I 
did feel they were entitled to compensatory damages for the effects on their 
company that resulted from the monies wrongfully withheld by the Board. My 
reasoning for this was explained throughout the decision.

 
 
3. The 30% 
is not interest. It is just the 
method I chose to determine the compensatory damages.

 
 
4. The 30% 
was awarded as fair and equitable compensatory damages to JBC for the damages 
they suffered because of the Board wrongfully withholding payments due JBC. 
Because I did not have, nor would the total information be available until all 
claims were settled, all of the information needed to determine a fixed amount 
for compensatory damages, I chose the percentage method because it could easily 
be applied to the present known monies and also to any future monies that may 
apply. [emphasis in original]

 
 

[¶13.]  The City and Board moved the trial court 
for an order correcting or vacating Hunter's award of 30% compensatory damages. 
They also moved to disqualify Hunter as the neutral arbitrator, on the grounds 
that he was biased toward JBC. Angered by their suggestion of bias, Hunter 
resigned as the neutral arbitrator on July 16, 1989. The trial court entered an 
order holding the motion to correct the award in abeyance. It appointed a new 
arbitrator, Stuart Bartholomew, to hear JBC's remaining individual 
claims.

 
 

[¶14.]  After JBC's substantive claims were heard 
and decided, and only the interest amount remained to be considered, JBC 
petitioned the court, with extensive briefs and exhibits, to confirm the 30% 
compensatory damage award and to remand for a calculation of damages. The 
defendants responded by opposing this motion and again moving that the 30% 
arbitration award be vacated. On December 19, 1991, the trial court ruled that 
Hunter exceeded his authority in making the 30% award. It vacated the award. 
After the trial court certified that there was no just cause for delay pursuant 
to W.R.C.P. 54(b), JBC took timely appeal to this court from the trial court's 
order vacating the arbitrator's award.

 
 
Standard of 
Review

 
 

[¶15.]  We have located no cases setting out the 
standard of review to be followed when evaluating an order of the trial court 
which vacates an arbitration award. Our prior cases do not make clear whether we 
owe any deference to the trial court's determination that grounds existed for 
vacating the award.

 
 

[¶16.]  The trial court's power to set aside an 
arbitration award seems best analogized for standard of review purposes to its 
power to grant judgment notwithstanding a jury's verdict (JNOV). See W.R.C.P. 
50(b). When reviewing the trial court's entry of a JNOV, we "undertake a full 
review of the record without deference to the views of the trial court." 
Inter-Mountain Threading, Inc. v. Baker Hughes Tubular Serv., Inc., 812 P.2d 555, 558 (Wyo. 
1991). Like the question of whether a JNOV should be entered, the issue of 
whether the arbitrator exceeded his authority is primarily a question of law. We 
owe no deference to the trial court's determination of questions of law. Cf. 
Union Pacific R.R. Co. v. State Bd. of Equalization, 802 P.2d 856, 859 
(Wyo. 1990) 
(no deference to trial court's determination of questions of law in agency 
appeal).

 
 

[¶17.]  In reviewing the record below, we are 
mindful that the grounds for vacating or modifying an arbitrator's award remain 
narrow in scope. Because of its voluntary, informal nature, awards made in 
arbitration are subject to less intensive scrutiny than are, for example, the 
orders of administrative agencies. See W.S. 16-3-114. The reviewing court must 
observe the principle that arbitrators are free to fashion forms of relief which 
could not be ordered by a court in law or equity. W.S. 1-36-114(a)(v). 
Furthermore, we are reluctant to disturb an arbitrator's just solution to a 
controversy, even if it differs from the resolution we might have chosen, had we 
been in the arbitrator's place. See Matter of Town of Greybull, 560 P.2d 1172, 1175 (Wyo. 1977). As a 
voluntary method for resolution of disputes, arbitration is embedded in the 
public policy of Wyoming and is favored by this court. T & 
M Properties v. ZVFK Architects and Planners, 661 P.2d 1040, 1043 (Wyo. 
1983).

 
 
Did the 
Arbitrator Exceed His Authority?

 
 

[¶18.]  Wyoming Statute 1-36-114(a) requires the 
trial court upon application to vacate an arbitrator's 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. [emphasis 
added]

 
 

[¶19.]  When considering a motion to vacate, the 
trial court is not limited to the grounds listed in the statute but may also 
vacate the award for, among other reasons, "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." Texas West Oil and Gas Corp. 
v. Fitzgerald, 726 P.2d 1056, 1062 (Wyo. 1986), 
quoting Riverton Valley Elec. Ass'n v. Pacific Power and Light Co., 391 P.2d 489, 500 (Wyo. 
1964).

 
 
a. Double 
Recovery

 
 

[¶20.]  The trial court found that if the 30% 
compensatory damage award were allowed to stand in addition to recovery for the 
individual claims, JBC would receive a double recovery. The consequential damage 
award was a substitute for the total cost claim, which in turn was an 
alternative remedy to JBC's individual claims. JBC had already submitted and 
received payment for many of these individual claims. Since JBC is not entitled 
to double recovery for its injuries, the trial court held that the consequential 
damage award must be reversed.

 
 

[¶21.]  Consequential damages, of course, are not 
necessarily double recovery when awarded for foreseeable harm which differs from 
that compensated by direct damages. The damages awarded in an action for breach 
of contract are designed to put the plaintiff in the same position as if the 
contract had been performed, less proper deductions. Robert W. Anderson 
Housewrecking and Excavating, Inc. v. Board of Trustees, Sch. Dist. No. 25, 681 P.2d 1326, 1333 (Wyo. 1984). This measure of damages includes 
recovery for incidental or consequential loss caused by the breach. General 
Insur. Co. of America v. City of Colorado 
Springs, 638 P.2d 752, 759 (Colo. 1981). In Reposa v. Buhler, 770 P.2d 235, 237-38 (Wyo. 1989), we recognized the measure of 
damages for breach of contract set out in Restatement, Second, Contracts § 347 
(1981):

 
 
Subject to 
the limitations stated in §§ 350-53, the injured party has a right to damages 
based on his expectation interest as measured by

 
 
(a) the 
loss in the value to him of the other party's performance caused by its failure 
or deficiency, plus

 
 
(b) any other loss, including incidental or 
consequential loss, caused by the breach, less

 
 
(c) any 
cost or other loss that he has avoided by not having to perform. [emphasis 
added]

 
 

[¶22.]  Arbitrator Hunter's award was intended to 
cover such "incidental or consequential loss," as demonstrated in the following 
statement from his decision letter:

 
 
Under our 
contracting system the Contractor is willing to take on considerable risk and 
expend their resources for basically one reason - PAYMENT FOR WORK PERFORMED. To 
withhold payment strikes at the very heart of the Owner's responsibility under 
the contract. The contract specifications are very explicit in outlining the 
payment requirements of the Owner. Withholding payment places a tremendous 
hardship on the Contractor. The restriction of "cash flow" on any one project, 
not only affects that project but normally sets off a type of "chain reaction" 
that totally affects and encompasses the Contractor's entire company. As pointed 
out in JBC's presentation, "As a result of the Board's failure to pay over one 
year's worth of work, JBC's capital was impaired; its line of credit was reduced 
from 16 million to 11 million; it didn't have resources to bid some jobs; its 
overall backlog had to be reduced; its lenders increased its interest note by 
1/2 of 1%; it suffered a reduction in its bonding capacity and had to obtain a 
new bonding company." Because of the severe and far-reaching consequences of 
withholding payment, the Engineer and Owner must, therefore, also bear the 
tremendous responsibility and liability for the repercussions of their 
action.

 
 

[¶23.]  Thus, the prohibition on double recovery 
did not necessarily prohibit JBC from recovering consequential damages in 
addition to its direct damages.1 As will be 
discussed, the real problem with the arbitrator's award lies in the fact that 
JBC never made a claim for consequential damages under the claims submission 
process.

 
 
b. JBC's 
Failure to Present a Claim

 
 

[¶24.]  The broad freedom an arbitrator has to 
resolve disputes and fashion remedies is limited by the contractual nature of 
the arbitration agreement from which he draws his powers.

 
 
The right 
to have a dispute submitted to arbitration is contractual. Panhandle Eastern 
Pipeline Company v. Smith, Wyo., 637 P.2d 1020 (1981). An arbitrator's 
authority is limited by the bounds of the agreement, and courts may vacate 
awards that extend beyond the contractual scope of arbitration. International 
Brotherhood of Electrical Workers, Local 1400 v. Citizens Gas & Coke 
Utility, Ind. 
App., 428 N.E.2d 1320 (1981). An arbitrator exceeds his powers when he decides 
matters which were not submitted to him. Himco Systems, Inc. v. Marquette 
Electronics, Inc., 86 Ill. App.3d 476, 41 Ill.Dec. 515, 407 N.E.2d 1013 (1980).

 
 
T & M 
Properties, 661 P.2d  at 1044.

 
 

[¶25.]  The Submission Agreement for arbitration 
entered into by the parties required them to:

 
 
"submit to 
the representatives, with copies to each other * * * a full statement of each 
claim made by that party with respect to the Contract, along with such 
documentary supporting material as that party considers 
appropriate."

 
 

[¶26.]  The representatives were to attempt to 
resolve the parties' claims. If they could not do so, they were to select a 
neutral third party to decide them. Thus, the submission agreement provided that 
the arbitrator would decide only those claims made with respect to the contract 
which were first submitted to the parties' representatives and then forwarded to 
him for decision.

 
 

[¶27.]  JBC's failure to submit a claim for 
consequential damages was consistent with its position below that the total cost 
remedy was the only contractual remedy provided to make JBC whole under the 
circumstances. Since JBC never submitted a consequential damage claim according 
to the required process, it seems almost self-evident that the arbitrator could 
not make an award of consequential damages.

 
 

[¶28.]  JBC now argues, however, that its failure 
to submit a claim for consequential damages would not prevent the arbitrator 
from making the award he did. JBC points us to cases holding that an arbitrator 
is free to fashion relief additional to or different from that requested by the 
parties, and that the questions submitted for the arbitrator's decision should 
be broadly construed. Matter of Town of Greybull, supra 560 P.2d 1172; 
Department of Public Safety v. Public Safety Employees Ass'n, 732 P.2d 1090 
(Alaska 1987); Carte Blanche (Singapore) Pte., Ltd. v. Carte Blanche Int'l, 
Ltd., 888 F.2d 260 (2nd Cir. 1989); National Tea Co. v. Richmond, 548 So. 2d 930 
(La. 1989); David Co. v. Jim W. Miller Const., Inc., 444 N.W.2d 836 (Minn. 
1989); City of Worcester v. Granger Bros., Inc., 19 Mass. App. Ct. 379, 474 N.E.2d 1151 (1985), review denied 394 Mass. 1103, 477 N.E.2d 595 (1985); Seppala 
& Aho-Spear Assoc. v. Westbrook Gardens, 388 A.2d 88 (Me. 
1978).

 
 

[¶29.]  Most of the cases JBC cites serve only to 
cloud the real issue, which is whether JBC observed the contractually-mandated 
requirements of the claims procedure. Carte Blanche, 888 F.2d 260, is closest on 
point, in that it allowed the arbitrator to award relief for a claim which 
should have been but was not properly filed. In that case the Eighth Circuit 
held that the statement of issues provided by the parties was sufficiently broad 
that it included the omitted claim. The terms of the submission agreement here 
cannot be so easily satisfied. The total cost claim could not substitute, as JBC 
argues, for a claim for consequential damages for failure to make timely 
payment. A "claim" must be specific enough to connote assertion of a legal 
right. Stephan & Sons, Inc. v. Municipality of Anchorage, 629 P.2d 71, 75 (Alaska 1981). No such 
assertion was made through the claims process here.

 
 
Consequential 
Damages in Tort

 
 

[¶30.]  Because suggested as an issue on appeal, 
we find it appropriate to discuss whether JBC can recover in tort for consequential damages resulting 
from the City and Board's failure to pay. The issue may surface as the trial 
court considers the remaining claims on remand, particularly JBC's tort claims, 
which were not subject to arbitration under the Submission 
Agreement.

 
 

[¶31.]  We have recognized that breach by a 
contracting party of an independent duty which arises out of the contractual 
relationship may give rise to an action in tort. McCullough v. Golden Rule Ins. 
Co., 789 P.2d 855 (Wyo. 1990); Tate v. Mountain 
States Tel. & Tel. Co., 647 P.2d 58 (Wyo. 
1982); Cline v. Sawyer, 600 P.2d 725 (Wyo. 
1979); Brubaker v. Glenrock Lodge Int'l Order of Odd Fellows, 526 P.2d 52 
(Wyo. 1974). 
We decline, however, to extend this cause of action to allow recovery in tort 
for consequential damages resulting from an owner's failure to pay sums due 
under a construction contract. There are three reasons for this. First, it is 
not our policy to recognize tort actions for purely economic damages. See 
Continental Ins. v. Page Engineering Co., 783 P.2d 641, 647 (Wyo. 1989) (denying 
recovery on negligence and strict liability theories for simple product 
failure). Second, tort recovery based on the contractual relationship should 
only be allowed where the breach constitutes an independent injury over and 
above disappointment of the plaintiff's expectation interest. Bowdish v. 
JohnsCreek Assoc., 200 Ga. App. 93, 406 S.E.2d 502, 504 (1991). 
Finally, tort liability can only be premised on a duty independent of 
contractual duties. Preferred Marketing Assoc. Co. v. Hawkeye Nat'l Life Ins. 
Co., 452 N.W.2d 389 (Iowa 1990).

 
 

[¶32.]  This is not to say that JBC has no 
independent cause of action based in tort, only that such an action cannot be 
based upon the fact that the City and Board failed to make timely payment. Our 
holding on this point seems almost self-evident. Failure to pay sums due under a 
contract or under arbitration provided for by contract is clearly ex contractu 
rather than ex delicto.

 
 
Conclusion

 
 

[¶33.]  We are not unsympathetic to the quandary 
JBC found itself in when the City was either unwilling or unable to pay amounts 
due under the contract and awarded in arbitration. However, we cannot allow JBC 
to exempt itself from the claims procedure it agreed to in the Submission 
Agreement, particularly where the failure to file a claim meant that the City 
and Board would have insufficient notice that the question of moneys due as 
consequential damages for nonpayment would be at issue. Since no claim for 
consequential damages was made, the arbitrator had no authority to award such 
damages. He exceeded his authority when he made the award. Therefore, the trial 
court properly vacated this portion of the award.

 
 

[¶34.]  Affirmed.

 
 

THOMAS and 
URBIGKIT, JJ., each 
files a separate specially concurring opinion.

 
 
FOOTNOTES

 
 

1 It is at least 
questionable whether a claim for consequential damages could have been made 
"with respect to the contract." JBC has not directed us to any provision of the 
contract which allows for consequential damages of the type the arbitrator 
ordered. At least one other court acting under similar circumstances denied 
damages for delay ordered by an arbitrator which were not provided for by the 
construction contract. See Harrison F. Blades, Inc. v. Jarman Memorial Hosp. 
Bldg. Fund, Inc., 109 Ill. App.2d 224, 248 N.E.2d 289, 292 (1969). 
Blades appears to impose an overly restrictive view of the scope of arbitration, 
however, and cannot alone be determinative of the issues of this case. More 
essential is JBC's failure to assert a claim for consequential 
relief.

 
 

THOMAS, Justice, 
concurring specially.

 
 

[¶35.]  I am in accord with the decision of the 
majority to affirm the order of the trial court reversing the award of 
consequential damages by the arbitrator. I agree the arbitrator exceeded his 
powers in this situation. My concern is about the portion of the opinion of the 
majority that addresses consequential damages in tort. I do not find that the 
issue of consequential damages in tort is properly before this court, and our 
response to the arguments of the parties on the issue is clearly an advisory 
opinion. I cannot join in that portion of the majority 
opinion.

 
 

[¶36.]  In introducing the topic the majority 
states:

 
 
     Because suggested as 
an issue on appeal, we find it appropriate to discuss whether JBC can recover 
in tort for consequential damages 
resulting from the City and Board's failure to pay. The issue may surface as the 
trial court considers the remaining claims on remand, particularly JBC's tort 
claims, which were not subject to arbitration under the Submission 
Agreement.

 
 
Majority 
opinion at 1197.

 
 
The order 
that is before the court in this case dealt only with rulings of the arbitrator 
and, by definition of the majority, these tort claims were not subject to 
arbitration. This portion of the majority opinion deals gratuitously with a 
question that is not presented to the court.

 
 
     To answer questions 
which were not brought before this Court would be to issue an advisory opinion. 
In State Board of Equalization v. Jackson Hole Ski Corporation, Wyo., 745 P.2d 58, 59 (1987), we said:

 
 
     "Although the question 
as postulated in this case may be properly before us in the future, to render an 
opinion here would be to issue an advisory opinion. This court has said 
repeatedly that it will not issue advisory opinions, and we decline to do so 
now. Graham v. Wyoming Peace Officer Standards 
and Training Commission, Wyo., 737 P.2d 1060 
(1987)."

 
 
Brad Ragan 
Tire Co. v. Gearhart Industries, 744 P.2d 1125, 1126 (Wyo. 
1987).

 
 

[¶37.]  Our rule is that this court does not 
offer advisory opinions. Briggs v. Wyoming Nat'l Bank, 836 P.2d 263 (Wyo. 1992); 
Phillips v. Duro-Last Roofing, Inc., 806 P.2d 834 (Wyo. 1991); Coulthard v. 
Cossairt, 803 P.2d 86 (Wyo. 1990); Wyoming Health Services, Inc. v. Deatherage, 
773 P.2d 156 (Wyo. 1989); State Board of Equalization v. Jackson Hole Ski 
Corporation, 745 P.2d 58 (Wyo. 1987); Brad Ragan Tire Company; Graham v. Wyoming 
Peace Officer Standards and Training Commission, Wyo., 737 P.2d 1060 (1987); 
Koontz v. Town of South Superior, 716 P.2d 358 (Wyo. 1986); Knudson v. Hilzer, 
551 P.2d 680 (Wyo. 1976); Cranston v. Thomson, 530 P.2d 726 (Wyo. 1975); West v. 
Willey, 453 P.2d 883 (Wyo. 1969). Cf. Reno Livestock Corp. v. Sun Oil Co. 
(Delaware), 638 P.2d 147 (Wyo. 1981); Tobin v. Pursel, 539 P.2d 361 (Wyo. 1975); Wallace v. Casper Adjustment Service, 500 P.2d 72 (Wyo. 1972). As this court 
said, in its most recent discussion of this subject:

 
 
     It is neither 
necessary nor proper for this Court to decide in this case whether or not we 
will enforce a "no contest" clause if a challenged provision in a trust 
agreement is in violation of the law. Although this question may properly be 
before us in the future, an opinion rendered in this instance would clearly be 
advisory. This Court has repeatedly said that it will not issue advisory 
opinions, and we decline to do so now. Brad Ragan Tire Company v. Gearhart 
Industries, 744 P.2d 1125, 1126 (Wyo. 1987); 
State Board of Equalization v. Jackson Hole Ski Corporation, 745 P.2d 58, 59 
(Wyo. 
1987).

 
 
Briggs, 836 P.2d  at 266.

 
 

[¶38.]  Since this aspect of the court's opinion 
is a classic example of an advisory opinion, it should not have been uttered, 
and I feel compelled to disassociate myself from it. Other than this one 
feature, I concur in the majority opinion.

 
 

URBIGKIT, Justice, 
specially concurring.

 
 

[¶39.]  I concur in the decision of the court 
except for the segment regarding consequential damages in tort. I do not 
understand the tort theory of malicious or improper intent failure to pay 
construction payments when due to have been presented as a pleaded claim in the 
initial pleadings or now to be presented as an appellate issue for this 
litigation. Consequently, if this understanding of the state of our present 
appellate record is correct, any present opinion discussion is dictum.1

 
 

[¶40.]  I have a direct concern about any effort 
to broaden the non-recovery of the consequential damage reach of Continental 
Ins. v. Page Engineering Co., 783 P.2d 641 (Wyo. 1989), for which my dissent 
remains unremitted.

 
 

[¶41.]  The more encompassing concern is the 
broad conclusion developed from any unlimited rule that delayed payments cannot, 
in properly confined circumstances, create a tort liability. It is my perception 
that the litigant can state a claim in tort if accompanied by proof of the 
requisite malice or tortious ulterior purpose which extends damage beyond the 
economics of purely delayed or denied payments, which would be, generally, the 
value of the present payment of money. While there may be unusual and scattered 
cases, the philosophic concept involving the tort of delay or non-payment, when 
properly proved, addresses the same generic rationale as first-party or 
third-party bad faith torts which we considered in McCullough v. Golden Rule 
Ins. Co., 789 P.2d 855 (Wyo. 1990) (first-party) and in Western Casualty and 
Surety Co. v. Fowler, 390 P.2d 602 (Wyo. 1964) (third-party bad faith failure to 
settle).

 
 

[¶42.]  Tortious conduct resulting from bad faith 
failure to pay for ulterior purposes or malicious intent should not be excluded 
from the arsenal of protection available to the wronged party by any assumptive 
conclusions in this decision where the subject is not essentially presented by a 
pending pleading, briefing or oral argument. I do not find the cited cases in 
the majority decision of Bowdish v. Johns Creek Associates, 200 Ga. App. 93, 406 S.E.2d 502 (1991) and Preferred Marketing Associates Co. v. Hawkeye Nat. Life 
Ins. Co., 452 N.W.2d 389 (Iowa 1990) to be counter-indicative. See, e.g., Woods 
Petroleum Corp. v. Delhi Gas Pipeline Corp., 700 P.2d 1023 (Okla. App. 1983) and 
the cases cited therein; Hall Jones Oil Corp. v. Claro, 459 P.2d 858 (Okla. 
1969) and Oklahoma Natural Gas Co. v. Pack, 186 Okla. 330, 97 P.2d 768 (1939). 
"It is well settled, however, that a tort may arise in the course of the 
performance of a contract and that tort may then be the basis for recovery even 
though it is the contract that creates the relationship between the parties." 
Woods Petroleum Corp., 700 P.2d  at 1027. For comparison, see Z.D. Howard Co. v. 
Cartwright, 537 P.2d 345 (Okla. 1975) (misrepresentation or fraud 
damages instead of contract breach recoveries). Cf. Zenith Drilling Corp. v. 
Internorth, Inc., 869 F.2d 560, 565 (10th Cir. 1989), where the tort concept was 
introduced, not for the recovery of compensatory damages, but only to seek a 
punitive damage award. A non-payment tort case, although reaching relationships 
with third-parties, is considered in Mississippi Interstate Exp., Inc. v. 
Transpo, Inc., 681 F.2d 1003 (5th Cir. 1982).

 
 

[¶43.]  The foundational concept authored in 
dispositive fashion for bad faith insurance cases in Crisci v. Security Ins. Co. 
of New Haven, Conn., 66 Cal. 2d 425, 58 Cal. Rptr. 13, 18, 426 P.2d 173, 178 
(1967) recognized:

 
 
     Fundamental in our 
jurisprudence is the principle that for every wrong there is a remedy and that 
an injured party should be compensated for all damage proximately caused by the 
wrongdoer. Although we recognize exceptions from these fundamental principles, 
no departure should be sanctioned unless there is a strong necessity 
therefor.

 
 

[¶44.]  Consequently, I concur in this court's 
decision, but would neither: foreclose for this case, if provident, proper or 
within time limitation provided by statutes of limitation; nor, create for 
future litigation, an absolute preclusion in this jurisdiction against the 
injured party's alternative right to the remedies provided by the tort of 
delayed payment based on particularized malice or ulterior purpose. Salem Engineering and 
Const. Corp. v. Londonderry School Dist., 122 N.H. 379, 445 A.2d 1091 
(1982).

 
 
FOOTNOTES

 
 

1 The subject of 
delayed payments was the basis for the thirty percent arbitration award which is 
directly included as a subject in this appeal. The events, however, from which 
that award flowed to now be reversed by this decision, occurred after the July 
1987 date when this lawsuit was instituted and also after the Cheyenne, Wyoming Board of Public Utilities secured the 
initiation of the arbitration proceedings provided in the parties' contract. 
Piecemeal arbitration awards were made from time-to-time thereafter, but not 
actually paid by the city. The neutral arbitrator found, as clearly justified 
within the record, that the Board of Public Utilities used a defensive mechanism 
for the justification of non-payment by withholding amounts admittedly due 
accompanied by the contention of a work deficiency retainage. This nullification 
of both payments already made or proof of right to additional payments was an 
apparent maneuver to escape budgetary funding deficiencies encountered by the 
contracting owner, the Board of Public Utilities.

     This non-payment by 
justification of work deficiencies - when, in reality, the problem was shortage 
of funds for payment - obviously bothered the neutral arbitrator. He said so and 
assessed the thirty percent "surcharge."

     This dispute, however, 
developed during arbitration long after the district court complaint and amended 
complaint had been filed and is not present, as far as I can discern, as a 
pending pleaded complaint stated in either tort or contract. The facts are not 
in much dispute and particularly so with finalization of the arbitration award 
defining basic amounts due from the owner to the contractor. The future 
potential for further pleadings, including a tort non-payment theory or its 
constituency criteria or legal effect, has neither been briefed nor argued 
during this appeal.