NO. 87-370 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

PHILLIP R. MORROW, d/b/a MORROW 

MECHANICAL CONTRACTORS, 

Plaintiff and Appellant, 

-vsFBS INSURANCE MONTANA-HOINESS LABAR, 

INC. , 

Defendants and Respondents. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable G. Todd Baugh, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Holland & Hart; James M. Ragain, Billings, Montana 

For Respondent : 

Moulton, Bellingham, Longo & Mather; Gerald B. Murphy, 

Billings, Montana 

Submitted on Briefs: Nov. 6, 1987 

Decided: February 9, 1988 
Mr. Justice R. C. McDonough delivered the Opinion of the 

Court. 

The Thirteenth Judicial District Court granted the 

respondent's motion for summary judgment. The issue here is 

whether the lower court, in granting summary judgment, erred 

in finding that there were no material questions of fact. We 

reverse on this issue and remand the cause for trial. 

Appellant Morrow, a subcontractor, alleged that 

respondent FBS Insurance Montana-Hoiness LaBar, Inc., (FBS), 

a construction bonding agent, intentionally interfered with 

Morrow's prospective economic advantage. The economic 

advantage allegedly jeopardized by FBS's conduct was the 

award of a subcontract offered by a general contractor, 

Fisher Construction, Inc., (Fisher), for work on the 

construction of a water plant. Morrow claims FBS used its 

influence as Fisher's bonding agent to prevent Fisher from 

accepting Morrow's subcontract bid. 

Prior to bidding as the general contractor for 

construction of the water plant, Fisher solicited bids from 

several subcontractors for the mechanical portion of the 

facility. Morrow and Star Service, Inc., (Star), bid lower 

than the other mechanical subcontractors bidding the job. 

After narrowing its selection to Morrow and Star, Fisher 

met with the two subcontractors to discuss ways to cut costs 

on the subcontract. Shortly after this meeting Fisher 

awarded the subcontract to Star. 

Dan Fisher, head of Fisher Construction, stated in his 

deposition that Star received the contract because it bid 

lower than Morrow. Alf Hulteng, the Fisher employee in 

charge of analyzing the two bids, stated in his deposition 

that Morrow's bid may have been lower than Star's bid because 
it included portions of the subcontract not covered by Star. 

Thus, the record fails to resolve which bid was initially 

lower. Morrow alleges that after the meeting to cut costs on 

the project, Star reduced its bid to match his bid. 

The record also reveals a conflict as to a "back 

bonding" requirement for the mechanical subcontractor on the 

project. Deposition testimony by Fisher and FBS employees 

shows that FBS contemplated a performance bond from the major 

subcontractors back to the general contractor to guarantee 

that the subcontracting work stayed within the amount bid. 

The depositions also show that all the parties were aware 

that Morrow would have difficulty obtaining a back bond, and 

that FBS would not provide a back bond to Morrow. However, 

the record does not resolve when Fisher actually communicated 

to the subcontractors that a back bond would be required. 

Star eventually did obtain a bond to guarantee its 

subcontract work on the project, but the bond was executed in 

June, long after the award of the subcontract to Star, and 

the bond itself was back dated from the date of actual 

execution. 

Morrow alleges that but for the conduct of FBS, he would 

have received the contract. To support this allegation, 

Morrow stated that Fisher employees Dan Fisher and Alf 

Hulteng told him that FBS pressure prevented Fisher from 

awarding him the subcontract. Morrow also points to the 

ambiguities concerning the back bonding requirement and the 

question of the low bid to discredit Fisher's explanation 

that Star received the subcontract because they bid lower 

than Morrow. 

According to Philip Morrow's wife and business 

associate, Donna Morrow, FBS's apparent motive for allegedly 

pressuring Fisher was a "soured business relationship" 

between Morrow and FBS. Donna Morrow also stated in her 
deposition that Alf Hulteng informed her that FBS employee 

Kip Vandeventer disliked the Morrows. 

The soured business relationship between FBS and Morrow 

apparently resulted from a payment made by FBS as Morrow's 

bonding agent on another job. This payment apparently 

resulted in FBS1s inability to back bond Morrow's work on the 

construction project at issue in this case. Deposition 

statements also showed that a bonding agent such as FBS could 

exert considerable pressure on a general contractor like 

Fisher. 

In its decision to grant summary judgment on the 

intentional interference claim, the District Court found, 

"Mostly this case is plaintiff's words against defendants1 

words." Also in regard to words against words, the District 

Court found that "all the testimonial evidence other than 

that from plaintiff and his wife, deny plaintiff's version of 

the pertinent occurrences." With the above stated facts and 

findings in mind, we will proceed to analyze Morrow's 

objection to the lower court's grant of summary judgment. 

ISSUE 

Whether the District Court properly found that no 

material facts existed, and that FBS was entitled to summary 

judgment as a matter of law. 

According to this Court's interpretations of Rule 56(c), 

M.R.Civ.P., l1 [t] he party moving for summary judgment has the 

initial burden of showing that there is no genuine issue as 

to any fact deemed material in light of the substantive 

principles that entitled the movant to judgment as a matter 

of law." Fleming v. Fleming Farms, Inc. (Mont. 1986), 717 

P.2d 1103, 1105-06, 43 St.Rep. 776, 779. And, all 

"reasonable inferences that may be drawn from the offered 

proof are to be drawn in favor of the party opposing summary 
judgment." Cereck v. Albertson's Inc. (1981), 195 Mont. 409, 

411, 637 P.2d 509, 511. 

Morrow asserts that in applying this rule, the lower 

court ignored the material fact questions created by the 

conflicting affidavits and depositions of the parties. In 

support of this argument, Morrow cites 5 26-1-301, MCA, which 

provides : 

One witness sufficient to prove a fact. The 

direct evidence of one witness who i' entitled to 

full credit is sufficient for proof of any fact, 

except perjury and treason. 

We agree with Morrow's argument. 

Other Courts have emphasized the impropriety of granting 

summary judgment where the credibility of an affiant may be 

crucial to decision of a material fact. See Durant v. 

Stahlin (Mich. 1965), 135 N.W.2d 392, 398; Arnstein v. Porter 

(2d Cir. 1946), 154 F.2d 464, 469-70. In Arnstein, the 

material question of fact depended on contradictory 

allegations in the depositions of the parties. Arnstein, 154 

F.2d at 469. In reviewing the lower court's grant of summary 

judgment, the Court stated: 

[W] here, as here, credibility, including that 

of the defendant, is crucial, summary judgment 

becomes improper and a trial indispensable. It 

will not do, in such a case, to say that, since the 

plaintiff, in the matter presented by his 

affidavits, has offered nothing which discredits 

the honesty of the defendant, the latter's 

deposition must be accepted as true. We think that 

Rule 56 was not designed thus to foreclose 

plaintiff's privilege of examining defendant at a 

trial, especially as to matters peculiarly within 

defendant's knowledge. 

Arnstein, 154 F.2d at 471. 
Drawing all reasonable inferences in favor of Morrow's 

offered proof, application of Arnstein's interpretation of 

Rule 56 is appropriate here because the issues presented by 

the offered proof generally involve witness credibility. For 

example: 

(1) Dan Fisher stated that Star received the 

subcontract because they were the low bidder. Philip Morrow 

stated that Dan Fisher told him Star received the subcontract 

because of pressure by FBS. Morrow's version of events is 

backed by Alf Hulteng's ambiguous statements as to who was 

the low bidder. 

(2) Alf Hulteng stated that pressure from FBS did not 

influence Fisher's decision to select Star over Morrow. 

Morrow stated that Hulteng told him that Star received the 

contract because of pressure from FBS. 

(3) Donna Morrow stated that a sour business 

relationship existed between the parties. Kip Vandeventer, 

the FBS employee working with Fisher at the time of the bids, 

denied the existence of animosity between the parties. 

Drawing all reasonable inferences in favor of the 

statements made by the Morrows, we cannot say that there 

exists no question of material fact. The question presented 

by the contradictory statements goes to the heart of Morrow's 

claim, i.e., did FBS pressure Fisher into awarding the 

subcontract to Star? Dan Fisher's statement that Star was 

the low bidder conflicts with statements made by Alf Hulteng, 

the Fisher employee who actually analyzed the bids. Under 

these circumstances, FBS has failed to carry the movant's 

initial burden of showing the absence of material facts in 

light of the substantive principles that entitled the movant 

to judgment as a matter of law. 

However, FBS argues that even if pressure existed, 

Morrow failed to produce evidence sufficient to show: 
(1) that FBS intended to harm Morrow by such pressure; 

(2) that the pressure was improper; 

(3) that but for the pressure Morrow would have 

received the contract. FBS argues that Morrow must come 

forward with proof creating a material question of fact on 

these issues to maintain an action for intentional 

interference with prospective economic advantage. 

The lower court set out the elements for the intentional 

interference with prospective economic advantage for this 

case as follows: 

(1) That FBS intentionally and willfully acted; 

(2) In a manner calculated to cause damage to plaintiff 

and plaintiff's business; 

(3) Which acts were done with the unlawful purpose of 

causing damage or loss to plaintiff without right or 

justification and; 

(4) From which acts plaintiff actually suffered damage 

or loss. We agree with the lower court's analysis in this 

regard. See Bolz v. Myers (1982), 200 Mont. 286, 295, 651 

P.2d 606, 611. However, drawing all reasonable inferences in 

favor of Morrow, Morrow's affidavits and deposition 

statements raise a material question of fact under the 

substantive principles of law involved. 

First, as to whether or not FBS acted intentionally, 

Morrow stated that FBS put pressure on Fisher. There is no 

evidence in the record to indicate that the alleged pressure 

was accidental. Morrow's statement, and the statements 

allegedly made by Fisher employees as to why Star received 

the contract, are allegations which by their very nature 

implicate intentional conduct on the part of FBS. 

Second, as to whether or not the interference was 

"improper" under Montana law, an inference may be drawn from 

Morrow's allegations that FBS pressured Fisher to award the 
contract to Star to make sure that the subcontractor 

receiving the bid could be back bonded with FBS. We cannot 

say that interference motivated to gain business advantage 

among the relationships between bonding agents, general 

contractors, and subcontractors is necessarily proper. And 

when there is 

room for different views, the determination of 

whether the interference was improper or not is 

ordinarily left to the jury, to obtain its common 

feel for the state of community mores and for the 

manner in which they would operate upon the facts 

in question. 

Restatement (Second) of Torts 5 767 at 38-39 (1977). 

Finally, in regard to whether or not an inference could 

be drawn that the pressure caused damage to Morrow, we need 

only point out that Fisher narrowed its choice of 

subcontractors to Star and Morrow. The allegation made by 

Morrow is that but for FBS's improper pressure, he would have 

received the contract. Under these circumstances, an 

inference may certainly be drawn that Fisher's choice of Star 

over Morrow damaged Morrow. 

For the foregoing reasons we overturn the lower court's 

grant of summary judgment and remand. 

We Concur: Justice 

/Justices