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 INSURANCEMONTANA-HOINESS LABAR, INC.

## , Defendants and Respondents.

APPEAL FROM: District Court of the Thirteenth Judicial District, Inand for the County ofYellowstone, The Honorable G. Todd Baugh, Judgepresiding.
COUNSEL OF RECORD:
ForAppellant:
Holland & Hart; JamesM. Ragain, Billings,Montana
ForRespondent: Moulton, Bellingham, Longo & Mather; Gerald B. Murphy, Billings,Montana

Submitted onBriefs: Nov. 6, 1987 Decided: February 9,1988Mr. Justice R. C. McDonough delivered the Opinion of the Court.

The Thirteenth Judicial District Court granted the respondent's motion for summary judgment. The issuehere is whether the lower court, in granting summary judgment, erred in finding that therewere nomaterial questionsof 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 acceptingMorrow's subcontractbid. 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 selectiontoMorrow and Star,Fisher met with the two subcontractorsto discuss ways to cut costs
on the subcontract. Shortly after this meeting Fisher awarded the subcontractto 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'sbid may have been lower than Star's bid because

### it included portions of the subcontractnot coveredby Star. Thus, the record fails to resolve which bid was initially lower. Morrow alleges that after the meeting to cutcostson theproject, Star reduced itsbid tomatch hisbid. The record also reveals a conflict as to a "back bonding" requirement for the mechanical subcontractoron the project. Deposition testimony by Fisher and FBS employees shows that FBS contemplatedaperformancebond 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 aback bond, and that FBS would not provide a back bond to Morrow. However, the record doesnot resolve when Fisheractually communicated to the subcontractors that a back bond would be required. Star eventually did obtain a bond to guarantee its subcontractwork on the project,but thebond 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 thatbut 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 thanMorrow. According to Philip Morrow's wife and business associate,Donna Morrow, FBS's apparentmotive for allegedly pressuring Fisher was a "soured business relationship" between Morrow and FBS. Donna Morrow also stated in herdeposition that Alf Hulteng informed her that FBS employee KipVandeventer disliked theMorrows. 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 FBS1sinabilityto back bond Morrow's work on the construction project at issue in this case. Deposition statementsalso showed that abonding 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 towords againstwords, the District Court found that "all the testimonial evidence other than that fromplaintiff 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 FBSwas entitled to summary judgmentas amatter of law. According to this Court's interpretationsof 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 tobe drawn in favor of the party opposing summaryjudgment." Cereckv. Albertson's Inc. (1981),195 Mont. 409, 411, 637P.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 supportof 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, exceptperjury and treason.
We agree with Morrow's argument. Other Courts have emphasized the impropriety of granting summary judgmentwhere the credibility of an affiantmay be crucial to decision of a material fact. See Durant v. Stahlin (Mich. 1965), 135N.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 theparties. 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 notdo, 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 depositionmust 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, 154F.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 involvewitness credibility. For example: (1) 

### Dan Fisher stated that Star received the subcontract because they were the lowbidder. 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 lowbidder. (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 ofpressure 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 existenceof animositybetween theparties. Drawing all reasonable inferences in favor of the statements made by the Morrows, we cannot say that there exists no question ofmaterial fact. The questionpresented by the contradictory statementsgoes to theheart ofMorrow's claim, i.e., did FBS pressure Fisher into awarding the subcontract to Star? Dan Fisher's statement that Star was the lowbidder 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 substantiveprinciples that entitled themovant to judgmentas amatter of law. However, FBS argues that even if pressure existed, Morrow failed toproduce evidence sufficientto 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 interferencewith prospective economic advantage. The lower court setout the elements for the intentional interference with prospective economic advantage for this

case as follows: (1) That FBS intentionally and willfully acted; (2) In amanner calculated to causedamage toplaintiff 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 substantiveprinciples 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 inferencemay be drawn from Morrow's allegations that FBS pressured Fisher to award thecontract 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 thereis

room for different views, the determination of whether the interference was improper or not is ordinarily left to the jury, toobtain its common feel for the state of community mores and for the manner inwhich they would operate upon the facts inquestion.
Restatement (Second) of Torts5 767 at38-39 (1977). Finally, inregard towhether ornot an inference could be drawn that the pressure caused damage toMorrow, we need only point out that Fisher narrowed its choice of subcontractors to Star and Morrow. The allegation made by Morrow isthatbut forFBS's improper pressure, hewould have received the contract. Under these circumstances, an inferencemay certainlybe drawn thatFisher's choice of Star

overMorrow damaged Morrow. For the foregoing reasons we overturn the lower court's grantof summary judgment and remand.

We Concur: Justice

/Justices