Examination Management Services, Inc. v. Kirschbaum

• Decision Date: 01 November 1996
• Docket Number: No. 95-278,95-278
• Citation: 927 P.2d 686
• Parties: 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).
• Court: Wyoming Supreme Court

Page 686

927 P.2d 686

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).

No. 95-278.

Supreme Court of Wyoming.

Nov. 1, 1996.

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.

GOLDEN, Justice.

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.

We affirm.

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?

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?

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.

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.

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.

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.

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.

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.

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...