Martin v. Wing

Decision Date18 August 1983
Docket NumberNo. 83-47,83-47
Citation667 P.2d 1159
PartiesPaul MARTIN and Carolyn Martin, husband and wife, Appellants (Defendants), v. George H. WING and Jermine L. Wing, husband and wife, Appellees (Plaintiffs).
CourtWyoming Supreme Court

Michael K. Shoumaker, Mark Murphy and James N. Wolfe, Sheridan, for appellants.

Rex O. Arney, Sheridan, for appellees.

Before ROONEY, C.J., and THOMAS, ROSE, BROWN and CARDINE, JJ.

ROONEY, Chief Justice.

This appeal is from a judgment, after a trial to the court, awarding appellees damages, court costs and $1.00 punitive damages. The trial court found that appellants had interfered with appellees' prospective contractual relationship with Mr. and Mrs. Charles Thomson who intended to purchase appellees' property.

Appellants word the issues on appeal as follows:

"I. Whether a Valid Contract Relationship or Business Expectancy Existed.

"II. Whether the Martins Had Sufficient Knowledge of the Contract or Business Expectancy.

"III. Whether There Was Intentional Interference Which Terminated the Business Expectancy.

"IV. Whether the Amount of Damages Awarded Was Excessive."

We affirm.

In early 1979 appellees had a house constructed on property they owned adjacent to appellants' property in Story, Wyoming. The house was built for speculative purposes. When the house was substantially In April, 1980, the Thomsons entered into a written offer to purchase the property contingent upon the sale of their home. The offer lapsed when they were unable to sell their home. Nevertheless, the Thomsons remained in contact with appellees, and after sale of other assets, the Thomsons had sufficient money for purchase of the property. In July, 1980, Mrs. Thomson prepared a purchase contract and she and Mr. Thomson traveled to Story to complete the transaction.

completed a for-sale sign was posted on the property and the property was listed with a real estate sales company.

As a final preparatory step to entering into the contract the Thomsons, together with two friends, inspected the property on the morning of July 12, 1980. At that time, they were approached by the appellants. Appellant Paul Martin spoke with Mr. Thomson. Appellant Carolyn Martin spoke with Mrs. Thomson.

Mr. Martin explained that he and his wife were entering the produce business and were constructing a 40' X 60' steel building adjacent to appellants' property. Fill dirt to level appellants' land with the adjacent road was being dumped on the property at that time. Mr. Martin said that there was a great deal of flooding on appellees' property and that the water got as high as the bottom of the window on appellees' house.

Mrs. Martin conveyed information to Mrs. Thomson concerning the construction of the produce building similar to that said by Mr. Martin. Mrs. Martin also told Mrs. Thomson that appellees' property flooded every spring; that the snow was so bad the property was inaccessible in winter; and that the septic system for the house had not been approved.

Appellants did construct a steel building on the property. However, appellee George Wing testified that there had never been a problem with flooding and that the septic system was designed by the county engineer and had been inspected and tested.

Because of the statements made by appellants to the Thomsons, the Thomsons refused to enter into the contract for purchase of appellees' property and this action resulted.

EXISTENCE OF A VALID CONTRACT RELATIONSHIP OR BUSINESS EXPECTANCY

Appellants' contention that the existence of a valid contract is necessary for appellees to recover is not in accord with Wyoming law. A contract had not yet been entered into in this case. However, a valid contract is not always necessary. In Wartensleben v. Willey, Wyo., 415 P.2d 613 (1966), we recognized that intentional interference with prospective contractual relations, without justification, creates liability for the harm caused thereby.

"Appropriately labeled, plaintiff is seeking relief for 'interference with prospective advantage,' as opposed to 'interference with contractual relations.' Prosser, Law of Torts, §§ 129 and 130 (4th Ed.1971). These separate causes of action tend to merge, except that the latter is aimed at the protection of the 'probable expectancies' of life, such as future contractual relations. Prosser, supra, § 130, at 950. The Court of Appeals of Washington, in Olson v. Scholes, 17 Wash.App. 383, 563 P.2d 1275, 1279-1280, summarized the elements of such actions--while at the same time implicitly indicating how the actions arise from common foundations--as follows:

" '... The theory advanced is that stated in Restatement of Torts § 766 (1939), as follows:

" '... [O]ne who, without a privilege to do so, induces or otherwise purposely causes a third person not to

"['](a) perform a contract with another, or

"['](b) enter into or continue a business relation with another

"[']is liable to the other for the harm caused thereby.

"[']The tort as defined in the Restatement is divided into two parts: (a) dealing with the cause of action arising when a third person induces a breach of contract, and (b) dealing with the cause "['](1) the existence of a valid contractual relationship or business expectancy;

of action which arises when a third person induces one person not to enter into a contract with another. The first subsection deals with present relationships, and the second with future relationships. The elements of the tort have been stated as:

"['](2) knowledge of the relationship or expectancy on the part of the interferor;

"['](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.

"[']See King v. Seattle, 84 Wash.2d 239, 525 P.2d 228 (1974); Scymanski v. Dufault, 80 Wash.2d 77, 491 P.2d 1050 (1971); Corinthian Corp. v. White & Bollard, Inc., 74 Wash.2d 50, 442 P.2d 950 (1968), and Calbom v. Knudtzon, 65 Wash.2d 157, 396 P.2d 148 (1964), inter alia.'

"See, also, 45 Am.Jur.2d, Interference, §§ 50 and 51; and 86 C.J.S. Torts § 43." Board of Trustees of Weston County School District No. 1, Weston County v. Holso, Wyo., 584 P.2d 1009, 1016-1017, reh. denied 587 P.2d 203 (1978).

And see Kvenild v. Taylor, Wyo., 594 P.2d 972 (1979).

Volume 4, Restatement of Torts 2d, § 766B, p. 20 (1979) defines the tort of intentional interference with prospective contractual relation as follows:

"One who intentionally and improperly interferes with another's prospective contractual relation (except a contract to marry) is subject to liability to the other for the pecuniary harm resulting from loss of the benefits of the relation, whether the interference consists of

"(a) inducing or otherwise causing a third person not to enter into or continue the prospective relation or

"(b) preventing the other from acquiring or continuing the prospective relation."

In this case there was a prospective contractual relation based upon the dealings between appellees and the Thomsons concerning the purchase of appellees' property by the Thomsons.

But appellants contend that the intentional interference with a prospective contractual relation cannot apply where real estate is involved, citing Bailey v. Banister, 200 F.2d 683 (10th Cir.1952); Springer v. Singleton, 256 Cal.App.2d 184, 63 Cal.Rptr. 770 27 A.L.R.3d 1220 (1967); Malevich v. Hakola, Minn., 278 N.W.2d 541 (1979); and Williams v. DeMan, 7 Mich.App. 71, 151 N.W.2d 247 (1967). However, in each of these cases not only was the prospective purchaser without a valid contract to purchase the property, but the party alleged to have interfered with the prospective purchaser's right was found to be exercising an equal right to purchase the property. These cases are distinguishable from this case in that appellants here were outsiders, not interested in purchasing the property and not competing in the market place to purchase the property.

In Martin v. Phillips Petroleum Company, Tex.Civ.App., 455 S.W.2d 429 (1970), this distinction was clearly drawn within the context of Texas law requiring that the interference be malicious. While we do not require that the interference be malicious, Board of Trustees of Weston County School District No. 1, supra, the analysis is otherwise valid.

" * * * Our courts have also recognized a cause of action for tortious and wrongful interference with advantageous business relationships. Cooper v. Steen, 318 S.W.2d 750, 757, (Tex.Civ.App.), no writ hist., and cases there cited. And see Pope v. Garrett, 147 Tex. 18, 211 S.W.2d 559. It need not be absolutely certain that the prospective contract would have been made were it not for such interference. A reasonable assurance thereof in view of all the circumstances, is generally sufficient. 86 C.J.S. Torts § 43, p. 959. But where there is no contract, as here, a In Wyoming ...

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