Scymanski v. Dufault, 42074
| Decision Date | 16 December 1971 |
| Docket Number | No. 42074,42074 |
| Citation | 80 Wn.2d 77,491 P.2d 1050 |
| Court | Washington Supreme Court |
| Parties | Peter SCYMANSKI and Donna Scymanski, husband and wife, Respondents and Cross-Appellants, v. Conrad DUFAULT and Jane Doe Dufault, husband and wife, Defendants, Washington State Hop Producers, Inc., a Washington corporation, Appellant. |
Chency & Hutcheson, Elwood Hutcheson, Yakima, for appellant.
Hovis, Cockrill & Roy, Ted Roy, Yakima, for respondents.
This case involves the tort of interference with business relations and the remedies which are available for that tort. For a proper understanding of the issues, the facts are presented at length.
In 1965, the United States Department of Agriculture issued a United States Hop Marketing Order which restricts the salable quantity of hops. Under this order, hops cannot be lawfully marketed unless covered by hop allotment base certificate rights (hereinafter called base), which vary according to a grower's production history. These base rights are transferable.
Some of these base rights were held by defendant, Conrad Dufault, a hop farmer. Conrad Dufault was a member of the Washington State Hop Producers, Inc. (appellant--hereinafter called co-op). In late 1966, he executed a marketing agreement with the co-op which obligated him to deliver all hops produced by him to the co-op for marketing. In signing, he became a member of the co-op and bound by its regulations. This agreement was to expire in 1972. The membership marketing agreement signed by Dufault contained the following:
20. During the life of the Agreement, the Grower agrees that he will not sell or otherwise transfer the lands or the possession thereof upon which hops are planted except to another member of the Association, until thirty days after he has offered the lands to the Association as agent for its members at the same price and upon the same terms as he is willing to sell or transfer to anyone else, or contract to transfer the land to such purchaser.
The bylaws of the co-op contained the following provision:
Section 30. HOP ALLOTMENT AND HOP RANCH SALES, LEASES: Notwithstanding compliance with paragraph 20 of the Membership Marketing Agreement with this Association, no member of this Association shall have the right to lease his hop ranch or any portion thereof to a non-member of the Association, or to sell, assign or transfer to a non-member of the Association, any of his hop allotment rights under the Federal Hop Marketing Order, without the written consent of the Association approved by its Board of Directors, except on the basis and subject to the express condition that all hop crops produced and harvested thereon during the remainder of the term of such Membership Marketing Agreement shall be delivered to this Association for marketing under said agreement, together with all hop allotment certificate rights of such member during said period, and in such event such member shall be personally responsible for such crop delivery, and the Association shall be entitled to the full unrestricted use during such period of all hop allotment certificates belonging to such member. (Adopted January 16, 1967).
The effect of these provisions is to require an owner desiring to sell or transfer his hop land to offer the lands to the co-op, as agent of its members, for 30 days before transferring to an outsider; and to obtain written permission from the co-op before selling or transferring any base rights, Except where the sale is conditioned upon the purchaser continuing to deliver the hops produced to the co-op for the remainder of the membership term.
Conrad Dufault considered withdrawing from hop farming and on September 5, 1968, gave the co-op notice of his intent to sell his 138,073 pounds of allotment base. He requested a price of $.35 per pound cash, or $.40 per pound on a time basis. This offer was communicated to other members of the co-op, but no member indicated a desire to buy the base offered. Leon Dufault, Conrad's brother and also vice president and a director of the co-op, agreed to purchase 18,940 pounds of the base at $.35 per pound for his individual use if the remainder could be sold.
Peter Scymanski, plaintiff/respondent, was also a hop farmer in the area, but did not belong to the co-op. Scymanski negotiated with Conrad Dufault and it was finally agreed that he would purchase the remaining base on the following terms: Scymanski would pay $.35 per pound for the base and would lease from Dufault 43 acres of hop land for a two-year period, namely 1969 and 1970. As rental, Scymanski was to pay the taxes, water, and remove the hop yard at the end of the term.
To formalize this agreement, Scymanski and Conrad Dufault met with Conrad Dufault's attorney on October 15, 1968. Leon Dufault was also present during this meeting. At this time, both Conrad and Scymanski signed and delivered their hop allotment certificates to the attorney, and Scymanski signed and delivered his check for the purchase price to the attorney to hold until the transaction was completed. The lease of the land was to be prepared by the attorney and signed when finished. It was recognized at this meeting that, by virtue of Dufault's membership, the co-op had certain rights which this agreement had to take into account and which should be looked into. Other than investigating the rights of the co-op, the parties concluded at this meeting that the sale was made.
Just prior to this meeting, Conrad Dufault had called the co-op manager, Jack Rutherford, and inquired as to the procedure for selling base to a nonmember. Dufault was informed that written permission was required from the co-op before such a sale could take place. On the day after the meeting, Conrad Dufault received a letter from Jack Rutherford, stating:
Mr. Conrad Dufault
Route 1
Prosser, Washington
Dear Conrad:
In discussing the selling of Allotment Base with members, I have become concerned that there may be a misunderstanding of the procedure involved.
In addition to advertising the Allotment for 30 days to the membership, written permission from the Board of Directors is also necessary before the Allotment is sold to anyone outside of Washington State Hop Producers, Inc.
If you have any question and would like to discuss this matter with me, please feel free to call or visit the office.
Yours sincerely,
WASHINGTON STATE HOP PRODUCERS, INC.
Jack Rutherford,
On October 23, 1968, the Board of Directors of the co-op (including Leon Dufault) met. During that meeting the requests of four members, including Conrad Dufault, for release and permission to sell their base were considered. While one member was granted release, no action was taken on Dufault's request.
On October 31, 1968, the board met, and again Leon Dufault was present. The release of Conrad Dufault was not discussed; however, a bank loan to the co-op to allow the co-op to purchase 344,025 pounds of base was discussed and a motion was passed giving the manager the authority to purchase base at $.35 per pound.
Sometime after this meeting, Scymanski contacted Jack Rutherford to discuss his (Scymanski's) agreement to purchase Conrad Dufault's base. While no understanding was reached, the possibility of Scymanski reselling the base back to the co-op was considered. Accordingly, at the next meeting of the board, on November 5, it was reported that Scymanski had agreed to deliver to the co-op the hops grown through the remainder of Dufault's membership term, that is, through the 1972 crop. In addition, it was reported that Scymanski was willing to either sell the base back to the co-op at the end of the membership term for market value, or, to make a contract to deliver the hops to the co-op for the years following 1972. Leon Dufault then made a motion to release Conrad to sell the base to Scymanski and to accept Scymanski's delivery through the 1972 crop at which time the co-op would purchase the base from him at $.35 per pound 1 for the base. This motion was passed, and the proposition was presented to Scymanski. Scymanski found the offer of resale at $.35 per pound at the end of the 1972 crop year unacceptable.
After Scymanski's rejection, no further action was taken by the co-op on the matter, and Conrad Dufault was not given his releae. Being anxious to sell, Dufault finally contacted the co-op to ascertain their willingness to purchase the base. The co-op agreed to purchase it at $.35 per pound and the sale was made.
Subsequently, Scymanski started an action against Conrad Dufault for breach of contract, and against the co-op on a theory of interference with business or contractual relations. In addition, Scymanski sought to impress a constructive trust on the base and thus have the base transferred to him. The trial court, sitting without a jury, dismissed defendant Dufault on the ground that the contract between him and Scymanski was oral, and thus violated the statute of frauds. However, the court found against the co-op for interference with a business relationship, but declined to transfer the base and instead awarded damages of $61,215.42. The co-op appealed, and Scymanski cross-appealed from the denial of a constructive trust and transfer of the base.
The elements for the tort of interference with business relations have been repeatedly stated by this court as:
(1) the existence of a valid contractual relationship or business expectancy; (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.
Calbom v. Knudtzon, 65 Wash.2d 157, 162, 396 P.2d 148, 151 (1964). See also, F. D. Hill & Co. v. Wallerich, 67 Wash.2d 409, 407 P.2d 956 (1965); Corinthian Corp. v. White & Bollard, Inc., 74 Wash.2d...
To continue reading
Request your trial
-
Board of Trustees of Weston County School Dist. No. 1, Weston County v. Holso
...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, 39......
-
Texas West Oil and Gas Corp. v. Fitzgerald
...& F Industries v. Medallion Group, Inc., 102 A.D.2d 865, 476 N.Y.S.2d 928 (1984) (caused diversion of trust funds); Scymanski v. Dufault, 80 Wash.2d 77, 491 P.2d 1050 (1971) (co-op marketing None of the cases involving a successful appeal for intentional-interference claims had to do with p......
-
Greensun Grp., LLC v. City of Bellevue
...¶50 To establish a valid business expectancy, courts require something less than an enforceable contract. Scymanski v. Dufault, 80 Wash.2d 77, 83, 491 P.2d 1050 (1971). Instead, a "valid business expectancy includes any prospective contractual or business relationship that would be of pecun......
-
Manna Funding, LLC v. Kittitas Cnty.
...expectation of fruition. And this relationship must be known, or reasonably apparent, to the interferor.” Scymanski v. Dufault, 80 Wash.2d 77, 84–85, 491 P.2d 1050 (1971). ¶ 35 Manna contends that summary judgment dismissal was improper because it established a prima facie case on all five ......
-
Table of Cases
...50, 816 P.2d 1229 (1991): 22.3(1)(b)(iii) Scott v. Wallitner, 49 Wn.2d 161, 299 P.2d 204 (1956): 7.3(1), 7.3(2) Scymanski v. Dufault, 80 Wn.2d 77, 491 P.2d 1050 (1971): 2.2(1)(c) Seabed Harvesting v. Dep't of Natural Res., 114 Wn.App. 791, 60 P.3d 658 (2002): 17.8(1) Seattle-First Nat'l Ban......
-
§13.7 Causes of Action and Remedies Against Fiduciaries
...a trust will be implied in favor of the persons entitled thereto." Estate of Krappes, 121 Wn.App. at 664 (quoting Scymanski v. Dufault, 80 Wn.2d 77, 88, 491 P.2d 1050 (1971)). Courts impose constructive trusts when the evidence establishes the decedent's intent that the legal title holder w......
-
§4.3 Rights and Claims Available to All Beneficiaries
...of the property [is] not wrongful." Mehelich v. Mehelich, 7 Wn.App. 545, 551, 500 P.2d 779 (1972) (quoting Scymanski v. Dufault, 80 Wn.2d 77, 89, 491 P.2d 1050 (1971)). Such trusts arise "where the retention of the property would result in the unjust enrichment of the person retaining it." ......
-
§2.2 - Trusts-Creation of Interest
...arise when there has been no fraud or undue influence. Baker v. Leonard, 120 Wn.2d 538, 547, 843 P.2d 1050 (1993); Scymanski v. Dufault, 80 Wn.2d 77, 89, 491 P.2d 1050 The right of a trust beneficiary under a constructive trust to reclaim the property or interest is cut off by a bona fide p......