Texas West Oil and Gas Corp. v. Fitzgerald

negligent buyer If a Kirby Systems In v. Mineral is not Building foreclosed Wyo., 704 P.2d Explorations Company, warranty recovery from breach of even (1985), jury found though we noted that his negligence, compared, may neg- Building Corporation Drake to be 35% of have exceeded that the seller then a interesting ligent. It is to note Cen- that party position Corporation in the of Centric only negligent. Corporation tric 20% by not be foreclosed would the contribution computations are my While mathematical recovering consequential from its statute correction, subject jury ver- always to damages attributable to its own conduct in $8,392,216.90 per- of reduced dict proximate the context of cause. A fact centage attributable to the fault of might comparative negli- finder use $419,610.85 plaintiff of leaves a balance gence resolving proxi- determination $7,972,606.05. Thirty-five percent that question, per- cause I not mate but am $2,790,412.12. is That was the suaded that it be bound to do would so. disposed compromising which Drake of in reiterate, not To this issue was before negligence sum claim it for the case, the court for decision but it $250,000. I do not understand how we investigation justi- seems me a careful say Building Corpo- can really that Drake adopting fied forth in before views set pay again. They ration not should Rooney’s special Justice concurrence. paid yet. haven’t first time special concurring opinion, In his Justice

Rooney’s consequential thesis is that dam-

ages arising out under of a contract claim Code con- Uniform Commercial are provisions trolled the contribution in our TEXAS WEST AND OIL GAS CORPO pertaining negligence statutes actions. Johnson, RATION and Bob true, I necessarily am satisfied not (Plaintiffs), Appellants court, urge and I would the trial counsel, give of briefs assistance v.

matter careful consideration if it must be FITZGERALD, Appellee D.N. addressed. (Intervenor), Rig v. Equipment Sheldon Unit & Wyo and Rentals of Sales Co., (10th Cir.1986) 797 F.2d 883 court Inc., ming, Wyoming a reversed determination United (Defendant). corporation, Appellee States District Court for the District held, Wyoming effect, had that a FITZGERALD, Appellant D.N. plaintiff negli who found to be more (Intervenor), gent as the jury applied than defendant v. comparative negligence our statute could TEXAS WEST AND OIL GAS CORPO for a of warranty recover breach claim. Johnson, RATION and Bob Appeals United States Court of held (Plaintiffs), Appellees degree injury proximately resulting warranty from the Oil Patch Sales Rentals might percentage be controlled Wyoming, Wyoming negligence plaintiff attributable but (Defendant). corporation, that the balance of his claim was recovera 86-9, Nos. 86-10. ble. Rig The result v. Sheldon Unit & Co., Equipment supra, is like that of Tex Supreme Wyoming. Court Yards, sun Feed Inc. v. Ralston Purina Oct. Co., (5th Cir.1971), Signal 447 F.2d 660 Rehearing Denied 21,1986. Nov. Products, Tex., Oil & Gas Universal perceive S.W.2d 320 I those analogous authorities to be to the situation

presented in this case. Gosman,

Jeffrey Casper, C. for Texas Corp. West Oil and Gas and Bob Johnson. Schwartz, Bon, Harold E. Meier of McCrary Walker, Casper, & for D.N. Fitz- gerald. ” October, Overeem, ing the first weeks of Casper, for Oil two 1981’ Maher

Susan crucial and that Oil Patch had failed to Wyoming, Inc. and Rentals Patch Sales addition, fulfill contract. Texas C.J., BROWN, THOMAS, Before figure West stated that million $5.1 MACY, CARDINE, JJ. URBIGKIT only approximation; that Oil Patch expenditures nearly had not shown MACY, Justice. amount; price and that the contract could origins their in the These two cases have less than million. $5.1 first contract. We will consider same complaint against Texas filed a West dispute plain- relating to the between facts asserting Patch in October Corporation tiffs Texas West Oil and Gas failing Patch had breached the contract West) (Texas defend- and Bob Johnson and complete rig. deliver com- Wyo- Patch Sales and Rentals ant Oil sought possession plaint as well (Oil Patch). ming, Inc. damages allegedly caused breach. explor- is in the business of Texas West Patch answered and asserted that it Oil for, developing, producing impossible complete and oil and ing rig was the with the 1, 1981, agreed originally Texas West set out in the con- gas. On June drawworks drilling rig from Oil Patch. tract and that Texas West had refused to purchase a $500,000 pay- specify for a substitute drawworks which it provided The contract accept repudiated had the con- execution and four would and day ment on the $750,000. tract. Oil Patch counterclaimed for the payments The con- monthly purchase price i.e., of the balance price paid $5.1 the to be tract also stated that — any sought million—less setoffs and inci- approximately drilling rig $5.1 for the was damages dental it claimed to have suffered defi- figures million “exact to be made with repudiation. from Texas West’s agreement par- the nite and certain ties, agreed upon, by or if unable to be requested After Oil Patch that the issue arbitration, is to be based actual purchase price to arbi- be submitted of Seller as well as time involved costs tration, parties stipula- entered into a the Finally, provid- the contract construction.” they agreed to submit all tion anticipated rig the ed that it was that dispute in the to an legal and factual issues completed in 1981. would be October panel. hearing April a After arbitration 1984, that panel concluded the arbitration paid mil- Although Texas West the $3.5 price million a contract was with $5.1 the contract, Patch required by lion the Oil any in case of overrun of costs provision rig parties had could not deliver the as the rig Because the beyond that amount. problems anticipated because of completed, panel awarded Oil Patch not rig’s to Oil delivery of the drawworks million minus the price the contract of $5.1 parties Patch. After the had discussed completing rig, panel which the cost of drawworks, Patch problems with the $1,133,000, pay- found to be and the down February sent Texas West a letter on panel The also found ment of million.1 $3.5 requested that which Oil Patch pay Texas West should interest on the that drawworks, Texas West select substitute price of the contract from March balance pay the additional cost for these substitute drawworks, and advance balance time, of- contract. At the same Oil Patch in district court to Texas West moved award, rig delivering modify the alternative of fered or the arbitration vacate exchange for the Patch asked for an order confirm- without drawworks while Oil price ing less the cost The district court deter- balance of the contract the award. responded that the award should not be set Texas West mined drawworks. $100,000 (except for the delivery ‘dur- aside or modified by stating that the date of “ $567,000. $467,000. party would be for Neither in an award the award 1. This results $467,000. panel disputes meant panel arbitration miscalculated and stated error) guaranty. accordingly entered arithmetic These actions induced Oil Patch confirming order and dismiss- award to breach contract requiring more ing modify. Texas price motion vacate than the contract before it would de- appealed has from this order. West rig. liver the These actions form also against basis for Texas West’s claim Fitz- presented dispute also We are gerald. which, although connected with the con- West, tract between Oil Patch and Texas against Fitzgerald Texas West’s claim Fitzgerald parties now involves as D.N. was tried a jury before which found that Fitzgerald and Texas West. Fitzgerald had interfered with the contract original complaint in the named filed between Oil Patch and Texas West. The Patch, Texas West but he inter- jury also found that as a result Texas West hold vened because he claimed to damages Fitzgerald suffered of million. $4 Patch, inventory interest in the of Oil judgment notwithstanding moved sought which included the Texas West (JNOV) verdict alternatively a new possess. intervened, Fitzgerald After trial or remittitur. The trial court denied complaint joining Texas its West amended granted the motion for JNOV but the mo- Fitzgerald and others as In its defendants. tion new trial unless Texas West complaint, alleged amended Texas West $3,431,675. consented to a remittitur of intentionally interfered appealed order, Texas West has from this with the contract between Oil has cross-appeal taken a itself, which caused Texas West to suffer portion from denying the order damages. motion for JNOV. Fitzgerald original incorpo- had been an president rator and vice of Oil Patch. As ARBITRATION AWARD guarantee agreed corpora- such he to The order of the affirming district court

tion’s loans from First Bank Interstate the arbitration award is affirmed. Casper, (Bank). Although N.A. he re- merely The motion Texas West stated signed as a director of Oil Patch in March that the arbitration award should be vacat- Fitzgerald the Bank did not release ed or for any modified and all reasons $500,000. guaranty fact, from his In in contemplated by allowed or law. Fitzgerald April 1982 guaran- increased the ty to According $1.1 million. This became to the brief Texas West important Oil ap- because Patch filed in the in support borrowed district court of its proximately motion, million from the Bank $1.1 Texas West contended that completing rig it worked on award Texas should be set aside because it is Fitzgerald’s guaran- West. In addition to manifest mistake of to prof- law award full in ty, March acquired the Bank also it on a contract which the seller failed to perform. alternative, interest in all of Oil inven- In the Texas Patch’s West tory receivable, and accounts which includ- contended that the award should be mod- rig. By (1) ed the September $226,000, ified to the loans reduce the award past due, had become and the Bank which it profit asked claims is the ratio of for the Fitzgerald to guaranty. Fitzger- portion honor his completed; (2) of the not to ald did so and received the note securi- $100,000 reduce award to reflect the ty error; previously (3) interest held require- Bank. arithmetic to strike the payment ment for the interest attor- Texas West asserts that in- fees; ney’s require to to duced the Bank rig. to take the lien on the convey incompleted title to the oil rig to Then assumed control over the upon receiving Texas payment any West disposition rig, requiring addi- unpaid balance owed it. money paid tional be under the contract between Oil Patch and Texas West in order opposition its brief in motion protect West, himself from on the Texas Oil Patch contended that the

1Q61 presents following in Texas West that it did issues was insufficient motion relating to grounds the arbitration award review particularity the there- state with 7(b)(1), W.R.C.P., before Court: by Rule required for as part that: provides refusing “Did the err in which District Court vacate the arbitration award as a mani- for an order application “An to the court injustice buyer fest where the under a which, unless made shall motion is forced pay contract for sale full trial, during hearing or shall be made seller, profit defaulting on a contract to a writing, partic- state with shall [and] * * complete who has refused to and deliver ularity grounds therefor goods the contract under the terms of added.) (Emphasis contract? further contends in its brief Oil Patch [Cjourt “Did err confirm- [District any has failed to show that Texas West ing the arbitration award of interest at convincing why reason the award clear above the First Interstate Bank of 2% any grounds vacated on should be N.A., Casper, prime unliqui- rate on an l-36-114(a), W.S.1977, enumerated in § period began dated sum for a which shall vacate provides that the court (2) years prior run two to the arbitration an award where: arbitration award? “(i) procured by corrup- The award was “Did the District Court err in not vacat- means; tion, undue fraud other ing being the award of interest as “(ii) partiality There was evident panel’s excess of the arbitration authori- neutral, corrup- appointed as a arbitrator ty?” or miscon- any

tion of of the arbitrators Patch has addressed the issues of any party; prejudicing duct by restating Texas West them as follows: “(iii) pow- their The arbitrators exceeded refusing “Did Trial Court err in ers; the arbitration award as a mani- vacate injustice? fest “(iv) postpone refused to arbitrators being hearing upon confirming sufficient cause “Did the District Court err shown, to hear evidence material award of interest? refused the arbitration controversy or otherwise conduct- err in not vacat- “Did the District Court hearing prejudice to substan- ed the as being ing the award interest tially party; the of a or panel’s the authori- excess of arbitration ty?” “(v) agreement, There was no arbitration adversely determined

the issue was not third issues The second and were provided by the by a court as law and dispo presented the district court for not participate in the arbi- applicant did not is, It by trial brief or otherwise. sition hearing raising objec- tration without therefore, appropriate for this Court that the relief such tion. fact or not the arbitra now determine whether granted that it could not or would not be those award should vacated for tion be equity Dennis, a court of or is not a Wyo., law specific reasons. Dennis v. refusing (1984). to con- ground vacating firm the award.” dealing with the first issue Although the court’s order contained West, contend Patch continues to Texas Oil recognizing Texas statement that West’s only time an award can arbitration grounds for va- specify motion did not pleads applicant an be vacated is when modification, appears it from the grounds cation or set out proves one of the agree. the motion was judge’s l-36-114(a). decision letter that do not The stat We that court va merely not denied for such reason and ute states that the must grounds any if stated arguments counsels’ cate the award order is based on pro- does not exists. The statute tracking therein their briefs. vacating hibit the court from an Patch district tween Oil and itself. This action was grounds. other We said award on tried before a jury which returned $4a can that an award also be vacated if before million verdict of Texas favor West. On it appeal Fitzgerald presents following fraud, corruption, “was obtained be- issues: beyond jus- havior the bounds of natural “THE COURT ERRED IN NOT tice, authority, excess of or a manifest A GRANTING JUDGMENT NOTWITH- appearing mistake of fact lawor STANDING THE VERDICT IN THAT * * face award Riverton THERE WAS NO EVIDENCE FROM Valley Electric Association v. Pacific A WHICH JURY COULD FIND: Company, Light Wyo., Power and “A. That D.N. interfered P.2d with the contract between Texas West We have also that is a stated arbitration [Corporation Oil and Gas Oil voluntary disputes method of settlement of Patch of Wyoming, Sales and Rentals public policy Wyoming embedded in the Inc.; or Court, and is this favored that this Court is reluctant “B. The of any damages disturb arbitrators’ amount sus- controversies, just solutions and that tained as a of any result interference. upset before we will a district court deci- “THE COURT ERRED IN NOT upholding award, sion an arbitration A GRANTING JUDGMENT NOTWITH- applicant discharged proof must have its STANDING THE VERDICT IN THAT convincing burden clear with evidence. THE INTERVENOR PRESENTED [A] Supply Company Northern v. Town of DEFENSE WHICH ENTITLED HIM TO Wyo., Greybull, JUDGMENT AS A MATTER OF LAW.” have examined the arbitration We Texas presents following West also award, panel’s and we are find unable to relating damages issue in- for contract any profit that Oil Patch realized much less terference: profit $226,000. To arrive at “Did the District Court err in applying find, amount must we as Texas West con legal incorrect standard determin- tends, that million it $3.5 advanced ing the jury verdict in- equals the expended by actual costs Oil rig tervenor, Fitzgerald, get stage Patch to the oil in the D.N. was excessive construction which it existed when and shocked the conscience of dispute are arose. We unable to do this Court?” any more than we could find that Patch In order to establish the claim expended may million million. $1 $4 It contract, tortious interference anticipated that it would plaintiff prove must following ele profit make a completed, when (1) contract; (2) ments: the existence of the wholly but Texas West has failed to draw knowledge contract; the defendant’s of the any testimony our attention to document (3) intentional plain interference with the panel which was before the arbitration indi justification; tiff’s contract without cating Oil did that Patch so. The conten resulting damages. Basin Electric Power tion Texas West is on an based unwar Cooperative-Missouri assumption. ranted Basin For Power this reason we Project Howton, Wyo., hold v. that Texas West has failed to 603 P.2d 402 sustain court, its burden and that the district there

fore, entering judgment did not err in af making When

firming determination of the arbitration award. whether or a trial court should have CONTRACT INTERFERENCE verdict, directed a this Court considers the evidence alleged Fitzgerald party against Texas West that inten- favorable the tionally interfered with be- gives the contract whom the motion is directed and that taking rig. from the There- Carey Texas West inferences. all reasonable evidence after, that a lien existed Jackson, P.2d 868 Gibson admitted Wyo., 603 v. that the matter was out of his hands. a contract being question no that There attempted speak with Dunnavant then knowledge Fitzgerald had and that existed ” “ shots,’ calling the person the ‘who [was] it, carefully examined we have and, had of a conversation he result determine whether appeal record Harries, principals one of the with Tom interfered with Fitzgerald unjustifiably Patch, told he contacted who Oil and, so, Texas West if whether contract rig to take the Texas him that order damages as a result. suffered pay the Bank the have to West would to Texas The evidence favorable $508,000 negotiation and that there was no unjustifiable concerning Fitzgerald’s West point. on that prob that even after interference shows delivery and the infer- developed with find from this evidence lems We drawworks, relationship between Texas may drawn therefrom that ences that On Feb Patch was amicable. and Oil intentionally justifi- West and without 19, 1982, however, Gordon Gibson ruary with the contract between cation interfered to Texas West offer sent a letter Oil Patch Patch and Texas West. Oil paying the of either ing it the alternative pur Having million that there was suffi $5.1 million balance of found $1.6 drawworks, price, jury less the cost of to the to find presented chase cient evidence drawworks, the new paying the cost of interfered Fitzgerald unjustifiably advancing the along balance between Oil Patch and with the contract rig. price completed for the Gib purchase West, must determine Texas we now the first time the that this was son testified sufficient evi or not there was whether money discussed question of additional jury to find that presented to the dence This and Oil Patch. Texas West between damaged actions Texas West. such Gibson, money, according to additional presented jury There was evidence $508,000 which applied to be toward rig value of the without that the market to the Bank on an unsecured Patch owed mil- approximately $3.2 the drawworks was by Fitzgerald. guaranteed loan interference during the times of the lion Milliken, 11, 1982, A. February John On at rig worth would been officer, Fitzger- contacted the Bank’s loan completed if Patch had million Oil least $4 obligations to concerning Patch’s ald possible It is rig with the drawworks. guaranty. Fitz- Fitzgerald’s the Bank and damage this measure of jury used to take a lien on the gerald asked the Bank million. its verdict of $4 it returned when (including rig) and accounts inventory that it lost Texas West contends Patch. The Bank took receivable of Oil interference, and Fitzgerald’s as a result of April during the month of security, and therefore, should be the mar- damages, its liability on 1982, Fitzgerald increased his rig. ket value This new million. to $1.1 though the Bank given even guaranty was relies Texas West The cases to loan Oil made no commitment of dam- value as a measure market concern the time for money or extend additional personal or destruction of age for the loss any existing loans. Packing Co. property. Rocky Mountain (1964); Branney, Wyo., meantime, was at- In the Texas West Hansen, Wyo., 361 P.2d Rogers v. agreement a tempting to finalize or infer (1961). to conclude We are unable to finish party joint for a venture third jury presented to the the evidence Dunnavant, from L.N. rig put it work. to rig. The infer- lost the that Texas West West, that on president of Texas testified interfered with the Fitzgerald ence is that 19, 1982, the existence denied June Gibson delivery rig to Texas West. rig prevent any lien on the which would of We, therefore, judge delivery hold that the trial to rig Patch withhold until applying pay- not his discretion not made did abuse Texas West sufficient additional applicable protect market value as the standard of to ments him from on damages he determined the jury when guaranty.

verdict was excessive therefore, We, Fitzgerald’s hold that de- of and shocked the conscience the court. fense is untenable and that the court did previously grant held refusing We not err in judgment to a damages of inter Fitzgerald notwithstanding measure intentional the verdict. compen ference is amount which will proximately of detriment sate all TRIAL REMITTITUR—NEW duty. of caused Martin v. presents following Texas West issues (1983). Wing, Wyo., 667 P.2d 1159 relating to a remittitur new trial: Bishop Omer testified that he had access “Did the District Court abuse it’s [sic] through a compa-

to drawworks one of his ordering discretion in a remittitur or new Dunnavant, nies and that he and on behalf trial? West, attempted negotiate of Texas to a complete rig put deal to it to “Did the work. District Court abuse it’s [sic] Bishop further testified that he ordering was “dead discretion in not a new trial as but, according serious” the venture damages only, about to when the District Court Dunnavant, testimony of the deal expressly found that there was sufficient was killed when refused to allow support evidence the jury to verdict find- payment to be delivered before was ing liability against the intervenor D.N. to lien the rig. made release the Fitzgerald for interference with Plaintiff’s contract?” jury The properly could have found that Fitzgerald’s proxi- interference was the power The to order a new trial Bishop mate cause Texas West and damages for excessive is committed to the getting together complete put Cody sound discretion the trial court. rig to work that Texas West dam- Atkins, (1983). Wyo., 658 The trial aged thereby. jury The could also have authority also court has com order a found, contends, as Texas West that Fitz- plete damages new trial or one limited gerald’s proximate interference was the when the is Wright verdict excessive. 11 & nondelivery the rig cause and that Miller, Federal Practice and Procedure: damage equaled Texas West’s the invest- (1973); Blair, Civil 2815 Wyo., Smith v. rig. ment value ap standard for Although the extent and the amount of pellate judge’s review of a trial order damages may have resulted from granting a new trial for an excessive dam Fitzgerald’s interference are difficult age verdict whether trial court ascertain, find that there was we sufficient abused its Taylor discretion. v. Wash presented to the jury evidence for it to find ington Terminal Company, F.2d 145 damaged. that Texas West (D.C.Cir.), cert. denied 396 U.S. S.Ct. 24 L.Ed.2d 85 Fitzgerald’s defense that “the taking Agreement of Security a for consid Texas West’s contention that the court law, is, eration ordering as matter not interfer its abused discretion in a remit- rights” ence of any contractual and that titur aor new trial because apply it did not he, therefore, should have been entitled the market value as a standard measur- It ing damages directed verdict. was the Bank which previous- is untenable. As we security agreement. Fitzgerald stated, took the ly damages this measure of is not guarantor. was the applicable We do not find as a when the merely interference Fitzgerald’s position matter of delay law that causes a delivery personal entitled him to property. induce Oil bar, discussing to their situa- question of were resolutions case at In the part tion. A of those discussions involved Fitzgerald interfered or not whether adjustment an to the contract the nature and Oil Texas West contract between regard of a novation. Instruction proper vigorously contested and Patch jury No. 12 advised the as follows: differ trial court on three ly decided. The suffi right found that there was Wyoming party ent occasions2 “In has the find presented jury to the evidence be free from the intentional interference cient right negotiations of interference Texas West on issue to conduct probability that have a reasonable of re- by Fitzgerald. sulting in a contract.” compel it unfair to We find that would be arguable appears It to have been risk another trial on all Texas West to Inter- security interest held the First court solely the trial the issues because Casper, state Bank N.A. did not extend do so damages to excessive. To found i.e., progress, drilling to the work case, when, as in this the issues rig. expended The Bank then substantial separated without cre- damages and can be obtaining effort an amendment to the inconvenience, confusion, prejudice ating or agreement financing state- court’s Fitzgerald is an of the trial abuse ment, the effect of which was to make the pe- not be Texas West should discretion. drilling rig unequivocally subject to the consenting remittitur. for not to a nalized security agreement. The record would 59(a), W.R.C.P., Although Rule jury’s that this was justify the conclusion authority trial courts to pertains to the Fitzgerald, at the insistence of done part on all or remand for retrial justify would also a conclusion that issues, au possesses equivalent this Court security interest to the extension of the thority partial new trial. to order Wheat perhaps prevented drilling inhibited and McGuire, Wyo., v. Irrigation District land and Gas the efforts of Texas West Oil and Rent- Corporation and Oil Patch Sales confirming the arbitration The order Inc., resolve their dif- Wyoming, als of affirmed, is remand- and the case award substituting a different con- ferences damages issue of ed for a new trial on the arrangement. I am satisfied that tractual only. support jury’s the law do the facts and wrongful in- that there was

determination THOMAS, Justice, specially con- Chief Fitzgerald.1 by D.N. terference curring. disposition by dissent from the I must case for a remands the judg- this court which

I in the affirmance of concur damages only. trial on the issue Fitzgerald. Recogniz- new ment D.N. ordered a remittitur or problems The district court ing significance of the which a new trial. Whether dissenting opinion the alternative raised in the been complete new trial or re- new trial should be Urbigkit, especially the law’s of Justice which I limited new trial is a matter wrongful interfer- quirement that there be discretion placed to be within the existing perceive ence causes breach of may well contract, judge district and which does disclose that sub- the record perception of how much depend sequent early 1982 Texas events plaintiff required to induce the leverage is Corporation and Oil West Oil Gas remittitur. accept Wyoming, and Rentals of Sales Howton, Wyo., verdict, Project judg- Missouri Basin Power motion for 2. Motion for directed verdict, Fitzger- notwithstanding and the One in 404-405 ment finding judgment. position court’s in its order the Bank's is entitled to all of ald’s guaranteed obligation which he has on an justification 1. Whether interference is without it, he has no lawful basis when he satisfies but jury improper question is a of fact for the enhancing creating any rights. Cooperative- one of law. Basin Electric Power 1066 implicated lending process trial has wide discretion con- in court this normal granting history, of a new since earliest recorded no

cerning propriety and case Atkins, of this nature is either cited or Wyo., presently 658 P.2d Cody trial. directly indirectly holding found (1983). I majority 63-64 do not read the guarantor surety right does not have the opinion reaching as a conclusion that there protection request principal from the in was an abuse of the trial court’s discretion the event of a for payment. lender call regard. in I do think the record Yet, justify would such a in conclusion. This convoluted and controversial field of of that conclusion what has absence tort law comes this court’s consideration occurred is that this court has substituted significantly any different than other its for of discretion the district court. directly factual situation addressed dis- principles jurisprudence Since of foreclose precedent.2 Preliminarily, covered an in- of our discretion for that substitution trinsically logical inconsistency is created court, I district would remand the in by affirming this case the arbitration case for a new trial on both the issues of decision which determined that no contrac- damages. and liability by nondelivery by tual breach occurred manufacturer in the of payment absence of Justice, URBIGKIT, concurring part remaining due, amount and ap- then dissenting part. and proving third-party liability causing for breach which had not occurred. I concur in the of decision this court to award, respect- affirm arbitration and Unfortunately, questions evidentiary and fully comprehensively and dissent in analysis confused discussion and decision establishing guarantor decision legal on the status which established application of a theory tort an intention- law should have been determinative. al with interference a contract. judgment The Texas theory West and singularly important banking-in- recovery

This is a buyer in its claim for suretyship dustry Principles by appli- decision. intentional interference should fail legal princi- case are cation of three in this well-established and law merchant invoked law, ples: as old as Roman perhaps and older.1 stated, Succinctly this case (1) concerns the Guarantor does not wrong- invoke a principal retained and his purpose ful by requesting or intent assets when required security position protec- lender obtain good guaranty.

stand on a The contention involving tion available assets of the of intentional has interference never Any been debtor. claimed position history (1985); ascribing Handler, 1. A well-considered the differ- 39 Sw.L.J. 123 Broida and ing surety language derivation of from Roman Prospec Tortious With Contract and Interference usage history and Illinois, and from Teutonic Advantage tive 32 De Paul L.Rev. 325 Radin, Guaranty Surety- to be found in and (1982-83); Commentary, With Con Interference (1928-29). ship, 17 Cal.L.Rev. 605 It is contend- Alabama, tractual and Business Relations 34 general ed princi- some authorities that the Comment, (1983); Ala.L.Rev. 599 Interference ples relationships involving suretyship can Prospective With Gain: Must There abe Con history be dated back to the earliest of man in a tract?, Diego (1985); Note, San 22 L.Rev. 401 relationship. societal Tortious With Contractual Relations Interference Century: in the Nineteenth The Transformation subject 2. The of intentional interference aas Contract, Tort, Property, 93 Harvard comprehensively tort is addressed authorities (1980); Perlman, L.Rev. 1510 with Note, Interference journals Leigh law which include: Expectancies: Contract and Other Economic A Carpet Furniture and Co. v. Isom: Utah's New Doctrine, Clash Tort and Contract 40 U.Chi.L. Prospective Tort with Economic for Interference (1982); Note, Rev. 61 Tortious with Relations, (1984); J.Contemp.Law Interference Com Society’s Contract: A Reassertion Interest ment, Analysis An Property Formation Stability Commercial Integrity, and Contractual Rights Underlying Tortious Interference (1981); Dobbs, 81 Colum.L.Rev. 1491 Tortious Relations, Contracts and Other Economic Relationships, with Contractual (1983); Gavin, Hughes U.Chi.L.Rev. 1116 Interference (1980-81). Practices, Ark.L.Rev. 335 Deceptive Commercial Torts and Trade Patch, newly any entity, balance created only co-existent with guaranteed $500,000. loan total of unpaid. 30, 1981, guarantor, any pre- did not cause 2. March as a Guarantor organizer principal, determined vious and a contract since arbitration withdrew princi- operational from the in unpaid was and the involvement that a balance interest, primary party corporation, except guaran- in for continued pal, as the drilling rig responsibility. not release the without tor would receipt. No of contract payment 1, 1981, drilling rig 3. June a manufac- existed. ture contract was executed between Oil West, of an interest in the Patch and Texas contract As a holder secured, clarity was a model for lack of and transaction as a debtor to be term specificity. guarantor privileged as a matter protect his status law to seek to business 4. Patch came Oil to have two loans at by the col- in the normal business effort Bank, one unsecured except by guar- inventory assignment lateral of business anties, operational with an line of credit and receivables. $508,000, with a balance of a and second $645,000, by secured real estate mort- guarantor relationship is a subcate- gage property Casper. on its in business general suretyship, gory of the field of 11, 1982, commonly noted difference be- 5. On March both notes with were surety category having pri- delinquent, rig a due and and the in- tween a as undelivered, guarantor only complete mary liability, and the sub- and with contro- versy as to the construction contract ject monetary by call default price. principal. primary This is the versus sec- ondary liability differential. This field of 6. As a consideration of note-extension generally suretyship, called law (as negotiations, guarantor well as the

procedural aspects here involved as that of being princi- two others the officers and Stearns, guaranty. Suretyship Law of Patch) pals re-signed continuing 1.1, 1.5, (5th 1951). at 4 ed. §§ guaranty in favor of the Bank $1,100,000. larger amount

This case is a business transaction involv- Additionally, 7. the Bank took a securi- ing Fitzgerald (guarantor), First Interstate financing statement ty agreement and (lender), Casper, Bank of N.A. involving “Any and All from Oil Patch Wyoming (principal Sales and Rentals of Inventory,” and Accounts Receivable manufacturer), and and Texas West Oil and File No. U-513862. Corporation (buyer-customer), wherein Gas Texas West entered into contract obligations of the two notes 8. The purchase drilling rig. The a constructed were then renewed and extended $508,000 not unusual construc- days, case accommodates the one for due interest, payment delivery, on com- reciting tion factors of and renewal = Inventory pleted partial payment, incomplete Any con- and All and “S/A F/S Receivable”; $645,- conflict, struction, the one for price with the bal- Accounts having extended renewal dispute. Stripped ance then due in been month to involving for an earlier one jury-trial hyperbole banks and attachment 11,1982, was further extended for buyers or claims of factual is- March contested sues, following days, Inc., Wyoming, operating & Rental of 22,1982, 13. Fitzgerald, October in hon- time, money from time to at and the oring his guaranty on the line-of-credit present note, time have a by secured loan, purchased $508,000 the note with mortgage first on all account receiva- interest, accrued assignment and secured inventory bles and in the amount of financing filed both statements. $508,000. 14. This replevin case commenced aas our Bank “When entertained loan re- by action Texas (long West since denied quests from Oil Patch and Sales Rental court), by the trial by moved intervention Wyoming, request loan by Fitzgerald contest, to priority a lien approved upon your based financial consider, and now comes to after com- standing your guarantee. pleted contract-price arbitration, past 9, July “Both loans are due since question guarantor of whether a “inten- performance with no to date on tionally justification and without inter- either on building loan. Interest fered” with the sales contract September $65,- loan to security loan-renewal document taken 700.42, per with a charge $340.42 diem lender on the borrower’s business after that date. The due interest to inventory and receivables. September 20, inventory 1982 on the 15. The stip- record reflects an in-court $51,745.44, loan is with a $268.11 ulation that amounts due from Texas day charge each after that date. unpaid West as the balance are due to promised performance “Due lack of Fitzgerald repayment guaran- on his loans, on these hereby asking we are ty payment, which amounts were settled you your guarantee. to honor Upon subsequent the arbitration award and payment notes, in full these we will court confirmation. assign you, your protection, our banking The issue in terms is whether a mortgages in the security which colla- lender, or request a lender at the of a teralizes each note. guarantor, require security can collateral “May we hear from you no later than being note subject renewal without Monday, October 1982.” a claim of intentional interference with a 15, 1982, 10.October the Bank secured Pragmatically, also, contract. ques- - financing second statement from Oil tion of whether there could in- have been Patch, granted which security listed terference with a ques- contract since equipment specifically included proof tion of contract itemized inclusions the undelivered Texas principal as vendor with the vendee is rig,

West financing statement was issue not otherwise except by determined 19, 1982, filed October Coun- prior Natrona collateral decision an arbitration ty generalized covered detail that a unpaid balance remained when the prior financing collateral contained provided contract delivery upon full statement. payment.3 exhaustively Texas West briefed the issue for the trial court that constrained Conceding everything juncture at to mined effect of the 1982 replevin denial of majority Texas or the of this either West appeal.4 as not raised on this court, only intrinsic, I would consider essence the case as a mercantile unquestioned banking transaction and its question invoking law suretyship precedent dispositive clearly attributes as under the quotation is defined in a from the majority perspective current status and historical opinion: the law. “ * * * We do not find as a matter of law Obviously, guarantor was interested Fitzgerald’s position as a protecting guaranty exposure, his entitled him to induce Oil Patch to with- being issue whether the law constrains that delivery hold until Texas West See Martin v. being unjustified. effort as made payments sufficient additional Texaco, Inc., (S.D.Miss. F.Supp. protect him guaran- from 1969). ty.” 726 P.2d at 1064. stated, guarantor prop- Otherwise can a Apparently the court found that the de- erly require request get that a lender linquent obligated borrower was to release available at a time of note renew- rig, and further held that collateral al, so, if what then did rights by held the lender or the wrongly 34-21-373, do? See W.S.1977 § surety wrongful lender’s constitute inter- (U.C.C. 3-606); Baitcher v. National In- ference. This determination assumes sig- Miami, Fla.App., dustrial Bank of nificant fact not determined as to Oil (1979); Murray, Commercial So.2d 439 willingness obligation release; Patch’s or Law, (1979- of Univ. Miami L.Rev. 527 fact, in the actual record was completely to 80). contrary. the There is by confusion undetermined final Conceding argument the of Texas West litigation by and unclarified or oral brief Fitzgerald that asked the Bank to obtain argument, right possession as to the of security on the line-of-credit loan at the clouded contract balance issues delinquency time the negotiat- renewal later determined was the contested arbitra- ed, and that thereafter tion award which now is settled as the potential beneficiary requested court’s decision. Since the balance due as that contested, purchase now determined paid delivery, was then we balance be before question would following about the issue-deter- we have the status:5 subrogation suretyship good of good demand the idiom of news: news/bad compliance, consequently payment that his depositors availability news for new is the security. released the collateral The issue was pen pencil either a set or an oil well as a again appeal. addressed in this It is the premium; pen the bad news is that all out, "you buy only pay cannot but can off" pencil gone. sets are argument, corollary right subrogation encompass right does not complete 5. A review the entire record reveals security. argued, available Since not now that Excluding little actual conflict in the evidence. except contention will not be further addressed examination, unsustained intimations supporting authority to note that lack of controversy essentially events of factual in- complicated found to be further the actual due, payment volved and balance all of which security acquisition eq- in consonance with the requested by was determined arbitration first Stearns, right subrogation. supra, uitable by stipulation Texas West and then scheduled 11.1, 11.7, 439, 456; Calhoun, Suretyship §§ at between Texas West and Oil Patch. There is an (1981- Lawyer, the Iowa 67 Iowa L.Rev. 219 Fitzger- inferred conflict as to the effect of what 82). renewal, ald said to the Bank note but we have assumed the favorable inference to Texas present industry 4. With conditions in the oil it requesting security, West it had the effect of generally assumed that the without draw though even the record reflects that anat earlier only origi- works is now worth a fraction of the meeting loan committee of the Bank it was price. Nobody really nal cost or contract wants any they require determined that in event would rig very badly Apropos at this time. is a security before note renewal. quip circulating Casper current about banks in

(a) absolutely no conflicting evidence that Patch as to whether the offer was agreed payment, release without both). made Oil or Fitzgerald, reason;6 whatever stipulated It was parties between the at (b) has now determined arbitration that a any trial that wrongful contention of con- due; balance was only duct of occurred suit before (c) Fitzgerald money wanted out filed, and consequently honoring his rig to the loan balance and cover accepting the collateral guaranty; assignment for collection assistance in sub- (d) Wyoming both the contract and the rogation and indemnity not a claimed provided statute had vendor factor for contractual interference. right payment to demand in full before majority The opinion finds relevant evi- release merchandise. asking dence of interference the lender In order define the case in some mean requiring take the lien and then payment ingful terms, since the scenario shifts in negotiation release, without on the Bank’s litigation, the course it is first neces premised on the manufacturer’s concur- sary times, to ascribe events or actions to rence. This standard fails to include the wrongfully.” the “intentional interference improper motives, means, improper and ef- lacks record evidence to find interfer fective cause of contractual breach ence, deter- more so to but even find lack of required minations which liability. are justification surety- activities ship transaction, Leigh Isom, despite Carpet Furniture and Co. application of v. Utah, appellate (1982); the usual Top standards of consider 657 P.2d 293 Service ing only evidence, conflict, when in Body Shop, Inc. v. Allstate Insurance favorable to Texas West. Nicholls Nic Company, 283 Or. holls, Wyo., (1986).7 “ * * * appear It would that Texas con- In summary, West such claim is wrongful tends interference in: made out when resulting interference (a) “convincing” injury to wrongful by the lender another is require to some security March chattel position beyond measure the fact of the interfer- receivables; inventory and ence liability may itself. Defendant’s (b) improper arise from agreeing not to or from the later release of the motives refusing Bank’s and equi- improper They lien to use of may take means. be ty position (the rig in the wrongful by evidence is reason a statute or other 6. addition reimbursement and indem 7. Two events are denominated Texas West as nity responsibilities Fitzgerald of Oil wrongful Patch to and causative in the intentional-inter- call, upon guaranty there another reason tort ference context. The first note for reluctance of the officers of Oil Patch to renewal. Texas West what intimates was cer- release tainly proven assets which a balance accepted was claimed. not but is as fact for this persons, (Gib principals opinion, Fitzgerald get Those as in Oil Patch that asked the lender to Harries) co-guarantors, security. son and were and as What was demonstrated the evi- obligation Fitzgerald such have an that contribution. Re dence was "asked the bank Security they paperwork statement of Law sure had 149 at 420. their § order.” The Calhoun, Suretyship See also loan the Iowa committee of the Bank had Law earlier deter- 3, 278; Stearns, supra yer, supra, operational mined n. at should § 11.18 at loan be col- lateralized before inventory 478. With renewal. or without in fa Bank, vor ultimate rested with 1982, July, apparent- The second event was in Patch, and, insolvent, contributory if then ly expired, after note extension time had (Gibson responsibility principals with its and Fitzgerald agree when did not to the lien re- Harries) co-guarantors. flight fancy as It is a only way lease. The could have con- say “controlled" the nonre- (a) payoff guaran- trolled at that time was O'Haver, lease call, decision Oil Patch. Black v. ty (b) rights before and release of both (10th Cir.1977), 567 F.2d 361 cert. denied 435 subrogation indemnity against as to (1978); Patch, U.S. S.Ct. L.Ed.2d co-guarantors well as to convince the Bollard, Inc., Corporation Corinthian White & accept who controlled Oil Patch release 74 Wash.2d 442 P.2d buyer. the asset to the regulation, recognized or a of com- fortunately, appeal rule the issue on is not ad- law, perhaps stan- dressed, mon an established but somehow in- intertwined as profession. ques- dard of a trade or No flicted by the creation of the lender’s lien privilege tion of arises unless the inter- by inventory security. The principal, Oil wrongful ference would be but for the Patch, party interest, was the finite real privilege; only it becomes an issue if the inevitably since any payment by surety charged would be tortious on the acts debt, created a and the contract balance part unprivileged Top of an defendant.” claimed to be due afforded only asset Shop, Body Service Inc. v. Allstate In- for its prospective satisfaction of the debt Company, supra, surance 582 P.2d at after guaranty call. controversy somehow, Albeit there Texas West also finds interference in the seems to be a assumption blithe of breach negotiation, prin- draw-works need for the of contract the manufacturer Oil Patch cipal money payment, to obtain for a loan in nondelivery after the subsupplier for the surety request for the lender to obtain insolvency. draw works went into Wheth- renewal, security for the loan additional true, er or not that circumstance has noth- debt, to cover the total and the ing to do with this case after the arbitra- requesting receiving Bank chattel-loan tion award was obtained and affirmed to assets, security encompassing including all establish a balance due. rig inventory. the drill within the business Both the statute require and the contract Assessing this, legal all of the issue as a payment delivery. provid- The contract principle is whether intentional interference ed: if surety occurs asks a lender obtain “ * * * paid upon balance to be [t]he security on a loan renewal a circum- completion delivery, and its stance where manufacturer claimed a presently anticipated during to be right payment of retention until was made. October, 1982,” first two weeks of I subject surety- address the under the 34-21-259, (U.C.C. 2-511), W.S.1977 § ship principles, law and lien of manu- provides: Wyoming facturers under the statutes:8 “(a) agreed, otherwise Unless tender of (a) buyer right Did the have the payment is a condition to the seller’s request security lender’s duty complete any to tender deliv- outstanding for an inventory loan as col- ery.” lateral? (b) right Did the seller 4 to refuse See Anderson Uniform Commercial Code

delivery, financing 2-511, burdened its bank at 7.

obligations? 19, 1982, judge, The trial on October first, Addressing question the subject by second the addressed the letter to counsel complicated, issue is since the trial court for Texas West: replevin, denied which became the law of “Upon reviewing legal the file and some designated the case and is not now as er- authorities, appears it to me that a writ ror, and is further inflicted the arbi- replevin in My cannot issue this case. determining tration award that a balance understanding buyer of the law is that a remained due. goods only replevin can maintain when However, complete. the contract of sale is The subject we can address the obligation ambiguous the issue of the contract here is as to manufacturer’s least, partial pay- price. very to deliver total purchase plain- under a At the price developed. unpaid ment where conflicts Un- tiff need to tender the would bal- L.Rev., Conner, suretyship principles, supra Enforcing 8. An exhaustive review of n. See also exoneration, including Vanishing sub- reimbursement and Commercial Guaranties in Texas: defenses, Limitations, Questions, rogation, houn, Remaining as well as is found in Cal- 12 Texas (1981). Suretyship Lawyer, the Iowa 67 Iowa Tech.L.Rev. 785 price Sprinklers, on the million. Even Wyo., (1985), $5.1 anee 705 P.2d 846 then, plaintiff might entitled customary not be this court fashion addressed upon replevin, depending claims made interference; factors intentional provisions seller under contract case into question devolved of malice or compensation fig- in excess of that faith, in bad majority conflict between the I ure. note also under the contract that dissent, and and did not address a relation- figure agreed upon by if the exact is not ship suretyship such as which is existent parties, to be it is settled arbitra- here. event, In any appears tion. it to me that Wing, Wyo., Martin v. 667 P.2d 1159 time,” replevin be had at this cannot (1983), involved a real-estate transaction January and order entered 1983: wherein an outsider property slandered the coming “THE ABOVE MATTER before and conditions the court found that the Court on the Motion of the Plaintiff outsider was without business interest Replevin, for Writ of and the Court hav- plaintiff transaction. The suc was also ing herein, reviewed Affidavit filed cessful in Coopera Basin Electric Power Stipulation parties, having and Project tive-Missouri Basin Power v. How arguments of heard counsel and received ton, Wyo., (1979), 603 P.2d 402 as a dis argument support Briefs and in charged employee of a who subcontractor opposition application gener- to said finds alleged and the jury convinced that his ally favor of the Defendants. instigation termination was “IT IS THEREFORE ORDERED that general contractor. the Motion of Replevin for Writ be and In Taylor, Wyo., Kvenild v. hereby the same is denied.”9 (1979),the court found the intentional- The issue of contract seemingly claim apply, interference did not since the disappeared litigation from the dispute only contractual was between two described orders and after the reference to parties, and a like result earlier found arbitration determination that a bal- in Board County Trustees Weston ance reject any remained due sufficient to Holso, Wyo., School District No. 1 v. contention of contractual breach for nonde- P.2d reh. denied 587 P.2d 203 except livery, assumption the retained now present justification without factual Wyoming Two cases with general some remaining proceeding. No breach-of-dam- relevancy are Safeway Allen v. Stores In- age given trial, instruction was in this but Wyo., corporated, (1985), presented that omission is not here as sepa- Willey, Wyo., Wartensleben 415 P.2d rate error. Allen, summary judgment granted, had been and then affirmed on In addressing legal is- substantive appeal. plaintiff employees were dis- sues, separate and without a review of the charged uncomplimentary comments to if hundreds not thousands of intentional-in- program inspector, a state food com- cases, terference no case is involving found ments had been communicated in- participants similar and factors. spector the employer. The court ana- Eight Wyoming cases varied include fac- lyzed the provision empha- restatement situations, tual all completely removed sized the “improperly” determining word in from the suretyship transaction existent proper that a purpose business existed for Spurlock Ely, Wyo., here. v. 707 188 pursued, the activity “One who intentional- (1985), case, school-employee a was decided ly and improperly interferes.” adversely plaintiff prove a failure for any Wartensleben, causation contractual breach defendant and Earlier, in district. attorney Dehnert v. Arrow proposed oper- contested a feedlot plaintiffs attorney 9. Thereafter removed sit- ensued. ting judge, judges trial other and substitution of

1073 ‘(1) that a valid contract existed ruled be The trial court ation. plaintiff party; tween the and another determining they did not plaintiffs knowledge that the defendant had means, rep- make false material illegal use of the contract and intended to induce resentations, to fraud or intimi- or resort thereof; (3) that the a breach contract dation, they what believed to and exercised breached; (4) proximate as a re legal rights good faith. their wrongful sult of the defendant’s or appellate court concurred. conduct; (5) unjustified [unprivileged] the four-factor rule Wyoming follows resulting damage plaintiff. to the position representative of the generally Fox, Abrams & Inc. v. [Citations.]’ 770: Restatement of Torts adopted § (1974), 604, 608, Briney Cal.App.3d 39 recognized prior cases the “We have 328, Cal.Rptr. 114 331.” Internation interference with con- tort of intentional Dry, al Wood Processors v. Power and have identified the tractual relations Inc., 710, (D.S.C.1984), F.Supp. 593 729 following elements of such action: (4th Cir.1986). aff’d 792 F.2d 416 “(1) of a valid contractu- the existence Comtrol, The Colorado rule is similar. relationship; al Telephone Inc. v. Mountain States “(2) knowledge of the contractual rela- 384, Telegraph Colo.App. 32 Company, interferor; tionship part of the on the “(3) improper intentional and interfer- differently: The Missouri rule is stated causing inducing ence or otherwise a “(1) A contract or a valid business rela- relation- or termination (not tionship expectancy necessarily or ship; and contract); “(4) damage party resultant “(2) knowledge Defendant’s of the con- relationship disrupt- has whose been relationship; tract or added.) (Emphasis Dehnert v. ed.” “(3) Intentional interference the de- Inc., supra, Sprinklers, 705 Arrow inducing causing fendant a breach of P.2d at relationship; the contract or adopted of Torts and has the Restatement “(4) justification; The absence 773 defense: § “(5) Damages resulting from defendant’s Food is set conduct.” Institutional Market- subject justification, it

“On Associates, Restatement, Torts, 773, p. Ltd. v. Golden State ing out in 4 87 Strawberries, F.Supp. (1939), that: (E.D.Mo.1983), aff’d 747 F.2d privileged purposely to cause “One (8th Cir.1984). contract, or perform not to another rela- enter into or continue a business Washington four-point test follows tion, good person by in with a third Wyoming delineation. Cal similar to the asserting threatening pro- faith Knudtzon, 65 Wash.2d bom v. legally protected inter- properly tect P.2d 148 may est of his own which he believes from those significant A number of cases destroyed by impaired or otherwise be position support taken jurisdictions the contract or performance here. Willey, transaction.” Wartensleben Wyoming prece- particularizing Without supra, 415 P.2d at 614. noted, general princi- except dent as Annot., 1227; Annot., also 26 A.L.R.2d

See Restatement, ples we which follow A.L.R. 43. judg- the disabilities of the would consider five-part test: follows a California in this case the factual issue ment without questions. law, inducing breach California “Under (1) security request that ele- Guarantor’s tort with five basic

of contract is a wrongful. is not See Allen v. obtained ments: 1074 Co., Inc., In Ford Incorporated, v. C.E. Wilson & supra;

Safeway Stores su- Quinlivan Co., v. Brown Oil pra, posi- 96 Mont. the Bank exercised its v. C.E. 147, Ford (1934); 29 374 tion intentional interference was de- Inc., Co., (2d & Wilson third-party 129 F.2d 614 as to nied creditor claimants: * * “ * Penfield, Cir.1942); Knapp Misc. v. 143 In addition to all the Bank (1932); v. 132, 256 Braden 41 N.Y.S. a privilege had interfere with the Perkins, 885, 174 22 144 Misc. N.Y.S.2d plaintiff’s expectancies contracts and be- ‘acting equal cause it was under (2) No contract occurred involv- superior right’ seeking security when ing guarantor. conduct its own advances.” 129 at F.2d (3) 773, Restatement of Under Torts § Feeley McAuliffe, v. Ill.App. See also 335 has a defense of virtue 99, 80 N.E.2d 373 the interest as a debtor the transac- similar in nonsuretyship For results tion. cases, see Inc. v. Conoco Inman Oil Com (4) Damage lacking in the absence Inc., (8th Cir.1985) (oil pany, 774 895 F.2d specific agree- of concurrent release Borden, Inc., bidding); Landess v. sales by the ment manufacturer. The conduct (7th Cir.1981) (milk F.2d 628 delivery 667 did create the not unlawful tort. contract); International Wood Processors Inc., Dry, v. Power supra, F.Supp. 593 710 Wrongful (1) Improper Interference (no prima justifi facie of of evidence abuse only case sim found a somewhat marketing controversy); cation food Corporation Balter, Ethyl ilar nature is Texaco, Martin v. supra, F.Supp. 304 (1980), 386 Fla.App., So.2d 1220 cert. denied (filling gasoline 498 station leases and sales 955, 101 3099, 452 U.S. S.Ct. 69 L.Ed.2d 965 business); Corp. v. Hannah Geofreeze (1981). Ethyl Corporation guaran was a Co., (E.D. Construction 588 F.Supp. 1341 tor, default satisfied the indebt Pa.1984) (withholding progress payments payment edness lender. Certain contract); Bledsoe v. Wat on construction followed, subrogation efforts later son, 105, Cal.App.3d Cal.Rptr. 30 106 197 pursued transactions did borrower (letter (1973) government body about develop. satisfactorily Ethyl Corpora Stork, Bergfeld v. attorney’s fees); 7 Ill. ultimately tion was sued for contractual 486, (1972) (lease App.3d 288 N.E.2d 15 trying interference for protec maintain reservation); Quinliven Co., v. Brown Oil tion for payment. its Inc., supra; Culp Donald G. v.Co. Reli Giving several reasons the verdict Corp., able 161, Stores App.3d 14 Ohio 470 reversal, the court said: (1983) 193 (exercising N.E.2d control on is, moreover, sepa- sublease); Sys Pearse v. McDonald’s completely

“There store Ohio, Inc., rate, additional, 164, 1 tems overriding Op.3d reason Ohio 47 precludes Ethyl’s liability App.2d 20, (1975) (val ‘in- Ohio 351 N.E.2d 788 any of employee managerial terference’ with con- id various business interest Strous, and relationships training); 402, tracts cited Wahl v. Balter. 344 Pa. 25 was, Ethyl law, (1942) fees, privileged (attorney’s a matter 820 A.2d invalid throughout contract); as it Hunt v. Coastal States Gas act did the entire Co., Producing course events in this Tex.Civ.App., involved case. 570 S.W.2d times, reasonably At (1978), 322, all its actions were aff’d 583 S.W.2d cert. de recovery 992,100 to the very directed sub- nied 444 U.S. S.Ct. 62 L.Ed.2d Pac-Craft, (1979), it stantial sums was owed reh. denied 444 U.S. protection (oil its pur status as S.Ct. 62 L.Ed.2d 790 co-obligor corporation naturalization); on a after Black Lake chase $450,000 loan to Pipe Co., Line Co. v. Union Construction required it later Inc., Tex., and, pay, finally, as the (1976), lawful holder (recovery S.W.2d its rejected requiring stock.” 386 So.2d 1224-1225. 100% additional crews for

1075 Lewis, law, Davis v. construction); “At Tex. common where the creditor re- pipeline security principal ceived from the (1972) (auto re for the 411 Civ.App., 487 S.W.2d debt, payment surety of the could not shop contro company direction pair finance Steck, force the creditor to look first Sakowitz, Inc. v. to such versy). See also payment. surety for his The (1984) (enforcement Tex., of 105 669 S.W.2d protect by paying could himself the credi- agreement); employment noncompetition thereby becoming subrogated tor and Knudtzon, supra (attorney’s Calbom v. rights security.” the creditor’s in the fees). Id., 7.22 at 237. § resulting in a Factual determinations “Subrogation suretyship in is ‘a mode intentional-interfer attack as an successful equity adopts compel the ulti- Pipe in Alyeska are illustrated ence claim discharge of the him mate debt who Service, Air Co. v. Aurora line Service it, good ought pay conscience and to Inc., Alaska, (1979) (sub-sub 1090 604 P.2d him relieve whom none but the creditor ill and bad faith and will terminated right pay.’ scope could ask to The fact); alleged creating issue of general subrogation consists the immediate Co., 16 Cal. Leasing Bridges v. Cal-Pacific transfer, law, by operation of (1971) (com 118, Cal.Rptr. 796 App.3d 93 promisor suretyship all transaction, advice to third plex real estate principal the creditor whenev- payments, to make inference party not promisor pays er the the debt or satisfies Koz support justification); lack of could obligation. right subrogation This Bank, 6 lowsky National v. Westminster agreement independent any be- (1970) (offi 593, Cal.App.3d Cal.Rptr. 86 52 parties upon princi- and rests tween Morgan, v. McEnroe discharge); 106 cer Id., ples justice equity.” of natural (1984) 326, (justification Idaho 678 P.2d 595 11.1 439. at § transaction, involvement un for real estate great equitable right “The third of a proved); Barlow v. International Harvest surety right, payment is his on Company, er 95 Idaho debt, principal’s be indemnified (slander (1974) guaranty dis involvement principal for the loss sustained F v. Medallion P & Industries turbance); making payment surety in of the debt. Group, 102 A.D.2d 476 N.Y.S.2d right This sometimes also described as a funds); (1984) (caused diversion of trust 928 exoneration, right to reimbursement Scymanski Dufault, 491 Wash.2d Id., recognized.” at universally 11.35 § conflict). marketing (co-op Efficacy Guaranty The involving Alces, of the cases a successful also None See Sophisticated Commercial claims Contracts in appeal for intentional-interference Transactions, 61 N.C.L.Rev. 644 principles factual situa- had to do with affording authority support tions clearly principles These seem identified permitting of this court or a rule decision significant ques without and established guaranty recovery in this situation. tion, evolving suretyship, from and earliest and Roman literature. See noted Greek rela- The intrinsic status of (2d Guaranty Pingrey Suretyship on surety- tionship aspect of the field of as an 1913); Brandt, Suretyship Guaranty I & ed. consequently explore claimed ship must Surety, 66 U.Pa.L. The (3d 1905); Loyd, ed. relationship legitimacy of the business of a (1917-18). Rev. guarantor requesting security protection bearing Wyoming Two statutes upon note renewal. aspects applicable are here. suretyship “Suretyship may defined as a contrac- ap whereby person one en- has the status under tual relation plication for the debt or of the Uniform Commercial Code gages to be answerable 34-21-905, W.S.1977, Stearns, default of another.” Law as a debtor. See § 9-105(1)(d)). (U.C.C. Cum.Supp. Suretyship, supra, 1.1 at 1. § (D.Del. Shea, F.Supp. contracts, v. 423 468 Rushton which validated the release deni- 1976); Norton v. National Bank Com al principal, the lender guar- and the of 131, Bluff, merce 240 Ark. Pine 398 antor. of (1966); 538 v. S.W.2d Barnett Barnett Not a scintilla of evidence of improper an Jacksonville, Fla.App., Bank 345 So.2d purpose business demonstrated (1977); Glover, Gering 804 Bank v. 192 guaranty history lending and the transac 575, (1974); Neb. 56 223 N.W.2d T & WIce tion. Intimation and contention testimo Inc., Cream, Barn, Carriage Inc. v. 107 ny, obviously persuasive listening 328, NJ.Super. (1969); 258 162 A.2d Chase jury, suggest Fitzgerald might that have Bank, Natarelli, Manhattan N.A. v. 93 some control interest in Oil Patch in no 78, (1977); Misc.2d 401 N.Y.S.2d 404 Zions way legal and, fact, affects the result Utah, Hurst, First Bank v. Nat’l 570 P.2d relevant case law strength would find a (1977); Note, 1031 The Waiver of Defenses ened self-interest justifying factor his sepa By Guaranty Guarantors Contracts protection rate if he had fact been the and the Nonwaiver Provisions the Uni sole guarantor stockholder and for the cor Code, 5 Commercial Vermont L.Rev. form porate Cuneo, manufacturer. Petit v. 73, (1980). 290 84 8n. 16, Ill.App. 7 (1937). N.E.2d 774 See also 34-21-963, Additionally, W.S.1977, § Development Coronet Company v. (U.C.C. 9-504), Cum.Supp. 1986 provides: § F.S.W., Inc., 302, 150 379 Mich. N.W.2d 809 “(e) person A who is liable a secured (1967). indorsement, party guaranty, under a re- purchase agreement or the like and who Contractual Breach receives a transfer of collateral from the assumptive The posture of Texas West subrogated party secured appears to be that somehow a contractual rights has thereafter breach existed for which the consequent party. duties the secured Such a could be asserted.10 transfer of collateral is not a sale or It is axiomatic in contractual cases of this disposition of the collateral under this nature that valid contract does exist and article.” required a breach is for resulting liability. Nickles, See Rethinking Ar Some U.C.C. Inc., Sprinklers, Denhert v. Arrow supra, Subrogation; ticle 9 Equitable Problems — 846; 705 P.2d Underwriters In- Bellefonte Liens; Knowledge; Actual Waiver Se Tex., Brown, surance Co. v. 663 S.W.2d Interests; curity Party Secured Liability (1983), 562 on grounds rev’d other 704 5, Conversion Under Part 34 Ark.L. (1986). 742 S.W.2d See also Restatement (1980-81); Rev. 12 Hollabaugh, Sure of Torts 766. § ty’s Right Equitable Subrogation: Ov Arrow, question erture 51 J. timely Ins.Counsel 547 failure of completion, if factually existent breach, any way was not proximately No more realistic business decision from related and if contended could standpoint of a can be found nothing to do with interference than for him liabili request to consider and ty. Spurlock supra, See get any Ely, 707 lender collateral available when 188; March, Commerce, the note renewal occurred in Worldwide Inc. v. Frue Thereafter, Corp., Cal.App.3d 803, arbitration determined that in 84 149 Cal. hauf unpaid fact an Rptr. balance remained interesting anomaly 10. Another only exists with the guar- interference claim the outside two, co-guarantors. antor, three don ofOne the other Gor- parties and not the with control of Oil Gibson, signed note and the renewal attempt during Patch. An trial to add the Bank financing agreement approval of court, and Gibson was denied the trial guarantor, (these being other W.T. Harries two pending another lawsuit is now in this court on Patch). the shareholders and officers litigation. originally Suit instituted on the intentional remaining tion of intentional interference but is also then of contract The breach provisions directly proscribed of Re nondelivery, and contention would Torts, Sing statement of 773 and 769. in conso- §§ must be evaluated both that issue Corporation v. Mercer Island er Credit provision “deliv- of the contractual nance Inc., Wash.App. 538 P.2d Masonry, 34-21-259, W.S. payment,” and ery upon Chemicals, (1975); Kearney Matter delivery is due providing that (D.Del.1979); F.Supp. 1107 Bab with the contractu- payment, which accords Allison, Fla.App., Bros. son Co. v. parties. The real between the provision al (1976), So.2d 848 cert. denied 348 So.2d 944 con- recognized in that the must be world decided arbitration tract balance “ * * * con- any question good from the later a removed One who faith asserts by nonde- jury legally protected of contractual breach interest of his own vened nondelivery right to was livery, may impaired by since the he be the which believes law of proposed determined as the performance then otherwise of a transaction is delivery for was guilty demand tortious the case where not .interference.” requested accompanied by tendered Singer Corporation not v. Mercer Credit Likewise, original trial court payment. supra, the 538 P.2d at Masonry, Island quoted letter recognized by status the this 549. denying replevin when opinion and order Significant also is the fact that the collat- litigation had first been instituted.

the change security documents did not the eral Fitzgerald relationship also be made that and Texas Note must between Oil Patch pay- right possession West, assignment after en- only claimed since the collateral consequent as- cumbering inventory and and could ment receivables by him rights to If signment only of the collateral and did encumber receivable. nothing, he the lender. At that time became it was entitled the Texas West owed event, assign- This as earlier not- rig possession, secured lender. and the collateral ed, rig. not the interference in the by stipulation was ment afforded no interest changed pledge way in no title causative factor. collateral and money If was due status. Charged Party To be Interest of nothing right payment, likewise had a With Claimed Interference changed except right the of the lender Torts In accord the Restatement of guarantor to receive that or subordinated hard to define a more provision, it is money upon payment of whatever amount asset value remain- specific interest contrac- due as derived from the remained than that held ing due to the manufacturer relationship the manufacturer tual between guaranteed indebt- when the Corp. v. buyer. and Tidal Western into de- payment matured edness without Tex.Civ.App., 297 S.W. Shackelford, lender for then called fault Fi- guarantor payment. Zoby v. American (4) Damage Cir.1957) (4th 242 F.2d Company, delity substantial”); damage (“economic for determination of Assumptive interest Steck, Fitz- Sakowitz, supra, anything 669 S.W.2d of how question Inc. v. basic legal rela- adversely affected the gerald did by the tionships determined arbitration Legalistically, position of Texas West award. resulting appro- after jury verdict consequent creates priate summary-judgment motions contend for To malicious-prosecution con- to determine as amorphous, damages, required it is surety Fitzgerald, right of the turned law cept denying principle business guaranty payment, to contest and claim some time before lender after call to release the forced the seller delinquent borrow- should have rights to the collateral direct and buyer with two only equipment theory This is not er’s assets. First, significant asset results. func- divisive province any operational within the stigated gone repay- by Fitzgerald be from which funds for would which loss was ment to the could been sustained Texas Unfortunately, West. expected, juncture case, and for present in the of this principal avoid indemnification would speculate trial court is left to as to the if Secondly, have been lost. contractual default which constitutes the makes demand on the borrower to release damages might fact from which subse- security, then the borrower collateral proved be quently by the evidence as- right has the to claim an offset for the jury. complex sessed This is a against any due either instru- value debt since, requirement, my opinion, no con- subrogated right of assignment or ment proved. tract default has been indemnity. majority Since the is determined to re what of Califor- No matter construction court, verse the trial excise remittitur nia, York, Oregon, or New Restatement jury and reactivate further for the deter tort, may rules utilized damages, mination the court should de appropriate justify transaction was not termine the event of contract default and $500,000, $4,000,000, verdict for damages provide the measure of in order to may later be determined whatever expectancy litiga some rational this conclusion, jury figure aas that suits their pursued seasonably tion since 1982 will be jury Inc. as witnessed Texas Texaco probability terminated without the of an (2d Company, 784 F.2d 1133 v. Pennzoil jury appeal. other trial another followed Cir.1986), an interference case which ex- Deen, Ry. Colorado and Santa Fe Gulf ceeded billion. $11 (1957), Tex.Civ.App., 306 S.W.2d 171 rev’d 466, Clearly, some elucidation should now and remanded 158 Tex. be S.W.2d 933, detailing court granted afforded what mandamus Deen v. Hick man, of duty against guar- 1, 28, devolved U.S. S.Ct. L.Ed.2d resulting compensation antor and what is cert. denied in v. Gulf, Deen Colorado & justified therefrom. See Prosser Co., and Kea- Ry. Santa Fe 358 U.S. 79 S.Ct. (5th ed.) ton on Torts at 3 L.Ed.2d 105

It contemplation is not with idle I affirm would the decision of the trial damages concern about measure of arbitration, court on and would also today addressed. none par- Where reverse entry the trial court and direct the ticipants really drilling want the stacked judgment in of a favor defendant Fitz- rig, one is called to envision a morass with- gerald plaintiffs on the counterclaim safety rope out into which the trial court intervenor, against the expectancy will be thrust an effort to instruct the possibly litigation without further jury authority respon- next as to their parties investment in cost all would now sibility. Texas West owes I agree be concluded. would $467,000, plus sum of interest and attor- original court that neither jury award $678,387.17 ney’s totaling fees as of March nor the reduced amount remittitur was 13, 1985, statutory percent ten interest proven proper damage aas award. See payment, since that date. On Texas West dissenting majority opinions in Petty- rig, drilling should entitled to the which Ray Geophysical, Geosource, Division of apparently parties now value at about Ludvik, Wyo., Inc. v. $250,000.11 Against presently the amounts creditable due,

aas there debt determined would then jury damages

be the to be from a derived

determination of the ki- contractual default

11. The determination of amounts due award, arbitration which amount has been as judgment signed derived from the entered in favor of by Fitzgerald. to and is collectible West, pursuant Oil Patch Texas with notes is left the same both the case extension-period percent sequences unquestioned carrying an time events: interest rate. 1.December, 1980, Fitzgerald and oth- July 1982 came signed continuing guaranty ers 9. The due date 22,1982, (now went, September and on Casper First National Bank of First N.A.) Bank made written demand on Casper, Interstate Bank of to ac- (what honor his operational commodate an line of credit banking 18, 1982, the “guaranty known October the lawsuit was call”): instituted Texas West recover the Patch, raising from Oil the basic know, 30, 1981, on you “As June question possessory right of its for im- Casper Bank of First Interstate loaned delivery. mediate Wyoming, Oil Patch Sales & Rental Of 15,1982, Slough Equipment 12. October Inc., $645,000, secured a first mort- (a Company company not then controlled gage on the real estate located by Fitzgerald) bought the real estate St., Casper, Wyo- West Yellowstone mortgage Bank, from the received an ming. assignment of mortgage, com- “We also loaned Oil Patch Sales menced power foreclosure of sale.

Case Details

Case Name: Texas West Oil and Gas Corp. v. Fitzgerald

Court Name: Wyoming Supreme Court

Date Published: Oct 21, 1986

Citation: 726 P.2d 1056

Docket Number: 86-9, 86-10

Court Abbreviation: Wyo.