Martin v. Wing
667 P.2d 1159, 1983 Wyo. LEXIS 351 (1983)
Rule of Law:
Liability for intentional interference with prospective contractual relations can arise when non-competitors improperly interfere with a reasonable business expectancy, even in the absence of a fully executed contract.
Facts:
- In early 1979, George and his wife (appellees) had a house constructed on property adjacent to Paul and Carolyn Martin's (appellants) property in Story, Wyoming, for speculative purposes.
- Once substantially completed, the house was listed for sale with a real estate company and a 'for-sale' sign was posted.
- In April 1980, Mr. and Mrs. Charles Thomson made a written offer to purchase the property contingent upon the sale of their home, but this offer subsequently lapsed.
- In July 1980, after selling other assets, the Thomsons had sufficient funds for purchase, and Mrs. Thomson prepared a purchase contract.
- On the morning of July 12, 1980, as the Thomsons inspected the property as a final step before completing the transaction, Paul and Carolyn Martin approached them.
- Paul Martin told Mr. Thomson that the Martins were constructing a large steel building next door, that fill dirt was being dumped, and that the appellees' property experienced severe flooding, with water reaching the bottom of the house's window.
- Carolyn Martin told Mrs. Thomson similar information about the building, adding that the property flooded every spring, was inaccessible in winter due to snow, and its septic system had not been approved.
- 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 the Martins to the Thomsons, the Thomsons refused to enter into the contract for the purchase of the appellees' property.
Procedural Posture:
- Appellees (Wing) filed an action against appellants (Martin) in a trial court for interfering with their prospective contractual relationship.
- The trial court conducted a trial to the court.
- The trial court found that appellants had interfered with appellees’ prospective contractual relationship and awarded appellees damages, court costs, and $1.00 punitive damages.
- Appellants appealed the trial court's judgment to the Supreme Court of Wyoming.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the tort of intentional interference with prospective contractual relations require the existence of a valid, formed contract, and can liability arise when non-competitors intentionally and improperly interfere with a reasonable business expectancy?
Opinions:
Majority - Rooney, Chief Justice
No, the tort of intentional interference with prospective contractual relations does not require the existence of a valid, formed contract; a reasonable business expectancy is sufficient, and liability can arise when non-competitors intentionally and improperly interfere with such an expectancy. The court affirmed Wyoming's recognition of liability for intentional interference with prospective contractual relations, citing Wartensleben v. Willey and Board of Trustees of Weston County School District No. 1, Weston County v. Holso. This tort protects the 'probable expectancies' of life, such as future contractual relations, and aligns with Restatement of Torts 2d, § 766B, which covers inducing a third person 'not to enter into or continue the prospective relation.' The court found a clear prospective contractual relation between the appellees and the Thomsons. Critically, the court distinguished this case from others where the alleged interferer was exercising an 'equal right' to purchase the property; here, the Martins were 'outsiders, not interested in purchasing the property and not competing in the market place.' The court also found sufficient evidence to support the trial court's findings that the Martins had knowledge of the business expectancy (due to the 'for-sale' sign and initiating conversation where the Thomsons expressed intent to buy) and that their intentional, inaccurate statements terminated that expectancy. Finally, the award of damages, covering appellees' interest expense on their construction loans less rental payments, was deemed proper compensation for the detriment proximately caused by the failure to complete the sale.
Analysis:
This case significantly clarifies the scope of the tort of intentional interference with prospective contractual relations in Wyoming, affirming that a formal, executed contract is not a prerequisite for liability. It establishes that reasonable business expectancies are protected, aligning with the broader interpretation of the Restatement of Torts. The distinction between interference by a competitor versus a non-competing 'outsider' is crucial, indicating that a party without a legitimate interest in the transaction faces greater scrutiny for their interference. This ruling reinforces the importance of factual determinations regarding knowledge and intent at the trial court level and provides a basis for recovering economic damages stemming from thwarted business opportunities.
