Century Ready-Mix Co. v. Campbell County School District

816 P.2d 795, 1991 Wyo. LEXIS 126, 1991 WL 157611

• Court: Wyoming Supreme Court
• Decided: August 20, 1991
• Docket: 90-129
• Status: Published

Opinions

GOLDEN, Justice.

Appellant Century Ready-Mix Company (Century) appeals the trial court’s orders granting summary judgment to appellees in this suit arising out of an agreement to provide concrete for an addition to Campbell County High School in Gillette, Wyoming.

Appellant raises the following issue:

[Whether] [t]he District Court erred in granting Summary Judgment to Appel-lees, Campbell School District, Rundquist & Hard, P.C., and Chris Hard, and Tom Barker dba Cooper Engineering & Material Testing.

We affirm the orders granting summary judgment.

FACTS

This case is before us a second time. In Century Ready-Mix Company v. Lower & Company, 770 P.2d 692 (Wyo.1989) (Century I), we reversed summary judgment entered against Century and in favor of Lower & Company, the general contractor. We are now faced with an appeal from orders granting summary judgment to the other defendants.

Some of the facts presented here overlap those of our earlier opinion. In 1986, Campbell County School District (CCSD) decided to expand the Campbell County High School building in Gillette. CCSD let bids, and Lower & Company (Lower) was chosen as the general contractor for the project. Lower entered into a detailed, standard form agreement with CCSD.

Appellee Rundquist & Hard contracted with CCSD to provide architectural services. Rundquist & Hard signed a written standard-form contract with CCSD. Appel-lee Tom Barker, doing business as Cooper Engineering and Materials Testing (C.E. & M.T.), was hired by CCSD to do initial geotechnical investigation and to provide materials testing after construction began, apparently without a formal, written contract.¹

Century received a purchase order from Lower to supply concrete for the project. C.E. & M.T. tested samples of Century’s concrete as it was poured. The results of some of the 28-day tests² showed that the concrete samples failed to meet the design specifications required by the district. Specifically, the concrete broke at lower pressures than those required.

Century then called in an independent expert to evaluate C.E. & M.T.’s testing procedures. The expert, William Rossi, found that C.E. & M.T.’s testing procedures did not meet American Concrete Institute (ACI) and American Society for Testing in Materials (ASTM) standards. He characterized the procedures used by C.E. & M.T. for testing Century’s concrete as “the most careless and negligent procedures I had observed in 27 years of concrete testing.”

Chris Hard, the architect, recommended to the school board that core samples of the concrete already in place be removed and tested. Testing showed that the concrete in place met the design requirements and specifications.

The school board met on February 10, 1987. At this meeting, Chris Hard gave a progress report on construction of the high school addition. Larry Hite, one of the school board members, questioned Hard about the quantity of concrete already poured and then made a motion to stop the pouring of concrete until the testing problems could be worked out. During the discussion which ensued on this motion, Tom Barker of C.E. & M.T. stated that the unusual variations noticed in the stress the samples could handle was “probably a mistake in the ingredients.” Barker suggested that the job ought to continue under “more intense investigative activities to lay the basis for design mix revision.”

Hite asked Chris Hard for his opinion whether there was a problem with continuing to pour. Hard responded that in his opinion there was no major problem. He indicated that the already-poured concrete met the specifications of the bid. Nevertheless, the board voted to suspend pouring.

Barker then informed the board that an expert from the School of Mines in Rapid City had reviewed the procedures used on the projects and had indicated that the testing procedures were not the cause of the inconsistent test results. He stated that he “hoped” that the error was a product error, rather than a testing error.

After the meeting, Hard telephoned Jack Ylitalo, Lower’s project coordinator, and advised him of the board’s ruling. Hard received a return call from Dennis Lower, Jr., who asked him whether pouring could continue if the concrete supplier were changed. Hard stated he would pass this request on to the board.

Hard returned, at about 5:00 p.m., to the area where the board met. Most of the board members were still present. After explaining to board member Larry Hite that there may not have been a problem with the concrete, Hard presented Lower’s proposal to change concrete suppliers to various board members, and got their assent. (Apparently, no formal motion was made, nor is there any indication of official action taken in the board minutes on this point). Hard then called Lower back and they agreed to proceed quickly with the new supplier. The new supplier began pouring the next day.

Century sued Lower, the general contractor, for breach of contract. It sued CCSD for intentional interference with contract, negligent hiring, defamation, and breach of contract. It sued Tom Barker d/b/a C.E. & M.T. for negligence, intentional interference with contract, and defamation. It sued Chris Hard, individually, and Hard & Rundquist, P.C., for negligence and malpractice in breach of their contractual duties to the other defendants. The surviving claims involved in this appeal are against CCSD, Tom Barker d/b/a C.E. & M.T., and Chris Hard and Rundquist & Hard, P.C.

DISCUSSION

Standard of Review

Summary judgment is properly granted only where there is no genuine issue of material fact and the prevailing party is entitled to judgment as a matter of law. State of Wyoming v. Homar, 798 P.2d 824, 826 (Wyo.1990); Teton Plumbing and Heating, Inc. v. Board of Trustees, Laramie County School District No. One, 763 P.2d 843, 847 (Wyo.1988). When reviewing a grant of summary judgment,

we review the judgment in the same light as the district court, using the same information. A party moving for summary judgment has the burden of proving the nonexistence of a genuine issue of material fact. Material fact has been defined as one which, if proved, would have the effect of establishing or refuting an essential element of the cause of action or defense asserted by the parties. Upon examination of a summary judgment, we view the record from the vantage point most favorable to the party opposing the motion, giving him all favorable inferences which may be drawn from the facts.

Doud v. First Interstate Bank of Gillette, 769 P.2d 927, 928 (Wyo.1989) (quoting Garner v. Hickman, 709 P.2d 407, 410 (Wyo.1985)).

If we can uphold summary judgment under the record presented under any proper legal theory, we will do so. Reeves v. Boatman, 769 P.2d 917, 918 (Wyo.1989).

Summary Judgment for Campbell County School District

Defamation

Century argues that issues of material fact remain concerning its defamation claim against the school district. The alleged defamatory statements were made during the school board meeting on February 10, 1987, and are contained in the minutes of that meeting:

A discussion ensued during which Mr. Barker explained that the concrete cores which are poured, cured and then broken vary unusually widely in the amount of stress they can handle. This is probably a mistake in the ingredients. The testing guidelines are set by the American Concrete Institute. Mr. Barker said his firm, C.E. & M.T., has been authorized to investigate everything that is going on at the site. The firm conducted an investigation as to procedure and is satisfied.

Later in the meeting, school board member Dr. Antrim asked, “If it is not a testing error, then is it a product error?” To which Mr. Barker responded, “That is what we hope, too.”

Century claims Barker, the owner of C.E. & M.T., was acting as an “agent” of the school board when he made these statements, and others, at the meeting. Further, Century argues that the school district is vicariously liable for the statements. Century concedes that C.E. & M.T. “qualified as an independent contractor” on the project, but attempts to argue that C.E. & M.T. was nevertheless an agent of the school board for purposes of Barker’s statements.

Establishing the existence of an agency relationship is the burden of the asserting party. Czapla v. Grieves, 549 P.2d 650, 653 (Wyo.1976). Here, Century provides no cogent argument as to why independent contractor C.E. & M.T. or its owner, Tom Barker, should be considered an agent of the school board. Century’s claim that the school board is vicariously liable for statements made by Tom Barker is unsupported. We hold that no agency relationship has been demonstrated between either Barker or C.E. & M.T. and the school board or school district sufficient to make the latter liable for Barker’s statements.

Nor, in our opinion, were the challenged statements defamatory. A defamatory statement is one which “tends to hold the plaintiff up to hatred, contempt, ridicule or scorn or which causes him to be shunned or avoided; one that tends to injure his reputation as to dimmish the esteem, respect, goodwill or confidence in which he is held.” Tschirgi v. Lander Wyoming State Journal, 706 P.2d 1116, 1119 (Wyo.1985). See also W. Keeton, D. Dobbs, R. Keeton & D. Owen, Prosser and Keeton on the Law of Torts § 111 at 773 (5th ed. 1984).

Here, the statements made by Barker merely suggested that the mix was probably, or might have been, the problem with the test results. Barker’s statements did not directly impute any misfeasance to Century. Nor did Barker recommend that any action be taken against Century, other than to continue to investigate what he saw as a problem with the mix. Under the circumstances, these statements were simply not defamatory. See Grande & Son, Inc. v. Chace, 333 Mass. 166, 129 N.E.2d 898 (1955).

For the reasons stated above, we affirm the order of summary judgment on Century’s claim for defamation against Campbell County School District.

Interference with Contract

Century next asserts that summary judgment was inappropriate on its claim of interference with contractual relations. The trial court found that this claim was barred because it was not included within the waiver of immunity provided by the Wyoming Governmental Claims Act, W.S. 1-39-101 et seq. (June 1988 Repl.). We need not reach the issue of immunity because we hold that the school district’s actions under the circumstances did not constitute interference with contract and were justified to protect its own interests.

A claim of intentional interference with contractual relations requires that the plaintiff show

(1) the existence of a valid contractual relationship;

(2) knowledge of the relationship on the part of the interferor;

(3) intentional and improper interference inducing or otherwise causing a breach or termination of the relationship; and

(4) resultant damage to the party whose relationship has been disrupted.

Dynan v. Rocky Mountain Federal Savings and Loan, 792 P.2d 631, 641 (Wyo.1990) (quoting Dehnert v. Arrow Sprinklers, Inc., 705 P.2d 846, 850 (Wyo.1985)).

We have recognized a privilege to interfere with contractual relations where the defendant, in good faith, asserts his own legally-protected interest which he believes may be impaired or destroyed by the performance of the contract. Toltec Watershed Improvement District v. Johnston, 717 P.2d 808, 814 (Wyo.1986). Here, the school district first acted to protect its own interests in not having questionable concrete poured. After it voted to stop pouring concrete, the board did not recommend that Century be fired. Board members merely assented to Lower’s own decision to dismiss its subcontractor, again acting in the district’s own interests in having the project move forward.

The deposition testimony of the board members shows that the board did not take an active role in Lower’s dismissal of Century. Larry Tanner stated that he was asked if he would have a problem if another supplier was on the job pouring concrete. He answered no, not as long as the project specifications were met. Daniel Siebersma remembered Hard asking board members whether Lower could start pouring again if it had another supplier. The response, as he remembered it, was that the board had instructed its architect and engineer that they could proceed with pouring when they were satisfied that the specifications could be met. James Galt stated that he told Chris Hard “[tjhat’s not my problem. I don’t have anything to do with the supplier. That’s Lower’s problem. If he’s not satisfied, let him take care of it.” Larry Hite stated that Chris Hard came to him after the board meeting and asked if they could continue pouring concrete if Lower used another concrete company until they found out what the problem was with the existing concrete company. Mr. Hite agreed to the request.

In short, the school district did not “induce” or “otherwise cause” the breach of the relationship between Lower and Century. It merely acted to protect its own interests. There has been no showing that the district acted in bad faith. Its actions are privileged under our previous cases. Summary judgment was properly granted for CCSD and against Century on Century’s claim of interference with contract.

Punitive Damages

Since we affirm summary judgment for CCSD on Century’s other claims, its claim for punitive damages must also fail, because there is no underlying claim to support it. Condict v. Condict, 664 P.2d 131, 136 n. 3 (Wyo.1983).

Summary Judgment for Rundquist & Hard, P.C., and Chris Hard

Century’s claim against Rundquist & Hard and Chris Hard is based on negligence and malpractice. Century argues that Hard was responsible for overseeing the work and supervising construction and was responsible for providing arbitration concerning the quality of the concrete and that Hard breached these duties to Century.

The trial court granted summary judgment to Rundquist & Hard and Chris Hard on the basis that they owed no contractual duty to Century on which to base Century’s claim. The duty of care architects owe to contractors in the absence of contract is discussed in Annotation, Tort Liability of Project Architect for Economic Damages Suffered by Contractor, 65 A.L.R. 3rd 249, § 2(a) (1975). The annotation' notes that a majority of jurisdictions now recognize a tort duty of care in the absence of contractual privity. However, we do not need to reach this issue, because we hold that the architects in this case did not fail to use reasonable care in obtaining or relaying information for the school district.

Century fails to show that Chris Hard and Rundquist & Hard, P.C., acted negligently by virtue of Hard’s statements to the board. Although he informed the board of the “erratic breaks”, Hard also told the board that in his opinion there was no “major problem” with Century’s continuing to pour concrete. Once the board voted to suspend pouring by Century, Chris Hard acted only as a messenger for Lower’s proposals to the board but there is no evidence that he himself recommended that the board change subcontractors. No evidence exists that Hard failed to use reasonable care in obtaining or relaying the information to the school district.

Century further argues that Hard and his firm breached a duty to arbitrate the dispute over the quality of the concrete. The trial court found that there was no arbitration clause of record except for the one contained in Rundquist & Hard’s contract with CCSD. That clause contains the following provision: “No arbitration, arising out of or relating to this Agreement, shall include, by consolidation, joinder or in any other manner, any additional person not a party to this agreement except by written consent * *

Century was not a party to the agreement and did not obtain the parties’ consent. Thus, the arbitration clause did not impose a duty upon Hard and his firm to arbitrate Century’s concern over concrete testing.

Century argues that the “ACI Manual of Concrete Practice 1983” and the “ASTM Standards C94” were made part of the project specifications. Century claims that the ACI Manual provision requires the architect to ensure that qualified and conscientious inspectors are on the job. The ASTM standard, it says, requires the architect to arbitrate disputes in case there is a dispute concerning the quality of ready-mix delivered to the job site. However, neither the Manual section nor the applicable standard is included in the record on appeal before this court. This means we have nothing before us to consider regarding these claims. This court will not consider factual recitations in briefs unless supported in the record. Hayes v. American National Bank of Powell, 784 P.2d 599, 601 (Wyo.1989).

We hold that the trial court properly granted summary judgment on Century’s claims against Rundquist & Hard, P.C. and Chris Hard.

Summary Judgment for Tom Barker d/b/a C.E. & M.T.

Negligence

The trial court granted summary judgment against Century on its negligence claim against Barker on the ground that “[tjhere can be no liability for pecuniary harm, which does not involve physical harm, because of the negligent acts of another.” The court cited Champion Well Services v. NL Industries, 769 P.2d 382 (Wyo.1989) for this proposition.

We cannot agree with the trial court that Champion precludes all economic damages for pecuniary harm in the absence of physical harm. Champion merely holds that such damages may not be recovered by an employer for the loss of his employee’s services. However, we affirm summary judgment on another ground cited by the trial court: that C.E. & M.T.’s communication of test results to the school board was not the proximate cause of Century’s injuries.

The elements of a cause of action for negligence include: (1) a duty owed to the plaintiff; (2) a breach, or violation of that duty; (3) which is the proximate cause of (4) plaintiff’s injuries. MacKrell v. Bell H2S Safety, 795 P.2d 776, 779 (Wyo.1990). We discussed the concept of proximate cause in Stephenson v. Pacific Power & Light Company, 779 P.2d 1169, 1178 (Wyo.1989) (citation omitted): “Proximate cause is the concept ‘that the accident or injury must be the natural and probable consequence of the act of negligence.’ Proximate cause is normally a question of fact unless the evidence is such that reasonable minds could not disagree.”

In this case the evidence presented is such that reasonable minds could not disagree. We hold as a matter of law that C.E. & M.T.’s actions were not the proximate cause of Century’s injuries. After he discussed the initial test results with the board, Tom Barker did not recommend that Lower terminate its relationship with Century. Instead, he recommended that concrete pouring continue under careful scrutiny. The board voted, in spite of his recommendation, to stop pouring. Subsequently, Lower fired Century, without affirmative action on Barker’s part.

The ultimate harm, which forms the injury component of Century’s cause of action, was in Lower’s termination of Century from the project. Lower’s actions were not the natural and forseeable consequences of Tom Barker’s reports to the board or of any faulty concrete tests. Lower acted independently and its actions were an independent, intervening cause of Century’s harm.

An intervening cause is one that comes into being after a defendant’s negligent act has occurred, and if it is not a foreseeable event it will insulate the defendant from liability. It is reasonably foreseeable if it is a probable consequence of the defendant’s wrongful act or is a normal response to the stimulus of the situation created thereby.

Buckley v. Bell, 703 P.2d 1089, 1092 (Wyo.1985).

The causation element of negligence was not established here. Summary judgment was therefore properly granted on Century’s negligence claim against Tom Barker d/b/a C.E. & M.T.

As stated by the trial court, Barker did not advise Lower to terminate its contract with Century. Barker did nothing to “induce” or “cause” Lower to terminate its contract. Therefore, by definition, there can be no liability for interference with contractual relations. Dynan, 792 P.2d at 641.

As stated elsewhere in this opinion, Barker’s statements to the board were not defamatory. Therefore, the trial court properly granted summary judgment on Century’s defamation claim against Barker and C.E. & M.T.

CONCLUSION

The trial court’s orders granting summary judgment in favor of CCSD, Tom Barker d/b/a C.E. & M.T. and Chris Hard and Rundquist & Hard, P.C., are affirmed, as there are no genuine issues of material fact and appellees are entitled to judgment as a matter of law.

1 . In its brief C.E. & M.T. makes reference to the "terms of a contract" with the school district, but provides no citation for any written contract entered into the record embodying these "terms”. In his deposition, Tom Barker stated that he had no written contract with the school board but that C.E. & M.T. served "at the pleasure of the school district.”

2 . The affidavit of Century's expert contained in the record describes the testing process as follows:

(1)Samples of concrete are placed into molds to form cylinders.

(2) The cylinders are cured under strict temperature and humidity controls, and tested at regular intervals, e.g. 7, 14 and 28 days, with a minimum of two cylinders being tested after 28 days.

(3) The cylinders are "capped” to insure a dead level load-bearing surface for step 4; and

(4) Finally, the cylinders are compressed along the longitudinal axis by a calibrated hydraulic ram until they fail.