Malarkey Asphalt Co. v. Wyborney

821 P.2d 1235, 62 Wash. App. 495
CourtCourt of Appeals of Washington
DecidedDecember 18, 1991
Docket25489-8-I
StatusPublished
Cited by19 cases

This text of 821 P.2d 1235 (Malarkey Asphalt Co. v. Wyborney) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Malarkey Asphalt Co. v. Wyborney, 821 P.2d 1235, 62 Wash. App. 495 (Wash. Ct. App. 1991).

Opinion

Kennedy, J.

Appellant Malarkey Asphalt Company, formerly MCW, Inc., initiated the action below against respondents Wyborney, alleging that Harry Wyborney, while an officer and director of MCW, had breached his fiduciary duty by approving expenditures of $47,187.44 in corporate funds that personally enriched Mr. Wyborney and his family members. The Wyborneys denied that any wrongful expenditures had been made and filed a counterclaim against Malarkey Asphalt Company alleging that its two principals, Michael Malarkey and Peter Chance, had conspired to wrongfully discharge the Wyborneys from their employment with MCW. The Wyborneys also *498 brought a third party complaint against appellants Michael Malarkey and Peter Chance and several others alleging that these third parties had tortiously interfered with the contractual relationship between Harry Wybor-ney and MCW, Inc.

After jury trial of the case a verdict was returned finding that Harry Wyborney had not breached his fiduciary obligations to MCW. The jury also found that the Wybor-neys were entitled to damages in the sum of $10,000 for wrongful discharge of employment, and that the Wybor-neys could recover on the tortious interference claim, but only against the appellants Michael Malarkey and Peter Chance. When asked on the special verdict form what the amount of the Wyborneys' damages was for the tortious interference, the jury responded: "an amount of money equivalent to all defendants' court costs, legal fees [and] attorney fees."

Appellants Malarkey Asphalt Company, Michael Malarkey and Peter Chance brought this appeal to challenge the monetary judgments rendered on the verdict of the jury. Malarkey Asphalt Company has not appealed the jury's verdict that Wyborney did not breach his fiduciary obligations to MCW, Inc. We affirm in part and reverse in part.

Issues

Appellants Michael Malarkey and Peter Chance, hereinafter referred to as "Malarkey" and "Chance", respectively, claim that their motion for judgment n.o.v. should have been granted because there was no legal basis for an award of attorney fees on the claim of tortious interference with contract, and, that if there was a legal basis for this award, the trial court erred in determining the proper amount to be awarded. Appellant Malarkey Asphalt Company claims its motion for directed verdict and judgment n.o.v. should have been granted because there was no evidence that Marie Wyborney had been discharged from her employment or that Harry Wyborney had been wrongfully discharged. Malarkey Asphalt Com *499 pany also claims that the trial court misinstructed the jury in the wrongful discharge action.

Facts

MCW, Inc., was formed in 1978 by Messrs. Malarkey, Chance and Wyborney for the purpose of purchasing and operating an asphalt production facility then known as Duwamish Manufacturing. Duwamish Manufacturing was owned by the Santis family. At the time of the purchase, Malarkey was president of Malarkey Roofing Company, headquartered in Portland, Oregon. Chance was a salesman for both Duwamish Manufacturing and Malarkey Roofing Company. Wyborney was plant manager for Duwamish Manufacturing. Santis, Wyborney and Chance were also partners in a business known as Sea-Tac Supply, which was affiliated with Duwamish Manufacturing.

Malarkey put up most of the cash for the purchase of Duwamish Manufacturing, and thereby acquired a two-thirds interest in MCW, Inc. Chance put up $50,000 for a one-sixth interest. Wyborney put up $9,900 for a one-sixth interest, and also loaned MCW $31,758. Wyborney's principal contribution was to be his expertise. Wyborney was to assume the responsibility for the asphalt production and sales operations. Although Malarkey had sufficient funds to purchase the business without the participation of Chance and Wyborney, Malarkey did not wish to handle the daily operations of MCW, Inc., and Chance wished to continue in his sales activities, as previously had been the case. Wyborney had considerable experience and expertise, including some 20 years of direct experience in the marketing and production of asphalt.

Santis would not agree to sell the asphalt production facility to MCW unless Chance and Wyborney gave up their interests in Sea-Tac Supply, which they agreed to do. Chance and Wyborney received back their initial investments into Sea-Tac Supply, but no return on those investments.

MCW, Inc., operated the asphalt production and sales business from the time of its purchase in 1978 until November of 1983. During those years, Wyborney served *500 as plant manager and supervisor of sales. Malarkey continued to manage his other companies. Chance continued to work as a salesman for both MCW and Malarkey Roofing Company. Although the principals consulted about various management matters, Wybomey had primary responsibility for running the daily operations of MCW. Under Wyborney's management MCW gradually increased its gross sales from $1.5 million in 1979 to $6.3 million in 1983. Harry Wyborney was being paid a salary of $40,000 annually in 1983. Marie Wyborney was also employed by MCW as a part-time bookkeeper. The company became profitable enough to pay crew bonuses, but by 1983 it was not yet profitable enough for Wybomey to receive a bonus, nor to pay dividends to the shareholders.

On November 14, 1983, Wyborney was summarily fired without prior notice. Although the evidence was conflicting, there was testimony from which the jury could properly find that not only Harry Wyborney but also Marie Wyborney and the entire office staff of MCW were fired when Chance, Malarkey and several others drove up to the asphalt plant, emerged from their vehicles, came into the plant, abruptly fired Harry Wybomey and the office staff and ordered them off the premises (Marie Wyborney was not personally present on the morning of the firing, but another office employee testified that her first notice of her own termination was when a rather white and shaken Mr. Wyborney stepped into the front office and said, "We've all been fired.").

The testimony at trial was conflicting as to why the Wyborneys were fired. Although appellants' legal position is that the Wyborneys' employment was at will, so that they could be fired with or without just cause, they claim that only Harry Wyborney was fired, that the other staff members left voluntarily, and that Wyborney's termination resulted from unresolved complaints over quality control and customer satisfaction (the allegations as to wrongful expenditures arose after the firing, following an internal audit performed by defendant Boers, a CPA).

*501 Wyborney's position is that he was fired because he tried to expand MCW's customer base by soliciting customers in Hawaii who would need a new source of asphalt products when Chevron closed down its operations in Hawaii. One of Chevron's customers in Hawaii, American Factors, was also a customer of Malarkey Roofing Company — Malarkey's Portland company. Wyborney claimed that Malarkey was concerned about competition for the Hawaii business opportunity between MCW and Malarkey's Oregon operations.

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821 P.2d 1235, 62 Wash. App. 495, Counsel Stack Legal Research, https://law.counselstack.com/opinion/malarkey-asphalt-co-v-wyborney-washctapp-1991.