Toltec Watershed Improvement District v. Johnston

717 P.2d 808, 1986 Wyo. LEXIS 525

• Court: Wyoming Supreme Court
• Decided: April 9, 1986
• Docket: 85-169
• Status: Published

Opinions

BROWN, Justice.

This appeal results from a summary judgment in favor of appellees in an action for abuse of process, malicious prosecution and tortious interference with a contract. Appellants Toltec Watershed Improvement District, Roger Garrett, Don Robbins, Glen Dunlap and Bill Goodrich (hereinafter collectively referred to as Toltec) filed the action against appellees Eldon Johnston, C.W. Burnette, Associated Enterprises, Inc., and Bard Ranch Company (hereinafter collectively referred to as Associated Enterprises). Appellants raise a number of issues, but since we will affirm the district court, we need only review the summary judgment granted.

This is not the first time these parties have been before us, but we are optimistic that it will be the last. The litigation history between the parties is long and complex, ranging over some fifteen years. In their brief appellants have summarized the case history as follows:

The facts have been set forth in the previous opinions so a lengthy recital is not now necessary. Basically, appellants formed Toltec Watershed Improvement District for the purpose of building a reservoir on lands owned by Associated Enterprises. Associated Enterprises refused access to Toltec for surveying purposes and the first of five lawsuits was brought. Trial resulted in judgment for Toltec, and Associated Enterprises appealed to this court. We affirmed the judgment in Associated Enterprises, Inc. v. Toltec Watershed Improvement District, Wyo., 490 P.2d 1069 (1971). Associated Enterprises then appealed the case to the United States Supreme Court which affirmed the decision, with three justices dissenting in Associated Enterprises, Inc. v. Toltec Watershed Improvement District, 410 U.S. 743, 93 S.Ct. 1237, 35 L.Ed.2d 675 (1973).

The second case commenced in 1974 when Toltec filed a condemnation action against the lands owned by Associated Enterprises. Toltec prevailed and the decision was again appealed to this court. We modified the judgment and affirmed as modified in Associated Enterprises v. Toltec Watershed Improvement District, Wyo., 656 P.2d 1144 (1983).

The third case commenced when Associated Enterprises filed a declaratory judgment action against the state engineer, seeking to have the Toltec reservoir permits declared invalid. This action was dismissed by the district court and an appeal perfected to this court. The case was dismissed for want of prosecution. Associated Enterprises, Inc. and Johnston Fuel Liners, Inc. v. Floyd A. Bishop, State Engineer (No. 4581, October 30, 1975).

The fourth action began when Associated Enterprises objected to Toltec’s request for an extension of time from the state engineer in which to commence construction on the dam. The state engineer approved the extension and Associated Enterprises appealed to the district court which affirmed the decision. Appeal was made to this couid; and the decision affirmed in Associated Enterprises, Inc. v. Toltec Watershed Improvement District, Wyo., 578 P.2d 1359 (1978).

The final action commenced when Associated Enterprises filed suit in the Wyoming Federal District Court against the federal government to compel the preparation of an environmental impact statement (EIS). The relief was granted and an EIS filed. Johnston v. Davis, 500 F.Supp. 1323 (D.C.Wyo.1980). The Tenth Circuit affirmed the case but remanded for modification of the EIS in Johnston v. Davis, 698 F.2d 1088 (10th Cir.1983).

Before the Tenth Circuit decision and the decision of this court in Associated Enterprises, Inc. v. Toltec Watershed Improvement District, Wyo., 656 P.2d 1144 (1983) (the second case), Toltec filed the present action alleging abuse of process, malicious prosecution, tortious interference with a contract, and seeking punitive damages. As noted earlier, the trial court granted Associated Enterprises’ motion for summary judgment on all issues.

We begin by stating our applicable standards of review. In Garner v. Hickman, Wyo., 709 P.2d 407, 410 (1985), we said:

“When reviewing a summary judgment on appeal, we review the judgment in the same light as the district court, using the same information. Randolph v. Gilpatrick Construction Company, Inc., Wyo., 702 P.2d 142 (1985); and Lane Company v. Busch Development, Inc., Wyo., 662 P.2d 419 (1983). A party moving for summary judgment has the burden of proving the nonexistence of a genuine .issue of material fact. Dudley v. East Ridge Development Company, Wyo., 694 P.2d 113 (1985). 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. Samuel Mares Post No. 8, American Legion, Department of Wyoming v. Board of County Commissioners of the County of Converse, Wyo., 697 P.2d 1040 (1985). 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. Bancroft v. Jagusch, Wyo., 611 P.2d 819 (1980).”

ABUSE OF PROCESS AND MALICIOUS PROSECUTION

The tort of abuse of process is defined thusly:

“One who uses a legal process, whether criminal or civil, against another primarily to accomplish a purpose for which it is not designed, is subject to liability to the other for harm caused by the abuse of process.” Restatement (Second) of Torts § 682, p. 474 (1977).

“The essential elements of abuse of process, as the tort has developed, have been stated to be: first, an ulterior purpose, and second, a wilful act in the use of the process not proper in the regular conduct of the proceeding. Some definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process, is required; and there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions.” Prosser and Keeton, Torts § 121, p. 898 (5th ed., 1985).

In Foothill Industrial Bank v. Mikkelson, Wyo., 623 P.2d 748 (1981), this court reversed a judgment granted for abuse of process. In that case, the mortgagors brought action against the mortgagee when the mortgagee accelerated payments on a note after the mortgagors defaulted. We stated that the gravamen of abuse of process lies in the misuse of a court’s power to perpetrate injustice. We found there could be no action for abuse of process when the bank foreclosed the note upon default which was its right. We further found that the bank’s motive in so doing was immaterial and irrelevant. We quoted with approval the following language:

‘“If the law concerned itself with the motives of parties new complications would be introduced into suits which might seriously obscure their real merits. * * * ’ ” Id., at 757, quoting Dickerman v. Northern Trust Company, 176 U.S. 181, 190, 20 S.Ct. 311, 314, 44 L.Ed. 423 (1900).

Such is in accord with the general principle “ * * * that there is no action for abuse of process when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior purpose of benefit to the defendant.” Restatement (Second) of Torts § 682, p. 475 (1977). Abuse of process requires that the use of the process be primarily for an immediate purpose other than the purpose designed and intended. See, e.g., Bosler v. Shuck, 714 P.2d 1231 (Wyo., 1986).

Similarly, it matters not what the motive might be in instituting prosecution for purposes of malicious prosecution. In the case of Consumers Filling Station Company v. Durante, 79 Wyo. 237, 333 P.2d 691, 694 (1958), this court set forth the following elements necessary to sustain a cause of action for malicious prosecution:

“(1) The institution or continuation of original judicial proceedings, either criminal or civil;

“(2) Such proceedings having been by or at the instance of the defendant (such as Durante in this case);

“(3) The termination of such proceedings in favor of the plaintiff (such as Consumers in this case);

“(4) Malice instituting the proceedings;

“(5) Want of probable cause; and

“(6) The suffering of injury or damage as a result of the action complained of.

“If any one of these elements is lacking, the result is fatal to the action. [Citation.]”

The court went on to state that if probable cause in instituting the action is shown, such precludes an action for malicious prosecution, irrespective of the motive:

“ ‘Where it appears that there was probable cause to institute the original proceeding such fact constitutes a complete and absolute defense or bar to an action of malicious prosecution, irrespective of the motive in instituting the prosecution, or of a conspiracy. * * * ’ ” Id., 333 P.2d at 695, quoting 54 C.J.S. Malicious Prosecution § 18.

The difference between the torts of malicious prosecution and abuse of process has been stated by one authority as follows:

“Abuse of process differs from malicious prosecution in that the gist of the tort is not commencing an action or causing process to issue without justification, but misusing, or misapplying process justified in itself for an end other than that which it was designed to accomplish. The purpose for which the process is used, once it is issued, is the only thing of importance. Consequently in an action for abuse of process it is unnecessary for the plaintiff to prove that the proceeding has terminated in his favor, or that the process was obtained without probable cause or in the course of a proceeding begun without probable cause. It is often said that proof of ‘malice’ is required; but it seems well settled that except on tbe issue of punitive damages, this does not mean spite or ill will, or anything other than the improper purpose itself for which the process is used, and that even a pure spite motive is not sufficient where process is used only to accomplish the result for which it was created.” Prosser and Keeton, Torts § 121, p. 897 (5th ed. 1985).

We discussed certain policy considerations of malicious prosecution and upheld a judgment for such in Cates v. Eddy, Wyo., 669 P.2d 912, 917-918 (1983):

“On the one hand, it is stated that malicious prosecution actions are not favored in the law because of a public policy in favor of uncovering and prosecuting crime. Large tort judgments against well-meaning individuals, acting honestly and in good faith, might seriously inhibit those attempting to perform what they believe a civic duty. A policy that discourages citizens from reporting crime or aiding in prosecution would be undesirable and detrimental to society in general.

“On the other hand, it is generally accepted that for every wrong there should be a right. That also is necessary to an orderly society, for the alternative is that the party wronged seek his own redress. Experience has shown that remedy to be unacceptable. Thus, one who is subjected to unjustifiable criminal or civil proceedings because of spite or malice, which result in damage and injury, should recover compensation for that loss.

“The competing policy considerations are nicely balanced; and requiring malice and lack of probable cause as necessary elements to an action for malicious prosecution affords adequate protection to the first policy and restriction upon the second. Allowing a malicious prosecution action where the proceeding was ‘initiated, caused or procured’ by the defendant is fair. It will not be destructive of either of the stated policies.”

See also, Seamster v. Rumph, Wyo., 698 P.2d 103 (1985), wherein we sustained a summary judgment granted in favor of a defendant for malicious prosecution finding the plaintiff had not established lack of probable cause in the previous criminal proceeding.

In the present case, it is significant to note that Toltec relies upon two sources to resist Associated Enterprises’ motion for summary judgment: their second amended complaint and discovery completed to date. Such discovery refers to documents filed after the summary judgment hearing in the district court. Since the district court did not have such documents before it, we cannot consider such documents in our review since we must examine the judgment in the same light as the district court and use the same materials. Indeed, such documents were stricken from the record by order of this court; therefore, such documents cannot be considered in Toltec’s attempt to oppose the summary judgment.

Rule 56(c), Wyoming Rules of Civil Procedure, provides:

“The motion [for summary judgment] shall be served at least 10 days before the time fixed for the hearing. The adverse party prior to the day of hearing may serve opposing affidavits. The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. A summary judgment, interlocutory in character, may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages.”

The essence of Toltec’s. claim for abuse of process and malicious prosecution is that. Associated Enterprises acted out of an improper motive. While it appears that Associated Enterprises’ motives were anything but virtuous, we cannot find such motives to be sufficient to sustain an action for abuse of process or malicious prosecution. We agree with the trial court’s order wherein it stated:

“The Court finds that in each of the Defendants’ actions complained of in this matter that the Defendants were well within their rights in taking those actions and that they had probable cause to bring those questions before the Courts and that none of the various items of process listed by the Plaintiff were put to any use other than that contemplated at law.”

We find summary judgment was proper on Toltec’s claims of abuse of process and malicious prosecution.

TORTIOUS INTERFERENCE WITH A CONTRACT

Toltec also claims summary judgment was improper with regard to their claim against Associated Enterprises for tortious interference with a contract. Toltec contends Associated Enterprises tortiously interfered with the contract between Toltec and the Soil Conservation Service (SCS) due to the continued course of litigation. Toltec further contends that such interference damaged them through the increased cost of the land to be condemned, increased dam construction costs and attorney’s fees.

To oppose Associated Enterprises’ motions for summary judgment, Toltec filed a memorandum that contains numerous references to letters not-made part of the record until after the district court ruled on the summary judgment motions. We have already stated that we cannot consider any material not before the trial court. We recently upheld a summary judgment for tortious interference with a contract in Spurlock v. Ely, Wyo., 707 P.2d 188 (1985). In that case we found that appellant had not properly made all materials, upon which he relied to oppose the summary judgment, a part of the record.

Toltec also relies on a letter dated September 2, 1977, from B.D. Turner, Jr., of the SCS to Kim Cannon, one of Associated Enterprises’ attorneys. That letter is in response to a letter from Kim Cannon requesting federal funding for the dam be withdrawn. The Turner letter merely states that the SCS reviewed the questions raised by Cannon and found the funding should not be withdrawn. The letter does not show that Associated Enterprises’ interest or motive was somehow improper, and is not helpful in Toltec’s claim of tor-tious interference with a contract.

In further support of their opposition to summary judgment, Toltec filed an affidavit from one of their attorneys. Such affidavit merely states that the contract between Toltec and the SCS had to be negotiated three separate times due to the ongoing litigation between the parties.

Tortious interference with a contract is defined as:

“One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.” Restatement (Second) of Torts § 766, p. 7 (1979).

In an interference with contract action, Board of Trustees of Weston County School District No. 1 v. Holso, Wyo., 584 P.2d 1009, 1016-1017 (1978), we said that the necessary elements of proof were:

“(1) the existence of a valid contractual relationship or business expectancy;

“(2) knowledge of the relationship or expectancy on the part of the interferor;

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

“(4) resultant damage to the party whose relationship or expectancy has been disrupted.”

Factors to be considered for the action are listed as follows:

“In determining whether an actor’s conduct in intentionally interfering with a contract or a prospective contractual relation of another is improper or not, consideration is given to the following factors:

“(a) the nature of the actor’s conduct,

“(b) the actor’s motive,

“(c) the interests of the other with which the actor’s conduct interferes,

“(d) the interests sought to be advanced by the actor,

“(e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other,

“(f) the proximity or remoteness of the actor’s conduct to the interference and

“(g) the relations between the parties.” Restatement (Second) of Torts § 766, pp. 26-27 (1979).

We recognized the action in Wartensleben v. Willey, Wyo., 415 P.2d 613 (1966), where we upheld a judgment for tortious interference with a contract when the defendant interfered with prospective contractual relations without justification. In that case we said:

“Appellant’s starting premise — that the intentional interference with contractual relations, without justification, creates liability for the harm thereby caused— brings no material disagreement from us. See 4 Restatement, Torts, § 766, p. 49 (1939). But we still must concern ourselves with a determination as to whether defendants were reasonably justified in doing what they did to prevent the establishment of the feed lot on War-tensleben’s land, adjacent to Willey.

“On the subject of justification, it is set out in 4 Restatement, Torts, § 773, p. 87 (1939), that:

“ ‘One is privileged purposely to cause another not to perform a contract, or enter into or continue a business relation, with a third person by in good faith asserting or threatening to protect properly a legally protected interest of his own which he believes may otherwise be impaired or destroyed by the performance of the contract or transaction.' ”

“In the annotation on the subject of liability for procuring breach of contract in 26 A.L.R.2d 1227, 1234, it is indicated authority supports the rule that a party to a contract has a right of action against a person who has procured a breach of such contact by the other party thereto ‘otherwise than in the legitimate exercise of his own rights.’ ” Id., at 614.

We again upheld a judgment for tortious interference with a contract in Martin v. Wing, Wyo., 667 P.2d 1159 (1983), finding the trial court was correct in determining the defendants had interfered with the plaintiffs’ prospective sale of their real property.

It is generally recognized in Wyoming that malicious interference need not be shown. Martin v. Wing, supra. But one who interferes with a contract asserting a bona fide claim in good faith is not liable for tortious interference with a contract:

“One who, by asserting in good faith a legally protected interest of his own or threatening in good faith to protect the interest by appropriate means, intentionally causes a third person not to perform an existing contract or enter into a prospective contractual relation with another does not interfere improperly with the other’s relation if the actor believes that his interest may otherwise be impaired or destroyed by the performance of the contract or transaction.” Restatement (Second) of Torts § 773, p. 52 (1979).

Another authority has stated:

“The defendant is also permitted to interfere with another's contractual relations to protect his own present existing economic interests, such as the ownership or condition of property, or a prior contract of his own, or a financial interest in the affairs of the person persuaded. * * * ” Prosser and Keeton, Law of Torts § 129, p. 986 (5th ed. 1984).

The basis of the problem between the parties is that Associated Enterprises did not wish to have its lands condemned for the Toltec dam. Therefore, it appears that Associated Enterprises was trying to protect its lands, which is its right. In light of such, it is difficult to find error in the summary judgment granted with respect to the tortious interference with a contract claim when Associated Enterprises was trying to defend its property interest. Furthermore, it is noted that the contract which was the subject of the alleged tor-tious interference, was eventually entered into by Toltec and the SCS, and the funding for the dam approved.

We think the summary judgment granted by the trial court in this case was correct. It is speculative for us to say how the result might have changed if all materials upon which Toltec relies to oppose the summary judgment had been properly made a part of the record. We find summary judgment was proper in this case.

Affirmed.