Tindall v. Konitz Contracting, Inc.

No. 89-388

IN THE SUPREME COURT OF THE STATE OF MONTANA
1989

FRANCIS M. TINDALL,
Plaintiff and Appellant,
-vs-
KONITZ CONTRACTING, INC.,
Defendant and Respondent.
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APPEAL FROM: District Court of the Tenth Judicial Districq,':
In and for the County of Fergus,
The Honorable John Warner, Judge presiding. < - ,l- .I
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COUNSEL OF RECORD:
For Appellant:
Dennis McCafferty; James, Gray & McCafferty, Great
Falls, Montana
For Respondent:
William Berger; Wilkins & Berger, Lewistown, Montana

Submitted on Briefs: Oct. 20, 1989
Decided: December 20, 1989

Filed:
Justice Diane G. Barz delivered the Opinion of the Court.

Plaintiff, Francis M. Tindall, filed a complaint
against defendant, Konitz Contracting, Inc., on September 6,
1984, alleging that defendant breached a personal service
contract that the two parties entered into on November 16,
1981. Defendant filed a counterclaim on October 28, 1985,
alleging that plaintiff intentionally and maliciously
interfered with a business relationship between defendant and
a third-party and that plaintiff intentionally and
maliciously sent a libelous letter to a third-party that
caused defendant injury. The District Court of the Tenth
Judicial District, Fergus County, found that the personal
service contract was void for lack of consideration; that
plaintiff tortiously interfered with a business relationship;
and that plaintiff maliciously committed libel. The court
then imposed on Tindall $7,500 in compensatory damages and
$8,500 in punitive damages. Plaintiff appeals. We affirm.
The issues raised on appeal are:
1. Whether the District Court erred in concluding that
no consideration existed for the personal service contract;
2. whether the District Court erred in concluding that
plaintiff relied upon "forbearance to sue" as consideration
for the personal service contract;
3. whether the District Court erred in finding that
defendant agreed to the personal service contract under
duress;
4. whether the District Court erred in determining
that the counterclaim should not be tried separately;
5. whether the District Court erred in concluding that
plaintiff intentionally interfered with a business
relationship between defendant and a third-party;
 6. whether the District Court erred in concluding that
the November 19 letter from plaintiff was libelous - -per se;
7. whether the District Court erred in assessing
plaintiff with $8,500 in punitive damages after concluding
that plaintiff's actions were malicious; and
8. whether the District Court erred in refusing to
hear testimony regarding excessive drinking by defendant at
the time he signed the personal service contract.
Francis M. Tindall, plaintiff, operated a general
contracting business centered in Lewistown, Montana, that
primarily dealt with crushing gravel for secondary roadways
and runways. In 1979, Tindall wanted to retire. During that
same year, Tindall met Thomas Konitz, defendant, who at that
time was employed by another general contracting firm. The
two had several discussions regarding the sale of Tindall's
business to Konitz. Konitz finally agreed to purchase
Tindall's business and on August 1, 1979, Konitz and Tindall
consummated the sale of the business through the signing of
three documents. The documents were prepared by Tindall's
attorney to provide tax benefits for Tindall. The three
documents included a lease on the business real estate with
an option to purchase; an equipment lease; and a buylsell
agreement regarding some other specifically listed equipment.
Both parties realized that the only way Konitz could
successfully take over the business was through Tindall's
initial support and active assistance, including Tindall's
bonding capacity. During the next few months, Konitz bid on
three jobs--0MAD 3, OMAD 4 and the Stanford Airport. Konitz,
who had experience in bidding, expediting and supervising
smaller jobs, prepared the bids. Tindall, however, signed
the bid forms and furnished the bonds. Tindall was granted
these jobs, but Konitz did the actual work and paid the bond
premiums. The payments received on the jobs first went to
Tindall, who did not withhold any service charges for the use
of his bonding capacity. In March, 1980, Tindall and Konitz,
as a joint venture, bid on and were awarded the Griffin Creek
job. Konitz again prepared the bids and accomplished the
actual work. Konitz subsequently bid and bonded in his own
name, and without assistance by Tindall, the work on the
Magpie road.
During the spring of 1981, Tindall began presenting
Konitz with a personal service contract. The contract
provided that Konitz would pay Tindall for his services at a
rate of four percent of the gross contract price for
assistance in the bidding, preparation and other
administrative services necessary to complete the contract
and another three and half percent whenever Tindall acted as
a guarantor or surety on the contract. In addition, the
contract provided that payments would begin sixty-one months
from the execution of the contract at a rate of one thousand
dollars per month. Konitz initially refused to sign the
personal service contract. Tindall, however, was relentless
in pressuring Konitz to sign the contract. Tindall
threatened Konitz that if he did not sign the contract, he
would put Konitz out of business by going to Konitz's
suppliers, bankers and bonding companies and by repossessing
Konitz's equipment. In light of Konitz's deteriorating
financial situation, Konitz could not have successfully
fought an economic or legal battle with Tindall and remain in
a viable business position. Konitz therefore signed the
personal service contract on November 19, 1981 in Tindall.'s
attorney's office. The personal service contract that
Tindall prepared and that Konitz signed stated that Tindall
helped bid and bond five jobs and therefore Tindall was
entitled to $138,629.80, with payments of one thousand
dollars a month beginning August 1, 1984.
 Konitzls financial position substantially improved from
1981 to the fall of 1984. In the summer of 1984, Konitz made
the last payment to Tindall under the 1979 contracts. At
that time, Konitz decided not to exercise the option to
purchase the real estate and also not to make the August 1,
1984 payment under the personal service contract. Tindall
became very angry and attempted to carry out threats
previously made against Konitz in 1981 and the earlier part
of 1984.
On September 6, 1984, Tindall filed a complaint with
the District Court of the Tenth Judicial District, alleging
that Konitz breached the personal service contract. Konitz
subsequently filed a counterclaim, alleging that Tindall
intentionally and maliciously interfered with a business
relationship between Konitz and a third-party and that
plaintiff maliciously sent a libelous letter to a third-party
that caused Konitz injury. Tindall then filed a motion with
the District Court under Rule 42(b), M.R.Civ.P. to hear
Konitzls counterclaim separately from the original complaint.
The District Court denied the motion. A nonjury trial was
held on February 9 and 10, 1988. The court issued its
Findings of Fact and Conclusions of Law on October 17, 1988,
finding that the personal service contract was void for lack
of consideration; that Tindall tortiously interfered with a
business relationship; and that Tindall maliciously committed
libel. The District Court also concluded that Tindall should
be subjected to punitive damages. After a hearing was held,
the court imposed on Tindall punitive damages in the amount
of $8,500. Tindall appeals.
The first issue raised on appeal is whether the
District Court erred in concluding that no consideration
existed for the personal service contract.
 Consideration is an essential element of a contract.
Section 28-2-102(4), MCA; Boise Cascade Corp. v. First Sec.
Bank of Anaconda (19791, 183 Mont. 378, 391, 600 P.2d 173,
181. In the present case, the District Court concluded that
no consideration existed for the personal service contract.
The findings of fact support this conclusion. The personal
service contract that Konitz signed on November 16, 1981
stated that
WHEREAS TINDALL sold his
contracting business to Konitz and
thereafter assisted KONITZ in the bidding
and bonding of various construction
projects without which Konitz would have
been unable to operate.

NOW, THEREFORE, KONITZ hereby
agrees to pay TINDALL from the
percentages agreed upon between the
parties, for TINDALL'S assistance on said
projects, the sum of $138,629.80.
Provided further that said sum shall be
paid in monthly installments of $1,000.00
per month commencing August 1, 1984, and
continuing thereafter until paid in full.
The amount of $138,629.80 was derived from the total amount
Konitz received from five jobs--0MAD 3, OMAD 4, the Stanford
airport, Griffin Creek and the Magpie road. It is undisputed
that Konitz initially required Tindallls bonding capacity.
Tindall therefore assisted Konitz with bonding for the first
four jobs. Most importantly, however, all of these jobs were
bonded and executed prior to the signing of the personal
service contract in November, 1981. By the time Konitz
signed the personal service contract in 1981, he had already
developed a bonding capacity for himself and no longer needed
Tindallls assistance.
The general rule is that past consideration is not
sufficient to support a promise. Soukop v. Snyder (Hawaii
App. 1985), 709 P.2d 109, 113; Sheehy v. ~ o d i n inn. App.
1984), 349 N.W.2d 353, 354; Smith v. Recrion Corp. ( ~ e v .
19751, 541 P.2d 663, 665; Hansen v. ~ootenaiCounty Bd of
Comm'rs (Idaho 1970), 471 P.2d 42, 51. As the United States
District Court stated in Citibank, Nat'l Ass'n 17. London
(S.D. Texas 1981), 526 F.Supp. 793,
[a] promise supported by past
consideration is unenforceable because
the detriment did not induce the promise.
That is, "since the detriment had already
been incurred, it cannot be said to have
been bargained for in exchange for the
promise. "
526 F.Supp. at 803 (quoting J. Calamari & J. Perilo,
Contracts 5 4-2, at 135 (2nd Ed. 1977)). Likewise, Tindall's
consideration--bonding assistance--was tendered prior to the
signing of the personal service contract. Tindall did not
incur any new detriment upon the signing of the 1981 contract
that would have induced Konitz to pay Tindall an additional
$138,629.80. Konitz's promise to pay Tindall $138,629.80 is
thus unenforceable because it was supported by past
consideration.
The record also supports the District Court's finding
that when Konitz bought Tindall's equipment, he paid
$150,000.00 more than the estimated market value of the
equipment. The District Court found that Konitz did not
attempt to dicker on Tindall's figures because Konitz took
into consideration the assistance Tindall was giving him in
the business. Thus, Tindall was apparently already
adequately compensated for his bonding capacity. In light of
the above, the District Court did not err in concluding that
no consideration existed for the 1981 personal service
contract and b a therefore void as a matter of law.
rs
 Tindall also argues that the District Court erred
because it did not make a finding regarding one of ~indall's
witness's testimony. The District Court does not need to
address specifically each piece of Tindall's evidence. All
that is required is that the District Court set forth
adequate findings and conclusions so that this Court does not
have to speculate as to the reasons for the District Court's
decision. In re Marriage of Jones (1980), 190 Mont. 221,
224, 620 P.2d 850, 851-52. The District Court therefore did
not err merely because it did not make a specific finding
regarding one of Tindall's witness's testimony.
The second and third issues raised on appeal are
whether the District Court erred in concluding that Tindall
relied upon "forbearance to sue'' as consideration for the
personal service contract and whether the District Court
erred in finding that Konitz agreed to the personal service
contract under duress.
This Court does not need to address these issues
because we have already affirmed above the District Court's
conclusion that the personal service contract was void for
lack of consideration.
The fourth issue raised on appeal is whether the
District Court erred in determining that the counterclaim
should not be tried separately.
Rule 42, M.R.Civ.P., governing whether a district
court should consolidate or separate trials, provides a court
with broad discretion in the handling of trial procedures.
State ex r e . , Fitzgerald v. Dist. Court of the Eighth
Judicial Dist. (1985), 217 Mont. 106, 116, 703 P.2d 148, 155.
This rule provides in pertinent part that
[tlhe court in furtherance of convenience
or to avoid prejudice may order a
separate trial of any claim, cross-claim,
counterclaim, or third-party claim, or of
 any separate issue or of any number of
claims, cross-claims, counterclaims,
third-party claims, or issues.

Rule 42 (b), M.R.Civ.P. In the absence of prejudice to the
parties, this Court recognizes the policy that "[mlultiple
trials and appeals arising from a single dispute may create a
severe burden in terms of increased costs to litigants, delay
in resolution of the controversy, and court congestion. "
Fitzgerald, 217 Mont. at 117, 703 P.2d at 155 (quoting
Standard Insurance Co. v. Sturdevant (1977), 173 Mont. 23,
28, 566 P.2d 52, 55).
In the present case, Tindall argues that the court
confused the facts associated with his complaint with the
facts associated with Konitz's counterclaim. Tindall then
argues that he was prejudiced because this "confusion"
resulted in the court finding that the personal service
contract was void because Konitz signed it under duress. We
disagree. As already discussed above, the contract was void
for lack of consideration. Tindall therefore was not
prejudiced as a result of the court also finding that the
contract was void because of Konitz signing it under duress.
In addition, the facts surrounding the personal service
contract and the facts surrounding the bases of Konitz's
counterclaim are sufficiently intertwined. The District
Court therefore did not err in denying Tindall's motion to
separate trials.
The next issue raised on appeal is whether the District.
Court erred in concluding that Tindall intentionally
interfered with a business relationship between Konitz and a
third-party, Morgenstern.
In Conclusion of Law No. 4, the District Court
concluded that TindaII unlawfully interfered with Konitz's
and Morgenstern's gravel contract. In particular, the court
found that Konitz and Morgenstern had an agreement that
Konitz would purchase from Morgenstern 3,000 tons of gravel.
Although Tindall owned the gravel pit, Morgenstern leased the
pit from Tindall and paid royalties to Tindall on the gravel
he sold. Morgenstern primarily used the gravel for himself
but also sold gravel to the public. The court found that
Tindall interfered with Konitz's and Morgenstern's contract
when he directed Morgenstern not to sell the gravel to
Konitz. As a result, Morgenstern did not sell the gravel to
Konitz and Konitz was forced to go elsewhere and pay $7,500
more.
The four elements required to establish the tort of
interference with a contract are that the defendant's acts
(1) were intentional; (2) were calculated to cause damage to
the plaintiff in his or her business; (3) were done with the
unlawful purpose of causing damage or loss, without right or
justifiable cause on the part of the actor; and (4) actually
resulted in damage and loss to the plaintiff. Northwestern
Nat'l Bank of Great Falls v. Weaver-Maxwell, Inc. (1986), 224
Mont. 33, 40-41, 729 P.2d 1258, 1262; Bolz v. Myers (1982),
200 Mont. 286, 295, 651 P.2d 606, 611.
In light of the District Court's findings of fact, all
four of these elements were met in the present case. The
court found that Tindall intentionally contacted Morgenstern
so as to prevent Morgenstern from selling gravel that Konitz
had already contracted to purchase. The court also found
that Tindall was angry at Konitz for refusing to abide by the
personal service contract and therefore engaged in a number
of retaliatory actions, including interfering with the gravel
contract between Morgenstern and Konitz. Tindall did not
have the right to interfere with a third-party contract
merely because he owned the gravel pit that Morqenstern was
leasing. If Tindall did not receive royalties as a result of
Morgenstern's contract with Konitz, he would then have had
the right to bring a complaint against Morgenstern.
Furthermore, Tindall's suspicions or beliefs about Konitz
also did not give Tindall the right to interfere with a
contract between Konitz and Morgenstern. Obviously,
Tindall's actions were intentionally calculated to cause
damage to Konitz's business and were done without a
justifiable cause. Konitz thus had to purchase gravel
elsewhere to fulfill his obligations. Konitz had to pay
$7,500 more than if he would have been allowed to purchase
the gravel from Morgenstern. Konitz thus suffered actual
damage in the amount of $7,500.
The record supports the District Court's findings and
conclusions and we therefore hold that the court did not err
in determining that Tindall tortiously interfered with a
contract between Konitz and Morgenstern.
The sixth issue raised on appeal is whether the
District Court erred in concluding that the November 19
letter from Tindall was libelous per -se.
In its Conclusion of Law No. 5, the District Court
concluded that the November 19, 1984 letter from Tindall was
libelous and slanderous per - se. The court also concluded
that the letter, which was published to Morgenstern, was sent
with the purpose of destroying a lawful business rel-ationship
between Konitz and Morgenstern. The letter states
Dear Jack,
Due to Konitzs' [sic] dishonest
activites [sic] with me and defaulting on
Contracts I am advising you that I will
not allow any of his equipment, men, or
any of his associates to be on my
property from this day November 19, 1984
forward.
 Also you will not deliver or have
delivered, or be active in any activities
in furnishing any materials to Konitz on
any of his jobs in this area from this
day forward.
I just ordered his equipment off my
property a few minutes ago, and that is
the way it will be from this day forward.
The only way this situation will be
changed is by your communication from you
to me receiving a document in writing,
giving me full detail of the conditions
and activities that may take place and
etc.
Sincerely,

Francis Tindall
Slanderous words are spoken words, whereas libelous words are
written. Therefore, the letter cannot by definition be
slanderous - - however, this Court must nonetheless
per se,
determine whether the District Court erred when it determined
that the letter was libelous - -
per se.
Libel is defined in our statutes under S 27-1-802, MCA,

a false and unprivileged publication by
writing, printing, picture, effigy, or
other fixed representation to the eye
which exposes any person to hatred,
contempt, ridicule, or obloquy or which
causes him to be shunned or avoided or
which has a tendency to injure him in his
occupation.

This Court considers several interpretative rules when
determining whether words are libelous - -
per se. These rules
require that the defamatory words be construed according to
their usual, popular and natural meaning and their common
acceptance in society; the words must also be viewed by the
court without the aid of special knowledge possessed by the
parties concerned; the words must be susceptible of only one
meaning and that meaning must be opprobrious; and the words
must also be construed in their entirety and with reference
to the entire document. Wainman v. Bowler (1978), 176 Mont.
91, 94, 576 P.2d 268, 270. When interpreting the libel
statute, this Court has also stated that if the alleged
libelous words impute dishonesty or corruption they are
libelous per -
se. Manley v. Harer (1925), 73 Mont. 253, 260,
235 P. 757, 759.
In the present case, Tindall's letter stated explicitly
that Konitz had conducted dishonest activities with him and
had defaulted on contracts. In light of the letter as a
whole, and the business context in which it was addressed,
the District Court did not err in concluding that Tindall's
November 19, 1984 letter to Morgenstern was libelous - -
per se.
The next issue raised on appeal is whether the District
Court erred in concluding that Tindall is liable for punitive
damages.
In the District Court's October 17, 1988 order, the
court found that Tindall's actions were malicious and that as
a result he should be subjected to punitive damages.
However, the court also concluded that a hearing should he
held on the assessment of punitive damages. The court
subsequently held a hearing, and on May 12, 1989, the
District Court ordered Tindall to pay $8,500 in punitive
damages.
The statutes that govern the granting of punitive
damages are 5 s 27-1-220 and -221, MCA. Section 27-1-220(1),
MCA, allows a judge or jury to award punitive damages for the
purpose of punishing a defendant. Section 27-1-221(1), MCA,
states that "reasonable punitive damages may be awarded where
the defendant has been guilty of actual fraud or actual
malice. It The statute also specifies that when awarding
punitive damages the judge must clearly state the reasons for
making the award in the findings of fact and conclusions of
law. In particular, the findings and conclusions must
demonstrate a consideration of each of the following matters:
(i) the nature and reprehensibility of
the defendant's wrongdoing;
(ii) the extent of the defendant's
wrongdoing;
(iii) the intent of the defendant in
committing the wrong;

(iv) the profitability of the
defendant's wrongdoing, if applicable;
(v) the amount of actual damages awarded
by the jury;
(vi) the defendant's net worth;
(vii) previous awards of punitive or
exemplary damages against the defendant
based upon the same wrongful act;
(viii) potential or prior criminal
sanctions against the defendant based
upon the same wrongful act; and
(ix) any other circumstances which may
operate to increase or reduce, without-
wholly defeating, punitive damages.
Section 27-1-221 (7)(b), MCA.
In its findings of fact and conclusions of law
regarding punitive damages, the District Court addressed each
of these issues. The court found that Tindall acted with
malice; that Konitz's actual damage was $7,500; that
Tindall's net worth was $330,000; that no evidence existed of
any previous wrongdoing by Tindall; and that Tindall would
reap financial gain through his actions. When addressing the
nature, reprehensibility, and extent of Tindall's wrongdoing,
the court stated the following:
3. That Francis M. Tindall is guilty of
menace and duress, maliciously imposed
upon Thomas Konitz in the execution of
the Personal Service Contract; that
Francis M. Tindall published a letter
with the purpose of destroying a lawful
business arrangement between Thomas
Konitz and Jack Morgenstern, which let'ter
was libelous and slanderous per se and
Thomas Konitz is entitled to punitive
damages as follows:
a. That Francis M. Tindall
wrongfully used his "clout" which fully
amounted to duress to force Thomas Konitz
to sign the Personal Service Contract of
November 16, 1981; that said action by
Francis M. Tindall was reprehensible;
that Francis M. Tindall had the ability
to carry out the threats made to Thomas
Konitz to ruin the business of Thomas
Konitz; that Francis M. Tindall attempted
to carry out those threats, which the
publication of the libelous letter of
November 19, 1984 was but one example.

c. That the actions of Francis M.
Tindall were in part to frighten Thomas
Konitz and force him to sign the Personal
Service Contract in order for Tindall to
reap financial gains.
d. That the actions of Francis M.
Tindall were intentional.
The record supports these findings and therefore the District
Court did not err in determining that Tindall should pay
$8,500 in punitive damages.
The last issue raised on appeal is whether the District
Court erred in refusing to hear testimony regarding excessive
drinking by Konitz at the time he signed the personal service
contract.
The personal service contract was void for lack of
consideration. We therefore do not need to address Konitz's
mental state at the time he signed the contract.
Affirmed.

We concur:

J A,
v i e f Justice