## Facts

- The Mudges agreed to sell their family-owned welding business (M & M Welding, Inc.) to Redding under a written contract dated July 31, 1981.
- The sale included corporate stock and business assets, including inventory, equipment, and real property; the stock was placed in escrow while Redding operated the business and made payments.
- The contract contained a non-encumbrance covenant barring mortgaging business assets beyond existing debt without the Mudges’ consent until the purchase price was paid in full.
- The Bank later loaned Redding $100,000 and took a security interest in the business’s inventory and equipment without obtaining the Mudges’ consent.
- Redding defaulted on the purchase contract; the Mudges retook the business but faced the Bank’s foreclosure efforts against the collateral.
- To protect the business assets, the Mudges obtained a $100,000 letter of credit in favor of the Bank and claimed resulting losses as damages.
- The Mudges sued the Bank for intentional interference with their sale contract; a jury awarded $123,997.33.
- The Bank appealed, challenging jury instructions, denial of directed verdict motions, and exclusion of certain evidence.

## Issues

1. Whether sufficient evidence supported the jury’s finding that the Bank intentionally interfered with the Mudges’ contract.
2. Whether the trial court committed reversible error in instructing the jury on intentional interference and damages.
3. Whether the trial court erred in denying the Bank’s directed verdict motions on interference, causation, and damages.
4. Whether the trial court abused its discretion by excluding evidence offered by the Bank.

## Decision

- The Wyoming Supreme Court affirmed the judgment for the Mudges.
- The evidence permitted a reasonable finding that the Bank knew of the non-encumbrance covenant and intentionally proceeded in a manner inconsistent with it.
- The trial court properly denied directed verdict motions because the record contained evidence on each element supporting submission to the jury.
- The jury instructions, read as a whole, correctly stated Wyoming law and were not misleading or prejudicial.
- The evidentiary exclusions did not constitute an abuse of discretion and did not warrant reversal.

## Legal Principles

- Intentional interference with contract requires proof of: (1) a contract or beneficial relationship; (2) the defendant’s knowledge of it; (3) intentional and improper interference; (4) causation of breach or disruption; and (5) resulting damages.
- A directed verdict is improper where there is evidence on which a jury could reasonably find for the nonmoving party.
- Consequential losses proximately caused by intentional interference, including costs incurred to protect contractual interests from the effects of the interference, may be recoverable damages.
- Trial courts have discretion over evidentiary rulings; reversal requires a showing of prejudicial abuse of discretion.

## Conclusion

The court upheld a jury verdict holding a lender liable for intentional interference where the lender knowingly took a security interest that violated a contract’s non-encumbrance covenant, and it allowed recovery of damages tied to the sellers’ costs of protecting their interests against the lender’s foreclosure efforts.


First Wyoming Bank, Casper v. Mudge, 748 P.2d 713 (Wyo. 1988)