Bad-Faith Use of a First Right of Purchase Can Create Tort Liability and Excuse Tender; Attorney-Fee Punitive Damages Need Not Track a 1:1 Ratio

Case: Wyoming Fall Creek, LLC, a Wyoming Limited Liability Company v. Ernest Anderson; Martha Anderson; Noah Messinger and Brandy Chaplin
Citation: 2026 WY 42 (Wyo. Apr. 15, 2026)
Court: Supreme Court of Wyoming (Boomgaarden, C.J.)

1. Introduction

This consolidated appeal arose from a failed residential real-estate closing in Teton County complicated by a recorded 1976 covenant granting neighboring lot owners a “first right of purchase” exercisable within 60 days after the property is offered for sale. Ernest and Martha Anderson (sellers) contracted to sell their home (Lot 4B) to Noah Messinger and Brandy Chaplin (buyers). Wyoming Fall Creek, LLC (WFC), owner of the adjacent Lot 4A, held the covenant right affecting Lot 4B.

As the Messinger contract approached closing, WFC intermittently signaled it would exercise its purchase right but never consummated an agreement with the Andersons. The sale to Messinger did not close. Litigation followed among all parties: Messinger sought specific performance against the Andersons; the Andersons sought declaratory relief against WFC about the right’s expiration; and Messinger counterclaimed that WFC tortiously interfered with his contract.

The key issues on appeal were:

  • Whether the Andersons breached (supporting specific performance), or whether Messinger defaulted by not “tendering” payment on the closing date.
  • Whether WFC’s conduct amounted to “intentional and improper” interference, or was justified as good-faith protection of its own economic interests.
  • Whether attorney fees awarded as punitive damages against WFC were unconstitutionally excessive.

2. Summary of the Opinion

The Wyoming Supreme Court affirmed across the board:

  • Specific performance affirmed: The district court did not clearly err in finding the Andersons were unable or unwilling to close (largely due to fear of WFC litigation), which excused Messinger from formal tender on the closing date. The Andersons later breached by unilaterally terminating the purchase agreement without justification.
  • Tortious interference affirmed: The district court did not clearly err in concluding WFC intentionally and improperly interfered with Messinger’s contract—using the purchase right as leverage to extract covenant amendments, acting without good faith, and causing delay and damages.
  • Punitive damages affirmed: The award of attorney fees as punitive damages was not unconstitutionally excessive; due process does not impose a bright-line 1:1 ratio, and the district court’s analysis under Wyoming’s punitive-damages factors was sufficiently careful and supported.

3. Analysis

3.1 Precedents Cited

The court relied on and situated its rulings within established Wyoming standards for bench-trial review, equitable remedies, tortious interference doctrine, and constitutional limits on punitive damages.

A. Appellate review after bench trial

  • Leeks Canyon Ranch, LLC v. Jackson Hole Hereford Ranch, LLC, 2025 WY 63, ¶ 31, 569 P.3d 1120, 1130 (Wyo. 2025) (quoting Boot Ranch, LLC v. Wagonhound Land & Livestock Co., LLC, 2024 WY 136, ¶ 23, 560 P.3d 887, 893 (Wyo. 2024)): The opinion foregrounded the “clearly erroneous” standard for factual findings after a bench trial and de novo review for legal conclusions. This mattered because WFC attempted to reframe fact questions (e.g., causation, consent, good faith) as pure legal error.

B. Specific performance and breach

  • Ruppert v. Merrill, 2024 WY 113, ¶¶ 11-12, 558 P.3d 529, 534 (Wyo. 2024): Confirmed specific performance is equitable and discretionary, but available only upon breach.
  • Davis v. Harmony Dev., LLC, 2020 WY 39, ¶ 34, 460 P.3d 230, 241 (Wyo. 2020): Quoted via Ruppert for the foundational proposition that specific performance compels what the breaching party “should have done.”
  • Quinlan v. St. John, 201 P. 149, 150 (Wyo. 1921): Used for the traditional “time is of the essence” concept—timely performance is essential to require performance of the other party.
  • Morningstar v. Robison, 2023 WY 28, ¶ 25, 527 P.3d 241, 249 (Wyo. 2023): Supported the “ready, willing, and able” framework and the idea that sellers’ refusal to close can justify equitable relief for buyers.

C. Tortious interference with contract; improper interference; justifications

  • Sweetwater Station, LLC v. Pedri, 2022 WY 163, ¶ 31, 522 P.3d 617, 626-27 (Wyo. 2022) (quoting Downs v. Homax Oil Sales, Inc., 2018 WY 71, ¶ 21, 421 P.3d 518, 524 (Wyo. 2018)): Supplied the four-element test. WFC disputed only element (3): intentional and improper interference causing breach/termination.
  • Scheaffer v. State ex rel. Univ. of Wyo. ex rel. Bd. of Trs., 2009 WY 19, ¶ 51, 202 P.3d 1030, 1044 (Wyo. 2009): Cited to characterize “improper” interference as a fact question—undermining WFC’s attempt to secure de novo review.
  • Carlson v. Carlson, 775 P.2d 478, 484 (Wyo. 1989): Cited for the proposition that “good faith” protection of economic interests is a fact question.
  • Sunshine Custom Paints & Body, Inc. v. South Douglas Highway Water & Sewer Dist., 2007 WY 206, ¶ 23, 173 P.3d 398, 404 (Wyo. 2007): Quoted (via Sweetwater Station, LLC) for the privilege/justification doctrine: good-faith assertion of a legally protected interest may not be “improper.”

D. Punitive damages; attorney fees as punitive damages; constitutional limits

  • Prancing Antelope I, LLC v. Saratoga Inn Overlook Homeowners Ass'n, Inc., 2021 WY 3, ¶¶ 65-66, 478 P.3d 1171, 1187 (Wyo. 2021): Established that attorney fees can be awarded as punitive damages and reiterated Wyoming’s disfavor of punitive damages absent willful/wanton conduct.
  • Rosty v. Skaj, 2012 WY 28, ¶ 34, 272 P.3d 947, 958 (Wyo. 2012): Quoted (via Prancing Antelope I, LLC) for the “outrage”/willful-wanton threshold.
  • Jones v. Young, 2025 WY 130, ¶ 29, 580 P.3d 1026, 1035 (Wyo. 2025) (citing Sharpe v. Evans, 2025 WY 70, ¶ 14, 570 P.3d 731, 736 (Wyo. 2025)): Allowed the court to reach an unpreserved constitutional argument because a grossly excessive punitive award implicates fundamental due process.
  • State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416-25 (2003): Provided the federal due process framework and “three guideposts” for punitive damages; importantly, it rejected rigid ratio rules and spoke only in general terms (e.g., “single-digit” ratios as typically permissible).
  • Lompe v. Sunridge Partners, LLC, 818 F.3d 1041, 1061-74 (10th Cir. 2016): Used to illustrate de novo constitutional review; also distinguished because the 10th Circuit’s discussion of 1:1 ratios commonly occurs when compensatory damages exceed $1 million.
  • Farmers Ins. Exch. v. Shirley, 958 P.2d 1040, 1044 (Wyo. 1998): Anchored Wyoming’s seven-factor punitive-damages test (incorporating State Farm guideposts). The district court expressly applied these factors.
  • Aetna Life Ins. Co. v. Lavoie, 505 So.2d 1050, 1062 (Ala.1987): Quoted through Shirley for proportionality: punitive damages should bear a reasonable relationship to actual/likely harm.

3.2 Legal Reasoning

I. Specific performance: tender can be excused when closing would be futile due to the seller’s inability or unwillingness to perform

The Andersons’ appellate strategy was to invert default: because the contract said “time is of the essence,” and because Messinger did not close on November 6, 2017, they argued Messinger defaulted, allowing them to terminate later. The court rejected that framing by focusing on a practical and doctrinal point: a buyer’s tender obligation is not absolute when the seller cannot or will not perform.

  • The contract’s default clause made specific performance available to the buyer upon “default by Seller,” and limited the seller’s remedy upon buyer default.
  • The court accepted the district court’s factual finding that the Andersons did not want to proceed with closing while WFC’s asserted right loomed and WFC threatened litigation; therefore, a formal tender by Messinger would have been a “vain or useless act” in the face of the seller’s inability/unwillingness to deliver (the court supported this with treatise authority from 15 Williston on Contracts § 47:4).
  • Because the Andersons were not positioned to close, they could not credibly treat Messinger’s non-tender as buyer default. Their later unilateral termination in April 2019—after the parties had long treated the contract as still operative—was therefore a breach supporting specific performance.

On “ready, willing, and able,” the court declined to impose a rigid evidentiary requirement (such as documentary loan commitments). Messinger’s testimony that he prequalified for a loan was deemed sufficient for the factfinder, particularly under deferential review of credibility determinations.

II. Tortious interference: using an expired or unexercised purchase right as leverage to obstruct a sale can be “improper,” especially when not pursued in good faith

WFC challenged only element (3): intentional and improper interference causing breach/termination. The court’s analysis addressed three defenses: consent, causation, and good-faith economic interest.

  • Consent: WFC characterized a November 17, 2017 email from Messinger’s counsel as “permission” for a WFC purchase. The district court instead read the email as refusing to exit or assign Messinger’s contract until a separate Anderson/WFC deal actually closed, and the Supreme Court affirmed that reading as plausible and supported. The court found it “implausible” that Messinger consented to interference given his refusal to assign rights and his later push to sue WFC when negotiations stalled.
  • Causation vs. title-company waiver requirement: WFC argued that Wyoming Title and Escrow—not WFC—caused the delay by requiring a recorded waiver/release of the first right of purchase. The district court found the waiver requirement itself was triggered by confusion WFC created (invalid “exercise,” inactivity, and uncertainty), and that WFC then refused to sign a waiver to force covenant amendments. The Supreme Court held these were permissible factual inferences under the record and the prevailing-party lens.
  • Good-faith protection of economic interest: WFC invoked the privilege recognized in Sweetwater Station, LLC/Sunshine Custom Paints & Body, Inc.—that good-faith assertion of one’s own legally protected interest may not be improper. The district court, however, found WFC was not acting in good faith to protect the purchase right but to extract “a windfall profit” (covenant amendments “at no cost to itself”) after negotiations failed and after the exercise period lapsed. The Supreme Court treated good faith as a factual question and found no clear error.

Notably, the court did not hold that negotiating covenant amendments is inherently improper. The impropriety lay in the instrumentalization of the right of first purchase—purporting to exercise it, fostering uncertainty, then withholding waiver/clarity to obstruct closing unless unrelated concessions were granted.

III. Punitive damages: attorney-fee punitive awards may exceed compensatory damages without violating due process when justified under Wyoming’s factors

WFC’s constitutional argument sought a de facto rule: reduce punitive damages to match compensatory damages at a 1:1 ratio. The court declined for three reasons:

  • No bright-line ratio rule: State Farm Mut. Auto. Ins. Co. discourages gross excess and references “single-digit” ratios as typically acceptable, but does not require 1:1.
  • Distinguishing the federal cases: The court highlighted Lompe’s observation that 1:1 is often used when compensatory damages exceed $1 million—unlike here.
  • Anchoring punitive fees to litigation harm and deterrence: The district court applied Farmers Ins. Exch. v. Shirley’s seven factors and found WFC’s conduct to be willful and wanton and the “genesis” of the litigation. Because the punitive award was tied to the reasonable attorney fees generated by that conduct, the court found it reasonably related to the actual harm and appropriate for deterrence.

3.3 Impact

Although framed as application of existing doctrines, the opinion provides practical, litigation-relevant guidance likely to shape Wyoming real-estate and interference disputes in three ways:

  • Real-estate closings with “time is of the essence” clauses: Parties should not assume a buyer’s failure to tender on the closing date automatically equals default. If the seller is not prepared to convey (or makes closing futile due to threatened third-party claims), tender may be excused, preserving the buyer’s specific-performance remedy.
  • Neighbor rights (first right of purchase/right of first refusal) as leverage: Holders of such rights must act clearly, timely, and in good faith. An ambiguous “exercise,” delay, or refusal to clarify/waive—used to extract unrelated concessions—can support tort liability for interference.
  • Punitive damages based on attorney fees: Wyoming courts retain flexibility to use attorney-fee awards as punitive damages when the defendant’s conduct drives litigation costs and deterrence is a key policy need. Defendants cannot rely on a categorical 1:1 ratio cap as a due process shield.

4. Complex Concepts Simplified

  • “First right of purchase” / “right of first refusal”: A covenant right allowing a neighbor to buy the property on specified terms within a specified period after the owner receives an offer. Here, the covenant required agreement within 60 days after the property was offered for sale.
  • “Time is of the essence”: Timing is a material contract term. Normally, missing a deadline can be a breach. But timing rules do not reward a party who cannot perform or makes performance futile.
  • Tender (in closing context): The buyer’s presentation of performance—typically funds and signed documents—showing readiness, willingness, and ability to close. Tender can be excused where it would be useless (e.g., the seller won’t/can’t convey).
  • Specific performance: An equitable remedy compelling the seller to convey the property rather than merely paying damages—common in real property because land is considered unique.
  • Tortious interference with contract: A tort claim against a third party (not one of the contracting parties) who intentionally and improperly causes disruption of a contract, resulting in damages.
  • Punitive damages and due process: Punitive damages punish and deter, but the Constitution forbids “grossly excessive” punishment. Courts evaluate reprehensibility, proportionality, and comparability to similar cases (the State Farm guideposts), implemented in Wyoming through the Shirley factors.
  • Joint and several liability (as used in the fee award): The plaintiff may collect the jointly awarded amount from either defendant, leaving allocation issues to defendants between themselves.

5. Conclusion

2026 WY 42 affirms three consequential principles for Wyoming practitioners:

  • A buyer’s closing-date tender may be excused—and specific performance may remain available—when the seller is unable or unwilling to close and tender would be futile.
  • A neighbor’s first right of purchase is not a free-floating bargaining chip: using it (or the uncertainty it creates) in bad faith to obstruct a sale and extract unrelated concessions can constitute intentional and improper interference.
  • Attorney fees awarded as punitive damages can survive due process scrutiny without a mandatory 1:1 ratio, particularly where the defendant’s willful conduct is found to be the “genesis” of extensive litigation and the trial court applies Wyoming’s Shirley factors with care.