Roussalis v. Wyoming Medical Center, Inc.

Citation4 P.3d 209
Decision Date20 April 2000
Docket NumberNo. 96-219.,96-219.
PartiesLouis J. ROUSSALIS, M.D. and Jerry Lee Youmans, M.D., Appellants (Plaintiffs), v. WYOMING MEDICAL CENTER, INC., a Wyoming corporation, Appellee (Defendant).
CourtUnited States State Supreme Court of Wyoming

Representing Appellants: Mark W. Gifford of Gifford & Bonner, Casper, Wyoming.

Representing Appellee: Michael J. Sullivan of Brown, Drew, Massey & Sullivan, Casper, Wyoming; and Raymond B. Hunkins of Jones, Jones, Vines & Hunkins, Wheatland, Wyoming.

Before LEHMAN, C.J., and THOMAS, MACY, GOLDEN and TAYLOR,1 JJ.

GOLDEN, Justice.

Dr. Louis J. Roussalis and Dr. Jerry L. Youmans (the doctors) appeal from the district court's summary judgment order in favor of the Wyoming Medical Center, Inc. (WMC) in the doctors' action for breach of contract, anticipatory repudiation, and tortious breach of the implied covenant of good faith and fair dealing arising from the failure of the parties' transaction in which the doctors would give their existing medical office buildings to WMC in exchange for a new medical office building to be constructed for them by WMC. We reverse and remand.

Having adopted a plan for improving, renovating, and updating Memorial Hospital of Natrona County in Casper, Wyoming, which it operates, WMC determined that a westward expansion of the hospital was appropriate. Key to that westward expansion was WMC's acquisition of land west of the hospital, on which the doctors' medical office buildings were located. Following several months of negotiation and consideration of several draft documents, the parties signed a four-page written document entitled Letter of Intent—Section 1031 Exchange Agreement prepared by WMC. Under the terms of this document, which the doctors contend was later orally modified in several respects, WMC promised to build and convey to the doctors a new medical office building to be located on land to the south of the hospital and the doctors promised to convey to WMC their existing medical office buildings and the land on which those buildings were located. The plan was for the new medical office building to be constructed first, then the doctors would move from their existing buildings into the new building, the existing buildings would be demolished, and the hospital expansion construction would encompass that land. Upon the strength of the parties' executed document, WMC secured approval of a $31.8 million revenue bond issue to finance the hospital expansion construction. Site preparation for the new medical office building began and was completed, and construction of that building began. Differences concerning the cost of and enhancements to that building later developed between the parties. After several months into the project, WMC halted construction. The parties discussed but were unable to resolve their differences. The doctors filed suit for specific performance and later amended their complaint by deleting that claim and asserting the money damages claims of breach of contract, anticipatory repudiation, and tortious breach of the implied covenant of good faith and fair dealing.

Following discovery, WMC moved for summary judgment on all claims. With respect to the doctors' breach of contract claim, WMC's primary ground for summary judgment was that a binding agreement had not been formed because the parties failed to achieve mutuality of assent on the project's scope and cost. As a precaution, WMC also raised alternative summary judgment grounds should that primary ground fail. These alternative grounds were: (1) oral modifications to the alleged agreement, including an increase in the size of the building (from 9,500 square feet to 11,9002 square feet), the addition of numerous luxury features, and a nearly finished full basement instead of a roughed-in full basement, failed for lack of consideration; (2) the alleged modified agreement was not in writing and was, therefore, barred by the statute of frauds; (3) the alleged agreement was invalid for unconscionability because the doctors' interpretation of the alleged agreement imposed no practical restrictions on the cost of the new building and the high quality of the new building's features; (4) the parties rescinded the alleged agreement, but if rescission did not occur, then the elements of promissory estoppel in a rescission context were satisfied; and (5) the doctors' demands regarding the new building's design and high quality features constituted a prior material breach of the comparability provision in the agreement and of their duty of good faith and fair dealing arising from the alleged agreement.

With respect to the doctors' anticipatory repudiation claim, WMC's ground for summary judgment was that WMC's conduct did not evince a distinct, unequivocal and positive intention to refuse performance in the future. With respect to the doctors' tort claim for the breach of the implied covenant of good faith and fair dealing, WMC's ground for summary judgment was that the tort claim has been recognized only in two contexts, long-term employment contracts and first-party insurance contracts, and should not be recognized here and the predicate special relationship of trust and reliance between the parties upon which the claim rests was missing.

The district court granted WMC's summary judgment motion, ruling simply that there was no contract because "[t]here was no meeting of the minds as to the nature of the project, the cost of the project, or how the cost was to be determined." Because each of the doctors' claims was predicated on the existence of the agreement, the district court's ruling that no agreement existed effectively disposed of all the claims.

Recognizing that this Court can affirm a summary judgment upon any proper legal ground, even if different from the ground on which the district court's judgment rests, the parties have discussed in their briefing and oral argument to this Court not only the primary ground but also each of the alternative grounds advanced by WMC below. Necessarily, therefore, we must consider each of the grounds briefed and argued in order to provide a complete review of this appeal.

As we begin our review, we remember that, in another summary judgment setting, a wise jurist not long ago observed:

It is difficult to decide, in Holmes' phrase, where the axe should fall, because my brothers and I are expressing value judgments.
We are governed by beliefs about facts more than by abstract rules. We derive these beliefs more from practical standards and views about the allocation of competence between judge and jury than by logically determinable or empirically observable data. We are deciding, I suppose, what bubbles—intellectual, philosophical and jurisprudential—are at the moment most in need of pricking.

Deepwater Investments v. Jackson Hole Ski Corp., 938 F.2d 1105, 1112 (10th Cir.1991) (Aldisert, Circuit Judge, dissenting).

Because the question whether the parties intended an agreement is a factual one, not a legal one, and, except in the clearest cases, the question is for the finder of fact to resolve; because we review the evidence submitted in connection with a summary judgment disposition in the light most favorable to the non-moving party, here the doctors; and because we find the existence of genuine issues of material fact about the parties' intention and about the other matters relating to WMC's alternative grounds for summary judgment, we determine that our proper course is to reverse the district court's summary judgment and remand this case to that court for trial.

ISSUES

The doctors present this single issue:

Do the materials submitted to the district court on Appellee's motion for summary judgment show the existence of any genuine issue of material fact as to the existence of a contract between the parties?

WMC presents these issues for our review:

1. Whether the district court erred in granting summary judgment for defendant-appellee Wyoming Medical Center, Inc. ("WMC") on the grounds that there was no meeting of the minds of the parties.
2. Whether the district court's decision can be sustained on any of the alternative grounds for summary judgment presented to the district court, including:
a. Lack of consideration;
b. Unconscionability;
c. Rescission;
d. Statute of Frauds;
e. Defects in appellants' claims for breach of the duty of good faith and fair dealing, and anticipatory repudiation.
f. Interference.
FACTS

We believe that a detailed objective recitation of the facts in a chronological context is necessary to an understanding of our resolution of the issues. In their briefs to this Court, the parties have each included so-called statements of facts which we have found largely to be argumentative in nature and content, necessitating on the Court's part a time-consuming, arduous, and detailed examination of the record. In their statements of facts, the parties in essence ask this Court to weigh the facts. It is worth remembering that this Court on summary judgment does not weigh facts; it determines only if genuine issues of material fact exist.

As required by our standard of review for summary judgment, we view the record, and the reasonable factual inferences drawn from it, in the light most favorable to the doctors as the non-moving party. We have arranged the facts into three separate phases: (1) Pre-Letter of Intent actions; (2) Letter of Intent; and (3) Post-Letter of Intent actions.

1. Pre-Letter of Intent Actions.

WMC is a non-profit corporation organized by the county to operate Memorial Hospital of Natrona County in Casper, Wyoming. WMC is run by a board of directors (Board) appointed by the medical staff, the community, and county commissioners. The Board is overseen by the Board of Trustees of Memorial Hospital of Natrona County (Trustees), a board appointed by the Board of County Commissioners of Natrona County. WMC leases the land, buildings and equipment of the hospital from the Trustees in...

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