Case Title: ROUSSALIS v. WYOMING MED. CTR., INC.

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2000-04-20T00:00:00Z

Document:
ROUSSALIS v. WYOMING MED. CTR., INC.2000 WY 984 P.3d 209Case Number: 96-219Decided: 04/20/2000Supreme Court of Wyoming
 
LOUIS J. ROUSSALIS, M.D. 
and JERRY LEE YOUMANS, M.D., Appellants (Plaintiffs), v.WYOMING MEDICAL CENTER, INC., a Wyoming corporation, 
Appellee (Defendant).

Appeal from the District 
Court of Natrona County Honorable Nancy J. Guthrie, 
Judge.

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,* 
JJ.

* Chief Justice at time of 
oral argument; retired November 2, 1998.

GOLDEN, 
Justice.

[¶1] 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.

[¶2] 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.

[¶3] 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 11,9001 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.

[¶4] 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.

[¶5] 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.

[¶6] 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.

[¶7] 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.

[¶8] 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.

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

[¶10] 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

[¶11] 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?

[¶12] 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

[¶13] 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.

[¶14] 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.

[¶15] 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 accordance with an operating lease.

[¶16] In 1986, 
the Board adopted a ten-year plan for improving, updating and renovating the 
hospital which required acquisition of only one parcel of land to the east of 
the hospital. In 1992, the Board hired Lin Carriger as its president and chief 
executive officer. Carriger envisioned transforming WMC into a regional medical 
center working in partnership with an integrated statewide network of physicians 
and persuaded the Board to build a $45 million acute care facility to be 
constructed on new land, adjacent to the existing hospital site. It was 
determined that the greatest cost savings would be realized by a westward 
expansion of the hospital which required the acquisition of several parcels of 
privately owned land. Bonds would finance the expansion. In order to secure 
approval for the bonds from the county and a top-rated underwriting firm, WMC 
had to secure contracts for the purchase of these properties as soon as 
possible. An additional financing concern was seizing an opportunity to save on 
interest costs by implementing construction within a certain time period. WMC 
decided to take advantage of the available interest costs savings and scheduled 
the expansion construction accordingly. The schedule could not begin, however, 
until WMC acquired the necessary properties. Two of these properties belonged to 
the doctors, each of whom had a medical office building on the properties which 
housed their separate medical practices.

[¶17] In early 
November, 1994, Carriger and WMC counsel, Richard Williams, met with the doctors 
and their accountant to discuss concepts involving WMC's acquisition of the 
doctors' properties and WMC's providing comparable office space and other 
remuneration to the doctors in exchange. WMC offered to purchase the doctors' 
properties but the doctors did not want to sell because their current offices 
best served their particular circumstances. Dr. Youmans suffers from 
debilitating arthritis. The location of his offices permitted him to make his 
hospital rounds by just crossing the street. A move would have required his 
driving to the hospital and parking, activities which are difficult for him. Dr. 
Roussalis had built ten years earlier an expensive, state-of-the-art medical 
office building because he wanted to work in comfort and was able to rent out 
part of it and receive good income; both doctors planned to sell their buildings 
eventually to finance their retirement. Carriger convinced the doctors that they 
were standing in the way of what was best for the hospital and promised them 
that he would build them a replacement building which would not only be 
comparable to Dr. Roussalis' offices, but would provide better facilities and 
access.

[¶18] On 
December 21, 1994, WMC counsel Williams described in a letter to the doctors the 
various ideas discussed by the parties to that date about the possible exchange, 
the doctors' goals in that regard, and a six-point offer he was prepared to 
recommend that WMC make to them. On December 27, 1994, WMC counsel Williams, 
after a discussion with Dr. Youmans, wrote the doctors another letter in which 
he clarified several issues in his December 21 letter. Williams then drafted a 
succession of proposed letters of intent on February 8, 1995, and February 28, 
1995, each of which contained WMC's offer to the doctors. At WMC's board meeting 
on February 8, the Board authorized its administration to enter into an exchange 
agreement with the doctors for a new 8,000 square foot office building with a 
cost cap of $150 per square foot. The doctors responded that, before they would 
agree to a cost cap, they wanted to see the final plans and specifications and 
design of the new office building so they could determine what they were 
agreeing to.

[¶19] Carriger 
reported the doctors' position on the cost cap to WMC's board. In his February 
28 memorandum to the doctors accompanying a revised draft of a letter of intent, 
WMC counsel Williams stated:

Attached is the revised 
letter agreement. . . . I have struggled with some way to incorporate a maximum 
construction cost, which was a concern of the Board, but I don't see any way to 
do that at this point in time, so I need to proceed without that figure in the 
agreement.

[¶20] Carriger 
and Williams had discussed that potentially the final plans and specifications 
and design drawings of the doctors' new medical office building would not be 
ready for four to six months. Carriger did not want to wait that long. As 
explained by WMC counsel Williams, WMC was working on the revenue bonds and was 
in a political place where we were trying to - to gather the support of the 
medical staff for the new hospital, which was a sore political issue because of 
prior stops and starts. Moreover, WMC needed to have a written agreement or 
commitment of some type for the land on which the expansion would occur in order 
to be able to make its presentation to the rating agencies and bond insurers. 
The bond people were putting time pressure on WMC. If WMC moved quickly it could 
save several million dollars on interest expense because of attractive interest 
rates. According to WMC counsel Williams, we talked at the board level about 
taking a leap of faith, if you will, to - that we could do the [doctors'] 
transaction without having that safety hook [of a cost cap]. As Williams 
explained in October, 1995, in a prepared press release for WMC, [WMC] took a 
good faith business risk in proceeding with the construction of the new office 
building prior to having the final cost determined, in order to facilitate the 
construction schedule of the new hospital and to take advantage of the favorable 
bond market. WMC decided to go forward with the agreement with the doctors 
without a cost cap. Williams would later explain:

The concept of the 
transaction has always been that the replacement building would be the type of 
building that Dr. Roussalis would build if he were building a building of the 
same type of state-of-the-art quality (technologically and aesthetically) which 
was included in his current office when he built it 10 years ago. Dr. Roussalis 
built a very nice, and very expensive, building ten years ago ($132/ft.). As you 
can see, this is somewhat of a different concept than a straight replacement 
building, where the limits are clear that only those features that are in the 
current building may be included in the new building. I appreciate that this is 
a very open-ended concept but I can tell you that this was the essence of our 
agreement, and was the critical factor in the physicians agreeing to relocate. 
That is the intent and spirit of the letter agreement.

2. Letter of 
Intent.

[¶21] The 
parties signed the document2 from which this lawsuit arises on 
March 2 and 3, 1995. The opening and closing paragraphs of this document contain 
language which addresses the legal effect of the parties' signing the document. 
The opening paragraph reads:

In executive session on 
February 8, 1995, the Board of Directors of Wyoming Medical Center (WMC) 
authorized the following offer to be extended to you for the exchange of your 
existing medical office buildings for a new office building, to be constructed 
by Wyoming Medical Center, which exchange would qualify under Section 1031 of 
the Internal Revenue Code. By signing this letter of intent, you are agreeing to 
a legally enforceable contract for this exchange upon successful and acceptable 
completion of all of Wyoming Medical Center's obligations as described in this 
letter.

[¶22] The 
closing paragraph reads:

This agreement is binding 
in all of its aspects upon WMC and Physicians and their respective heirs, 
successors and assigns. By the signature below, Wyoming Medical Center, Inc. 
intends to be legally bound by the terms and conditions set forth in this 
letter. If you agree to this exchange arrangement, please execute this letter of 
intent in the space provided below.

Very truly yours, /s/ 
Lindel L. Carriger Lindel L. Carriger President, Wyoming Medical 
Center

[¶23] With 
respect to the inclusion of the first sentence of this closing paragraph which 
added the doctors' heirs, successors and assigns, WMC counsel Williams, who 
wrote the document, as well as the earlier drafts of the document, later 
explained:

[A]s I was doing the last 
draft, it popped into my mind what would happen if Dr. Roussalis died halfway 
into the building or if Dr. Youmans died. I wanted it clear that we wouldn't 
have half a building sitting there with a partial owner that never agreed to 
anything.

[¶24] Under the 
heading New Medical Office Building, in numbered paragraphs 1, 2, 3, 4, 5 and 9 
of the document, the parties described the nature of the building 
project:

1. NEW MEDICAL OFFICE 
BUILDING

1. WMC will contract with 
Michael Gurkin, d/b/a Gurkin Construction Co., to construct an approximately 
9,500 square foot medical office building, with a full roughed-in basement, to 
be located on Lots 1,2,3 and 4, White's Addition to the City of Casper, and Lots 
17,18,19 and 20, Natrona Heights Addition to the City of Casper, which lots 
comprise approximately 48,000 square feet. This building size represents an 
equivalent amount of square footage from your existing buildings, as adjusted 
for ADA compliance, space required for the pilot computer project, and 
additional stairway and related office requirements. This eight-block area is 
located on Third Street, between Washington and Melrose Streets. It is 
acknowledged that the City of Casper will require an alley to be located on the 
southernmost portion of this parcel, extending at least from Washington Street 
to the existing north/south alley.

2. The floor plan of the 
new building, including the location of all suites, common areas and exam rooms, 
and the parking configuration for physicians, staff and patients, shall be at 
the discretion and direction of Drs. Roussalis and Youmans (Physicians), and 
shall be based on architectural and/or engineering drawings which are approved 
by Physicians. It is anticipated that physician, and possibly staff, parking 
will be located in the rear of the new facility. All parking will have adequate 
lighting (photo cell or comparable) for safety and aesthetic 
purposes.

3. The specific features 
which will be incorporated into the design and construction of this new medical 
office building are listed on Exhibit A to this letter of intent. It is the 
general intent of the parties that the new building will be of comparable 
quality to the building which is currently occupied by Dr. Roussalis, i.e. that 
the new building will be a replacement building of the same high quality and 
state-of-the-art which was built into the existing building owned by Dr. 
Roussalis. The list on Exhibit A is not meant to be exhaustive of all features 
of the new building, but is representative of the types of high quality features 
which the new facility will incorporate.

4. The quality of the 
interior of the building shall be equal in quality to the quality of the 
interior space of Dr. Roussalis' current building, including woodwork, 
cabinetry, carpet and general finish and interior furnishing. Tom Judy will 
direct the interior design, and Martin Sheldon or a similarly qualified finish 
expert will be in charge of the woodwork in the new 
building.

5. The exterior design of 
the new building will be of comparable quality to Dr. Roussalis' existing 
building, and the design for the exterior shall be acceptable to and approved by 
Physicians.

* * 
*

9. As further 
consideration for this exchange, WMC agrees to incorporate into the design and 
construction of the new facility a state-of-the-art computer system, which will 
be networked into the new information system which WMC is in the process of 
purchasing. Physicians' new facility shall serve as a pilot project for 
integrating physicians' private practices into one information system. Included 
in this information support component will be all necessary hardware and 
software, including upgrades, and this support will be provided at no cost to 
Physicians until such time as the product is developed to the point of being 
commercially available to Casper physicians in general, at which time Physicians 
may be charged only for any additional upgrades of the system then in 
place.

[¶25] Numbered 
paragraph 6 of the document addressed aspects of coordinating the architectural 
design, WMC's payment for all design work, and identification of contractor 
Gurkin as the doctors' representative in both the design and construction phases 
of the project. Numbered paragraph 7 addressed the parties' warranty deed 
transfers of their respective properties and closing matters which would occur 
upon completion and the doctors' written acceptance of the building. Numbered 
paragraph 8 of the document addressed WMC's payment of the doctors' moving costs 
and reimbursement of the doctors' revenue loss attributable to the relocation of 
their practices. Although several other provisions of the document need not 
concern us,3 another provision that is pertinent 
was the guaranteed buy-back provision under which WMC agreed to purchase the new 
building from the doctors at any time during the first twenty years after the 
exchange for a purchase price equal to the greater of the actual cost of the new 
building, including the land, or $1.25 million.

[¶26] We also 
note what the document does not contain. The document does not contain a 
limitation or cost cap on the building's cost; and the document does not contain 
a provision that the parties will agree in the future on a construction cost 
figure.

3. Post-Letter of Intent 
Actions.

[¶27] After the 
doctors and WMC's authorized representatives signed the document, WMC counsel 
Williams reported to the WMC board that signed contracts with [the doctors] have 
been secured. Demolition of the existing buildings [on the land south of the 
hospital] will begin in mid-April and construction of the new office building 
will begin in June.

[¶28] The 
parties' signing of the document in early March, 1995, triggered a number of 
events as the project moved forward. Looking at a construction period of about 
one year and a completion date of June, 1996, WMC's Carriger on March 3, 1995, 
wrote Michael Gurkin informing him that WMC and the doctors had contractually 
agreed to exchange the properties . . . upon WMC completing construction of a 
new medical office building; WMC's letter to Gurkin represents [WMC's] legally 
binding commitment to Gurkin Construction to enter into a contract or contracts 
for all of the construction work in connection with this project; [u]pon 
completion of the necessary design and engineering work, [WMC] would anticipate 
signing a standard AIA Document A111 construction contract . . . which would 
contain Gurkin Construction's guaranteed maximum price for the project; and WMC 
authorizes Gurkin Construction to negotiate a contract with Anderson De Bartolo 
Pan for the design of the project, and to authorize that entity to begin the 
design work. WMC believed that the June 1996 completion date was critical timing 
in the building schedule of the new hospital (in order to avoid building over 
two full winters). It is interesting to note that WMC had earlier hired Anderson 
De Bartolo Pan near the end of January, 1995, and that design firm had furnished 
WMC some preliminary drawings before Carriger wrote his letter to Gurkin. 
According to Williams, by March 3, Anderson De Bartolo Pan was working 
mightily.

[¶29] We note 
here that, from the record, and the reasonable inferences drawn therefrom, it is 
evident that this project proceeded differently from the way most construction 
projects proceed. According to Gurkin, most projects are - are drawn and built - 
or drawn and designed a year before they are bid. We were in a situation where 
it was all together. He talked to WMC about this, get the plans drawn, let me 
give you a price, and then build the building. According to 
Gurkin,

[¶30] [f]rom the 
beginning, WMC pushed for an early completion of the building. This meant 
expending substantial funds in design and construction costs before the final 
plans and specifications were prepared. On at least three occasions between 
January and July of 1995, I asked Dick Williams if it wouldn't be better to 
delay actual construction of the building until the design and specifications 
were finalized, so that a cost estimate could be prepared. On each occasion, 
Dick Williams instructed me to proceed with the project so as to be completed as 
early as possible.

[¶31] Sometime 
in March, 1995, Carriger approved an increase in the square footage of the 
medical office building from about 9,500 square feet to about 11,900 square 
feet. Several pieces of evidence bear this out and explain the increase. In his 
deposition, WMC's Williams testified that Carriger told me that he had approved 
the addition of a connecting space in between . . . the doctors' . . . suites 
and the rental suites. In his deposition, Dr. Roussalis testified that Carriger 
had approved the size increase, explaining that a substantial amount of the 
increase, about 1,100 to 1,300 square feet, was the result of enclosing the 
connecting space and was driven by safety considerations. According to Dr. 
Roussalis, early in the design drawing phase the architects (Anderson De Bartolo 
Pan) and the doctors realized that the unenclosed connecting space would cause a 
wind tunnel effect which was considered dangerous. The solution arrived at was 
to enclose the space; that enclosed area became an atrium or walkway. The 
remaining amount of size increase was attributable to some necessary changes in 
the tenant area and the addition of a canopy. The site plan agreement between 
WMC and the City of Casper, dated July 18, 1995, references an 11,833 square 
foot building. Mr. Gurkin's letter to WMC's Williams dated July 19, 1995, 
references an 11,900 square foot building. Upon receiving WMC's authorization to 
resume construction on July 19, 1995, Mr. Gurkin poured an 11,900 square foot 
foundation. In a letter to Williams dated August 25, 1995, Peter Trice, of the 
architectural firm Anderson DeBartolo Pan, explained the size increase in this 
way:

Program 
Issues

In our letter to Mike 
Gurkin dated February 23, 1995 (copy attached), we had reviewed the building 
program with respect to the tenant spaces. This document identifies the 
rationale for increasing the building's tenant spaces from 8,500 sf to 9,890 sf. 
During the design process, certain program elements were added such 
as:

Toilet, Mrs. Rousallis' 
Office 30 sf. Exams Rooms Enlarged 80 sf. Mrs. Youmans' Office Enlarged 25 sf. 
One Procedure Room Enlarged 30 sf. Staff Lounge Enlarged 25 
sf.

Total 250 sf. x 1.35 337 
sf.

[¶32] The final 
build program for tenant spaces was therefore 10,227 sf. (9,890 + 337). The 
actual design required 10,188 sf to accommodate these services. This is less 
than .5% variance from the program.

[¶33] The 
remaining square footage is for building circulation and support 
space.

[¶34] Stairs 370 
sf. Elevator 60 sf. Lobby 1,194 sf.

[¶35] Typically, 
multiple tenant medical office buildings require 20-25% additional square 
footage to allow for building support space, circulation and mechanical spaces. 
For this clinic, the final design required an additional 1,624 sf. or about 16% 
(excluding the mechanical space located in the basement). When this number is 
added to the revised tenant space program, the gross building square footage 
equals 11,812 sf. extremely close to the final design amount of 11,800 
sf.

[¶36] In a 
prepared statement dated October 5, 1995, which WMC issued to media 
representatives, WMC explained the size increase:

As the design progressed, 
the size of the building was increased, to take into account the requirements of 
the Americans With Disabilities Act and a pilot computerization project, as well 
as increased common areas which arose as a result of combining medical offices. 
Additionally, WMC agreed to a full basement, since there appeared to be at that 
time a probability that WMC would in the future re-acquire the property, and 
that additional space would be useful. The final size of the building was 11,800 
square feet, with a full basement.

[¶37] Finally, 
in his affidavit dated November 13, 1995, WMC's counsel Williams stated, in 
relevant part:

After signing the Letter 
of Intent, WMC cooperated with [the doctors] by, among other things, expanding 
the size of the New Building beyond the 9,500 square feet provided for in the 
Letter of Intent, to 11,900 square feet.

[¶38] Near the 
end of March or in early April, 1995, Williams participated in presentations to 
bond rating agencies and bond insurers in connection with the anticipated 
approval and issuance of revenue bonds to finance a substantial part of the 
hospital expansion project.

[¶39] On April 
17, 1995, WMC's counsel Williams received Gurkin's rough preliminary estimate of 
construction cost of the medical office building. The estimate was $2.1 million 
based upon a 9,850 square foot building, or about $215 per square foot, 
apparently not counting the full basement. On April 21, 1995, WMC signed a 
letter agreement with Gurkin which confirmed WMC's obligation to pay the 
architectural and engineering costs of the medical office building and Gurkin's 
associated costs, expenses and billing. On April 25, 1995, WMC held a press 
conference to announce the hospital expansion project and the doctors' new 
medical office building. At WMC's request, Dr. Roussalis attended and spoke 
briefly.

[¶40] On May 2, 
1995, the county commissioners of Natrona County approved proceeding with the 
revenue bond issue for financing the hospital expansion. On May 10, 1995, WMC 
board members learned that the revenue bond issue matters were progressing well 
and the plans for the doctors' new medical office building were nearing 
completion. On May 16, 1995, the WMC board and the hospital's trustees approved 
a resolution authorizing the revenue bond issue. That evening, the county 
commissioners approved the revenue bonds. On May 22, 1995, WMC's Williams signed 
a site application plan which was then submitted to the City of Casper, showing 
that WMC, as owner, was constructing a Medical Office Building for Dr.'s 
Rousallis [sic] and Youmans on eight lots and listing Gurkin as owner's 
authorized representative. On May 26, 1995, Gurkin wrote to Williams informing 
him that the projected costs for architects and engineers to complete the design 
of the doctors' building were more than $225,000. On May 30, 1995, Williams 
signed a $346,262 work authorization for Gurkin to proceed with demolition of 
the houses located on the eight lots where the doctors' new building would 
sit.

[¶41] In early 
June, 1995, the $31.8 million revenue bond issue was finalized, and the proceeds 
were received by Norwest Bank Casper, trustee of the bond funds. From March 
through the summer months, 1995, the doctors were putting in countless hours on 
the design of the new clinic. According to Gurkin, he had night meetings with 
the doctors at which they would go through every room and make sure that each 
room had in it what it was supposed to function as. Gurkin commented that [t]he 
doctors were buried. They were to the point where they couldn't keep up with me, 
and I was loading them up. He emphasized [a]nd we are loading them. When I say 
loading them,' I mean we are loading them. In the design phase and in the early 
stages, Gurkin met often with WMC's Williams to keep him 
informed.

[¶42] In early 
June, 1995, Gurkin proceeded with demolition work to clear the medical office 
building site. Excavation of the basement soon followed.

[¶43] On June 
26, 1995, Carriger died in a river rafting accident during a WMC executive 
retreat. Margo Bean, chairperson of the WMC board and a signatory of the March 2 
document, assumed Carriger's responsibilities.

[¶44] WMC and 
the City of Casper signed a site plan agreement for the doctors' new building 
dated July 18, 1995, showing an 11,833 square foot building. On either July 18 
or 19, 1995, Margo Bean and WMC counsel Williams discussed the need to get a 
handle on what the cost of the building was going to be. Bean directed Williams 
to ask Gurkin for an estimated cost of the building. Williams talked to Gurkin 
at the building site. Williams told Gurkin that he (Williams) was in a situation 
where Bean and the WMC board wanted to get a cost figure on the building. Gurkin 
told him that, although he did not have enough information to give him a cost 
figure because the final design and specifications were several weeks away, he 
would put something together based on what information he had. Gurkin also told 
Williams that he (Gurkin) needed to know how to proceed because he would be 
spending $100,000 in the next week; the foundation was going to be poured soon 
and substantial money would be going in the ground. Gurkin responded quickly to 
Williams' request for a cost figure with a letter to Williams dated July 19, 
1995, referencing their meeting at 9:00 a.m. earlier that day. The full text of 
the letter reads:

Dear Mr. 
Williams,

After I left our meeting 
today I went to see Gorder/South to see at what stage of development the plans 
were. Our target date has been and continues to be August 3 for the completion 
of plans for the medical building for Drs. Youmans and Roussalis. In our meeting 
this morning you had indicated to me that you need the best idea on cost at this 
time. If we receive plans on August 3, I anticipate that Gurkin Construction Co. 
can give you a firm price by August 21. At this time changes are being made and 
all approval in design, cabinetry, and interior finish have not been done. Our 
mechanical, electrical, interior design, and outside improvements are between 
70% and 80% complete. Our interior layout is in the approval stage for Drs. 
Youmans and Roussalis to overview before final documents and drawings can be 
completed.

It would be very 
difficult at this time, if not impossible, for me to shoot from the hip with a 
price. I will give you the information I feel might best help you with the data 
on the medical buliding [sic] at this time. The building consists of 
approximately 11,900 square feet with two outside canopies. The downstairs 
basement is approximately 11,900 square feet also. The basement has a finished 
ceiling and finished interior walls with outside walls exposed. It has no 
flooring in the basement. The type of medical facility this is consists of 
fairly small offices and working areas and the cost per square foot has been 
increased due to the quality of each office, exam room, and work area. The 
electrical and plumbing has been increased substantially to accomodate [sic] the 
facility because of lab rooms, procedure rooms, and exam rooms throughout. The 
tenants' side is very basic but nice. It is state of the art. The building as it 
has been designed and developed to this point is of high quality throughout. It 
will not be inexpensive to build as the quality throughout is maintained on both 
the doctors' side and the tenants' side. My best guess at this time, with the 
plans still in progress, is to square-foot the project based on past projects 
built and interpolate costs as I see them. It is a reasonable guess that costs 
are as follows:

11,900 S/F $180.00 per 
S/F main floor - $2,142,000 11,900 S/F $45.00 per S/F basement - 535,500 
$2,677,500

I feel that $2,677,500 is 
a reasonable guess at this time based on the quality and the large area with so 
many small exams, med labs, and offices. There are fifty-four substantial items 
of cost in this project. If each item of cost can be affected either in savings 
or upgrade, this project can flow either up or down $5,000 per item. At this 
time there is no way to pin down each item's cost until the plan, all its 
changes and approvals are complete. It is always something to consider that a 
project this size can have and should have an override of 5% to 10% for changes 
as the projects develops. With a complete set of plans and no changes, Gurkin 
Construction Co. will build this project for the exact amount agreed 
upon.

I hope this helps in some 
way to give you information you have asked for. If you can give the project a 
budget, I am willing to meet that budget but the approval for that would have to 
come through Drs. Youmans and Roussalis. I would be glad to meet with you or 
anyone on your staff to find ways to work with the hospital, while at the same 
time keeping the doctors' interest in meeting the requirements that they have 
placed on me. Please let me know if you have any further questions or if I can 
be of further assistance to get this project underway.

[¶45] Although 
it is unclear, Gurkin possibly met again with Williams that day before 
delivering the letter to him, and Gurkin orally gave Williams the $2,677,500 
reasonable guess. Williams asked him what the consequences would be of shutting 
down the project until the WMC board could meet. Gurkin replied that he might 
lose his scheduling advantage, his place in the schedule for the various 
subcontractors, and that it could set him back as much as ten days. Williams 
directed Gurkin to shut down the project.

[¶46] Around 
5:00 p.m. that afternoon, Williams and the WMC board held an emergency board 
meeting. Williams distributed copies of Gurkin's letter to all of the board 
members. He informed the board members that he had shut down the project. A 
lengthy discussion followed. The board also reviewed the March 2 Letter of 
Intent. According to Williams, board member Dallas Laird spoke about three 
quarters of the meeting, making comments to the effect that we knew that this 
was going to be an expensive building; that the Letter of Intent was very 
open-ended; that we had drafted the Letter of Intent, it would be construed 
against us; that until we got the final price and final specs and had someone - 
some outside source prepare [sic] [compare] what was in the final plans and 
specs with what was in the Letter of Intent, that we weren't in the position to 
make a final decision. He also wanted to pursue getting an outside opinion on 
the inurement issues, because his argument was that we signed the Letter of 
Intent and should - should comply with it. And unless we can say that there is 
something in the $2.6 million that doesn't comply with the Letter of Intent, we 
should go forward with the project.

[¶47] Dr. Bailey 
and Dr. Maddy both talked about keeping our eye on the hospital 
expansion.

[¶48] According 
to Williams, [t]he ultimate outcome of the meeting was that Dallas [Laird's] 
suggestions were accepted. The board told Williams to restart the project. 
According to Williams, the board did not discuss what amount of money it was 
prepared to spend on the project. Williams called Gurkin that night and told him 
to resume full operations on the project. Williams sent Gurkin a letter dated 
July 21, 1995, confirming his directions to resume operations 
and

[¶49] [WMC's] 
commitment to you that all of the work which is being done, and which will be 
done, on the Roussalis/Youmans Clinic prior to the signing of a guaranteed 
maximum price contract will be paid for, as billed by you. This commitment 
includes payment for all subcontract work, as well as work and charges of Gurkin 
Construction Co., Inc.

[¶50] In 
accordance with Williams' instructions, Gurkin poured the building's 11,900 
square foot foundation.

[¶51] At this 
point in our narrative of the facts, it is appropriate to return momentarily and 
briefly to the March, 1995, time period to review WMC conduct which affected the 
doctors' interests in the project but about which WMC did not inform the doctors 
until after WMC had received Gurkin's final construction cost estimate in late 
August, 1995. At the time of the execution of the March 2 document, which 
identified the eight lots on which the doctors' new building would be located, 
title to those lots was in WMC's name. At that time, the operating lease between 
WMC, on the one hand, and the hospital trustees and the board of county 
commissioners of Natrona County, on the other hand, did not contain a 
requirement that WMC convey any acquired properties to the county. WMC had never 
been asked to convey any of its acquired properties to the 
county.

[¶52] In 
mid-March 1995, WMC and the county commissioners began discussions regarding 
changes to be made to the operating lease. Williams, on behalf of WMC, and the 
county attorney, on behalf of the county, began working on a draft of amendments 
to the lease. Among the proposed amendments was a provision that all property 
acquired by WMC became the county's property regardless of how the property was 
legally titled. In late April and early May, 1995, WMC and the county agreed 
that the amendment would require WMC to transfer title to its acquired 
properties to the county before the end of the fiscal year. On May 16, 1995, the 
amended operating lease was signed. By a warranty deed dated and filed on August 
10, 1995, but made effective as of June 30, 1995, WMC transferred to the county 
all but one of its acquired properties, including the lots on which the doctors' 
building was being constructed. WMC did not tell the doctors about this 
conveyance until mid-September, 1995, after WMC became concerned about the 
project's high cost. The one WMC property not included in this transfer to the 
county was a lot for which WMC had given an option to purchase to the Central 
Wyoming Cancer Treatment Center and Hospice. The expiration date for the option 
was June 1, 1998. After a discussion on August 2, 1995, between WMC and the 
Hospice, the latter exercised its option. By warranty deed dated August 14, 
1995, WMC conveyed the lot to the Hospice. Although construction of the doctors' 
building was well under way by August, 1995, WMC did not exclude, as it had the 
Hospice option lot, the lots committed to the doctors' building from the August 
10 deed to the county.

[¶53] Returning 
our narrative to the late July to mid-August, 1995, period, at the same time 
that WMC directed Gurkin to resume full operations on the doctors' building, WMC 
began exploring, without telling the doctors, the abandonment of the doctors' 
building project and the relocation of the hospital's westward expansion to the 
south which would, of course, engulf the lots on which the doctors' building was 
being constructed. WMC's architect for the hospital's expansion project informed 
WMC that the relocated southward expansion would cost an estimated additional 
$2.6 million and result in a seven-month delay.

[¶54] In early 
August, 1995, the doctors' building architects delivered the final design 
drawings, plans, and specifications, and Gurkin immediately distributed bid 
packages to various subcontractors. On August 21, 1995, having received the 
subcontractors' bids, Gurkin delivered to and discussed with Williams the 
long-awaited cost estimate for the doctors' building; it was $3,547,791. That 
evening Gurkin met with the doctors and they discussed the estimate and the 
possibility of cost-cutting. The doctors called Williams and arranged to meet 
the next morning. Gurkin, the doctors, and Williams met the next morning and 
discussed the estimate, Williams' concern about the high cost, Williams' concern 
about the guaranteed buy-back provision in the March 2 document, the possibility 
of cost-cutting to make the project work, and the possibility of WMC's becoming 
an equity owner in the building. About a week later, Gurkin and Williams met and 
discussed the situation. Gurkin was going to develop a list of cuts to present 
to the doctors; Williams told Gurkin that his (Williams') read of the WMC board 
was that we were going to need to get the costs down, back around the 2.6 area, 
or we were going to have problems selling it to the board.

[¶55] On August 
30, 1995, Williams and the WMC board met and discussed, among other things, 
Gurkin's estimate, the reasons for the cost, the potential tax problems to WMC 
posed by the transaction, the cost of the relocation options, and problems 
concerning the March 2 document's guaranteed buy-back provision which Williams 
wanted to renegotiate with the doctors. Williams told the board that the parties 
were looking for ways to reduce costs and the plans would be reviewed by outside 
architects to that end. On September 1, 1995, Williams called Robin Dermon of 
Health Futures Development Group, Englewood, Colorado, to request that firm's 
review of the doctors' building project. By letter dated September 5, 1995, to 
Dermon, Williams confirmed their earlier conversation, identified the reasons 
that the March 2 document was very open-ended, described the concept of the 
transaction as captured by the March 2 document, and explained what WMC wanted 
Dermon's firm to focus on. About the reasons that the March 2 document was very 
open-ended, Williams wrote: 

The physicians would not 
sign any type of agreement with a dollar limitation in it until a complete set 
of plans and specifications were generated and approved. Because of WMC's desire 
to proceed on the revenue bonding process prior to those plans being completed, 
and the necessity that the land be under contract prior to issuing the bonds 
(for rating and bond insurance purposes), the decision was made to leave the 
agreement open-ended.

[¶56] About the 
concept of the transaction, Williams wrote:

The concept of the 
transaction has always been that the replacement building would be the type of 
building that Dr. Roussalis would build if he were building a building of the 
same type of state-of-the-art quality (technologically and aesthetically) which 
was included in his current office when he built it 10 years ago. Dr. Roussalis 
built a very nice, and very expensive, building ten years ago ($132/ft.). As you 
can see, this is somewhat of a different concept than a straight replacement 
building, where the limits are clear that only those features that are in the 
current building may be included in the new building. I appreciate that this is 
a very open-ended concept, but I can tell you that this was the essence of our 
agreement, and was the critical factor in the physicians agreeing to re-locate. 
That is the intent and spirit of the letter agreement.

[¶57] About the 
focus of the review that WMC was requesting from Dermon's firm, Williams 
wrote:

We would like the primary 
focus to be to identify areas where the project cost might be decreased, while 
not substantially changing the design or concept of the building. We would like 
you to focus on the mechanical and electrical systems, and the basement area. 
Our overall goal is to assist Mike Gurkin and the physicians, in a collaborative 
effort, to reduce costs, but not quality. We are not in a position to become 
adversarial with the physicians or contractor. That is why I have asked you to 
not focus on a comparison of the current building with the proposed building. I 
can foresee creating only more battles, when what we need is 
cooperation.

[¶58] Prior to 
preparing or submitting any type of written report, please call me to discuss 
the scope and contents of the opinions you have developed. Obviously, if you 
[sic] consultants find design deficiencies, we need to know that immediately, 
even if the net result is an increase in cost of the project. We want the 
building to be a success in all aspects.

[¶59] From the 
last of August 1995 until around the second week of September 1995, Gurkin 
worked on proposed cuts in the estimate. His idea was to present this to the 
doctors. My idea was to get a magic number out of Dick Williams and then get to 
that number, to make the project go. Gurkin took his list of proposed cuts to 
the doctors. After reviewing Gurkin's list, the doctors took the position they 
wanted to know WMC's number before making the cuts. Next, Gurkin talked to 
Williams. He told Williams that the doctors were not willing to cut anything at 
this time. . . . It - it didn't mean they weren't going to cut. That was the 
answer at that time, . . . so he knew where we were at. Williams responded, I 
told him at that point that I - I didn't have anything else to say to him, and 
that the project was in deep trouble.

[¶60] On the 
evening of September 17, 1995, the doctors and their wives and the doctors' 
attorney met with Margo Bean, Williams, county commissioner Bill Brauer, and 
hospital trustee president Bob Miracle. They reviewed the building project's 
problems, the perceived difficulties presented by WMC's recently disclosed 
transfer to the county of ownership of the lots on which the building was being 
built, and the possibility of rescission of the March 2 document and WMC's 
payment of money to Gurkin and the doctors in connection with that rescission, 
and finding comparable office space for two doctors who had agreed to be tenants 
in the new building. The next morning, September 18, 1995, the WMC board and 
Williams met to discuss the situation. The board authorized Williams to 
negotiate a recision [sic] of the Letter of Intent with the . . . Doctors, 
though the Board retains the authority to vote on the final transaction. The 
board also authorized Williams to negotiate the purchase at appraised value 
without further approval of three pieces of property south of the hospital which 
were required if expansion to the south [was] considered. Following that board 
meeting, Williams shut down the doctors' building construction project. That 
same day, Williams wrote WMC's $31.8 million revenue bond underwriter informing 
it that the doctors' building transaction, as currently designed and specified 
[with a $3.5 million cost, not including equipment, furniture, and information 
system costs], would not be legally supportable from WMC's standpoint . . . and 
we are therefore negotiating the details of an agreement to mutually rescind our 
contract with the two physicians. Williams also wrote that [i]n anticipation of 
this potential problem several months ago, we had requested our architects to 
develop contingency estimates and opinions on hospital expansion southward; the 
southward expansion is operationally a totally acceptable alternative; and there 
may be some minor delays attributable to this relocation 
decision.

[¶61] That same 
day, September 18, 1995, Gurkin's attorney met with Williams, and in a letter to 
Williams dated September 20, 1995, memorialized their earlier conversation 
regarding Williams' order to stop construction and Gurkin's foreseeable costs 
and damages claims arising from what Gurkin characterized as WMC's breaches of 
Gurkin's contract with WMC. Gurkin's attorney also wrote that WMC accept this 
letter as a preliminary notification . . . of the damages sustained by Mr. 
Gurkin in the form of lost profits as well as all other expenses and costs 
incurred by other individuals or entities which have or were expecting to 
provide services or construction materials to the project. We are presently 
unable to fully state all damages suffered by Mr. Gurkin. We will, however, be 
submitting, as it becomes available to us, substantiation of the damage claim. . 
. .

[¶62] The next 
day, September 19, 1995, the doctors wrote Williams that numerous sources were 
blaming the doctors for the project's failure; that the doctors were not to 
blame; and [i]f there is any serious notion that reasonable cost cuts could be 
implemented which would still result in construction of the type and quality of 
building promised by our letter agreement, we would much prefer to go that 
route. We therefore will meet with anyone, at any time, to discuss any logical 
effort to carry the project to its successful conclusion.

[¶63] The next 
day, September 20, 1995, Williams responded in a letter to the doctors, writing, 
among other things,

In 
response to the specific suggestion in your letter, WMC would reopen discussions 
about completing the project, but the cost figure that we would support would be 
a maximum of $2 million, which would include furniture and equipment. We believe 
that a building can be built, equipped and furnished for this amount which would 
comply in all respects with the Letter of Intent. We cannot guaranty that we can 
obtain County Commissioner approval for the project at this cost, but we will 
advocate for completion of the clinic at this cost. We would also like to 
restructure the buy-back provision, to tie the purchase price to some 
supportable value of your current buildings, or else use an appraised value.

One 
other issue that I might as well address at this point is the payments to you if 
the recision [sic] stands. Lin [Carriger] agreed to pay you for your lost 
medical practice time, and we will honor that agreement, based on reasonable 
time and billing rates. It was our understanding after the meeting on Sunday 
that that was what was going to be submitted. That was the specific question 
that was raised by Mr. Miracle, and there was no indication at that time that 
there was going to be a damage claim of any kind. Mark Gifford [the doctors' 
attorney] now indicates that there will be such a claim. My strong sense from 
the Board meeting on Monday is that the Board is not willing to pay anything 
other than the lost practice time. That ultimately will be a Board decision, but 
I just wanted to be up-front on where I think the Board is on that issue.

Obviously, we need to resolve these issues as soon as we 
can. We are currently actively working on design modifications to relocate the 
new hospital, and my guess is that word of the change will leak out in the next 
day or so. If you have interest in pursuing cutting the cost of the project as 
outlined in this letter and presenting the issue to the County Commissioners for 
approval, please let Mark know immediately. I have tried to reach both Bill 
Brauer and Bob Miracle to try to get a feel for where they would stand on this 
price. I have been unable to contact Mr. Miracle, and Mr. Brauer was unwilling 
to commit on what position the Commissioners would take. As I have indicated, 
WMC would strongly advocate for completing the project at that price.

Please let Mark know your thoughts at your earliest 
convenience.

[¶64] On September 21, 1995, the doctors and their attorney 
met with Williams, Gurkin, and Gurkin's attorney. When Williams was asked if $2 
million was the number for which the building could be built, he said that he 
would have to go to his board. When asked what such a facility would look like, 
and where the cuts would be made, Williams could not answer those questions.

[¶65] During the month following this September 21 meeting, 
various WMC representatives made substantively varying settlement overtures to 
the doctors. Board member Laird made such an overture; hospital trustee 
president Miracle and county commissioner Brauer made such an overture. The 
doctors rejected these overtures and demanded completion of the building.

[¶66] On October 4, 1995, at a WMC board meeting, Margo 
Bean told WMC board members that negotiations were still underway with the 
doctors' attorney. The board adopted a resolution under which WMC would 
indemnify any WMC board member or agent for any civil damages liability incurred 
while acting for WMC. On October 5, 1995, WMC issued to members of the media in 
a scheduled press conference a prepared statement by Williams. WMC's statement 
included a historical overview of the hospital's expansion project and the 
doctors' building project; it recited that the WMC-doctors' agreement has been 
cancelled and the hospital expansion would move southward; and it stated:

[WMC] took a good faith business risk in proceeding with 
the construction of the [doctors'] new office building prior to having the final 
cost determined, in order to facilitate the construction schedule of the new 
hospital and to take advantage of the favorable bond market. The ultimate cost 
of the proposed clinic was too high to proceed, and the decision was made to 
take the loss associated with abandoning the property exchange, and instead 
alter the location of the new hospital.

[¶67] On October 20, 1995, the doctors filed suit for 
specific performance of the alleged contract; in December, 1995, they amended 
their complaint by deleting that claim and asserting instead their several money 
damages claims as we described earlier. Following WMC's answer and the parties' 
discovery activities, WMC moved for summary judgment, and the district court 
granted it, as we described earlier. The doctors have timely appealed that 
summary judgment.

STANDARD OF REVIEW

[¶68] Summary judgment is appropriate when 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. 
W.R.C.P. 56(c). Materiality of a fact depends upon it having some legal 
significance so that it establishes or refutes some essential element of a cause 
of action or defense asserted by one of the parties. Matter of Estate of Roosa, 
753 P.2d 1028, 1031 (Wyo. 1988). In any given case, the materiality of any facts 
is limited by the pertinent legal standard[s] for the asserted claim and for the 
corresponding defenses to that claim. Id. at 1032. On appeal, the law assigns to 
the moving party, here the defendant WMC, the burden to demonstrate clearly the 
absence of any genuine issue as to any material facts. Id.; Seay v. Vialpando, 
567 P.2d 285, 287 (Wyo. 1977). WMC must demonstrate clearly the absence of any 
genuine issue as to any material facts by using only admissible evidence to 
support its motion. If WMC has made the requisite demonstration, then the 
doctors, as plaintiffs, and as the parties opposing WMC's motion, cannot rely 
upon the allegations in their amended complaint; rather, they must, using the 
submitted materials, demonstrate the presence of material facts which pose 
genuine issues for trial. Estate of Roosa, 753 P.2d  at 1031.

[¶69] In reviewing a summary judgment, we do not accord any 
deference to the district court's decisions on issues of law, and we examine de 
novo the entire record the parties' submissions of evidence in the light most 
favorable to the parties who opposed the motion, here the doctors. Id. We give 
the doctors the benefit of every reasonable inference and every doubt, Fiscus v. 
Atlantic Richfield, 773 P.2d 158, 161 (Wyo. 1989), which may be drawn from the 
materials either supporting or opposing the motion. Estate of Roosa, 753 P.2d  at 
1031.

[¶70] Long ago, this Court described an inference to be the 
conclusion drawn on reason from premises established by proof. In a sense, it is 
the thing proved. Wright v. Conway, 34 Wyo. 42, 51, 242 P. 1107, 1110 (1926). In 
more recent times, we have approved the concept that [a]n inference is a 
deduction of fact that may logically and reasonably be drawn from another fact 
or group of facts found or otherwise established in the action. Estate of Roosa, 
753 P.2d  at 1034. A properly drawn inference, contrary to direct testimony, can 
serve to structure a genuine issue of material fact. Id. We also have adopted 
this language:

A 
reasonable inference is as truly evidence as the matter on which it is based, 
and is not a mere presumption or guess; appropriate inferences from proved facts 
are not a low order of evidence, but are just as valid as evidence as statements 
of eye-witnesses and are to be weighed by the jury along with the other evidence 
before it and may be strong enough to outweigh positive and direct oral 
statements. Whether or not they should be permitted to overcome positive and 
direct testimony depends, in every case, on the relative strength of the one or 
the other. Id.

[¶71] If, upon review of the record, doubt exists about the 
presence of issues of material fact, that doubt must be resolved against the 
party carrying the burden, here WMC. Kobielusz v. Wilson, 701 P.2d 559, 561 
(Wyo. 1985). If there appears to be no great disagreement about the evidentiary 
facts, but the evidence is subject to conflicting interpretations or reasonable 
minds might differ as to its significance, summary judgment is improper. Weaver 
v. Blue Cross-Blue Shield, 609 P.2d 984, 987 (Wyo. 1980); Fegler v. Brodie, 574 P.2d 751, 753-55 (Wyo. 1978).

DISCUSSION

1. 
Whether the Parties Formed an Agreement.

[¶72] In defense of the doctors' claim of breach of 
contract, WMC contends that the alleged agreement was flawed in its formation by 
the parties' failure to achieve mutuality of assent and definiteness on the 
scope and cost of the new medical office building. WMC summarizes its position 
in its brief:

The 
lack of a cost term, the absence of an objective standard by which cost could be 
determined, and the manifestly different understanding and expectations of the 
parties with respect to cost from the inception . . . illustrates that an 
enforceable contract never came into being at the inception, or most assuredly 
as sought here to be enforced.

[¶73] WMC claims that the cost of the new medical office 
building is a term essential to the formation of a contract, and the parties did 
not agree upon that cost, and that cost term was neither included in the Letter 
of Intent nor established by the parties' subsequent conduct. WMC asserts that 
the parties' omission of the cost term from the Letter of Intent renders that 
document too indefinite to be enforced. Moreover, WMC relates this 
indefiniteness defense to the alleged absence from the Letter of Intent of an 
objective method for determining the cost of the new medical office 
building.

[¶74] Finally, with respect to the nature of the new 
medical office building, or the kind of building to be constructed, WMC 
maintains the parties failed to achieve mutuality of assent and definiteness 
because of the parties' different interpretations of those provisions of the 
Letter of Intent which relate to the quality of the building's exterior and 
interior and specific features to be incorporated into the design and 
construction of the building. According to WMC's view, the doctors expected a 
building equivalent to an expensive custom home, but WMC expected a modern 
medical office building. In this regard, WMC contends that the doctors' 
interpretation of these Letter of Intent provisions is that cost did not matter, 
while WMC's interpretation is that cost did matter. As evidence of this 
contention, WMC points to the doctors' bringing in an interior designer, which 
you don't do if you're concerned about cost.

[¶75] Claiming that the above and foregoing facts are 
undisputed, WMC argues that whether a contract was formed (mutuality of assent 
and definiteness of terms) becomes a question of law, citing Robert W. Anderson 
Homewrecking and Excavating, Inc. v. Board of Trustees 681 P.2d 1326, 1330 (Wyo. 
1984). In other words, WMC argues, as it stated in oral argument, that 
reasonable minds could only come to the conclusion that no contract formation 
occurred.

[¶76] In reply to WMC's contentions, the doctors assert 
that genuine issues of material fact exist about whether the parties achieved 
mutuality of assent and definiteness of terms with respect to both the cost of 
the new medical office building and the kind of building to be constructed. In 
the doctors' view, the parties achieved mutuality of assent as evidenced by the 
negotiations preceding the execution of the Letter of Intent, the Letter of 
Intent itself, and the parties' subsequent conduct.

[¶77] About the cost of the new medical office building, 
the doctors remind us that the parties specifically negotiated for several weeks 
about the terms of the Letter of Intent document, especially the cost term. WMC 
sought a cost cap; the doctors rejected a cost cap until the final designs, 
plans and specifications of the building were known. WMC did not want to take 
the time (four to six months) to develop the final designs, plans and 
specifications from which bids of building cost are calculated before it began 
construction because WMC was in a hurry to get the doctors committed in order to 
capture a favorable low interest rate on its construction bonds to finance the 
expansion project. Consequently, the parties negotiated for the exclusion of the 
cost term and the inclusion of the doctors' commitment to the exchange of their 
properties. In other words, in the doctors' view, the parties agreed, purposely 
and deliberately, to exclude the cost term desired by WMC. From these facts of 
negotiation and purposeful exclusion of a maximum cost or cost cap term from the 
subsequently signed Letter of Intent, the doctors argue that a juror could 
reasonably infer that cost was not an essential term of the parties' 
contract.

[¶78] Instead of including a cost term in the Letter of 
Intent, according to the doctors, the parties included provisions that, in 
effect, related cost to the quality of the exterior and interior of the 
building. For example, in numbered paragraph 3 of the document, the parties 
agreed that their general intent is for the new building to be of comparable 
quality to Dr. Roussalis' existing medical office building; the new building is 
to be of the same high quality and state-of-the-art as his existing building. 
The parties attached Exhibit A to their document which was a representative, but 
not exhaustive, list of the types of high-quality features which were to be 
incorporated into the design and construction of the new building. In numbered 
paragraph 4 of their document, the parties agreed that the quality of the 
interior of the new building shall be equal in quality to the quality of the 
interior space of Dr. Roussalis' current building, including woodwork, 
cabinetry, carpet and general finish and interior furnishing. In this paragraph, 
WMC expressly agreed that an interior designer and a qualified woodwork finish 
expert would handle the interior of the new building. With respect to the 
quality of the exterior of the new building, the parties repeated the comparable 
quality standard applicable to the building's interior.

[¶79] In addition to the evidence of their pre-agreement 
negotiations and the agreed-upon provisions of the Letter of Intent, the doctors 
support their position with the evidence of a letter written by WMC's counsel 
which reads in pertinent part that the parties' concept of the transaction and 
the intent and spirit of letter agreement were that the new building would be 
the type of building that Dr. Roussalis would build if he were building a 
building of the same type of state-of-the-art quality (technologically and 
aesthetically) which was included in his current office when he built it 10 
years ago. According to WMC's counsel, this very open-ended concept . . . was 
the essence of our agreement.

[¶80] Claiming that the above and foregoing facts, and the 
reasonable inferences to be drawn from them, create genuine issues of material 
fact about mutuality of assent and definiteness of the agreement, the doctors 
maintain that under Wyoming law whether a contract has been formed depends on 
the parties' intent and is a question of fact. Burg v. Ruby Drilling Co., Inc., 
783 P.2d 144, 153 (Wyo. 1989); Wyoming Sawmills, Inc. v. Morris, 756 P.2d 774, 
775 (Wyo. 1988). The doctors urge us to apply the rule stated in Engle v. First 
National Bank of Chugwater, 590 P.2d 826, 831 (Wyo. 1979):

While it is essential that the mutual assent of the parties 
to the terms of a contract must be sufficiently definite to enable the court to 
ascertain what they are, nevertheless it is not necessary that each term be 
spelled out in minute detail. It is only that the essentials of the contract 
must have been agreed upon and be ascertainable. * * * The law does not favor 
the destruction of contracts on the ground of indefiniteness, and if it be 
feasible the court will so construe the agreement so as to carry into effect the 
reasonable intention of the parties if that can be ascertained. Furthermore, it 
is a well-established principle of law that that which can be made certain is 
certain.

[¶81] In addition, the doctors rely upon the legal 
principle that the parties' subsequent words, conduct or performance may remove 
uncertainties in a contract:

A 
contract which is originally and inherently too indefinite may later acquire 
precision and become enforceable by virtue of subsequent acts, words, and 
conduct of the parties. In other words, an uncertain agreement may be so 
supplemented by subsequent acts, agreements or declarations of the parties as to 
make it certain and valid. The acts of practical construction placed upon a 
contract by the parties thereto are binding and may be resorted to relieve it 
from doubt and uncertainty. Thus, the objection of indefiniteness may be 
obviated by performance and acceptance of performance.

17A 
Am. Jur. 2d, Contracts 198, at 209 (1991) (footnotes omitted).

[¶82] From our careful consideration of the record, 
including the reasonable inferences which could be drawn in favor of the 
doctors, and of the principles of contract formation law, we conclude that 
genuine issues of material fact about contract formation exist which can only be 
resolved by trial.

[¶83] As we begin our analysis, it is appropriate to keep 
in mind basic principles. In determining the intent of the parties in contract 
situations, whether in the context of formation as we have here or in the 
context of interpretation, we use an objective approach. We have explained:

An 
objective test is applied. A party's intention will be held to be what a 
reasonable man in the position of the other party would conclude his 
manifestations to mean.

Shrum v. Zeltwanger, 559 P.2d 1384, 1387 (Wyo. 1977); 
accord, Wyoming Game and Fish Comm'n v. Mills Co., 701 P.2d 819, 822 (Wyo. 
1985). As the doctors have correctly pointed out, we have embraced these 
principles:

[¶84] While it is essential that the mutual assent of the 
parties to the terms of a contract must be sufficiently definite to enable the 
court to ascertain what they are, nevertheless it is not necessary that each 
term be spelled out in minute detail. It is only that the essentials of the 
contract must have been agreed upon and be ascertainable. * * * The law does not 
favor the destruction of contracts on the ground of indefiniteness, and if it be 
feasible the court will so construe the agreement so as to carry into effect the 
reasonable intention of the parties if that can be ascertained.

[¶85] Engle, 590 P.2d  at 831. We also agree with this 
statement:

The 
question of what is an essential term is often a question of fact involving a 
determination of each party's intent to be bound, and thus must frequently be 
decided by a jury.

[¶86] Panzer v. Shields Development Co., 660 F. Supp. 56, 
60 (D.Del. 1986) (reversing summary judgment, the court ruled that issues of 
fact requiring jury resolution existed on whether the parties formed a binding 
contract). We also recognize that where the existence of a contract or the terms 
of it is the point in issue, as here, and the evidence is conflicting or admits 
of more than one inference, it is for the jury . . . to determine whether the 
contract did in fact exist. . . . So, . . . when the terms of the contract are a 
matter of controversy under the evidence, the question should be put to the 
trier of the facts as a matter for their determination, and it is not the 
province of the court to determine and to instruct the jury what the terms are. 
17A C.J.S. Contracts 611, at 1225-28 (1963); accord, Robert W. Anderson 
Housewrecking and Excavating, Inc., 681 P.2d  at 1330.

[¶87] In determining whether a contract was formed, we may 
consider not only the alleged contract but also the conduct of the parties with 
reference to the alleged contract. Wheatland Irrigation Dist. v. Dodge, 387 P.2d 679, 682 (Wyo. 1963). Their conduct before and after making the alleged contract 
may shed light on their intent. I E. Allan Farnsworth, Farnsworth on Contracts 
3.8, at 184 (1990). [A] party's subsequent behavior, such as issuing a press 
release, may be persuasive, especially if inconsistent with the party's later 
contention. Id.

[¶88] WMC principally relies on the absence of a specific 
cost figure from the alleged contract, the Letter of Intent document, as its 
evidence of the parties' failure to achieve mutuality of assent and definiteness 
on the cost of the new building, which WMC claims is an essential term of the 
alleged contract. In opposition, the doctors rely not only on the Letter of 
Intent document, but also on the parties' behavior before and after the signing 
of that document as evidence of the parties' achievement of mutuality of assent 
and definiteness on the nature of the new building, the cost of it, and the 
essential terms of the contract.

[¶89] The first part of our earlier statement of the facts 
accurately described the parties' pre-Letter of Intent conduct. The highlights 
of the record are as follows:

WMC 
was committed to its $45 million expansion project, at the heart of which was 
its westward construction. Because the doctors' properties lay west, WMC's 
acquisition of them was a necessity. The doctors did not want to relocate for a 
number of legitimate reasons. To persuade them to move, WMC promoted the 
state-of-the-art replacement medical office building which would equal in 
quality what Dr. Roussalis had in his existing medical office building. The new 
building would represent WMC's vision of the partnership achievable between a 
hospital and a doctor. If WMC moved quickly to secure the doctors' commitment, 
WMC could affect a $2.6 million saving in interest on its $31.8 million revenue 
bond. In order to obtain the revenue bond, WMC had to show a binding contract on 
the doctors' properties. WMC needed to begin construction as soon as possible. 
WMC approached the doctors and negotiations ensued. WMC desired a maximum 
construction cost term; it proposed a cost cap of $150/sq. foot. The doctors 
rejected a maximum construction cost term or cost cap until the design drawings, 
plans and specifications were developed and final because they wanted to know 
what the new building would look like. It would take four to six months to 
develop final design drawings, plans and specifications. WMC did not want to 
wait that amount of time because of the $2.6 million interest savings if it 
moved quickly. WMC and the doctors intentionally and deliberately deleted from 
the Letter of Intent the maximum construction cost or cost cap term. They 
intentionally and deliberately included the terms which appear in that document. 
They knew the new medical building project would not be a typical project in any 
sense. According to Mike Gurkin, the general contractor, in a typical 
construction project, the design drawings, plans and specifications are 
developed and finalized first; then that package is distributed to the 
subcontractors who submit bids (construction costs) based on the drawings, 
plans, and specifications; when the bids are received, the cost of construction 
is determined, winning bids are accepted, construction contracts awarded, and 
construction begins. WMC's new building project took on strange trappings. 
Because of WMC's fast track requirements, the doctors' new medical building 
would be literally designed and built on the run.

[¶90] Our earlier statement of the facts accurately 
identifies the contents of the Letter of Intent which the parties signed in 
March, 1995, in culmination of their negotiations. It is true, as WMC argues, 
that this document does not contain a term stating the cost of the new medical 
office building. However, as the doctors contend, a juror could reasonably infer 
that the parties did not intend that a specific cost term be essential to the 
formation of their contract. This reasonable inference could be drawn from the 
parties' prior negotiations and the contents of the cover memorandum which WMC's 
counsel Williams attached to WMC's final draft of the Letter of Intent. In that 
memorandum, Williams wrote:

Attached is the revised letter agreement. . . . I have 
struggled with some way to incorporate a maximum construction cost, which was a 
concern of the Board, but I don't see any way to do that at this point in time, 
so I need to proceed without that figure in the agreement.

[¶91] The doctors also note that Williams testified, we 
talked at the board level about taking a leap of faith, if you will, to - that 
we could do the [doctors'] transaction without having that safety hook [of a 
cost cap]. From this evidence, a juror could draw the reasonable inference that 
the parties achieved mutual assent that a cost term was not an essential term of 
the contract.

[¶92] As we read the parties' Letter of Intent, we are 
struck by the words of present contract formation. For example, in the opening 
paragraph we find the words the following offer, [b]y signing this letter of 
intent, you are agreeing to a legally enforceable contract for this exchange 
upon successful and acceptable completion of all of [WMC's] obligations as 
described in this letter. In the closing paragraph, we find similar contract 
formation language: [t]his agreement is binding, and [WMC] intends to be legally 
bound by the terms and conditions set forth in this letter. As WMC's counsel 
Williams explained, WMC intentionally included in this closing paragraph 
language specifically binding not only the doctors, but also their heirs, 
successors and assigns so that they too would be bound in the event one or both 
doctors died halfway into the building. In reviewing the results of other 
litigation about whether such letters of intent are binding, Professor 
Farnsworth informs us that [i]n many cases courts have looked to the degree of 
formality and the use of legal terminology. I Farnsworth, supra, 3.8, n.3, at 
179-80; and see 3.8b, at 193-94. See, e.g., Field v. Golden Triangle 
Broadcasting, 305 A.2d 689, 692-93 (Pa. 1973), cert. denied, 414 U.S. 1158 
(1974) (the letter agreement itself, by its terms [describing it as an offer'], 
formality and the extraordinary care in its execution, indicates that the 
signatories intended to bind themselves to an enforceable contract); APCO 
Amusement Co. v. Wilkins Family Restaurant, 673 S.W.2d 523, 527-28 (Tenn. App. 
1984) (instrument speaks through words such as agrees,' acceptance,' and 
accepts' [and] has been dated and signed); and Reynolds Aluminum Co. v. 
Multnomah County, 287 P.2d 921, 927 (Or. 1955), cert. denied, 350 U.S. 970 
(1956) (we find words speaking in the present, not in futuro, such as seller 
hereby sells' and purchaser hereby buys'). 

[¶93] In addition to the language used in these opening and 
closing paragraphs, and the formality and care taken by the parties in drafting 
and in executing the document, we note that the document neither contains 
language that the parties will agree in the future about a specific cost figure 
nor language that they will execute in the future a later writing. Professor 
Farnsworth notes:

In 
doubtful cases, courts have looked to many factors, but no single factor is 
likely to be decisive. Often the final decision is left to the trier of the 
facts.

I 
Farnsworth, supra, 3.8, at 180-81.

[¶94] Against the argument that the failure to spell out 
usual terms shows that the parties did not intend to be bound, Professor 
Farnsworth replies, appropriately we think, such an inference seems unjustified 
if there is no indication that those terms were to be the subject of further 
negotiations. Id. at 182. We would add the observation that the movant in a 
summary judgment setting, WMC here, does not enjoy the benefit of inferences; 
rather, only the non-movant, the doctors here, does. We agree with that said in 
Berg Agency v. Sleepworld-Willingboro, Inc., 346 A.2d 419, 424 (N.J. 1975):

The 
absence of some provisions in a document does not necessarily negate its 
viability as a binding agreement.

[¶95] The key factor is not the absence of any contractual 
undertakings which may normally be included by contracting parties engaged in a 
similar transaction. It is rather the intent of the particular parties involved 
in the transaction at issue. And the presence or absence of essential contract 
provisions is but an element in the evidential panorama underlying a factual 
finding of intent and enforceability.

[¶96] In our judgment, the contents of the Letter of Intent 
and the reasonable inferences which a jury may draw from them are evidence which 
may support a jury's conclusion of the intent of the parties to be bound.

[¶97] Other provisions of the Letter of Intent provide 
evidence from which a reasonable juror could conclude that the parties' 
intention was that the kind of building, not the cost of that building, was an 
essential term of their contract. From this evidence a reasonable juror could 
also conclude that the parties achieved mutuality of assent and definiteness 
about the kind of building to be constructed. Those provisions include numbered 
paragraphs one through five and nine of the document. Those provisions speak in 
terms of an approximately 9,500 square foot medical office building, with a full 
roughed-in basement which is an equivalent amount of square footage from [the 
doctors'] existing buildings, as adjusted for ADA compliance, space required for 
the pilot computer project, and additional stairway and related office 
requirements; [t]he floor plan of the new building . . . shall be at the 
discretion and direction of [the doctors] . . ., and shall be based on 
architectural and/or engineering drawings which are approved by [the doctors]. 
Exhibit A to the document is a representative, not exhaustive, list of the types 
of high quality specific features which will be incorporated into the design and 
construction of this new medical office building. In the words of these parties, 
[i]t is [their] general intent . . . that the new building will be of comparable 
quality to [Dr. Roussalis' currently occupied building], i.e. that the new 
building will be a replacement building of the same high quality and 
state-of-the-art which was built into [Dr. Roussalis' existing building]. The 
quality of both the interior and exterior of the new building shall be equal in 
quality or of comparable quality to Dr. Roussalis' existing building.

[¶98] WMC pointedly relies on that provision (paragraph 
four under the heading New Medical Office Building) which recites that Tom Judy 
will direct the interior design, and Martin Sheldon or a similarly qualified 
finish expert will be in charge of the woodwork in the new building to support 
an inference to be drawn in WMC's favor that you do not bring in an interior 
designer if you're concerned about cost. Of course, on summary judgment, 
favorable inferences are drawn in favor of the non-movant, not the movant.

[¶99] With respect to this interior designer provision, it 
must be remembered that WMC drafted this document and agreed to its provisions, 
including this one. The favorable inference to be drawn in the doctors' favor 
from this particular provision, using WMC's logic, is WMC was not concerned 
about cost either because it agreed to bring in the interior designer and 
qualified woodwork finish expert.

[¶100] Keeping in mind these particular provisions 
describing the kind of building to be constructed, we tie in to our analysis at 
this precise point what WMC's counsel Williams wrote on September 5, 1995, 
shortly after WMC had received Mr. Gurkin's estimate of the cost of the new 
building, when WMC was seeking a review of the new building's cost. Williams 
described the transaction in these words:

The 
concept of the transaction has always been that the replacement building would 
be the type of building that Dr. Roussalis would build if he were building a 
building of the same type of state-of-the-art quality (technologically and 
aesthetically) which was included in his current office when he built it 10 
years ago. Dr. Roussalis built a very nice, and very expensive, building ten 
years ago ($132/ft.). As you can see, this is somewhat of a different concept 
than a straight replacement building, where the limits are clear that only 
features that are in the current building may be included in the new building. I 
appreciate that this is a very open-ended concept, but I can tell you that this 
was the essence of our agreement, and was the critical factor in the physicians 
agreeing to locate. That is the intent and spirit of the letter agreement.

[¶101] (Emphasis added.) These words provide evidence from 
which a reasonable juror could conclude that the parties' intention, about what 
was or was not an essential term of the contract, was what kind of building was 
to be constructed. Moreover, Williams' closing words in this letter - to the 
effect that if the cost reviewer concludes that an increase in the project is in 
order, WMC needs to know and wants the building to be a success in all aspects - 
are evidence from which a reasonable juror could conclude that cost was not an 
essential term of the contract, but that the type of building that Dr. Roussalis 
would build of state-of-the-art quality was.

[¶102] From the facts that the parties knowingly and 
purposely negotiated out a specific cost figure; WMC did not want to wait four 
to six months for final design drawings, plans and specifications from which a 
specific cost figure is typically determined, and the new building was literally 
being designed and built on the run; the parties, as evidenced by Exhibit A to 
their Letter of Intent, expressly contemplated that other high-quality features 
would be added to the new building as performance proceeded, which additional 
features would more likely than not increase the cost of the building; a 
reasonable juror could draw the inference that the parties did not intend a 
specific cost figure to be an essential term of their contract. From the facts, 
including those provisions of the Letter of Intent particularly related to the 
quality of the new building, a reasonable juror could draw the inference that 
the parties intended a Dr. Roussalis-built building to be an essential term of 
their contract. As WMC's Williams put it, that very open-ended concept . . . was 
the essence of our agreement . . . [and] the intent and spirit of the letter 
agreement.

[¶103] We now turn our attention to the parties' 
post-Letter of Intent actions as evidence of the parties' mutuality of assent 
and definiteness about their transaction. Of course, WMC's Williams' September 
5, 1995, letter to the cost reviewer, just mentioned above, falls into this 
category, and will be taken into account, but need not be repeated here. Other 
post-Letter of Intent actions exist and are described earlier in the statement 
of facts. Rather than reiterate verbatim that evidence here, we shall briefly 
identify some of the highlights of that evidence.

[¶104] Shortly after the doctors and WMC's authorized 
representative signed the Letter of Intent, WMC counsel Williams reported to the 
WMC Board that signed contracts with [the doctors] have been secured. Demolition 
of the existing buildings [on the land south of the hospital] will begin in 
mid-April and construction of the new office building will begin in June. WMC's 
Carriger informed general contractor Gurkin of the contractual agreement with 
the doctors and declared WMC's legally binding commitment to Gurkin to enter 
into a construction contract for the project. 

[¶105] WMC believed that a June 1996 completion date on the 
doctors' new building was critical timing in the building schedule of the new 
hospital. Mr. Gurkin asked WMC's Williams if it would be better to delay actual 
construction of the doctors' new building until the design drawings, plans and 
specifications were finalized, so that a cost estimate could be prepared. 
Williams instructed Gurkin to proceed with construction in order to be completed 
as early as possible.

[¶106] In late April, 1995, WMC held a press conference to 
announce the hospital expansion project and the doctors' new medical office 
building. At WMC's request, Dr. Roussalis attended and spoke.

[¶107] In May, 1995, the county commissioners of Natrona 
County approved proceeding with the revenue bond issue for financing the 
hospital expansion; the WMC Board and the hospital trustees approved a 
resolution authorizing the revenue bond issue; and the county commissioners 
approved the revenue bonds. Also in May, WMC's Williams signed a site 
application plan which he submitted to the City of Casper, showing that WMC as 
owner was constructing a medical office building for the doctors. In early June, 
the $31.8 million revenue bond issue was finalized, and the Norwest Bank of 
Casper received the proceeds as trustee of the bond funds.

[¶108] From March through the summer months of 1995, the 
doctors spent countless hours on the design of the new building. Gurkin loaded 
them up. In June, Gurkin did the demolition work to clear the site on which the 
new medical office building would be constructed. Excavation of the basement 
occurred.

[¶109] In mid-July, after Carriger's death, representatives 
of WMC and the City of Casper signed a site plan agreement for the doctors' new 
building. WMC's Williams asked Gurkin to give him an estimate of the cost of the 
new building; Gurkin told Williams that he (Gurkin) had to know how to proceed 
because he was soon to pour the building's foundation, spending $100,000. Gurkin 
gave Williams a written guess of the cost of the new building (11,900 square 
feet main floor and 11,900 square feet basement) of $2,677,500. Gurkin told 
Williams that there were fifty-four substantial items of cost which can flow 
either up or down $5,000 per item. He cautioned that each item's cost could not 
be pinned down until the plans, all of the changes and approvals, were complete; 
and a project of this size should have a 5% to 10% override for changes as the 
project develops. Thus, a reasonable juror could infer from this evidence that 
WMC knew or should have known at that time the cost might exceed $3 million. 
Williams directed Gurkin to shut down the project; Williams arranged an 
emergency meeting of the WMC Board. At that meeting the WMC Board read Gurkin's 
cost guess letter, reviewed the Letter of Intent, and discussed what action to 
take. The Board did not discuss what amount of money it was prepared to spend on 
the project, but authorized Williams to restart construction. Williams told 
Gurkin to resume full operations. Gurkin poured the new building's 11,900 square 
foot foundation. From this evidence, a reasonable juror could infer that the 
parties' intention was that a specific cost figure was not an essential term of 
their contract, but that a new building of the type and high quality that Dr. 
Roussalis would build was.

[¶110] In early August, 1995, the architects delivered the 
final design drawings, plans and specifications to Gurkin, who immediately 
distributed bid packages to various subcontractors. On August 21, based on the 
subcontractors' bids, Gurkin had a cost estimate of $3,547,791 for the new 
building. Gurkin gave this information to WMC's Williams. Over the next several 
weeks these various parties met and discussed the estimate, cost-cutting, and 
other possible arrangements. In early September, Williams contacted the cost 
reviewer as we earlier described.

[¶111] Late in September, the parties met and discussed 
rescission of the contract. The parties dispute the outcome of these 
discussions. But, from the fact that they discussed rescission, a reasonable 
juror could infer that the parties believed they had contracted earlier. Various 
WMC representatives made settlement overtures to the doctors after the 
rescission discussions. 

[¶112] On October 5, 1995, WMC held a press conference at 
which it issued a prepared statement which included the announcement that the 
parties' agreement has been cancelled. It also stated:

[WMC] took a good faith business risk in proceeding with 
the construction of the [doctors'] new office building prior to having the final 
cost determined, in order to facilitate the construction schedule of the new 
hospital and to take advantage of the favorable bond market. The ultimate cost 
of the proposed clinic was too high to proceed, and the decision was made to 
take the loss associated with abandoning the property exchange, and instead 
alter the location of the new hospital.

[¶113] So, in lieu of westward expansion, WMC would expand 
southward, engulfing the site intended for the doctor's new office building.

[¶114] From this post-Letter of Intent conduct, a 
reasonable juror could infer that the parties achieved mutual assent and 
definiteness in their exchange transaction, but WMC ultimately backed out 
because of the high cost. We find genuine issues of material fact for the trier 
of fact to resolve.

[¶115] In addition to arguing that the parties' failure to 
include a cost term in their alleged contract was fatal to their achieving 
mutual assent on the new building's cost, WMC argues there was not even mutual 
assent on an objective standard by which cost could be determined, or when or 
how cost was to be determined.

[¶116] WMC claims that the Letter of Intent simply states 
that the new building is to be comparable' to the Roussalis building. . . . This 
is no standard at all. According to WMC, the doctors interpret the comparability 
provision to mean the new building was to be of the highest quality, without 
limitation, regardless of cost. WMC characterizes the doctors' approach with 
these words, they brought in an interior designer, which you don't do if you're 
concerned about cost.' WMC also believes that the Section 1031 exchange nature 
of the transaction provided some measure of protection against uncontrolled 
costs. WMC claims that the law treats as too indefinite for legal enforcement a 
term which gives one party to a contract an unlimited right to determine the 
nature and extent of performance. WMC claims that the comparability provision of 
the Letter of Intent, as interpreted by the doctors, is just such an indefinite 
term.

[¶117] About WMC's argument that the comparability standard 
in the Letter of Intent is no standard at all, the doctors respond that WMC 
agreed to this subjective standard in order to induce the doctors to sign the 
Letter of Intent. In support of this response, the doctors point to WMC's own 
words, as conveyed by its counsel Williams, to the cost reviewer in early 
September, 1995, that the new building would be the type of building that Dr. 
Roussalis would build if he were building a building of the same type of 
state-of-the-art quality (technologically and aesthetically) as he built ten 
years earlier. Williams emphasized that this Dr. Roussalis transaction concept 
was a different concept than a straight replacement building, where the limits 
are clear that only those features that are in the current building may be 
included in the new building. . . . [T]his was the essence of our agreement. The 
doctors' legal authority in support of this subjective standard is Restatement 
(Second) of Contracts 34 (1981).4 According to the doctors, the law allows the 
parties to a contract to give one of them a large choice of what performance 
that party may demand or must accept, and a term is not too indefinite that 
provides one party's performance must be satisfactory to the other party. 17A 
Am. Jur. 2d, Contracts 199, at 210; 648, at 655-56 (1991). The doctors also 
respond that WMC's actions and words as design and construction of the new 
building proceeded through spring and summer of 1995 obviated any objection of 
indefiniteness. Id., 198 at 209.

[¶118] In analyzing the parties' respective positions on 
this particular point, we have consulted several authorities. Corbin provides 
some guidance. For example, he counsels:

The 
courts must take cognizance of the fact that the argument that a particular 
agreement is too indefinite to constitute a contract frequently is an 
afterthought excuse for attacking an agreement that failed for reasons other 
than the indefiniteness. In such instances, the court should not be too fussy to 
determine how the gaps should have been filled. It is simply unnecessary.

* * 
*

[¶119] [T]hat the parties have left some matters to be 
determined in the future should not prevent enforcement, if some method of 
determination independent of a party's mere wish, will and desire exists, either 
by virtue of the agreement itself or by commercial practice or other usage or 
custom. This may be the case, even though the determination is left to one of 
the contracting parties, if this party is required to make it in good faith in 
accordance with some existing standard or with facts capable of objective 
proof.

[¶120] 1 Joseph M. Perillo, Corbin on Contracts 4.1, at 
535-37 (rev. ed. 1993). Corbin also comments on the effect of part performance 
of an indefinite contract:

That 
one of [the parties], with the knowledge and approval of the other, has begun 
performance is nearly always evidence that they regard the contract as 
consummated and intend to be bound thereby. It may also aid in the 
interpretation of their words with respect to the character of the performances 
to be rendered. In this way, the indefiniteness may be cured, or at least 
reduced. The fair and just solution may then be the enforcement of promises 
rather than a decision that no contract exists.

Id. 
at 542; and see 4.7 at 606-13. Acknowledging that an agreement which provides 
that the performance to be rendered shall be left to the will or discretion of 
one of the parties has been held not enforceable, Corbin also observes that one 
of the parties reserves the power of fixing or varying the price or other 
performance is not fatal if the exercise of this power is subject to prescribed 
or implied limitations, as that the variation must be in proportion to some 
objectively determined base or must be reasonable or in good faith. Id., 4.4, at 
586-87.

[¶121] Professor Farnsworth counsels that, in deciding 
whether the requirement of definiteness has been met, a court would first 
interpret the language of the contract, and might next consider the parties' 
preliminary negotiations and references to external sources of terms, including 
trade and other standard terms. I Farnsworth, supra, 3.28, at 356. He also 
observes [a]n agreement may be fleshed out by usages to which the parties are 
subject, by a course of dealing between the parties prior to their agreement, or 
by a course of performance between them after their agreement. Indefiniteness 
may also be cured by the addition of such implied terms as will be supplied by 
law, including - at least as to minor items - the parties' implied obligations 
of good faith and fair dealing.

Id. 
at 357.

[¶122] We note here that, under Wyoming law, every contract 
is deemed to contain an implied term of good faith and fair dealing. See, Garner 
v. Hickman, 709 P.2d 407, 411 (Wyo. 1985), and cases cited therein; Kahn v. 
Traders' Insurance Co., 4 Wyo. 419, 471, 34 P. 1059, 1075 (1893). We see no 
reason why that would not be true in this case. Finally, Professor Farnsworth 
counsels, [a] host of opinions can be found to support the proposition that less 
definiteness is required to support an award of damages than a decree of 
specific performance. I Farnsworth, supra, 3.28 at 361. In this case, the 
doctors seek an award of money damages, not a decree of specific 
performance.

[¶123] In light of the above and foregoing authorities, we 
have concluded that WMC's argument, that the parties failed to achieve mutuality 
of assent on an objective standard by which cost could be determined, must be 
tested by the trier of fact. A reasonable juror could find from the evidence 
that, just as the parties may have intended not to have a specific cost term as 
an essential term of their agreement, they intended not to have an objective 
standard for determining specific cost. As the doctors point out, there is 
evidence from which a reasonable juror could infer that WMC expressly agreed to 
a subjective standard. WMC's own words in its September 5 letter to its cost 
reviewer are strong evidence of a Dr. Roussalis standard. The provisions in the 
Letter of Intent which speak of exterior and interior quality, of the doctors' 
approval of architectural and engineering drawings, of high quality features on 
the representative Exhibit A list, of a state-of-the-art computer system, and of 
WMC's buy-back guarantee of the greater of $1.25 million or the actual cost of 
the new building are also evidence of an intentional subjective standard. That 
juror could also turn WMC's own logic against it because WMC agreed to having 
interior design and woodworking experts in charge of and directing the interior 
quality. If one does not have such experts when there is concern about costs, 
WMC's agreement to having them on the project speaks loudly against WMC's 
litigative position. That juror may find evidentiary value in WMC's actions upon 
receiving in mid-July Mr. Gurkin's guess of a construction cost of $2.6 million. 
Rather than insisting on a need to establish and apply an objective standard for 
determining cost, WMC authorized Mr. Gurkin to resume construction, knowing that 
the doctors were working on the design drawings, plans and specifications as the 
Letter of Intent directed them to do.

[¶124] A reasonable juror may also determine that the 
doctors' legal obligation of good faith and fair dealing and the Section 1031 
nature of the exchange serve to contain the doctors' exercise of discretion 
under the Dr. Roussalis standard within reason; we think those factors are 
worthy of the juror's consideration. We are satisfied that evidence exists from 
which a reasonable juror could find a sufficiently definite standard by which to 
measure the doctors' performance. For all of the above and foregoing reasons, we 
hold that genuine issues of material fact regarding contract formation exist in 
this record.

II. 
Whether Alleged Oral Modifications to the Alleged Letter of Intent Agreement 
Fail for Lack of Consideration.

[¶125] WMC asserts that alleged oral modifications of the 
alleged agreement, namely, the expansion of the size of the building from 9,500 
square feet to about 11,900 square feet and the addition of many special 
features beyond the list on Exhibit A attached to the Letter of Intent, fail for 
lack of consideration. Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531, 540 
(Wyo. 1993); Willard Given & Assoc.'s, P.C. v. First Wyo. Bank, 706 P.2d 247, 251 (Wyo. 1985); Harvard v. Anderson, 524 P.2d 880, 883 (Wyo. 1974). WMC 
correctly states that this Court follows the pre-existing duty rule, namely, an 
agreement to do what one is already bound to do cannot serve as consideration to 
support a modification. See Brodie v. General Chemical Corp., 934 P.2d 1263, 
1268 (Wyo. 1997); Harvard, 524 P.2d  at 883; Long v. Forbes, 58 Wyo. 533, 548-49, 
136 P.2d 242, 246-47 (1943). WMC claims that the doctors provided no new 
consideration to support the square footage increase or the many special 
features they added after the parties signed the Letter of Intent. Without new 
consideration to support these modifications, WMC reasons, the modifications 
were invalid and fail.

[¶126] Earlier in this opinion, we stated the facts and 
circumstances surrounding the square footage increase of the building size and 
noted that in the Letter of Intent the parties expressly stated that the list of 
specific features shown on Exhibit A attached to the Letter of Intent was 
representative, but not meant to be exhaustive . . . of the types of high 
quality features which the new facility will incorporate. With these facts and 
circumstances in mind, we will analyze the parties' contentions concerning 
whether there was consideration to support these modifications.

[¶127] In response to WMC's claim that the addition of many 
special features beyond the representative list on Exhibit A attached to the 
Letter of Intent was not supported by new consideration, the doctors answer 
that, in the Letter of Intent, the parties specifically provided for the 
addition of special features as the design and construction of the building 
progressed. Implicit in this answer would seem to be the point that new 
consideration was unnecessary to support the addition of special features 
expressly anticipated or contemplated by the parties in the original agreement. 
In other words, the additional special features, provided for in the original 
agreement, are deemed supported by the consideration which supported the 
original agreement. We think that logically follows, and WMC offers no authority 
to the contrary. Moreover, the doctors maintain that the additional features 
were discussed with WMC's representatives Carriger and Williams, who supported 
the additions because WMC (1) received the benefit of promoting the new 
state-of-the-art building for WMC's organizing efforts with its visionary 
Wyoming Integrated Network, a state-wide association of hospitals and 
physicians, with WMC at its hub; and (2) would re-acquire the building in the 
future, pursuant to the buy-back provision in the Letter of Intent, and 
therefore would benefit from the additional special features.

[¶128] With respect to WMC's claim that the building size 
increase was also not supported by new consideration, the doctors maintain that 
WMC knew of and expressly approved the increase and received its benefits 
because of the probability that WMC would re-acquire the building in the future. 
In this regard, we recall the facts and circumstances of WMC's knowledge of and 
involvement in this size increase, and in particular WMC's October 5, 1995, 
prepared statement to media representatives in which WMC explained the size 
increase to the public and stated that the additional space would be useful when 
WMC re-acquired the property. The doctors correctly observe that, of the many 
definitions given for consideration, one of them recognized by this Court is a 
benefit to the promisor or a detriment to the promisee. Laibly v. Halseth, 345 P.2d 796, 799 (Wyo. 1959); Moorcroft State Bank v. Morel, 701 P.2d 1159, 1162 
(Wyo. 1985).

[¶129] We are inclined to agree with the doctors' argument. 
With respect to the additional special features, we find that the parties 
contemplated and provided for them in the Letter of Intent; new consideration 
was unnecessary to support them. But even if new consideration were necessary, 
the benefits accruing to WMC from these additional special features constitute 
consideration. With respect to the building size increase, we hold that WMC 
received a benefit from this increase and that benefit constituted 
consideration.

[¶130] Even if the benefit received by WMC did not 
constitute consideration for the building size modification, we would find an 
appropriate and applicable exception to the pre-existing duty rule in 
Restatement (Second) of Contracts 89, at 237 (1981). See Wilder v. Cody Country 
Chamber of Commerce, 868 P.2d 211, 219 (Wyo. 1994). That section states in 
pertinent part:

A 
promise modifying a duty under a contract not fully performed on either side is 
binding (a) if the modification is fair and equitable in view of circumstances 
not anticipated by the parties when the contract was made.

Restatement (Second) of Contracts 89, at 237. Whether a 
modification is fair and equitable goes beyond the absence of coercion and 
requires an objectively demonstrable reason for seeking a modification. Id. at 
89 cmt. b, at 238. The reason for modification must rest in circumstances not 
anticipated when the contract was made. Id. When such a reason is present, the 
relative financial strength of the parties, the formality with which the 
modification is made, the extent to which it is performed or relied on, and 
other circumstances may be relevant to show or negate imposition or unfair 
surprise. Id. Recalling Dr. Roussalis' testimony and architect Trice's letter to 
WMC explaining the reasons for the building size increase, we conclude that the 
facts and circumstances surrounding the size modification were not anticipated 
by the parties when they signed the Letter of Intent. Recalling from the 
relevant portion of the statement of facts that WMC approved of the size 
modification and cooperated with the doctors in making the modification, that 
WMC's site plan agreement with the City of Casper called for an 11,833 square 
foot building, that WMC authorized Mr. Gurkin to pour an 11,900 square foot 
foundation, and that Mr. Gurkin in fact poured that foundation, we must conclude 
that the size modification was fair and equitable. All of the facts and 
circumstances surrounding this modification negate imposition or unfair 
surprise.

III. 
Whether Alleged Oral Modifications of the Alleged Letter of Intent Agreement are 
Barred by the Statute of Frauds.

[¶131] WMC contends there is no written agreement signed by 
it which (1) increases the size of the doctors' building from 9,500 square feet, 
as written in the Letter of Intent, to nearly 11,900 square feet, as now 
expected by the doctors; (2) changes the full roughed-in basement, as written in 
the Letter of Intent, to a full finished basement, as now expected by the 
doctors; and (3) adds numerous special features in the building, such as 
basement air conditioning, motion sensor lighting, a nurse call system, brick 
pavers, and car block heaters, to name only a few, as now expected by the 
doctors. Because these alleged modifications to the Letter of Intent were orally 
made, if at all, and not made in writings signed by WMC, WMC claims they are 
barred by the statute of frauds. Wyo. Stat. Ann. 1-23-105 (LEXIS 1999).

[¶132] WMC asserts that the May 22, 1995, site plan 
application and the July 18, 1995, site plan agreement which reference an 11,833 
square foot building, are merely evidence of the terms of a subsequent parol 
modification of the Letter of Intent which evidence is inadmissible to prove a 
written modification of the Letter of Intent, citing North American Uranium, 
Inc. v. Johnston, 316 P.2d 325, 335 (Wyo. 1957) (citing 32 C.J.S. 1005, 1011). 
WMC also contends the doctors' documents do not reference the numerous new 
features which the doctors have added to the building. WMC argues that Williams' 
July 21, 1995, letter to Gurkin, the doctors' representative, which instructed 
him to resume construction operations, is not written confirmation of the 
alleged oral agreement. According to WMC, that letter does not mention either 
increased building size or the additional special features. WMC argues that 
these alleged modifications of increased size, finished basement, and additional 
features must be in a writing signed by WMC because the alleged agreement was 
one for the transfer of real estate and one which could not be performed within 
one year of its making, the Letter of Intent being signed in March 1995 and 
Gurkin confirming he had fifteen months in which to build the building. Wyo. 
Stat. Ann. 1-23-105(a)(i) and (v) (LEXIS 1999). WMC maintains that the 
regrettable situation in which it and the doctors find themselves is the result 
of mistakes and misunderstandings, and the purpose of the statute of frauds is 
to guard against just such a situation.

[¶133] In response to WMC's argument, the doctors claim 
that the requirements of the statute of frauds have been satisfied to the extent 
the agreement sought to be enforced by them falls within the statute of frauds. 
Thus, they point out that, to the extent the agreement at issue is one for the 
sale or transfer of land, three particular writings signed by WMC's authorized 
agent contain a sufficient description of the land involved. These writings are 
the Letter of Intent, WMC's site plan application, and WMC's site plan agreement 
with the City of Casper. The Letter of Intent contains legal descriptions of 
both properties to be exchanged. WMC's site plan agreement contains a legal 
description of WMC's property on which the proposed office building was to be 
built and describes an 11,833 square foot medical office complex on a land site 
of 38,594 square feet. Clearly, the alleged oral modifications do not purport to 
modify the land involved. They do purport to modify the size of the building to 
be built on that land, the nature of the finish of the full basement of that 
building, and the kind of special features to be included in that building.

[¶134] Neither party directs our attention to authority on 
the precise question which emerges from this situation, namely, whether these 
particular oral modifications are of such nature that they must be in writing 
signed by WMC. Our own research reveals the existence of a general rule that if 
an original agreement was required to comply with the statute of frauds, any 
material modification of that agreement must also conform to the statute of 
frauds. Allen v. Kingdon, 723 P.2d 394, 396-97 (Utah 1986). As to be expected, 
there are recognized exceptions to that general rule.

[¶135] One exception is

where a party has changed position by performing an oral 
modification so that it would be inequitable to permit the other party to found 
a claim or defense on the original agreement as unmodified.

Id. 
at 396. See also, Quirin v. Weinberg, 830 P.2d 537, 541 (Mont. 1992); Crandell 
v. Resley, 804 P.2d 272, 275 (Colo. App. 1990); Mikesell v. Newworld Dev. Corp., 
840 P.2d 1090, 1095 (Idaho App. 1992); Siegner v. Interstate Prod. Credit Ass'n, 
820 P.2d 20, 30 (Or. App. 1991); Kirk v. Tomulty, 831 P.2d 792, 796 (Wash. App. 
1992). This particular exception seems appropriately applicable to the alleged 
oral modification of the size of the building from 9,500 square feet to 11,900 
square feet.

[¶136] From our earlier statement of the facts, we recall 
that sometime in March, 1995, Carriger approved an increase in the square 
footage of the medical office building from about 9,500 square feet to about 
11,900 square feet. Several pieces of evidence bear this out and explain the 
increase. In his deposition, WMC's Williams testified that Carriger told me that 
he had approved the addition of a connecting space in between . . . the doctors' 
. . . suites and the rental suites. In his deposition, Dr. Roussalis testified 
that Carriger had approved the size increase, explaining that a substantial 
amount of the increase, about 1,100 to 1,300 square feet, was the result of 
enclosing the connecting space and was driven by safety considerations. 
According to Dr. Roussalis, early in the design drawing phase the architects 
(Anderson De Bartolo Pan) and the doctors realized that the unenclosed 
connecting space would cause a wind tunnel effect which was considered 
dangerous. The solution arrived at was to enclose the space; that enclosed area 
became an atrium or walkway. The remaining amount of size increase was 
attributable to some necessary changes in the tenant area and the addition of a 
canopy. The site plan agreement between WMC and the City of Casper, dated July 
18, 1995, references an 11,833 square foot building. Mr. Gurkin's letter to 
WMC's Williams dated July 19, 1995, references an 11,900 square foot building. 
Upon receiving WMC's authorization to resume construction on July 19, 1995, Mr. 
Gurkin poured an 11,900 square foot foundation. In a letter to Williams dated 
August 25, 1995, Peter Trice, of the architectural firm Anderson DeBartolo Pan, 
explained the size increase in this way:

Program Issues

[¶137] In our letter to Mike Gurkin dated February 23, 1995 
(copy attached), we had reviewed the building program with respect to the tenant 
spaces. This document identifies the rationale for increasing the building's 
tenant spaces from 8,500 sf to 9,890 sf. During the design process, certain 
program elements were added such as:

Toilet, Mrs. Rousallis' Office 30 sf. Exams Rooms Enlarged 
80 sf. Mrs. Youmans' Office Enlarged 25 sf. One Procedure Room Enlarged 30 sf. 
Staff Lounge Enlarged 25 sf.

Total 250 sf. x 1.35 337 sf.

[¶138] The final build program for tenant spaces was 
therefore 10,227 sf. (9,890 + 337). The actual design required 10,188 sf to 
accommodate these services. This is less than .5% variance from the program.

[¶139] The remaining square footage is for building 
circulation and support space.

Stairs 370 sf. Elevator 60 sf. Lobby 1,194 sf.

[¶140] Typically, multiple tenant medical office buildings 
require 20-25% additional square footage to allow for building support space, 
circulation and mechanical spaces. For this clinic, the final design required an 
additional 1,624 sf. or about 16% (excluding the mechanical space located in the 
basement). When this number is added to the revised tenant space program, the 
gross building square footage equals 11,812 sf. extremely close to the final 
design amount of 11,800 sf.

[¶141] In a prepared statement dated October 5, 1995, which 
WMC issued to media representatives, WMC explained the size increase:

[¶142] As the design progressed, the size of the building 
was increased, to take into account the requirements of the Americans With 
Disabilities Act and a pilot computerization project, as well as increased 
common areas which arose as a result of combining medical offices. Additionally, 
WMC agreed to a full basement, since there appeared to be at that time a 
probability that WMC would in the future re-acquire the property, and that 
additional space would be useful. The final size of the building was 11,800 
square feet, with a full basement.

[¶143] Finally, in his affidavit dated November 13, 1995, 
WMC's Williams stated, in relevant part:

After signing the Letter of Intent, WMC cooperated with 
[the doctors] by, among other things, expanding the size of the New Building 
beyond the 9,500 square feet provided for in the Letter of Intent, to 11,900 
square feet.

[¶144] Not only are there writings signed by WMC which 
evidence that size increase, but there is evidence that WMC expressly authorized 
Gurkin, the doctors' agent, to pour an 11,900 square foot foundation. Indeed, 
that foundation was poured and existed in the ground. That performance 
exclusively referable to the alleged agreement must certainly be considered 
sufficient to exempt it from the effect of the statute of frauds. Ryon v. Earl, 
618 P.2d 54, 56 (Utah 1980). The construction of an 11,900 square foot 
foundation alone and without the aid of words of agreement is extraordinary 
unless as an incident of agreement. See Burns v. McCormick, 135 N.E. 273 (N.Y. 
1922). And see Restatement (Second) of Contracts 139 (1981).5 In passing, we 
recall what we wrote in B&W Glass, Inc. v. Weather Shield Mfg., Inc., 829 P.2d 809, 819 (Wyo. 1992), in the course of holding that under Wyoming law an 
oral promise otherwise within the statute of frauds declared in Wyo. Stat. Ann. 
34.1-2-201 (1991) (goods) and the Uniform Commercial Code may be enforceable on 
the basis of promissory estoppel. We said this Court has accepted a role of 
leadership in invoking equitable principles to avoid injustice. Id. at 818. 
After touching on our precedent in this regard and quoting Restatement (Second) 
of Contracts 139 (1981), we noted our approval of the use of promissory 
estoppel, as phrased in the Restatement (Second), to avoid the general statute 
of frauds. Remilong v. Crolla, 576 P.2d 461, 465 (Wyo. 1978) (buyers of land 
could enforce an oral promise from the seller that all trailers would be removed 
from adjacent lands). Eschewing the concern of the 17th Century English courts 
that a writing is the sole method to avoid undetected [perjury], we confidently 
asserted that [o]ur judicial system is capable of discerning perjury and 
reaching a determination in an instance in which a litigant establishes 
promissory estoppel by appropriately assuming his burden. B&W Glass, Inc., 
829 P.2d  at 819. Our interest in invoking equitable principles to avoid 
injustice remains steadfast today.

[¶145] There is evidence here which explains that 
construction problems unforeseen by the parties in March, 1995, before the 
design drawings, plans and specifications were prepared were responsible for the 
size increase. Although WMC raises some question whether Carriger agreed to the 
size modification, its own representative Williams testified that Carriger did. 
In any event, this is an issue which can be better resolved at trial.

[¶146] With respect to the alleged oral modification of the 
building's special features, we must observe that the Letter of Intent expressly 
covered the topic of specific features to be incorporated into the design and 
construction of the building, listing them on Exhibit A to the Letter of Intent 
and stating that the list was representative, but not exhaustive of the types of 
high quality features to be incorporated into the building. We do not believe 
that the additional features which WMC wants to treat as an oral modification 
should be considered such in light of the express provision in the Letter of 
Intent. Rather, this subject is better left to be treated as a disputed issue of 
material fact, that is to say, what did the parties intend with respect to those 
additional features which might be incorporated into the building.

[¶147] With respect to the alleged oral modification of the 
full roughed-in basement to a full finished basement, we believe that is a 
construction detail also better left to be treated as a disputed issue of 
material fact to be resolved at trial. Obviously, as we have noted earlier in 
this opinion, the nature of the parties' agreement was unique because, as Gurkin 
described it, the project was being designed and built simultaneously and on a 
fast track. Under such circumstances, it is foreseeable that design and 
construction details may change and such changes do not readily lend themselves 
to comply with the strict requirements of a writing. A similar situation arose 
in Petrie v. Spooner, 223 S.W. 383 (Ark. 1920), where in a written contract 
Spooner agreed to build and convey to Petrie a house on a lot owned by Spooner 
according to plans to be approved by Petrie, but later a dispute arose 
concerning numerous changes and additions made during construction which Spooner 
claimed Petrie had approved; in answer to Petrie's contention that the oral 
modification violated the statute of frauds and he could not be held for the 
changes or additions to the plans, the court stated:

[I]t 
may be said that the writing evidencing the contract to sell the land does not 
prescribe what the plans of the building shall be. Upon the contrary, it 
expressly recites the fact to be that the plans had not been then prepared, but 
were to be subsequently prepared and approved; so that this written contract 
cannot be conclusive of the plans according to which the building was to be 
constructed, and the statute of frauds does not apply to the building contract. 
It was not essential that there be a written contract approving the plans for 
the building, and it was therefore permissible for the parties to modify or 
alter these plans without evidencing that modification or alteration in 
writing.

Id. 
at 385.

[¶148] Upon the record before us, we conclude that these 
alleged oral modifications are not within the statute of frauds. We also 
conclude that disputed issues of material fact as to these alleged oral 
modifications exist and must be resolved at trial.

IV. 
Whether the Alleged Letter of Intent Agreement is Unconscionable.

[¶149] WMC's assertion that the Letter of Intent was 
unconscionable at the time it was made and thereafter rests on the estimated 
construction cost of the new building, which Gurkin reported at $3,547,791 after 
receiving subcontractors' bids in late August, 1995, which estimate cost 
allegedly resulted from the combined oppressive effect of both the presence and 
absence of certain provisions in the Letter of Intent. Specifically, WMC points 
to the absence of a provision capping construction costs; the presence of 
open-ended provisions establishing a comparability standard for the new building 
and unchecked discretion in the doctors as to exterior and interior design, 
furnishings, and equipment; and the presence of a buy-back provision giving the 
doctors the opportunity, by running up costs, to increase the buy-back price WMC 
would pay. WMC claims that the resulting construction cost unfairly surprised 
WMC and made the contemplated property exchange grossly unequal, both of which 
are indices of unconscionability. 

[¶150] Although WMC's focus is on the oppressive nature of 
and the unfair surprise caused by these items, and not on unequal bargaining 
power, it asserts in passing that if unequal bargaining power were the issue, 
the doctors had the upper hand because they knew that WMC needed their property 
for hospital expansion, refused a cost cap provision, and agreed to open-ended 
provisions which they later interpreted as giving them unlimited discretion over 
design and cost.

[¶151] Without supporting authority, WMC asserts that who 
proposed the allegedly unconscionable provisions is beside the point. In 
closing, WMC candidly reminds us that the question of unconscionability is one 
of law for the court, but that the court should be cautious in holding an 
agreement unconscionable.

[¶152] Responding to WMC's argument, the doctors refer us 
to our leading case of Matter of Estate of Frederick, 599 P.2d 550, 556 (Wyo. 
1979), in which we discussed and applied, in the context of a filling station 
lease with an option to purchase, the relevant considerations in the 
identification of unconscionability. Based upon this, and similar authority, the 
doctors assert that a cursory review of the facts reveals the baseless nature of 
WMC's argument. In this regard, the doctors note that it was WMC, not them, 
which proposed the buy-back provision; the doctors did not reject the cost cap 
concept, but made it clear to WMC that they wanted to see the new building's 
design before they would agree to a cost cap; WMC did not want to wait the four 
to six month period for design drawings to be prepared and freely chose to 
proceed without a cost figure, thus bearing the risk of a higher-than-expected 
construction cost and corresponding buy-back cost. The doctors characterize 
WMC's argument as an allegation, which they deny, that they breached an 
obligation of good faith by running up the cost of the building to benefit 
themselves on the buy-back obligation. They claim this allegation presents 
issues of fact best suited for a jury. Like WMC, the doctors close their 
argument by reminding us that judges have been cautious in applying the doctrine 
of unconscionability.

[¶153] We hold, as a matter of law, for the reasons which 
follow, that WMC's contention of unconscionability lacks merit. That we must 
exercise caution in our resolution of this issue is because we recognize the 
basic right of persons, real and artificial, to freely enter into contracts. 
Sinclair Oil Corp. v. Columbia Cas. Co., 682 P.2d 975, 978 (Wyo. 1984). Our 
reluctance to redraw or nullify the provisions of a contract made by competent 
parties draws strength from the eloquent statement from the United States 
Supreme Court which we favorably quoted in Sinclair Oil Corp.:

The 
right of private contract is no small part of the liberty of the citizen, and 
that the usual and most important function of courts of justice is rather to 
maintain and enforce contracts, than to enable parties thereto to escape from 
their obligation on the pretext of public policy, unless it clearly appear that 
they contravene public right or the public welfare. It was well said by Sir 
George Jessel, M.R., in Printing & Co. v. Sampson, L.R. 19 Eq. 465: It must 
not be forgotten that you are not to extend arbitrarily those rules which say 
that a given contract is void as being against public policy, because if there 
is one thing which more than another public policy requires it is that men of 
full age and competent understanding shall have the utmost liberty of 
contracting, and that their contracts, when entered into freely and voluntarily, 
shall be held sacred, and shall be enforced by courts of justice. Therefore, you 
have this paramount public policy to consider - that you are not lightly to 
interfere with this freedom of contract.'

Id. 
at 978-79 (quoting Baltimore & Ohio Southwestern Railway Co. v. Voigt, 176 U.S. 498, 505, 20 S. Ct. 385, 387, 44 L. Ed. 560, 565 (1900)).

[¶154] Our cases admit of the difficulty of defining 
unconscionability. See, e.g., Svalina v. Split Rock Land and Cattle Co., 816 P.2d 878, 882 (Wyo. 1991). Our cases repeat the various judicial definitions 
which other courts have offered and which give only the most general guidance on 
the meaning of the term. See, e.g., Estate of Frederick, 599 P.2d  at 556. 
Perhaps the better judgment is to confess, as the leading commentators have, 
that [i]t is not possible to define unconscionability. It is not a concept, but 
a determination to be made in light of a variety of factors not unifiable into a 
formula.

[¶155] 1 James J. White and Robert S. Summers, Uniform 
Commercial Code 4-3, at 213 (4th ed. 1995). (Although the Uniform Commercial 
Code governs only transactions in goods, courts have applied its 
unconscionability provision, 2-302, to other contracts either by analogy or as 
an expression of a general doctrine. I Farnsworth, supra 4.28, at 497. See Wyo. 
Stat. Ann. 34.1-2-302 (LEXIS 1999)).

[¶156] Our leading case of Estate of Frederick, as well as 
Svalina which relied upon it, identified the approach and the various factors 
which we have considered in making a determination that an agreement is or is 
not unconscionable. These factors and others which we find appropriate have been 
identified by other courts and leading commentators. This Court, and most 
others, as well as leading commentators, test the contention as of the time the 
agreement is made and not in accordance with hindsight. Estate of Frederick, 599 P.2d  at 556; and see, White and Summers, supra, 4-3, at 211. We consider the 
characteristics of the parties including age, education, intelligence, business 
acumen and experience. Estate of Frederick, 599 P.2d  at 556. leading commentator 
reports, Courts have generally been chary about using the doctrine . . . to 
protect merchants and similar professionals and have declined to apply the 
doctrine in favor of sophisticated corporations. I Farnsworth, supra, 4.28, at 
505-06; and see White and Summers, supra, 4-9, at 237 (courts have not generally 
been solicitous of business persons in the name of unconscionability). For 
example, in Continental Airlines v. Goodyear Tire & Rubber Co., 819 F.2d 1519, 1527 (9th Cir. 1987), in rejecting an airline's claim of unconscionability 
in connection with a contract for the purchase of aircraft, that court said it 
makes little sense in the context of two large, legally sophisticated companies 
to invoke the . . . doctrine. See also, AT&T v. New York City Human 
Resources Admin., 833 F. Supp. 962, 988-89 (S.D.N.Y. 1993) and cases cited 
therein. We consider whether the allegedly aggrieved party has enjoyed the 
advice of legal counsel. Estate of Frederick, 599 P.2d  at 556. [N]umerous courts 
have considered the presence and advice of counsel to constitute circumstantial, 
if not conclusive, evidence that a contract is not unconscionable. Resource 
Management Co. v. Weston Ranch, 706 P.2d 1028, 1045 (Utah 1985); and see, 
Cryogenic Equipment, Inc. v. Southern Nitrogen, Inc., 490 F.2d 696, 699 (8th 
Cir. 1974) (negotiators included knowledgeable commercial lawyer with eighteen 
years experience and an engineer with twenty-four years in management and 
production). We consider which party proposed the allegedly unconscionable 
provisions. Estate of Frederick, 599 P.2d  at 556; Svalina, 816 P.2d  at 882. As a 
matter of common sense and fairness, which party proposed an allegedly 
unconscionable provision is of legitimate concern to a court asked to exercise 
its equitable power. Because a court focuses on the relative fairness of the 
obligations assumed and is determining the presence vel non of one-sided terms 
which oppress or unfairly surprise an innocent party, we find it difficult to 
accept the notion that a party who proposes an allegedly unconscionable term can 
be viewed as an innocent party who is oppressed or unfairly surprised by a 
provision of its own making. See, e.g., Osgood v. Medical, Inc., 415 N.W.2d 896, 
901-02 (Minn. App. 1987) (terms not unconscionable where party asserting so 
provided them); Johnson v. Mobil Oil Corp., 415 F. Supp. 264, 268 (E. D. Mich. 
1976) (one of the variety of factors is who drafted the agreement). We also find 
it appropriate to consider whether both absence of meaningful choice and 
presence of contract provisions unreasonably favorable to the other party must 
be found to satisfy a claim of unconscionability. Leading commentators report 
that most courts require a quantum of both and take a balancing approach in 
applying them. White and Summers, supra, 4-7, at 230-31; and see, Maxwell v. 
Fidelity Financial Services, Inc., 907 P.2d 51, 58 (Ariz. 1995) (Many courts, 
perhaps a majority, have held that there must be some quantum of both procedural 
and substantive unconscionability to establish a claim, and take a balancing 
approach in applying them); and White and Summers, supra, 4-9, at 242 (In 
general, then, in the absence of procedural unconscionability [bargaining 
naughtiness or absence of meaningful choice], courts will not invalidate 
commercial contracts in the name of unconscionability). In Estate of Frederick, 
we identified and applied in our analysis factors falling under the rubric of 
this so-called procedural unconscionability: deprivation of meaningful choice as 
to whether to enter into the contract, compulsion to accept terms, opportunity 
for meaningful negotiation, such gross inequality of bargaining power that 
negotiations were not possible, characteristics of alleged aggrieved party 
(underprivileged, uneducated, illiterate, easily taken advantage of), and 
surprise by fine print or concealed terms. Estate of Frederick, 599 P.2d  at 
556.

[¶157] Having carefully considered WMC's argument in light 
of the record and the foregoing authority, we must reject its claim of 
unconscionability. The record does not support WMC's contention that the doctors 
enjoyed superior bargaining power, the so-called upper hand. While it is true 
the doctors knew that WMC wanted their property for hospital expansion, it is 
also true that WMC, before giving them this knowledge, had explored its 
available options of expanding either westwardly in the doctors' direction or 
southwardly in the direction it ultimately selected when the deal with the 
doctors began to collapse. It was WMC that freely chose to approach the doctors, 
who initially did not want to sell their properties, and convinced them that 
they were standing in the way of what was best for WMC. WMC envisioned 
transforming itself into a regional medical center working in partnership with 
an integrated network of doctors. It proposed to build the doctors a 
state-of-the-art medical office building as a showcase for WMC's integrated 
network vision. It was WMC that determined the greatest cost savings would be 
realized by westwardly expansion. It was WMC that pressed for negotiations with 
the doctors. At all times WMC was represented by its chief executive officer, 
informed board members, and experienced legal counsel. The record shows that 
that legal counsel in an early September, 1995, letter, explained about the 
absence of a cost cap provision:

The 
physicians would not sign any type of agreement with a dollar limitation in it 
until a complete set of plans and specifications were generated and approved. 
Because of WMC's desire to proceed on the revenue bonding process prior to those 
plans being completed, and the necessity that the land be under contract prior 
to issuing the bonds (for rating and bond insurance purposes), the decision was 
made to leave the agreement open-ended.

[¶158] (Emphasis added). The record further shows that 
WMC's October, 1995, press release stated, [WMC] took a good faith business risk 
in proceeding with the construction of the new office building prior to having 
the final cost determined, in order to facilitate the construction schedule of 
the new hospital and to take advantage of the favorable bond market. We are 
aware that there are elements of risk in any contract. Estate of Frederick, 599 P.2d  at 556. It has been rightly said:

The 
policy underlying that rule [unconscionability cannot be demonstrated by 
hindsight] is that virtually all contracts involve the assessment of risks. How 
fast, if at all, will land values rise over the next ten years? Are interest 
rates likely to increase, decrease, or remain constant? Is a particular venture 
likely to be a wild success or an abysmal failure? . . . Assessment of such risk 
is intrinsic to the process of contracting and affects the terms on which 
contracts are entered into. To judge the substantive fairness of contracts at a 
date subsequent to their making could nullify many contracts entailing a 
speculative element.

Resource Management Co., 706 P.2d  at 1043.

[¶159] The record shows WMC is a sophisticated business 
entity and was represented by experienced negotiators, including experienced 
legal counsel, and that they negotiated with the doctors over many weeks. The 
record does not show WMC was compelled to accept provisions but rather enjoyed 
meaningful negotiation and freely proposed the provisions it would now 
challenge. We have no difficulty in concluding that WMC had the unfettered 
choice to either assent to the alleged agreement, negotiate modifications to its 
provisions, or simply walk away from the doctors as easily as it had first 
walked toward them in the early days of 1995.

[¶160] Because we do not find that WMC was deprived of 
meaningful choice in any sense of that concept, we need not dwell long 
considering WMC's contention that the combined effect of both the presence and 
absence of certain provisions resulted in an unfair, one-sided agreement which 
produced an excessive construction cost which unfairly surprised WMC and made 
the contemplated property exchange grossly unequal. White and Summers, supra, 
4-7, at 230-31; 4-9, at 242; Maxwell, 907 P.2d  at 58. As we noted earlier, the 
record shows, as the doctors claim, that WMC both provided, and freely deleted, 
some of the provisions it would now challenge. It is, therefore, in a poor 
position to now claim it is an innocent party which is unfairly surprised. 
Although WMC complains of the excessive construction cost estimate which Gurkin 
calculated in August, 1995, after receiving subcontractors' bids based upon 
finally available design drawings, plans and specifications, the record shows it 
was reasonably foreseeable to WMC that the construction cost estimate would be 
high. It was, after all, WMC that insisted on the atypical way in which this 
construction project proceeded. WMC knew, as Gurkin discussed with it early on, 
that most projects are typically drawn and designed a year before they are bid. 
Gurkin said to WMC, get the plans drawn, let me give you a price, and then build 
the building. Gurkin asked WMC's legal counsel, to no avail, if it wouldn't be 
better to delay actual construction of the building until the design and 
specifications were finalized, so that a cost estimate could be prepared. But 
WMC pushed for a June, 1996, completion date because that date, in WMC's 
judgment, was critical timing in the building schedule of the new hospital (in 
order to avoid building over two full winters). It is common knowledge that in 
major projects construction costs are difficult to manage. Surely, that 
difficulty must be exacerbated when the project is designed and built on the fly 
against a compressed time schedule as this one was. Moreover, the record shows 
that WMC knew that one of the doctors had built a very nice and very expensive 
($132 per square foot) office building ten years earlier. Inflation is a 
commonly known element of risk in any contract. Estate of Frederick, 599 P.2d  at 
556. It was reasonably foreseeable to WMC that the new building would be more 
costly than the building constructed ten years earlier. By mid-April, 1995, a 
week before WMC at a press conference announced the hospital expansion project 
and the doctors' new medical office building project, WMC had in hand Gurkin's 
rough preliminary estimate of a $2.1 million construction cost based upon a 
9,850 square foot building, or about $215 per square foot, apparently not 
counting the full basement. At that time WMC also knew that the size of the 
building had increased from 9,850 square feet to 11,900 square feet because 
Carriger and the doctors had agreed to it in March. Knowing in mid-April, then, 
of a $215 per square foot estimate and of an 11,900 square foot building, WMC 
reasonably should have known that a rough estimate of the construction cost 
would be around $2.5 million, apparently not counting a full basement. If a 
construction cost of $45 per square foot were applied to an 11,900 square foot 
full basement (as Gurkin estimated in his July, 1995, letter to WMC), that 
results in an additional $500,000 roughly, for a total rough estimate of $3 
million. Thus, in the early days after the agreement was made, it was reasonably 
foreseeable to WMC that construction costs were going to be high. This was 
brought to WMC's attention again in mid-July, 1995, when Gurkin gave WMC his 
guesstimate of $2.6 million. He informed WMC that this guesstimate could grow 
another $500,000 roughly depending on increases of $5,000 each on fifty-four 
substantial items ($270,000) and an override of 5% to 10% for changes (10% of 
$2.8 million is $280,000; add that figure to $2.8 million estimate, for a total 
rough estimate of $3 million). Having this information in July, 1995, the WMC 
board heard its board member Dallas Laird comment to the effect that we knew 
that this was going to be an expensive building, and then WMC authorized Gurkin 
to pour an 11,900 square foot foundation and resume construction operations.

[¶161] In analyzing this matter, it is also important to 
keep in mind that WMC reaped a substantial benefit almost immediately upon the 
parties' execution of the agreement. That execution of the agreement paved the 
way for WMC to secure its revenue bond financing at a favorable interest rate 
for the hospital expansion construction project. In May, in succession the 
county commissioners approved proceeding with the revenue bond issue, the WMC 
board and the hospital's trustees approved a resolution authorizing the bond 
issue, and the county commissioners approved the bonds. In early June, 1995, the 
$31.8 million revenue bond issue was finalized and the trustee of the bond funds 
received the proceeds. WMC's actions of using the doctors' Letter of Intent 
agreement to secure this substantial benefit and later repudiating that same 
document runs dangerously close to violating the long-recognized principle that 
a party to a contract cannot rely upon part of the contract and repudiate the 
rest to the prejudice of another party to that contract. McKenzie v. Neale 
Const. Co., Inc., 75 Wyo. 175, 186, 294 P.2d 355, 359 (1956).

[¶162] Having carefully considered WMC's argument in light 
of the record and the foregoing factors, we must reject its claim that the 
alleged agreement is an unfair, one-sided agreement that produced an excessive 
construction cost which unfairly surprised WMC and made the contemplated 
property exchange grossly unequal.

V. 
Whether the Parties Formed and Performed an Agreement of Rescission Cancelling 
the Alleged Letter of Intent Agreement.

[¶163] WMC contends the record shows in mid-September, 
1995, when the parties were at impasse over cuts to the $3.5 million cost 
estimate, the doctors orally offered to rescind the alleged Letter of Intent 
agreement if three conditions were satisfied by WMC; WMC accepted that offer; 
WMC shut down the project in reliance on the agreement of rescission; and WMC 
performed the three conditions contained in the doctors' offer. WMC asserts that 
a legally binding agreement of rescission resulted from these foregoing 
events.

[¶164] Challenging WMC's assertion, the doctors contend the 
record shows that WMC never unconditionally assented to their oral offer; WMC 
did not unconditionally perform the three conditions of their offer; the doctors 
withdrew their offer before WMC accepted the offer and performed its conditions; 
and, in the days following the doctors' offer, WMC not only did not 
unconditionally perform the three conditions but it made, through various 
agents, several different settlement offers to the doctors, all of which belie 
WMC's assertion that a legally binding agreement of rescission was formed.

[¶165] To be sure, Wyoming law recognizes that if an 
executory contract is within the Statute of Frauds and is in writing, a 
subsequent oral agreement to rescind the contract is effectual if that oral 
agreement fulfills the requisites of a contract at common law. Gaido v. Tysdal, 
68 Wyo. 490, 505, 235 P.2d 741, 746 (1951); and see 10 Richard A. Lord, 
Williston on Contracts' 29:43, at 753 (4th ed. 1999); Restatement (Second) of 
Contracts 148 and 283 (1981). An agreement of rescission is limited to the 
discharge of contract duties. . . . [C]onsideration is provided by each party's 
discharge of the other's remaining duties. . . . The agreement may even be 
inferred from conduct - like an implied-in-fact contract - if it indicates 
mutual abandonment. I E. Allen Farnsworth, Farnsworth on Contract 4.24, at 
526-27 (2d ed. 1998). We agree that the validity of such an understanding to 
rescind is controlled by the same rules as in the case of other contracts. . . . 
[T]here must exist an offer by one party and an unconditional acceptance of that 
precise offer by the other, prior to withdrawal by the offeror, before a binding 
agreement is born.

Lemlich v. Bd. of Trustees of Harford Comm. College, 385 A.2d 1185, 1189 (Md. 1978).

[¶166] Our case law identifies the requisites of a 
contract. An offer, acceptance, and consideration are the basic elements of a 
contract. Bouwens v. Centrilift, 974 P.2d 941, 946 (Wyo. 1999) (quoting Miller 
v. Miller, 664 P.2d 39, 40 (Wyo. 1983)). There must be mutual assent to the same 
terms. Bouwens, 974 P.2d  at 946. The contracting process is usually 
straightforward. One party makes a manifestation of assent, called an offer, to 
another; the latter then makes a manifestation of assent, called an acceptance, 
to the former. Id. Whether an oral contract exists, the terms and conditions of 
the oral contract and the intent of the parties are generally questions of fact. 
Wilder v. Cody Country Chamber of Commerce, 868 P.2d 211, 218 (Wyo. 1994). Only 
when the offer, the terms of the offer, and the unconditional acceptance of the 
offer are shown without any conflict in the evidence does the interpretation of 
the contract become a question of law for the court. Id.; Engle v. First Nat'l 
Bank of Chugwater, 590 P.2d 826, 830 (Wyo. 1979). With these requisites in mind, 
we proceed to examine the record to determine whether there is conflict in the 
evidence relating to these requisites.

[¶167] On the evening of September 17, 1995, the doctors 
(and their wives) and the doctors' attorney met with Margo Bean (chairperson of 
WMC's board), WMC's attorney Williams, County Commissioner Bill Brauer, and 
hospital trustee president Bob Miracle. They reviewed the building project's 
problems, the perceived difficulties presented by WMC's disclosure at that 
meeting to the doctors of WMC's transfer to the county of ownership of the lots 
on which the building was being built, and the possibility of rescission of the 
Letter of Intent agreement based upon several conditions. According to the 
doctors, they offered to rescind the Letter of Intent agreement on three 
conditions: (1) WMC would pay Gurkin his full $250,000 contractor's fee; (2) WMC 
would make office space arrangements for Dr. Scaling and Dr. Cubin comparable to 
those they would have had as tenants of the ill-fated office building; and (3) 
WMC would compensate the doctors for [their] time and trouble, including, at a 
minimum, payment for [their] time spent away from [their] practices, receipt of 
the computer system promised in the [Letter of Intent agreement], as well as the 
equipment that had already been purchased for the new clinic. With respect to 
the condition that WMC would compensate the doctors for their time away from 
their practices, Mr. Miracle recalled:

[W]e 
talked about the hours spent, the time spent. No one had a - their fingers on it 
at that moment, they would have to go check their records.

It's 
my belief that everyone agreed that there was going to be a recision [sic] and 
that the amount of the cost was going to be the hours that these doctors had 
devoted to this project multiplied by some figure.

Miracle heard a figure of $100 an hour; and then, I 
believe, before it got over with, we were up to $360 an hour. According to Dr. 
Roussalis, Margo Bean said [the doctors] would probably be indemnified between 
two, three hundred thousand dollars over and above the payment for the doctors' 
lost time. With respect to the doctors' condition that Gurkin receive his full 
commission for the project, Mr. Miracle testified as follows:

A. 
We discussed the contractor. And they wanted assurance that the contractor was 
going to be taken care of. We gave that assurance.

Q. 
What assurance did you give?

A. 
That whatever had been expended by the contractor, he would be made whole, he 
and his suppliers, et cetera.

Q. 
Don't you recall [the doctors] indicating that they felt he should receive his 
full commission for the job?

A. 
They may have said that.

Q. 
What do you recall about that?

A. 
We said we will deal with the contractor, the hospital will deal with the 
contractor; he will be made whole as he sees it, the contractor sees it.

[¶168] In conflict with the doctors' version of the facts 
about the three conditions of their offer to rescind, WMC's counsel Williams 
testified at his deposition as follows:

Q. 
And is it true . . . that during that meeting there was [sic] some other items 
discussed with respect to rescinding the agreement?

A. I 
don't understand your question. 

Q. 
For instance, do you recall discussion about making things right with Mike 
Gurkin -

A. 
Yes.

Q. - 
as a condition of the rescission?

A. I 
- I don't know that I would state it as a condition of the rescission. It was an 
item that we talked about in the context of the rescission.

Q. 
Do you recall discussion about making things right with Dr. Scaling and Dr. 
Cubin as a condition of the rescission?

A. I 
would have the same - I guess the same problem with as a condition of the 
rescission.

Q. 
So was it your impression at the conclusion of that meeting that the doctors had 
unconditionally rescinded the agreement?

A. 
It was my understanding that at the conclusion of that meeting that the 
agreement had been rescinded and that we had agreed to take care of the 
subcontractors and Mike Gurkin. We had agreed to work with Dr. Scaling and Dr. 
Cubin. And Dr. Roussalis and Dr. Youmans had agreed to submit to us their 
statements for lost practice time. And that we were to approach the board on the 
issue of couching the agreement in terms of a mutual rescission.

Q. 
What was your understanding of what was meant by working with Dr. Scaling and 
Dr. Cubin?

A. 
To find out from them whether the arrangements they had made to vacate their 
existing space were irreversible and, if so, to talk to them about some 
substitute space.

[¶169] But, in some conflict with his deposition testimony 
that making things right with Gurkin and Dr. Scaling and Dr. Cubin were not 
conditions of the rescission, WMC's counsel Williams stated in his second 
affidavit in pertinent part:

At 
the meeting on September 17, 1995, plaintiffs [the doctors] offered to rescind 
the Letter of Intent with three conditions: (1) that WMC would pay them for 
their time spent on the project, (2) that WMC would settle up with Mike Gurkin 
and the subcontractors, and (3) that WMC would work with prospective tenants 
Drs. Cubin and Scaling to help them find alternative office space.

Mr. 
Miracle's take on the condition relating to Dr. Scaling's and Dr. Cubin's 
situation was slightly different. He testified as follows:

I 
think we took the position, hey, we didn't make the deal. [County Commissioner] 
Bill Brauer said it wasn't on the table until that day, that moment. It was the 
position that something could be worked out if it really was a crisis; that they 
had no alternatives; that they were forced to move; and this is where they had 
to go; that something could be worked out up there with other properties. He 
believed the cooperation would be extended in that effort to try to solve that 
matter.

[¶170] There is also conflict in the evidence whether the 
Letter of Intent agreement had been rescinded at the conclusion of that 
September 17 meeting. In the deposition of WMC's counsel Williams, quoted above, 
he offers the conclusory opinion that the agreement had been rescinded and we 
were to approach the board on the issue of couching the agreement in terms of a 
mutual rescission. There is no evidence that WMC had authorized those 
individuals attending the meeting to act on WMC's behalf to accept an offer from 
the doctors. Instead, a reasonable inference from the evidence of record is to 
the contrary. Bill Brauer, county commissioner, who attended the meeting, has a 
recollection of the matter different from Williams' recollection. According to 
Mr. Brauer,

A. I 
think [Mr. Miracle] and [Mr. Williams] both indicated to [the doctors' attorney] 
that they would call an immediate meeting of the - both the Board of Trustees 
and the Board of Directors and relay this information to them; and that this 
would be the best option, would be to rescind it, pay the doctors for their 
time.

* * 
*

Q. 
And that those were all the terms of this idea that we were kicking around for 
rescission of the contract? 

A. 
Yeah. I - I guess I thought it was more than kicking around.

Q. 
Okay.

A. I 
mean, it seemed to me what I heard was an offer was made to rescind.

Q. 
Right.

A. 
Wyoming - the [WMC] Board wasn't there. They had entered into an agreement. And 
- but that the - it was going to be recommended to that Board that they accept 
your offer to rescind, or the doctors' offer to rescind.

[¶171] Mr. Miracle recalled that as the meeting ended he 
believed the doctors were going to go away and compute their hours. That was 
going to be submitted, and we were going to have a nice, friendly recision [sic] 
of this matter. According to the minutes of the meeting of the WMC board the 
next day, September 18, the WMC board and its counsel Williams met to discuss 
the situation, and the board authorized Williams to negotiate a recision [sic] 
of the Letter of Intent with the . . . Doctors, though the Board retains the 
authority to vote on the final transaction. That same day, Williams wrote WMC's 
revenue bond underwriter of the hospital expansion project and said in pertinent 
part we are therefore negotiating the details of an agreement to mutually 
rescind our contract with the two physicians. Mr. Miracle recalled that he 
attended a WMC board meeting within the next week or two after the September 17 
meeting and probably at that time the question was asked, Where are we? Have we 
got the figures? And probably got a report that the thing had not been resolved. 
The foregoing evidence belies the conclusion that rescission was a fait 
accompli; rather, this evidence strongly argues that negotiations were ongoing 
and only the board had the authority to vote on the final transaction. Moreover, 
on this important point, there is no evidence in the record that Williams ever 
negotiated an agreement of rescission or that the WMC board ever voted on the 
final transaction. In this regard, the minutes of the WMC board meeting dated 
October 4, 1995, state in pertinent part, Margo [Bean] noted that negotiations 
were still underway with [the doctors' attorney]. . . .

[¶172] With respect to the doctors' condition that WMC 
compensate them, there is also conflict in the evidence as to whether WMC 
unconditionally performed this condition. According to the doctors' 
affidavits,

[¶173] WMC arbitrarily deducted several thousand dollars 
from our bills for time spent on the project without even consulting us about 
it. Checks for a reduced amount were submitted by WMC, which [we] cashed only 
because [WMC's new attorney] stated in writing that the checks were being 
tendered unconditionally.

[¶174] There is additional evidence in the record that, in 
the days following the September 17 meeting to discuss rescission and the 
September 18 WMC board meeting at which the board authorized Williams to 
negotiate but retained the authority to vote on the final transaction, various 
WMC representatives made various and different settlement offers to the doctors, 
all of which activity conflicts with WMC's assertion that it had unconditionally 
accepted and performed the conditions of the doctors' offer to rescind. Board 
member Dallas Laird had made such an offer because the board members talked 
[him] into it. Upon hearing of Mr. Laird's offer at a WMC board meeting, Mr. 
Miracle, accompanied by Mr. Brauer, visited Dr. Roussalis' office and made a 
different offer. Mr. Miracle testified in pertinent part:

Made 
him an offer of $100,000 to settle this thing. The $100,000 figure was a figure 
that I believed probably was going to represent the time that they had spent on 
this matter.

[¶175] Mr. Miracle understood that by the time of his 
meeting with Dr. Roussalis the rescission option had come apart. Dr. Roussalis 
rejected the offer.

[¶176] The record also shows that on September 19 the 
doctors had written to WMC's counsel Williams and offered to discuss completion 
of the building project. Although there were subsequent discussions on that 
subject, nothing substantive developed. In reply to the doctors' September 19 
letter, Williams wrote them on September 20. In that letter he said, in 
pertinent part: 

One 
other issue that I might as well address at this point is the payments to you if 
the recision [sic] stands. Lin [Carriger] agreed to pay you for your lost 
medical practice time, and we will honor that agreement, based on reasonable 
time and billing rates. It was our understanding after the meeting on Sunday 
that that was what was going to be submitted. That was the specific question 
that was raised by Mr. Miracle, and there was no indication at that time that 
there was going to be a damage claim of any kind. [Your attorney] now indicates 
that there will be such a claim. My strong sense from the Board meeting on 
Monday [September 18] is that the Board is not willing to pay anything other 
than the lost practice time. That ultimately will be a Board decision, but I 
just wanted to be up-front on where I think the Board is on that issue.

Obviously, we need to resolve these issues as soon as we 
can.

[¶177] It would serve no useful purpose to continue 
referencing the summary judgment materials for the purpose of showing more of 
the obvious, namely, that conflicting evidence abounds concerning the proof of 
the elements of an agreement of rescission. On this record, we find summary 
judgment on this point inappropriate.

VI. 
Whether Promissory Estoppel Applies with Respect to Rescission of the Letter of 
Intent Agreement.

[¶178] As an alternative ground of defense in the event its 
defense of an agreement of rescission fails, WMC asserts that the record 
supports the application of promissory estoppel with respect to rescission of 
the Letter of Intent. WMC correctly states that the elements of promissory 
estoppel demand evidence that establishes (1) the existence of a clear and 
definite promise which the promisor should reasonably expect to induce action by 
the promisee; (2) proof that the promisee acted to its detriment in reasonable 
reliance on the promise; and (3) a finding that injustice can be avoided only if 
the court enforces the promise. Loghry v. Unicover Corp., 927 P.2d 706, 710 
(Wyo. 1996); B&W Glass, 829 P.2d  at 818. The first two elements present 
questions of fact and the third element requires judicial consideration. Loghry, 
927 P.2d  at 711; Inter-Mountain Threading, Inc. v. Baker Hughes Tubular 
Services, Inc., 812 P.2d 555, 560 (Wyo. 1991); Davis v. Davis, 855 P.2d 342, 
348-49 (Wyo. 1993). The party who is asserting promissory estoppel is assigned 
the burden of establishing all of the elements of the doctrine with a standard 
of strict proof. B&W Glass, 829 P.2d  at 819.

[¶179] Calling forth that same evidence in the record upon 
which it based its contention that the parties made an agreement of rescission 
in mid-September, 1995, WMC contends that same evidence establishes the 
requisite elements of promissory estoppel. The doctors counter that WMC's 
promissory estoppel contention must fail for the same reasons that its 
agreement-of-rescission contention fails, namely, that the record fails to 
support the satisfaction of each of the elements of promissory estoppel.

[¶180] Based upon our careful examination of the record, we 
hold here, as we did on WMC's agreement-on-rescission issue, that genuine issues 
of material fact exist with respect to the first two elements of promissory 
estoppel. Should the jury determine those issues in WMC's favor, it would still 
remain with the trial judge to decide the third element of that doctrine.

VII. 
Whether the Doctors Interfered with the Alleged Agreement and, if so, Whether 
WMC's Performance under the Alleged Agreement was Excused Because of that 
Interference.

[¶181] Asserting that the parties' Letter of Intent 
agreement contained the implicit requirement for the utmost good faith and fair 
dealing between the parties, WMC contends that the doctors' demands regarding 
the new office building's design amounted to bad faith, and, thus, constituted a 
prior material breach of the doctors' duty of good faith and fair dealing and of 
the agreement's comparability provision. WMC claims that this unwarranted breach 
excused WMC from performance of its obligations under the agreement. Williams v. 
Collins Communications, Inc., 720 P.2d 880, 891 (Wyo. 1986); Applied Genetics 
Int'l, Inc. v. First Affiliated Securities, Inc., 912 F.2d 1238, 1244 (10th Cir. 
1990); see also, Stockton v. Sowerwine, 690 P.2d 1202, 1205 (Wyo. 1984).

[¶182] Stating that they vigorously dispute WMC's 
contention that they acted in bad faith, the doctors maintain that WMC's 
contention is without support in the record. The doctors claim that the record 
shows that WMC's agents Carriger and Williams were fully informed with respect 
to design matters and the project as it progressed; that, in his testimony, Tom 
Judy, the interior designer designated by WMC and the doctors in the agreement, 
explained in detail in what way the features in the new building were not as 
good as Dr. Roussalis had in his ten-year-old building; and that the 
Denver-based consultant hired by WMC conceded in her testimony that she prepared 
her report, which criticized the high cost of the new building, without any 
knowledge of the high-quality features of Dr. Roussalis' ten-year-old building 
and that she could identify perhaps $500,000 to $600,000 in potential cuts from 
Gurkin's $3.5 million estimates.

[¶183] Having carefully examined the record, we have 
concluded that it is pregnant with genuine issues of material fact relating to 
the parties' respective performances under their agreement. Therefore, summary 
judgment is inappropriate.

VIII. Whether the Doctors' Claim for Anticipatory 
Repudiation is Valid.

[¶184] In their pleadings, the doctors stated a claim 
against WMC for anticipatory repudiation in these allegations:

55. 
By the following acts, WMC has evinced an intention to refuse performance of its 
contract with the doctors:

a. 
By failing to acquire all the land it promised the doctors under the March 2, 
1995 Letter Agreement;

b. 
By conveying away the land it once owned and promised the doctors under the 
March 2, 1995 Letter Agreement; and

c. 
By abandoning the construction of the new medical office building required under 
the March 2, 1995 Letter Agreement.

[¶185] 56. WMC's refusal to perform its obligations under 
the contract is unequivocal and absolute.

[¶186] 57. As a result of WMC's anticipatory repudiation of 
its contract with the doctors, the doctors are entitled to recover their 
consequential and benefit-of-the-bargain damages in an amount to be proven at 
trial.

[¶187] As the doctors correctly note, this Court in J. B. 
Service Court v. Wharton, 632 P.2d 943, 945 (Wyo. 1981), recognized that a 
party's repudiation of its duty before the time for performance has arrived is 
called an anticipatory breach or, more precisely, anticipatory repudiation. 
[T]he doctrine . . . [has] gained widespread acceptance . . . [and] [c]ourts 
have accepted the general rule that an anticipatory repudiation gives the 
injured party an immediate claim to damages for total breach, in addition to 
discharging that party's remaining duties of performance. II E. Allan 
Farnsworth, Farnsworth on Contracts 8.20, at 470 (1990). Professor Farnsworth 
has captured the elements of anticipatory repudiation:

A 
repudiation is a manifestation by one party to the other that the first cannot 
or will not perform at least some of its obligations under the contract. For a 
repudiation to have legal effect, the threatened breach must be serious. 
According to the Restatement Second, it must be serious enough that the injured 
party could treat it as total if it occurred. A repudiation may be by words or 
other conduct.

[¶188] Usually a repudiation consists of a statement that 
the repudiating party cannot or will not perform. The statement must be 
sufficiently positive to be reasonably understood as meaning that the breach 
will actually occur. A party's expressions of doubt as to its willingness or 
ability to perform do not constitute a repudiation.

[¶189] An especially troublesome situation arises when a 
party's statement results from an honest but mistaken understanding of its 
rights under the contract. The traditional view is that the party's good faith 
will not prevent the statement from amounting to a repudiation. A party 
therefore acts at its peril if that party, insisting on what it mistakenly 
believes to be its rights, refuses to perform its duty. As the commentary to the 
Uniform Commercial Code put its, a statement of the intention not to perform 
except on conditions which go beyond the contract is a repudiation. Furthermore, 
if a party wrongfully states that it will not perform unless the other party 
consents to a modification of the contract, the statement is a repudiation; 
although the concession that the first party seeks may be a minor one, the 
breach that it threatens in order to exact it is not. A proposal of or a demand 
for performance on terms that go beyond the contract is not a repudiation, 
however, unless it is coupled with a threat of nonperformance if those terms are 
not accepted.

[¶190] A party may repudiate by conduct as well as by 
words. A promisor's voluntary affirmative act that renders the promisor actually 
or apparently unable to perform without a breach is a repudiation. A vendor of 
land, by conveying the deed to a third person, may indicate as clearly as by 
words that the vendor cannot perform. Since the conduct must be an affirmative 
act, mere delay in performing is not a repudiation. Since the act must be 
voluntary, inability to perform due to incompetence or financial difficulties is 
not a repudiation. Furthermore, courts have required that the act make the 
promisor's performance impossible, so that conduct that indicates mere 
unwillingness is not enough.

Id. 
at 8.21, 474-79.

[¶191] In reply to this claim, WMC contends that its 
August, 1995, conveyance to the county of the lots on which the new office 
building was being constructed was required by the county under the terms of its 
amended operating lease with WMC which was negotiated and signed after the 
Letter of Intent agreement was signed. Further, WMC contends that these lots 
could have been conveyed to the doctors upon completion of the new office 
building when the formal property exchange was to have taken place. Moreover, 
WMC asserts that had the doctors dealt with WMC in good faith - had the doctors 
enhanced the new office building only up to the $2 million range or agreed to 
significant cuts to bring the cost down - the transaction would have been 
performed.

[¶192] Suffice it to say, because genuine issues of 
material fact exist concerning proof of the elements of anticipatory 
repudiation, summary judgment on this claim is inappropriate.

IX. 
Whether t he Doctors' Tort Claim for Breach of the Implied Covenant of Good 
Faith and Fair Dealing is Valid.

[¶193] In their pleading, the doctors included a tort claim 
for breach of the implied covenant of good faith and fair dealing. In its 
summary judgment order, the district court did not independently rule on this 
claim, but, as we noted earlier, that court's order effectively disposed of all 
claims including this one. In this appeal, the parties present the question 
whether this tort claim is legally cognizable under the facts and circumstances 
of this case. Because we are reversing and remanding, judicial economy will be 
served in this case if we answer that question now and, thus, give direction to 
the district court and the parties on this particular issue.

[¶194] Simply stated, the doctors urge this Court to extend 
the tort claim adopted in Wilder v. Cody Country Chamber of Commerce, 868 P.2d 211, 221 (Wyo. 1994), in the context of an employer's tortious conduct which 
arises out of a contractual relationship of employment in breach of the implied 
covenant of good faith and fair dealing, to cover the doctors' contractual 
relationship with WMC. The doctors correctly acknowledge that this particular 
breed of tort adopted in Wilder requires not only the presence of a duty created 
by law, as all torts do, but more, namely [t]he kind of breach of duty that 
brings into play the bad faith tort arises only when there are special 
relationships between the tort-victim and the tort-feasor. . . . Id. Moreover, 
[a] showing is required that a special relationship of trust and reliance exists 
between the particular employee seeking recovery and the employer. Id. According 
to the doctors, the elements of trust and reliance exist when the party seeking 
recovery has been placed in a position of having to specially rely upon a 
promise or commitment made by the party from whom recovery is sought.

[¶195] The doctors find evidence of a special relationship 
of trust and reliance in their agreement with WMC in the following matters:

· 
The new medical office building was an important part of Carriger's vision of a 
Wyoming Integrated Network, a statewide association of hospitals and doctors, 
with WMC at its center. The building would serve as a model of what hospitals 
and doctors, working together, could accomplish.

[¶196] · At the April 25, 1995, WMC press conference to 
announce the hospital expansion project, WMC persuaded Dr. Roussalis to speak 
about the doctors' partnership with WMC to realize the vision.

[¶197] · The doctors put their lives on hold for six months 
to accommodate WMC's desire for early completion of the new medical office 
building which, in turn, would enable an earlier commencement of the hospital 
expansion project.

[¶198] · The doctors freely shared with WMC all information 
concerning the development of the design drawings, plans and specifications of 
the new medical office building.

[¶199] · WMC's motive to gain the doctors' prompt 
commitment to transfer their property for the hospital expansion project was to 
secure promptly revenue bond financing at interest rates so favorable to WMC as 
to effect a savings of $2.6 million in interest expense for the hospital 
expansion project.

[¶200] WMC urges this Court to dismiss the doctors' tort 
claim because this type of tort claim has been previously adopted in Wyoming 
only in rare and exceptional circumstances in the context of first-party 
insurance contractual relationships, McCullough v. Golden Rule Ins. Co., 789 P.2d 855 (Wyo. 1990), and employment contractual relationships involving a 
long-term employment period coupled with termination of employment on the eve of 
the vesting of benefits, Wilder, 868 P.2d  at 221. WMC correctly observes that 
central to this Court's adoption of this tort of bad faith in the context of 
first-party insurance in McCullough was the public service nature of the 
insurance business and the unequal bargaining relationship between insurer and 
insured. McCullough, 789 P.2d  at 858-59. In Wilder, this Court relied on 
McCullough and concluded that the implied covenant, with appropriate 
limitations, serves to balance the inherently unequal relationship between an 
employer and an employee. Wilder, 868 P.2d  at 221. WMC asserts that its 
relationship with the doctors under the construction/property exchange agreement 
bears none of the particular characteristics of either the first-party insurance 
contract or employment contract which drove this Court's decisions in McCullough 
and Wilder. In particular, WMC contends that the doctors, not WMC, enjoyed the 
superior bargaining power. Of course, elsewhere in this opinion we have held 
that these parties possessed equal bargaining power.

[¶201] Having carefully considered the arguments, we hold 
that the parties' contractual relationship is not within that class of 
contractual relationships out of which a tort duty arises as implied by law 
independently of the contractual duty of good faith and fair dealing. We have 
recognized an independent tort duty only in rare and exceptional circumstances, 
such as first-party insurance contracts and long-term employment contracts in 
which there is a legitimate expectation of forthcoming benefits. An important 
underlying rationale in those rare and exceptional contractual relationships is 
inequality of bargaining power. That driving rationale is absent from the 
contractual relationship between WMC and the doctors. Consequently, we dismiss 
the doctors' tort claim.

[¶202] The doctors also urge this Court to allow it to 
expand its bad faith claim against WMC to include WMC's litigation conduct, 
under authority of Restatement (Second) of Contracts §§ 205, cmt. e, at 102 
(1981), which states that [t]he obligation of good faith and fair dealing 
extends to the assertion, settlement and litigation of contract claims and 
defense.

[¶203] Countering the doctors' position, WMC invites this 
Court to consider authority from Montana, the Sixth Circuit, and California6 to the effect that litigation conduct is rarely 
actionable in and of itself under the rubric of bad faith tort action. Randy 
Papetti, Note, The Insurer's Duty of Good Faith in the Context of Litigation, 60 
Geo. Wash. L. Rev. 1931, 1969 (1992). We agree with that said by the Montana 
Supreme Court:

The 
Rules of Civil Procedure control the litigation process and, in most instances, 
provide adequate remedies for improper conduct during the litigation process. 
Once the parties have assumed adversarial roles, it is generally for the judge 
in the underlying case and not a jury to determine whether a party should be 
penalized for bad faith tactics. Ted Stevens Honda, 238 Cal. Rptr. 363, 369 
(citing White, 221 Cal.Rptr. [509] at 525, 710 P.2d [309] at 325 [(1985)] 
(Lucas, J., concurring and dissenting)).

[¶204] An attorney in litigation is ethically bound to 
represent the client zealously within the framework provided by statutes and the 
Rules of Civil Procedure. These procedural rules define clear boundaries of 
litigation conduct. If a defense attorney exceeds the boundaries, the judge can 
strike the answer and enter judgment for the plaintiff, enter summary judgment 
for the plaintiff, or impose sanctions on the attorney. See White, 221 Cal. Rptr. 
at 525, 710 P.2d  at 325 (Lucas, J., concurring and dissenting).

[¶205] Palmer by Diacon v. Farmers' Ins. Exchange, 861 P.2d 895, 914 (Mont. 1993). We dismiss the doctor's bad faith claim in its 
entirety.

CONCLUSION

[¶206] The district court erred in granting summary 
judgment to WMC on the principal issue of contract formation in relation to the 
Letter of Intent agreement because genuine issues of material fact exist with 
respect to that issue. Genuine issues of material fact also exist with respect 
to (1) the alleged oral modifications of the Letter of Intent agreement; (2) the 
alleged formation and performance of an agreement of rescission relating to the 
Letter of Intent agreement; (3) the application of promissory estoppel to the 
alleged rescission of the Letter of Intent agreement; (4) the doctors' 
anticipatory repudiation claim; and (5) WMC's defense that the doctors 
interfered with the Letter of Intent agreement and that interference excused 
WMC's performance of the Letter of Intent agreement.

[¶207] We have held as a matter of law that (1) the alleged 
oral modifications of the Letter of Intent agreement, if they were in fact made, 
do not fail for lack of consideration and are not barred by the statute of 
frauds; (2) the Letter of Intent agreement, if it was in fact formed, was not 
unconscionable; and (3) the doctors' tort claim for breach of the implied 
covenant of good faith and fair dealing is not actionable.

[¶208] We reverse and remand for further proceedings not 
inconsistent with this opinion.

APPENDIX

[¶209] March 2, 1995

Louis J. Roussalis, M.D. Jerry Lee Youmans, M.D. 1129 East 
Second Street Casper, WY 82601

Re: 
Letter of Intent - Section 1031 Exchange Agreement 

Dear 
Dr. Roussalis and Dr. Youmans:

In 
executive session on February 8, 1995, the Board of Directors of Wyoming Medical 
Center ("WMC") authorized the following offer to be extended to you for the 
exchange of your existing medical office buildings for a new office building, to 
be constructed by Wyoming Medical Center, which exchange would qualify under 
Section 1031 of the Internal Revenue Code. By signing this letter of intent, you 
are agreeing to a legally enforceable contract for this exchange upon successful 
and acceptable completion of all of Wyoming Medical Center's obligations as 
described in this letter.

1. 
NEW MEDICAL OFFICE BUILDING

1. 
WMC will contract with Michael Gurkin, d/b/a Gurkin Construction Co., to 
construct an approximately 9,500 square foot medical office building, with a 
full roughed-in basement, to be located on Lots 1,2,3 and 4, White's Addition to 
the City of Casper, and Lots 17,18,19 and 20, Natrona Heights Addition to the 
City of Casper, which lots comprise approximately 48,000 square feet. This 
building size represents an equivalent amount of square footage from your 
existing buildings, as adjusted for ADA compliance, space required for the pilot 
computer project, and additional stairway and related office requirements. This 
eight-block area is located on Third Street, between Washington and Melrose 
Streets. It is acknowledged that the City of Casper will require an alley to be 
located on the southernmost portion of this parcel, extending at least from 
Washington Street to the existing north/south alley.

2. 
The floor plan of the new building, including the location of all suites, common 
areas and exam rooms, and the parking configuration for physicians, staff and 
patients, shall be at the discretion and direction of Drs. Roussalis and Youmans 
(Physicians), and shall be based on architectural and/or engineering drawings 
which are approved by Physicians. It is anticipated that physician, and possibly 
staff, parking will be located in the rear of the new facility. All parking will 
have adequate lighting (photo cell or comparable) for safety and aesthetic 
purposes.

3. 
The specific features which will be incorporated into the design and 
construction of this new medical office building are listed on Exhibit A to this 
letter of intent. It is the general intent of the parties that the new building 
will be of comparable quality to the building which is currently occupied by Dr. 
Roussalis, i.e. that the new building will be a replacement building of the same 
high quality and state-of-the-art which was built into the existing building 
owned by Dr. Roussalis. The list on Exhibit A is not meant to be exhaustive of 
all features of the new building, but is representative of the types of high 
quality features which the new facility will incorporate.

4. 
The quality of the interior of the building shall be equal in quality to the 
quality of the interior space of Dr. Roussalis' current building, including 
woodwork, cabinetry, carpet and general finish and interior furnishing. Tom Judy 
will direct the interior design, and Martin Sheldon or a similarly qualified 
finish expert will be in charge of the woodwork in the new building.

5. 
The exterior design of the new building will be of comparable quality to Dr. 
Roussalis' existing building, and the design for the exterior shall be 
acceptable to and approved by Physicians.

6. 
It is anticipated that the architectural design will be coordinated between 
Physicians, WMC, Mr. Gurkin and several architectural and engineering firms, 
with Anderson DeBartolo Pan from Tuscon [sic], Arizona being the lead design 
firm. All outside design firms will be accepted by Physicians. It is also 
anticipated that Mr. Gurkin will act as Physician's representative in both the 
design and construction phases of this project. WMC will pay for all design work 
for this new building.

7. 
Upon completion of the new building, and written acceptance of the building by 
Physicians, WMC will transfer the above described eight lots by warranty deed to 
Physicians. Exact legal ownership of the new building will be as determined 
between Dr. Roussalis and Dr. Youmans. The transfer shall include a standard 
owner's title insurance policy, insuring the title to the new building in 
Physicians. WMC shall pay all closing costs, including title insurance. At the 
time of closing, Physicians agree to transfer to WMC by warranty deed their 
existing office properties, unencumbered, which property is described as Lot 2, 
the western part of Lot 3, and the North 50 feet of Lot 9, Block 48, White's 
Addition to the City of Casper. In addition, WMC agrees to locate acceptable 
substitute rental space for the Central Wyoming Counselling Center, and to move 
that entity into the substitute space with minimal disruption to the operations 
of the Counselling Center.

8. 
WMC will pay all moving costs to relocate the practices of Physicians into the 
new facility immediately upon closing, in order to minimize or eliminate any 
disruption to Physicians' practice. In addition, WMC will reimburse Physicians 
for any loss of revenue which can be demonstrated which occurs as a result of 
the relocation of Physicians' practice.

9. 
As further consideration for this exchange, WMC agrees to incorporate into the 
design and construction of the new facility a state-of-the-art computer system, 
which will be networked into the new information system which WMC is in the 
process of purchasing. Physicians' new facility shall serve as a pilot project 
for integrating physicians' private practices into one information system. 
Included in this information support component will be all necessary hardware 
and software, including upgrades, and this support will be provided at no cost 
to Physicians until such time as the product is developed to the point of being 
commercially available to Casper physicians in general, at which time Physicians 
may be charged only for any additional upgrades of the system then in place.

10. 
As further consideration for this exchange, WMC and Physicians specifically 
agree to the environmental indemnity provisions which are set forth in detail on 
Exhibit B, attached hereto, and made a part of this agreement by this 
reference.

2. 
LEASE GUARANTY

1. 
It is anticipated that the new facility will contain three suites which will be 
leased to other physicians. Also, it is possible that the space which will 
initially be occupied by Dr. Roussalis or Dr. Youmans may also in the future, 
for various reasons, be leased to other physicians. As a part of this exchange 
agreement, WMC agrees, for a period of twenty years from the date of exchange, 
to guaranty that all vacant space in the new building, including the space 
originally occupied by Dr. Roussalis and Dr. Youmans, would be leased at the 
then highest average per-square-foot lease rate for medical office space in the 
Casper area, with a minimum rental rate of $15.50 per square foot. WMC would 
have the option of subleasing any space it leases, or using it for its own 
purposes, with any sub-tenant being subject to prior approval.

3. 
GUARANTEED BUY-BACK PROVISION

1. 
WMC agrees to purchase the new building at any time during the first twenty 
years after the exchange for a purchase price equal to the greater of the 
following:

(a) 
the actual cost of the new building, including the land; or

(b) 
$1.25 million.

2. 
This agreement is only a right of first refusal, subject to a prior right of 
first refusal in each of the owners to purchase the other owner's interest, if 
the market value of the property and building appreciates above the price set in 
Section 1 immediately above. In the event a bona fide offer is received, which 
is in excess of the buy-back price set in Section 1 above, WMC only has the 
right to match that offer.

3. 
The obligation to purchase the building for the set purchase price is applicable 
to each physician's interest, subject to an agreed upon proration of the 
purchase price.

4. 
For purposes of valuing the land, the per-square-foot value will be determined 
as if the building was located on Second Street, which our preliminary research 
indicates is $8 per square foot.

This 
agreement is binding in all of its aspects upon WMC and Physicians and their 
respective heirs, successors and assigns. By the signature below, Wyoming 
Medical Center, Inc. intends to be legally bound by the terms and conditions set 
forth in this letter. If you agree to this exchange arrangement, please execute 
this letter of intent in the space provided below.

Very 
truly yours,

/s/ 
Lindel L. Carriger Lindel L. Carriger President, Wyoming Medical Center

[¶210] This Letter of Intent is hereby accepted and agreed 
to by Wyoming Medical Center this 2 day of March, 1995.

[¶211] /s/ Margo Bean Margo Bean, Chairperson Wyoming 
Medical Center Board of Directors

[¶212] This Letter of Intent is hereby accepted and agreed 
to this 3 day of March, 1995.

[¶213] /s/ Louis J. Roussalis, M.D Louis J. Roussalis, 
M.D.

[¶214] This Letter of Intent is hereby accepted and agreed 
to this 2 day of March, 1995.

[¶215] /s/ Jerry Lee Youmans, M.D. Jerry Lee Youmans, 
M.D.

[¶216] EXHIBIT A

[¶217] GENERAL BUILDING FEATURES:

1. 
2X6 construction, with brick and glass, as determined by architect and 
Physicians

2. 
All windows - 2 or three panes, with tint and no maintenance requirements (e.g. 
paint)

3. 
Maximum quality insulation

4. 
Soundproofing throughout the building

5. 
Large, quality skylights throughout the building

6. 
Complete alarm system throughout the building

7. 
Modern audio (radio, cassette and CD) system throughout the building

8. 
Bathroom in waiting area

9. 
Bathroom in each physician office

10. 
Employee bathroom on main level

11. 
Shared bathroom for each exam room

12. 
Maximum outdoor drainage design, per architect recommendations

13. 
Drinking fountains in waiting rooms

14. 
Double entry way into waiting area

15. 
No maintenance roof, per architect design and Physician approval

16. 
Potential bay windows, per architect design

17. 
Heated outside walk

18. 
Pressure or in-line hot water

19. 
Wood work will be oak, cherry walnut or comparable throughout the building

20. 
Cable TV and computer wiring throughout building

21. 
Complete telephone/paging system throughout building

22. 
Secure/protected garbage bin system

23. 
Built-in display areas in waiting room

24. 
Appropriate landscaping, per architect and Physician direction

25. 
Water softener

[¶218] BASEMENT FEATURES

1. 
Full basement

2. 
Bathroom, including shower area

3. 
Partitioned utility/furnace room (including soft water, suction equipment, 
etc.)

4. 
Plumbed for washer and dryer

5. 
Partitioned for five secured spaces, corresponding to main floor footages, with 
heat and lights for each space

6. 
Finished dry wall (texture and painted), with locking doors for security and 
confidentiality

7. 
Shelving (adjustable) for file storage

[¶219] FURNISHING/DECORATING FEATURES

1. 
Tile bathrooms and entryway (Lavin Tile)

2. 
Paint and wall paper, per Physician choice

3. 
Floor coverings to be hardwood or quality, longwearing carpet, per Physician 
choice

4. 
Bathroom sinks and toilets to match color scheme

5. 
Two trash compactors and two refrigerators

6. 
Garbage disposal and dishwasher 

7. 
New signage

8. 
Built-in desk/computer terminal in physician office, if requested

9. 
Patient file system, if existing systems not adaptable

10. 
Waiting room furniture and decor (magazine racks, etc.)

11. 
Fully equipped exam rooms (exam tables, furniture, portable exam lights, wall 
mount o&o/opthalmo-scopes, electric thermometers, supply carts, etc.)

12. 
Physician chair for office

13. 
Color TV/VCR units for offices and exam rooms for educational purposes

14. 
Appropriate furniture

[¶220] MISCELLANEOUS

1. 
WMC to provide snow removal services

2. 
WMC to provide access to transcription services as a pilot project for PHO

3. 
Any additional cost attributable to the relocation, including stationery, 
checks, bills, etc. (to include additional printing costs and reimbursement for 
unused stationery items)

[¶221] EXHIBIT B

[¶222] WMC's Environmental Indemnity Agreement. In further 
consideration of the exchange set forth in the letter of intent, WMC agrees as 
follows:

Definitions. For purposes of this Exhibit B:

1. 
The Property means both the real property and improvements located at 1129 E. 
Second St. and 230 South Washington, and the property upon which the replacement 
building will be constructed, as more particularly described as Lots 1, 2, 3, 
and 4, White's Addition to the City of Casper, and Lots 17, 18, 19, and 20, 
Natrona Heights Addition to the City of Casper, Natrona County, Wyoming.

2. 
Hazardous Materials means (1) hazardous wastes, hazardous substances, hazardous 
constituents, toxic substances or related materials, whether solids, liquids or 
gases, including but not limited to substances defined as hazardous wastes, 
hazardous substances, toxic substance, pollutants, contaminants, radioactive 
materials, or other similar designations in, or otherwise subject to regulation 
under, the Comprehensive Environmental Response, Compensation and Liability Act 
of 1980, as amended, 42 U.S.C. § 9601 et seq.; the Toxic Substance Control Act, 
15, U.S.C. § 2601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. 
§ 1802; the Resource Conservation and Recovery Act, 42 U.S.C. § 9601 et seq.; 
the Clean Water Act, 33 U.S.C. § 1251 et seq.; the Safe Drinking Water Act, 42 
U.S.C. § 300f et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; and in any 
permits, licenses, approvals, plans, rules, regulations or ordinances adopted, 
or other criteria and guidelines promulgated pursuant to the preceding laws or 
other similar federal, state or local laws, regulations, rules or ordinance now 
or hereafter in effect relating to environmental matters (collectively the 
Environmental Laws); and (2) any other substances, constituents or wastes 
subject to any applicable federal, state or local law, regulation or ordinance, 
including any Environmental Law, now or hereafter in effect, including but not 
limited to (A) petroleum, (B) refined petroleum products, (C) waste oil, (D) 
waste aviation or motor vehicle fuel and (E) asbestos.

3. 
Environmental Conditions means conditions of the environment, including the 
ocean, natural resources (including flora and fauna), soil, surface water, 
ground water, any present or potential drinking water supply, subsurface strata 
or the ambient air, relating to or arising out of the use, handling, storage, 
treatment, recycling, generation, transportation, release, spilling, leaking, 
pumping, pouring, emptying, discharging, injecting, escaping, leaching, 
disposal, dumping or threatened release of Hazardous Materials. With respect to 
claims by employees, Environmental Conditions also includes the exposure of 
persons to Hazardous Materials within the workplace.

4. 
Environmental Noncompliance means, but is not limited to: (1) the release or 
threatened release of any Hazardous Materials into the environment, any storm 
drain, sewer, septic system or publicly owned treatment works, in violation of 
any effluent or emission limitations, standards or other criteria or guidelines 
established by any Environmental Law; (2) any noncompliance of physical 
structure, equipment, process or premises with the requirements of building or 
fire codes, zoning or land use regulations or ordinances, conditional use 
permits and the like; (3) any noncompliance with federal, state or local 
requirements governing occupational safety and health; (4) any premises 
operations procedures, designs, and the like which do not conform to the 
statutory or regulatory requirements of the Environmental Laws (including land 
use regulations and ordinances) intended to protect public health, welfare, and 
the environment; (5) the failure to have obtained permits, licenses, variances 
or other governmental authorizations necessary for the legal operation of any 
equipment, process, premise or any other activity; (6) the operation of any 
premise or equipment in violation of any permit condition, schedule of 
compliance, administrative or court order and the like.

5. 
Claims shall include, without limitation, claims, demands, suits, causes of 
action for personal injury or property damage (including any depreciation of 
property values, lost use of property, consequential damages arising directly or 
indirectly out of Environmental Conditions); actual or threatened damages to 
natural resources; claims for the recovery of response costs, or administrative 
or judicial orders directing the performance of investigations, response or 
remedial actions under the Environmental Laws; a requirement to implement 
corrective action pursuant to any order or permit issued pursuant to any 
Environmental Law; claims for restitution, contribution or equitable indemnity 
from third parties or any governmental agency; fines, penalties, liens against 
property; claims for injunctive relief or other orders or notices of violation 
from federal, state or local agencies or courts; and, with regard to any present 
or former employees, exposure to or injury from Environmental Conditions.

6. 
Expenses shall include any liability, loss, cost or expense including, without 
limitation, costs of investigation, cleanup, remedial or response action, the 
costs associated with posting financial assurances for the completion of 
response, remedial or corrective actions, the preparation of any closure of 
other necessary or required plans or analyses (including but not limited to 
spill prevention, control and countermeasure plans), or other reports or 
analyses submitted to or prepared by regulating agencies, including the costs of 
health assessments, epidemiological studies and the like, retention of engineers 
and other expert consultants, legal counsel, capital improvements, operations 
and maintenance testing and monitoring costs, power and utility costs and 
pumping taxes or fees, and administrative costs incurred by governmental 
agencies.

[¶223] WMC's Environmental Release. WMC hereby releases and 
forever discharges Physicians from any and all Claims, damages (including, 
without limitation, diminution in value), losses, liabilities and Expenses, 
lawsuits, deficiencies, interest, penalties and attorneys' fees, whether or not 
arising out of third-party claims, in connection with any Environmental 
Conditions or the remediation of any Environmental Conditions (whether now known 
or herafter discovered), or any Environmental Noncompliance, including without 
limitation any Claims, Expenses, losses, liabilities, and the like resulting 
from the alleged exposure of any person or property to Environmental Conditions, 
EXCEPT any such Claims which are determined by a court or Environmental Agency 
having jurisdiction over such matters by final, unappealable order to have been 
caused by the actions or operations of Physicians or their employees or agents 
during the time Physicians owned the Property.

[¶224] WMC's Environmental Indemnification. WMC hereby 
agrees to indemnify, defend and hold harmless Physicians from and against and in 
respect of any and all Claims, damages (including, without limitation, 
diminution in value), losses, liabilities and Expenses, lawsuits, deficiencies, 
interest penalties, attorneys' fees and all amounts paid in defense or 
settlement of the foregoing whether or not arising out of third-party claims, 
which may be imposed upon or incurred by Physicians or asserted against 
Physicians by any other party or parties (including any governmental entities), 
in connection with any Environmental Conditions or the remediation of any 
environmental Conditions (whether now known or hereafter discovered), or any 
Environmental Noncompliance, including without limitation any Claims, Expenses, 
losses, liabilities, and the like resulting for the alleged exposure of any 
person or property to Environmental Conditions, EXCEPT to the extent that such 
costs or liability arise as a result of the actions or operations of Physicians, 
their employees, agents or tenants during the time Physicians owned the 
property, as determined by a Court or Environmental Agency by final appealable 
order. The duty to defend and pay all expenses and costs therefore shall 
continue until such final order. WMC shall have the right to recover all such 
costs and expenses of defense if it is ultimately determined by such final order 
that the Claim was due to the actions or operations of Physicians. WMC's 
obligations pursuant to this section shall exist regardless of whether 
Physicians are alleged or held to be strictly or jointly and severally 
liable.

[¶225] Physician Representations. Physicians represent that 
they are aware of no Environmental Noncompliance or Environmental Condition with 
respect to the Property which would result in a Claim, and that the actions or 
operations of Physicians during the time they owned the Property complied with 
all Environmental Laws. Physicians acknowledge that this representation is 
material in WMC executing this environmental indemnity provision.

Footnotes

1 Throughout the record in 
this case, the increase in square footage is referred to in varying amounts, 
i.e., 11,800, 11,833, and 11,900. For purposes of this opinion, we will use 
11,900.

2 The document is 
reproduced in the appendix to this opinion.

3 Numbered paragraph 10 
addressed environmental indemnification; another provision addressed WMC's 
20-year guaranty of the lease of vacant space in the building.

4 Section 34 of 
Restatement (Second) of Contracts reads:

(1) The terms of a 
contract may be reasonably certain even though it empowers one or both parties 
to make a selection of terms in the course of performance.

(2) Part performance 
under an agreement may remove uncertainty and establish that a contract 
enforceable as a bargain has been formed.

(3) Action in reliance on 
an agreement may make a contractual remedy appropriate even though uncertainty 
is not removed.

5 139. Enforcement by 
Virtue of Action in Reliance

(1) A promise which the 
promisor should reasonably expect to induce action or forbearance on the part of 
the promisee or a third person and which does induce the action or forbearance 
is enforceable notwithstanding the Statute of Frauds if injustice can be avoided 
only by enforcement of the promise. The remedy granted for breach is to be 
limited as justice requires.

(2) In determining 
whether injustice can be avoided only by enforcement of the promise, the 
following circumstances are significant:

(a) the availability and 
adequacy of other remedies, particularly cancellation and restitution;

(b) the definite and 
substantial character of the action or forbearance in relation to the remedy 
sought;

(c) the extent to which 
the action or forbearance corroborates evidence of the making and terms of the 
promise, or the making and terms are otherwise established by clear and 
convincing evidence;

(d) the reasonableness of 
the action or forbearance;

(e) the extent to which 
the action or forbearance was foreseeable by the promisor.

6 Palmer by Diacon v. 
Farmers' Ins. Exchange, 861 P.2d 895, 914 (Mont. 1993); see e.g., FDIC v. Aetna 
Cas. and Sur. Co., 903 F.2d 1073, 1080 (6th Cir. 1990) (pressing a legitimate 
contractual defense . . . can certainly not be a basis for a bad faith claim); 
California Physicians Service v. Superior Court, 12 Cal. Rptr. 2d 95, 100 (Cal. 
Ct. App. 1992); Nies v. Nat'l Auto Cas. Ins. Co., 245 Cal. Rptr. 518, 524 (Cal. 
Ct. App. 1988).