IN THE SUPREME COURT, STATE OF WYOMING

2016 WY 96

OCTOBER TERM, A.D. 2016

October 6, 2016

MAVERICK BENEFIT ADVISORS, 

LLC; MOUNTAIN BENEFIT 

ASSOCIATES, LLC; TAYLOR H. 

HAYNES; and ELISABETH A. 

WASSON,

Appellants

(Plaintiffs/Third Party Defendants),

v.

DAVID J. BOSTROM; BOSTROM 

ENTERPRISES, LLC; and MOUNTAIN 

STATES REVIEW, INC.,

Appellees

(Defendants/Third Party Plaintiffs).

S-16-0030

Appeal from the District Court of Washakie County

The Honorable David B. Park, Judge

Representing Appellants:

Douglas W. Bailey and Henry F. Bailey, Jr. of Bailey|Stock|Harmon|Cottam P.C., 

Cheyenne, Wyoming. Argument by Mr. Douglas Bailey.

Representing Appellees:

Timothy W. Miller of Miller Law Office, Casper, Wyoming.

Before BURKE, C.J., and HILL, DAVIS, FOX, JJ, and DAY, D.J.

NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. 

Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, 

Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be 

made before final publication in the permanent volume.
1

FOX, Justice.

[¶1] The purchasers of a health claims administration company learned that they had 

not acquired all the assets they contracted to purchase. After continuing to operate the 

business for 18 months, they stopped making payments on the Promissory Note and 

commenced an action asserting breach of contract, among other claims. The seller 

counterclaimed for breach of contract, seeking full payment under the Asset Purchase 

Agreement, and the purchasers raised the affirmative defense that seller was first to 

breach. At trial, at the close of the purchasers’ evidence, the district court granted seller’s 

Rule 50 motion for judgment as a matter of law. It held that the purchasers failed to 

prove damages, and noted that rescission was no longer available because they elected to 

seek damages. The district court went on to enter judgment in favor of the seller, ruling 

that the purchasers’ first-to-breach affirmative defense was no longer available. We 

conclude that because they continued operating the business long after they had 

knowledge of the seller’s alleged breach, the purchasers waived the first-to-breach 

affirmative defense, and we affirm the district court’s order. 

ISSUES

[¶2] We consolidate and restate the issues as follows:

1. May the purchasers assert the first-to-breach affirmative defense on the 

seller’s breach-of-contract counterclaim?

2. Does the seller have a contractual right to its attorney fees on appeal?

FACTS

[¶3] Mountain Benefit Associates, LLC (MBA) is a third-party administrator of health 

benefit plans for self-insured and partially self-insured employers. David Bostrom started 

MBA in the mid-1980s. In August or September of 2009, Mr. Bostrom approached

Taylor Haynes (Dr. Haynes) regarding his potential purchase of MBA, and over the 

course of the next few months, Mr. Bostrom; Dr. Haynes; and Elisabeth Wasson, Dr. 

Haynes’ wife, had a number of discussions and written communications regarding the 

sale of MBA. During that time, Mr. Bostrom provided Dr. Haynes and Ms. Wasson with 

information, including enrollment records for the clients of MBA. In addition, Dr. 

Haynes and Ms. Wasson submitted written questions to Mr. Bostrom.

[¶4] One such question asked for a “[b]rief description of any significant client 

relationships severed within the last two years.” In response, Mr. Bostrom identified 

three groups that had terminated their relationships with MBA over the last two years. 

Ms. Wasson explained that because the major asset they were purchasing was the client 

list, or MBA’s book of business, the retention rate of MBA’s clients was significant to 
2

her when she evaluated the business. Mr. Bostrom represented that MBA had a client 

retention rate of 98 percent.

[¶5] On February 1, 2010, Dr. Haynes and Ms. Wasson’s business, Maverick Benefit 

Advisors, LLC (Maverick), entered into an Asset Purchase Agreement with MBA 

pursuant to which Maverick was to purchase MBA’s health insurance claims 

administration business. That agreement contained a provision warranting the 

information provided by MBA was true:

The representations and warranties of the Seller contained in 

this Agreement or other instrument furnished by the Seller 

pursuant to this Agreement do not contain any untrue 

statement of a material fact and do not omit to state any fact 

necessary to make any statement herein or therein not 

misleading or necessary to a correct presentation of all 

material aspects of the Business and the matters contemplated 

under this Agreement. 

Maverick agreed to pay a total of $4,395,582 for the business. Maverick paid one-half of 

the purchase price in cash and executed a Promissory Note for the remaining balance of 

$2,197,791. Maverick’s principals, Dr. Haynes and Ms. Wasson, personally guaranteed 

the note. In addition, Maverick entered into a Personal Service Contract with Mr. 

Bostrom, the previous owner of MBA, to secure his assistance with the transition in 

ownership and management of the business.

[¶6] Ms. Wasson testified that over the next 18 months, she discovered a number of 

inaccuracies in the information provided by Mr. Bostrom prior to the sale. For example, 

the 98 percent retention rate provided by Mr. Bostrom was not supported by the facts: 

over the two years prior to the purchase, MBA had lost 35 percent of its business. At 

trial, Mr. Bostrom admitted that when he responded to the question of whether MBA had 

lost any significant clients, he should have included a fourth group, Oftedal Construction 

Company, which had approximately 200 members enrolled on average, but that he failed 

to do so. He also admitted that MBA lost a number of other clients that he did not 

consider to be significant and therefore did not disclose to Dr. Haynes and Ms. Wasson. 

In fact, in 2008, MBA lost a total of 19 groups; and in 2009, it lost a total of 15 groups.

1

[¶7] Ms. Wasson and Dr. Haynes also discovered that Mr. Bostrom had failed to 

disclose information relating to the Wyoming Associated Builders Insurance Trust 

(WABIT) group, MBA’s largest client. The enrollment figures provided by Mr. Bostrom 

to Dr. Haynes and Ms. Wasson showed that WABIT had 780 enrolled members; after the 

 

1

Those groups represented up to 241 members.
3

purchase, they learned that WABIT’s enrollment had steadily declined from July of 2009

through closing on the sale of MBA to 300-350 members, roughly half of what had been 

represented. In addition, in July of 2009, MBA advanced $84,241 to WABIT because 

WABIT did not have enough money to cover pending claims. MBA made a second 

advance to WABIT in November of 2009 in the amount of $73,000.2 Also in November, 

Mr. Bostrom learned that WABIT had lost a lawsuit and its checking account was being 

garnished to pay attorney fees. Mr. Bostrom admitted that he did not disclose WABIT’s

declining enrollment, the money MBA had advanced to WABIT, or WABIT’s legal and 

financial trouble to Dr. Haynes and Ms. Wasson.

[¶8] In August of 2009, MBA’s net income was approximately $40,000 per month. 

Maverick purchased MBA in February of 2010. By the end of 2010, its net income was 

$5,000 per month. Maverick stopped making payments on the Promissory Note after 

August of 2011 and filed this lawsuit against Mr. Bostrom; Bostrom Enterprises, LLC; 

and Mountain States Review, Inc. (hereinafter collectively referred to as Mountain 

States), seeking damages but not rescission. Mountain States counterclaimed on the 

Promissory Note and brought a third-party complaint against Maverick, MBA, Dr. 

Haynes, and Ms. Wasson (hereinafter collectively referred to as Maverick) on the 

Personal Guaranty. Maverick asserted an affirmative defense that Mr. Bostrom was the 

first to breach the contract and Maverick is therefore excused from performing its

contractual duties.

[¶9] At trial, after Maverick rested its case, Mountain States moved for judgment as a 

matter of law on all of the pending claims. The district court granted the motion, ruling 

that Maverick had not proven damages:

I think the jury just would have no way of computing 

damages in this case for any of those claims so based on the 

lack of evidence from which the jury could with some 

certainty compute damages and the law is clear that a jury 

may not speculate or guess as to damages, those claims have 

to fail because of the fact that even if the jury were to find 

those breaches they would be unable to award any damages.

The district court also granted the motion with respect to Mountain States’ claims on the 

Promissory Note and the Personal Guaranty and ruled that Maverick’s first-to-breach 

affirmative defense could not be presented to the jury. The court entered judgment for 

the balance of the note, plus interest, in favor of Mountain States. Maverick timely filed 

this appeal, raising only the issue of its ability to assert its affirmative defense.

 

2 Mr. Bostrom testified that the first advance in the amount of $84,241 had been paid back. There is 

nothing in the record indicating whether the second advance was ever repaid by WABIT.
4

STANDARD OF REVIEW

[¶10] Judgment as a matter of law is permitted when “a party has been fully heard on an 

issue” and the “court finds that a reasonable jury would not have a legally sufficient 

evidentiary basis to find for the party on that issue.” W.R.C.P. 50(a)(1). We review 

district court decisions granting judgment as a matter of law de novo. Witherspoon v. 

Teton Laser Ctr., LLC, 2007 WY 3, ¶ 8, 149 P.3d 715, 723 (Wyo. 2007).

Under our de novo standard, we undertake a full review of the 

record without giving deference to the trial court’s views. 

Wyoming Medical Center, Inc. v. Murray, 2001 WY 63, ¶ 7, 

27 P.3d 266, ¶ 7 (Wyo. 2001). The test is whether the 

evidence is such that, without the witnesses’ credibility being 

weighed or the weight of the evidence otherwise being 

considered, there can be but one conclusion as to the verdict 

that reasonable persons could have reached. Id. We view the 

evidence in the light most favorable to the nonmoving party 

and give that party the benefit of all the reasonable inferences 

which may be drawn from the evidence. Id. When the facts 

presented permit the drawing of more than one inference, it is 

for the jury to choose which will be used. Id. “If the 

inferences favorable to the movant are subject to doubt, or if 

parallel inferences can be drawn, the motion appropriately is 

denied.” Id.

Witherspoon, 2007 WY 3, ¶ 8, 149 P.3d at 723 (citing Worman v. Carver, 2004 WY 38, 

¶ 9, 87 P.3d 1246, 1249 (Wyo. 2004)).

DISCUSSION

I. May Maverick assert the first-to-breach affirmative defense on Mountain States’

breach-of-contract counterclaim?

[¶11] The sole issue presented by Maverick for review is whether the district court erred 

in preventing it from asserting the first-to-breach affirmative defense. Maverick argues

that the district court’s finding that it did not prove damages on its original claims has no 

bearing upon the legal question of whether it can assert the first-to-breach affirmative 

defense against Mountain States’ counterclaim, and that the district court erred when it 

concluded that the defense was unavailable. Mountain States contends that the assertion 

of the first-to-breach defense in this instance would mean that Maverick is both affirming 

the contract by continuing to operate MBA and disaffirming the contract by avoiding its

duties thereunder, which the law does not permit.
5

[¶12] The posture of this case limits this Court’s options because Maverick seeks review 

only of its ability to assert the first-to-breach defense and not the question of whether it

proved damages.

3

It seems that both parties are asking for the same thing: to gain the 

benefit of the contract without having to fully satisfy their burdens. Maverick seeks to 

continue the business of MBA, without having to pay the outstanding balance due on the 

note. Mountain States claims that it is due the entire outstanding balance on the note 

despite the fact that, taking the facts in the light most favorable to Maverick as we are 

required to do on review of a Rule 50 judgment, the assets and clients delivered to 

Maverick were not what Mountain States contracted to sell.

[¶13] In ruling that Maverick could not assert its first-to-breach affirmative defense, the 

district court reasoned the assertion of the defense would excuse Maverick from paying 

the balance due on the Promissory Note and that in effect would be awarding damages in 

the amount of the full price of the contract less what had already been paid. However, 

because it had already ruled that Maverick had not proven damages, the district court 

could not allow Maverick to assert the first-to-breach defense and obtain damages in this

“indirect or backdoor way.” This approach is erroneous. Indeed, the parties have 

provided no authority and we have found none to support the notion that a party seeking 

to assert the first-to-breach defense must prove damages to maintain that defense. 

However, we may affirm a district court’s ruling on any basis appearing in the record, 

even if reasons articulated in the district court’s ruling are incorrect. JLK v. MAB, 2016 

WY 73, ¶ 15, 375 P.3d 1108, 1112 (Wyo. 2016); Redland v. Redland, 2015 WY 31, ¶ 17, 

346 P.3d 857, 866 (Wyo. 2015); Armstrong v. Hrabal, 2004 WY 39, ¶ 56, 87 P.3d 1226, 

1244 (Wyo. 2004); Walker v. Karpan, 726 P.2d 82, 89 (Wyo. 1986).

[¶14] We begin our analysis with an examination of the first-to-breach affirmative 

defense.4 The rule provides that a party cannot claim the benefit of a contract that it was 

the first to materially breach. White v. Empire Express, Inc., 395 S.W.3d 696, 715-16 

 

3

In its brief, Maverick states that it “do[es] not challenge [the finding that it did not present sufficient 

evidence upon which a jury could determine damages] or the decision based on the finding.”

4 Rule 8(c) of the Wyoming Rules of Civil Procedure governs the assertion of affirmative defenses. It 

states:

Affirmative defenses. – In pleading to a preceding pleading, a party shall 

set forth affirmatively accord and satisfaction, arbitration and award, 

assumption of risk, contributory negligence, discharge in bankruptcy, 

duress, estoppels, failure of consideration, fraud, illegality, injury by 

fellow servant, laches, license, payment, release, res judicata, statute of 

frauds, statute of limitations, waiver, and any other matter constituting 

avoidance or affirmative defense. When a party has mistakenly 

designated a defense as a counterclaim or a counterclaim as a defense, 

the court on terms, if justice so requires, shall treat the pleading as if 

there had been a proper designation. 
6

(Tenn. Ct. App. 2012); Kinstler v. RTB South Greeley, Ltd. LLC, 2007 WY 98, ¶ 7, 160 

P.3d 1125, 1127 (Wyo. 2007) (“one party’s material breach may excuse the other party’s 

performance under that agreement”).

[¶15] The party asserting the affirmative defense bears the burden of proof. To establish 

the first-to-breach affirmative defense, the party asserting the defense must show that the 

other party breached first and that the breach was material. The Ray Malloly Trust v. 

Juhl, 2004 WL 1375542 *3 (Tex. Ct. App. 2004); George K. Baum Properties, Inc. v. 

Columbian Nat’l Title Ins. Co., 763 S.W.2d 194, 203 (Mo. Ct. App. 1998); see also Pitts 

& Collard, L.L.P. v. Schechter, 369 S.W.3d 301, 316 (Tex. Ct. App. 2011) (finding 

evidence sufficient to support verdict that plaintiff was first to breach). Generally, the 

question of whether a party first breached is a question of fact to be determined by the 

factfinder. Clean Uniform Co. St. Louis v. Magic Touch Cleaning, Inc., 300 S.W.3d 602, 

612 (Mo. Ct. App. 2009); 17A Am. Jur. 2d Contracts § 684 (2004). For the purposes of 

this analysis, and because we examine the facts in the light most favorable to Maverick, 

we will assume that Mountain States breached the contract by failing to disclose the loss 

of certain members and accounts and that this breach was material.

[¶16] However, even where there has been a prior material breach, courts have held that 

a party may lose its right to assert the first-to-breach rule if it accepts the benefits of the 

contract with knowledge of the breach. See White, 395 S.W.3d at 716; Avila v. 

CitiMortgage, Inc., 801 F.3d 777, 787 (7th Cir. 2015); Madden Phillips Constr., Inc. v. 

GGAT Dev. Corp., 315 S.W.3d 800, 813 (Tenn. Ct. App. 2009); see also Restatement 

(Second) of Contracts § 246 (1981, database updated 2016). As one commentator has 

explained:

When there has been a material failure of performance 

by one party to a contract, so that a condition precedent to the 

duty of the other party’s performance has not occurred, the 

latter party has the choice to continue to perform under the 

contract or to cease to perform and conduct indicating an 

intention to continue the contract in effect will constitute a 

conclusive election, in effect waiving the right to assert that 

the breach discharged any obligation to perform. In other 

words, the general rule that one party’s uncured, material 

failure of performance will suspend or discharge the other 

party’s duty to perform does not apply when the latter party, 

with knowledge of the facts, either performs or indicates a 

willingness to do so, despite the breach, or insists that the 

defaulting party continue to render future performance.

14 Samuel Williston, Treatise on the Law of Contracts § 43:15, at 677-78 (Richard A. 

Lord ed., 4th ed. 2013) (emphasis added); see also 17A Am. Jur. 2d, Contracts § 715 
7

(2004) (“An election by a party to perform notwithstanding a breach, and thus waiving 

the breach, is conclusive in the sense of depriving that party of any excuse for ceasing 

performance, with the result that the party at fault may require that the other party 

perform.”). Thus, when one party to a contract materially breaches the contract, the nonbreaching party has two options: it may continue the contract -- retain its economic 

benefits and sue for damages, or it may repudiate the agreement -- suspend performance 

under the contract and sue for damages. Restatement (Second) of Contracts § 246, cmt.

a-c, illus. 1-3. If the party elects to continue with the contract, it cannot later suspend 

performance and then claim that it had no duty to perform based upon the first material 

breach. That defense is waived when the party elects to continue performance of the 

contract.

[¶17] Fryer v. Campbell, 48 Wyo. 122, 43 P.2d 994 (1935) illustrates this principle. 

There, the parties entered into a contract for the sale of motion picture show equipment 

along with the lease of a building. Id., 43 P.2d at 994-95. The purchaser sued, claiming 

that he was induced to make the purchase by certain fraudulent representations made by 

the defendant/seller. Id. at 995. Upon discovering the false representations, the plaintiff 

continued to operate the business and use the property and then sued, demanding a 

rescission and the return of his money. Id. at 995-96. The defendant argued that if the 

plaintiff had the right of rescission at one point, he waived it by continuing to use the 

property. Id. at 996. 

[¶18] Quoting Shappirio v. Goldberg, 192 U.S. 232, 242, 24 S.Ct. 259, 261, 48 L.Ed 

419 (1904), we stated:

That where a party desires to rescind upon the ground of 

misrepresentation or fraud, he must, upon the discovery of the 

fraud, announce his purpose and adhere to it. If he continues 

to treat the property as his own the right of rescission is gone, 

and the party will be held bound by the contract. In other 

words, when a party discovers that he has been deceived in a 

transaction of this character he may resort to an action at law 

to recover damages, or he may have the transaction set aside 

in which he has been wronged by the rescission of the 

contract.

Fryer, 43 P.2d at 997 (internal citation omitted). This Court then went on to explain that 

if the use of the property was “trivial in comparison with the sole subject-matter of the 

transaction,” or “was proper in the care and preservation of the property,” or “was during 

the reasonable time the buyer ha[d] to make his election” and “compensation for the 

change in conditions can be readily and accurately made,” recovery for rescission will 

still be available. Id. (internal citations omitted).
8

[¶19] In Long v. Huffman, 557 S.W.2d 911 (Mo. Ct. App. 1977), Long hired Huffman to 

work in his medical practice. They entered into a two-year employment agreement 

giving Huffman an option to purchase a 50 percent interest in the clinic upon “approval 

of the employer,” containing a covenant not to compete, and providing that the contract 

was not assignable. Id. at 913. Prior to the commencement of Huffman’s employment, 

Long incorporated his practice. Huffman took up employment with Long under the 

contract and worked until the completion of its two-year term. Id. During his second 

year of employment, Huffman told Long that he wished to exercise his option to purchase 

a 50 percent share in the clinic. Id. at 914. They entered into negotiations but were never 

able to reach an agreement. Id. After the completion of his two-year term, Huffman left 

Long’s clinic and opened a practice of his own. Id. Long sued, seeking an injunction 

restraining Huffman from violating the non-compete provision of the contract. Id. 

Huffman contended that Long was the first to materially breach the employment contract 

and, as a result, Huffman did not have to abide by the non-compete provision. Id. at 915. 

Huffman claimed that Long breached the contract when he incorporated the practice, 

which Huffman contended violated the prohibition against assignment, and when 

deductions were taken from income for the retirement plan. Id. The court concluded that 

Huffman waived the alleged breaches because he accepted pay from the corporation from 

his first day of employment and never objected, and because he knew about the 

retirement plan and acceded to it. Id. at 915, 916. “This conduct of acquiescence 

induced Long to continue to employ, pay and benefit Huffman . . . and now estops him to 

contradict earlier consent. To deny enforcement of the [non-compete provision] would 

be to allow a party to benefit from a contract he disaffirms.” Id. at 915. 

[¶20] More recently, in Edwards v. Allied Home Mortg. Capital Corp., 962 So.2d 194, 

208 (Ala. 2007), the Alabama Supreme Court affirmed the trial court’s judgment as a 

matter of law on Allied’s breach-of-contract claim. There, Edwards had been the branch 

manager of Allied’s mortgage brokerage office in Huntsville from 1997 through 2003 

when she was terminated. Id. at 198, 201. The terms of her employment were governed 

by the branch operating/employment agreement. That agreement specified: “All monies 

received by [Edwards] for [Allied] . . . shall be made payable to [Allied] and received in 

trust by [Edwards] . . . and delivered immediately to [Allied]. [Edwards] shall open no 

bank accounts in [Allied’s] name.” Id. at 199. Among other things, Edwards began 

retaining checks that were payable to Allied and deposited those checks into an account 

she opened in the name of “Vicki W. Edwards D/B/A Allied Mortgage Capital 

Corporation.” Id. at 200. After learning of the account, Allied sued Edwards seeking 

damages for violation of their agreement. Id. at 201. Edwards’ defense to Allied’s 

breach-of-contract claim was that Allied breached first (by underpaying her during the 

course of their relationship) and as a result could not enforce the agreement against her. 

Id. at 206. The court rejected that defense, holding:

Edwards continued the agreement and received its financial 

benefits for approximately four years after she learned of 
9

Allied’s purported nonperformance. Having made that 

election, Edwards was not excused from performing her own 

obligations under the agreement. See Restatement § 246. 

The evidence is undisputed that, following Allied’s purported 

breach, Edwards did not send all closing checks to Allied, 

failed to hold Allied’s funds “in trust,” opened a bank account 

in Allied’s name, and directly paid branch-operating expenses

from her d/b/a/ account. Edwards’[] argument that Allied 

“breached first” did not excuse her nonperformance where, as 

here, she accepted the benefits of the agreement with 

knowledge of Allied’s alleged breach.

Id. at 208.5

[¶21] Turning to the facts in the case before us, it is Maverick’s conduct which is 

dispositive. There is no evidence in the record manifesting its intent to do anything other 

than continue with the contract. Ms. Wasson testified that they learned that they had 

been provided inaccurate information beginning with WABIT and that the extent of the 

inaccuracies “unfolded over 18 months.” During that time, they continued to perform 

under the contract and to operate MBA. When Dr. Haynes was questioned about whether 

he confronted Mr. Bostrom after he first learned that WABIT was “bleeding numbers,” 

he responded:

A. [Dr. Haynes:] I wouldn’t say, “confront.” I’m sure we 

had a discussion, but not a confrontation. It’s early on and it 

was clear to me, especially with [Ms. Wasson’s] experience, 

that we needed [Mr. Bostrom] to do what we needed [Mr. 

Bostrom] to do, which is be a liason between us and the book 

of business and to keep a smooth transition in progress. Not 

any ripples.

. . . .

 

5 Edwards had also filed a breach of contract counterclaim against Allied. Allied argued that Edwards 

had waived its breach for the same reasons she could not assert the first-to-breach defense -- she 

continued to accept the benefits of the agreement after learning of Allied’s purported breach. Id. at 208-

09. The court disagreed, implicitly distinguishing between a waiver, an “intentional relinquishment of a 

known right,” and the acceptance of benefits of a contract with knowledge of the other party’s breach. Id.

at 208. The court relied upon Edwards’ testimony that during the term of the agreement “she orally 

complained on dozens of occasions to different representatives of Allied about its mismanagement of the 

branch account.” Id. at 209. The court concluded that whether Edwards had waived Allied’s breach was 

a factual question that must be addressed by a jury and that Allied was not entitled to a judgment as a 

matter of law on that question. Id.
10

Q. [H. Bailey:] All right. So you were trying to make the 

best of a bad situation?

A. You have to. Yes. You have to.

Q. Okay. Any other reason why you didn’t confront Mr. 

Bostrom and say, “Hey,” you know, “what’s the deal?”

A. Well, I’m sure I mentioned it and we had a discussion 

about it, but nothing that comes to mind about the discussion. 

In other words, it wasn’t heated. It was “What is going on 

with these guys?” Well, a myriad of problems. You know, 

obviously, I could have asked “Well, why didn’t you tell us 

that?” Well, it’s a little late for that. We have to make this 

work now.

Ms. Wasson testified in the same vein. There came a time when Dr. Haynes and Ms. 

Wasson discovered that Mr. Bostrom had taken $85,000 without permission. Ms. 

Wasson was questioned about this:

Q. [Mr. Miller:] And you didn’t demand it back?

A. [Ms. Wasson:] We asked him about it at that time and 

then he got his attorney involved and we wrote letters and 

[Dr. Haynes] and I discussed how to handle it and decided we 

needed [Mr. Bostrom] to help us with the business at that 

point. We didn’t want to rock the boat. We knew at some 

point down the road we could address it and get repayment.

. . . .

We wanted [Mr. Bostrom] to stay and pave our way with the 

existing client base, introduce us, make it a smooth transition. 

So no, we weren’t willing to go to battle over that at that 

point.

Q. Okay. You waited for a year and a half; right?

A. Yes. We waited until we were at the end of the rope.

[¶22] Taking all of the evidence in the light most favorable to Maverick and giving 

Maverick the benefit of all the reasonable inferences which may be drawn from the 

evidence, we cannot conclude that it demonstrated any intent other than continuing with 
11

the contract once it knew about Mountain States’ breach. In fact, it continued to perform 

its obligations under the contract from February 2010 through August of 2011. Having 

made the election to continue after learning of Mountain States’ alleged 

misrepresentations, it was not excused from performing its own obligations under the 

agreement.6

[¶23] Although in some circumstances the acceptance of contractual benefits will not 

constitute a waiver of the first material breach bar to recovery, they are not present here. 

See Fryer, 43 P.2d at 997. For example, “efforts on the part of an innocent party to 

persuade the promisor, who repudiates his agreement, to reject the repudiation and 

proceed honorably” that are ultimately unsuccessful have been held not to be a waiver of 

a first-to-breach defense. White, 395 S.W.3d at 716 (citations omitted). Further, where a 

party to a contract fails to assert the other party’s breach because they are fraudulently 

induced to continue with the contract, that party will not be prevented from asserting that 

the other party was the first to breach. Id.; see also Madden Phillips Constr., 315 S.W.3d 

at 816.

[¶24] There is no evidence in the record that would indicate Maverick’s continuance 

with the contract was a “temporary decision to withhold termination” of the contract or 

that it was fraudulently induced to continue with the contract. The evidence is 

undisputed that Maverick continued to operate the business for 18 months; the testimony 

of Dr. Haynes and Ms. Wasson illustrates that their intent was to continue operating the 

business, even as they discovered Mr. Bostrom’s misrepresentations; and there is no 

evidence that Dr. Haynes or Ms. Wasson indicated to Mountain States that they had any 

intent other than to continue to operate the business. Thus, Maverick’s acceptance of 

contractual benefits after learning of Mountain States’ alleged breach prevents it from 

asserting a prior breach as a defense to Mountain States’ breach-of-contract claim.

II. Does Mountain States have a contractual right to attorney fees on appeal?

[¶25] Mountain States takes the position that it has a contractual right to reasonable 

costs and attorney fees on appeal based upon language contained in the Promissory Note 

and Personal Guaranty.

[¶26] We have held that “[a] party is entitled to recover attorney fees if expressly 

provided by statute or contract. ‘Where a contract allows the award of attorney’s fees, 

that includes fees incurred on appeal.’” Lokey v. Irwin, 2016 WY 50, ¶ 15, 374 P.3d 311, 

316 (Wyo. 2016) (quoting Kinstler, 2007 WY 98, ¶ 13, 160 P.3d at 1129).

 

6 This election however did not prohibit Maverick from seeking damages on Mountain States’ breach. 

“[I]f the aggrieved party elects to continue the contract, the obligations of both parties remain in force and 

the injured party retains only a claim for damages for partial breach.” 17A Am. Jur. 2d § 705 (2004).
12

[¶27] Here, the Promissory Note provides:

Attorneys’ Fees. Maker [Maverick] hereby agrees to pay 

reasonable attorneys’ fees and all other reasonable costs and 

expenses incurred, after an Event of Default, in the 

enforcement of this Note, the enforcement of any security 

interest with respect to this Note, and the collection of 

amounts due hereunder, whether such enforcement or 

condition is by court action or otherwise. 

The Promissory Note includes “[m]aker’s failure to pay when due any part of the 

principal or interest under this Note within 10 days after such amount is due” as an 

“Event of Default.” Further, the Personal Guaranty executed by Dr. Haynes and Ms. 

Wasson provides that they “absolutely, irrevocably and unconditionally gurarantee[] to 

the Lender payment and the full, faithful and timely performance of any and all liabilities 

and obligations of Borrower whether now existing or hereafter incurred under the Note.”

[¶28] Mountain States is entitled by the terms of the Promissory Note and Personal 

Guaranty to recover reasonable attorney fees incurred on appeal. Pursuant to W.R.A.P. 

10.06, we will determine the appropriate sum to be awarded after counsel submits proper 

documentation. See Lokey, 2016 WY 50, ¶ 15, 374 P.3d at 316.

CONCLUSION

[¶29] Maverick’s continued performance of the contract after learning of Mountain 

States’ alleged breach prevents it from asserting a prior breach as a defense to Mountain 

States’ breach-of-contract claim. Mountain States is entitled to attorney fees on appeal. 

Affirmed.