Opinion ID: 901495
Heading Depth: 1
Heading Rank: 4

Heading: Weitzel's motion for summary judgment on the breach of contract claim.

Text: [¶ 20.] SVH argues the circuit court erred when it granted Weitzel's motion for summary judgment on the issue of the existence of an enforceable agreement, as the conduct of the parties indicated only an agreement to agree in the future and was therefore not enforceable as a contract. In the alternative, SVH argues that if an enforceable agreement did exist the circuit court erred when it granted the motion for summary judgment, as breach is an issue of fact for the trier of fact to resolve. [¶ 21.] A. Existence of an enforceable agreement [¶ 22.] A contract is an agreement to do or not to do a certain thing. SDCL 53-1-1. The existence of a valid contract is an issue of law to be determined by the court. Werner v. Norwest Bank South Dakota, N.A., 499 NW2d 138, 141 (SD 1993) (citing Mid-America Mktg. Corp. v. Dakota Indus., 289 NW2d 797 (SD 1980)). A contract may be either express or implied, but not both. SDCL 53-1-3. An express contract is one, the terms of which are stated in words. An implied contract is one, the existence and terms of which are manifested by conduct. Id. An express contract results when the parties mutually express an intent to be bound by specific terms and conditions. Werner, 499 NW2d at 141 (citing Van Zee v. Witzke , 445 NW2d 34 (SD 1989)). As we noted in Setliff v. Akins : A contract is implied in fact where the intention as to it is not manifested by direct or explicit words by the parties, but is to be gathered by implication or proper deduction from the conduct of the parties, language used, or acts done by them, or other pertinent circumstances attending the transaction. 2000 SD 124, ¶12, 616 NW2d 878, 885 (quoting Weller v. Spring Creek Resort, Inc. , 477 NW2d 839, 841 (SD 1991) (quoting Mahan v. Mahan , 80 SD 211, 215, 121 NW2d 367, 369 (1963))). [¶ 23.] An agreement must be sufficiently definite to enable a court to give it an exact meaning. In re Estate of Eberle, 505 NW2d 767, 770 (SD 1993) (citing Deadwood Lodge No. 508 Benevolent and Protective Order of Elks of the United States of Am. v. Albert, 319 NW2d 823, 826 (SD 1982)). However, absolute certainty is not required; only reasonable certainty is necessary. Id. (citing 17A AmJur2d Contracts § 196 (1991)). If an agreement leaves open essential terms and calls for the parties to agree to agree and negotiate in the future on essential terms, then a contract is not established. Werner, 499 NW2d at 142 (citing Transamerica Equip. Leasing Corp. v. Union Bank, 426 F2d 273 (9thCir 1970)). [¶ 24.] In the instant case, the circuit court concluded an enforceable implied employment contract existed. It based its holding on the conduct of the parties as it related to the July 14, 2000, Agreement that memorialized the consolidated demand notes and the support loan demand note, which it determined manifested the parties' assent to be bound to an employment contract beginning August 1, 2001. The circuit court then determined the terms of the implied employment contract were sufficiently definite to find that it was an enforceable contract. Specifically, the circuit court noted that the July 14, 2000, Agreement was executed with the understanding that Weitzel would return to SVH on or about August 1, 2001, as an interventional cardiologist with SVH at the rate of $500,000 per year, under terms and conditions that were to be materially similar to those in the parties' previous employment agreement. [¶ 25.] SVH contends that an implied contract was not formed, but rather the parties had agreed to agree to contract at a later date once Weitzel returned from his sabbatical. As support for its contention, SVH argues that the July 14, 2000, Agreement relied upon by the circuit court did not contain terms for an employment contract that were sufficiently definite to enable the circuit court to give the implied contract an exact meaning. SVH further argues that essential elements of the future employment contract remained to be negotiated, and therefore the contract was not sufficiently definite. It bases its argument on the language in the July 14, 2000, Agreement, which provides that the future employment agreement to be signed in August 2001 would contain terms and conditions of which shall not be materially different than the Current [1999 Staff] Physician Agreement, except as mandated by law or regulation. SVH argues that these future terms and conditions were unknown at the time of the July 14, 2000, Agreement, as any changes due to new laws and regulations could not be known at the time the July 14, 2000, Agreement was executed. SVH also argues that the definition of the term materially was vague, uncertain and undefined, and Weitzel would most likely have wanted to renegotiate many of the terms included in the previous physician contract between the parties. [¶ 26.] SVH's argument as to the lack of sufficient definiteness must fail. The July 14, 2000, Agreement and all affidavits and depositions make it clear that both parties had entered into the agreement with the intention that Weitzel would return to SVH on or about August 1, 2001, and would be compensated at the rate of $500,000 per year as an interventional cardiologist. SVH points to no specific essential terms missing from the parties' agreement. Changes in the relevant law and regulations pertaining to physician contracts would not have been a subject of negotiation between SVH and Weitzel, as those terms would be imposed upon both parties regardless of their preferences. Therefore, there were no terms essential for the parties to negotiate. All that was left was for any changes in the relevant law and regulations to be incorporated into a written contract and execution of the contract by the parties. Although SVH may have believed Weitzel would have wanted to negotiate many of the terms included in the previous contract between the parties, there is no indication in the record that Weitzel was unsatisfied with any of the additional terms. In addition, SVH did not indicate any specific terms with which it was dissatisfied, and no additional terms were identified as remaining to be negotiated prior to August 1, 2001. [¶ 27.] SVH next argues that the execution of the employment contract itself was one of the essential terms of the agreement. As support for its contention, SVH points to the language in the July 14, 2000, Agreement, which states that an employment agreement will be executed by the parties on or about August 1, 2001. [¶ 28.] SVH cites to G.H. Lindekugel & Sons, Inc. v. Brezina Constr. Co., 83 SD 404, 408, 160 NW2d 121, 123 (1968), for the proposition that if an intention is manifested in any way that legal obligations between the parties shall be deferred until the writing is made, the preliminary negotiations and agreements do not constitute a contract. While undoubtedly true, the instant case is materially distinguishable from Lindekugel in that the parties in that case engaged in protracted negotiations over almost five months in an attempt to come to an agreement as to the price of a construction subcontract and the materials to be used in the construction project. See id. 405-07, 160 NW2d at 121-22. More importantly, each offer and counteroffer contained a signature line for acceptance and none were ever signed by the offeree during the five months of negotiations. Id. at 410, 160 NW2d at 124. [¶ 29.] In the instant case, the salary and the type of work to be done by Weitzel had already been negotiated and were reflected in the July 14, 2000, Agreement. All that remained for the parties to do was await the promulgation of changes in the applicable laws and regulations and then update the 1999 Staff Physician Agreement to reflect any changes taking effect in 2001, the year the parties anticipated signing the contract. All other material or essential terms had been agreed upon, and nothing remained for the parties to negotiate. Therefore, the circuit court did not err when it determined an enforceable agreement existed between the parties that entitled Weitzel to return to SVH on or about August 1, 2001, as an interventional cardiologist under the then current staff physician agreement. [¶ 30.] B. Summary judgment on the breach of contract issue [¶ 31.] [T]he elements of breach of contract are: 1. An enforceable promise; 2. A breach of the promise; 3. Resulting damages. Guthmiller v. Deloitte & Touche, LLP, 2005 SD 77, ¶14, 699 NW2d 493, 498 (citing McKie v. Huntley , 2000 SD 160, ¶17, 620 NW2d 599, 603; Krzycki v. Genoa Nat'l Bank , 496 NW2d 916, 923 (Neb. 1993)). Whether a contract has been breached is a pure question of fact for the trier of fact to resolve. Rindal v. Sohler, 2003 SD 24, ¶13, 658 NW2d 769, 772 (citing Moe v. John Deere Co., 516 NW2d 332, 335 (SD 1994); C & W Enterprises v. City of Sioux Falls, 2001 SD 132, ¶19, 635 NW2d 752, 758; Harms v. Northland Ford Dealers, 1999 SD 143, ¶21, 602 NW2d 58, 63; Swiden Appliance v. Nat'l. Bank of S.D., 357 NW2d 271, 277 (SD 1984)). A breach of contract is defined as [a] violation of a contractual obligation, either by failing to perform one's own promise or by interfering with another party's performance. Black's Law Dictionary 182 (7th ed 1999). A breach may be one by non-performance, or by repudiation, or by both. Id. (quoting Restatement (Second) of Contracts § 236 cmt. a (1981)). A breach of contract caused by a party's anticipatory repudiation, i.e., unequivocally indicating that the party will not perform when performance is due[,] allows the nonbreaching party to treat the repudiation as an immediate breach of contract and sue for damages. Id. This type of breach is known either as an anticipatory breach or constructive breach. Id. [¶ 32.] In the instant case, the circuit court granted Weitzel's motion for summary judgment on the breach of contract claim. It did so by finding that Nickell's decision not to allow Weitzel to return to SVH was communicated to Patrick without nuance. The circuit court further determined that Patrick knew that Weitzel would not be permitted to return to SVH, and then delivered that message to Sanford, Weitzel's attorney. [¶ 33.] The time for performance of the employment contract was set for August 1, 2001. The series of conversations between the parties' attorneys occurred between February and May 2001, some three to six months before the time of performance. [¶ 34.] The circuit court concluded that Nickell's communication to Patrick was unequivocal. However, a genuine issue of material fact exists as to whether Patrick's communication to Sanford was an unequivocal indication that SVH did not intend to perform its contractual obligation. We therefore, reverse the circuit court's judgment and order granting Weitzel's motion for summary judgment on the issue of breach of contract and remand for trial on this issue. [¶ 35.] 2. Whether the circuit court erred when it held the