author: MEIERHENRY, Justice.

text:
    2006 SD 44
    Jim SCHWAIGER, M.D., Plaintiff and Appellant, v. AVERA QUEEN OF PEACE HEALTH SERVICES, Defendant and Appellee.
    No. 23679.
    Supreme Court of South Dakota.
    Argued March 22, 2006.
    Decided May 3, 2006.

      Robert A. Christenson of Christenson Law Office, PC, Sioux Falls, South Dakota, Jonathan K. Van Patten, Vermillion, South Dakota, Attorneys for plaintiff and appellant.
    Michael F. Tobin, Michael S. McKnight of Boyce, Greenfield, Pashby & Welk, LLP, Sioux Falls, South Dakota, Attorneys for defendant and appellee.
   MEIERHENRY, Justice.

[¶ 1.] . Dr. Jim Schwaiger (Schwaiger) brought this suit against Avera Queen of Peace Hospital (Avera) for negligence, defamation, breach of contract, and misrepresentation. The trial court granted summary judgment on all of Schwaiger’s claims. He appeals the judgment on the defamation and breach of contract claims. We affirm.

FACTS

[¶ 2.] On April 27, 1998, Jim Schwaiger began a one-year employment contract with Mitchell Radiological Associates, P.C., (MRA) in Mitchell, South Dakota. While employed at MRA, Schwaiger had medical staff privileges at Avera, the hospital in Mitchell, and performed radiological services there pursuant to a contract between MRA and Avera. Allegations of inappropriate behavior by Schwaiger arose during the summer and fall of 1998. According to those allegations, Schwaiger made inappropriate comments to both staff and patients at Avera while performing radiological services.

[¶ 3.] Information concerning the allegations against Schwaiger were transmitted in a December 28, 1998 e-mail from Rod Kernes (Kernes), the director of Av-era’s radiology department, to K.C. De-Boer (DeBoer), Avera’s Vice President of Professional Services. DeBoer then restated those allegations in a letter to Schwaiger’s employer, MRA, on December 29, 1998. The letter was addressed to Dr. Carey Buhler (Buhler), a partner at MRA; Buhler also acted as the medical director of Avera’s radiology department. DeBoer wrote:

I have now discussed with you on two occasions concerns being brought forward by employees related to the behavior of Jim Schwaiger, M.D., an employee of [MRA]. I regret the need to involve you in this situation, but since Dr. Schwaiger is an employee of your company, I feel it would be most appropriate for you to address these issues with him consistent with your contractual obligation as the President of [MRA].

The letter then detailed eight examples of alleged inappropriate behavior by Schwaiger. Three of the reported incidents involved Avera patients. Of all the allegations, the seventh was the most serious allegation in the letter. It involved Schwaiger’s behavior toward and comments concerning a male patient being prepped for an angiogram. The letter described the alleged incident as follows:

In August or September, a young male patient was being prepped for an angi-ogram. Dr. Schwaiger entered the control room area. He proceeded to inquire about the patient’s physical attributes. He made comments about the patient being “a young, good looking, blonde boy.” He entered the exam room and palpated the patient’s femoral artery. Dr. Schwaiger was not the physician involved in the case.

A note at the top of DeBoer’s letter indicated that it was “FOR DR. BUHLER’S EYES ONLY,” however, the bottom of the letter shows copies were sent to three administrators at Avera.

[¶ 4.] Shortly after receiving , DeBoer’s letter, Buhler and his partner at MRA, Dr. Kundel, met privately with Schwaiger to discuss some of the incidents described in the letter. The “blonde boy” incident, however, was not discussed at the meeting. After the meeting, Kundel privately informed Schwaiger about the “blonde - boy” allegation. Schwaiger then confronted Buhler and vigorously denied the allegation. A few days later, Buhler wrote a follow-up letter to Schwaiger detailing their meeting; Buhler wrote a similar letter to DeBoer. Thereafter, Avera received no further reports concerning questionable conduct by Schwaiger, and Avera took no disciplinary or personnel action against Schwaiger. Schwaiger continued to work at MRA and Avera until the completion of his contract..

[¶ 5.] Schwaiger brought this suit against Avera and originally asserted claims of negligence, defamation, and.tor-tious interference. He then amended his complaint so as to eliminate the claim of tortious interference and added claims of breach of contract and misrepresentation. Avera moved for summary judgment, and the trial court ruled in Avera’s favor on all of Schwaiger’s claims.

[¶ 6.] Schwaiger appeals the adverse ruling on his claims of defamation and breach of contract. Schwaiger claims that DeBoer’s letter — specifically, the details of the alleged “blonde boy” incident — constitutes ' a defamatory communication. Schwaiger admits that the letter is a communication between interested parties, but he argues that the qualified privilege applicable to such communications does not apply because the allegation was malicious. Schwaiger also alleges that Avera breached its contract with Schwaiger by failing to follow procedure established by the medical staff bylaws when investigating the alleged “blonde boy” incident. According to Schwaiger, the trial court erred in granting summary judgment for Avera, and he asks us to consider the following issues:

ISSUES
1. Whether the trial court erred in concluding that there was no genuine issue of material fact regarding the existence of malice, which would negate the qualified privilege defense to defamation - for communications > between interested persons.
2. Whether the trial court erred in con- • eluding that there was no genuine " issue of material fact as to whether Avera breached the medical staff bylaws.

STANDARD OF REVIEW

[¶ 7.] Our review of a' trial court’s decision on summary judgment is well established:

Summary judgment is authorized if 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 judgment as a matter of law. We will affirm only when there are no genuine issues of material fact and the legal questions have been correctly decided. All reasonable inferences drawn from the facts must be viewed in favor of the non-moving party. ,The burden is on the moving party to clearly show an absence of any genuine issue of material fact and an entitlement to judgment as á matter of law. Summary judgment will be affirmed if there exists any basis which would support the trial court’s ruling.

Cleveland v. BDL Enters., Inc., 2003 SD 54, ¶ 11, 663 N.W.2d 212, 216-17 (citations and quotation marks omitted) (emphasis in original). The non-moving party, however, cannot merely rest on its pleadings; it must point to specific facts which establish a genuine, material issue for trial. Wulf v. Senst, 2003 SD 105, ¶ 18, 669 N.W.2d 135, 141-42. Mere allegations are not sufficient to avoid summary judgment. Id. ¶ 18, 669 N.W.2d at 142.

Decision

Defamation

[¶,8.] We first review Schwaiger’s contention that genuine issues of material fact precluded summary judgment on his defamation claim. In South Dakota, defamation is defined by statute. SDCL 20-11-2. Defamation includes both libel and slander. SDCL 20-11-2. By definition, both libel and slander are “unprivileged” communications. SDCL 20-11-3; SDCL 20-11-4. Therefore, a defamation action may not survive if the alleged defamatory communication was privileged. Peterson v. City of Mitchell, 499 N.W.2d 911, 915 (S.D.1993). The existence of privilege is a question of law. Sparagon v. Native Am. Publishers, Inc., 1996 SD 3, ¶ 26, 542 N.W.2d 125, 132.

[¶ 9.] What constitutes a privileged communication is set forth by statute. SDCL 20-11-5. If a communication is made “without malice, to a person interested therein, by one who is also interested, or by one who stands in such relation to the person interested as to afford a reasonable ground for supposing the motive for the communication innocent, or who is requested by the person interested to give the information,” it is privileged. SDCL 20-11-5 (emphasis added). Consequently, communications between interested parties are protected unless those communications are made with malice.

[¶ 10.] In this case, Schwaiger bases his defamation claim oh DeBoer’s letter to Buhler concerning Schwaiger’s conduct. Schwaiger admits that the letter is a communication between interested parties, but he contends that the qualified privilege applicable to such communications does not apply because of the existence of malice. However, malice cannot be inferred from the defamatory communication alone. SDCL 20-11-5. Rather, Schwaiger must present evidence that the communication was made with “reckless disregard of the truth or actual malice.” Kieser v. Se. Props., 1997 SD 87, ¶ 15, 566 N.W.2d 833, 837-38. The test for whether DeBoer’s communication is reckless depends on whether he had “serious doubts” about its truthfulness at the time he sent the letter. Id. ¶ 15, 566 N.W.2d at 838. As we have stated*

The real test of whether a defendant’s conduct is reckless so as to constitute . actual malice is whether he in fact entertained serious doubts as,to the truth of his publications. Reckless conduct is not measured by whether a reasonably prudent man would have published, or would have investigated before publishing. ■

Petersen v. Dacy, 1996 SD 72, ¶ 8, 550 N.W.2d 91, 93 (citations and quotation marks omitted); see also Kieser, 1997 SD 87, ¶ 21, 566 N.W.2d at 839 (“Kiesers have offered no proof that Southeast Properties did not believe, at the time it communicated the allegations, that Kiesers stole the listed property.”); Petersen, 1996 SD 72, ¶ 14, 550 N.W.2d at 94 (“Petersen has offered no proof that Cerny did not believe, at the time she made the communication to the four Mr. G’s employees, that Petersen stole the tickets.”) “Because malice cannot be presumed, the party bearing the burden of proof must establish that there was a reckless disregard for the truth on the part of the accused,” and “a specific showing of malice is reqúired for purposes of raising a genuine issue of material fact.” Tibke v. McDougall, 479 N.W.2d 898, 905-06 (S.D.1992).

[¶ 11.] In his complaint, Schwaiger alleged that DeBoer’s letter was defamatory because Avera “knew or should have known that there was no factual basis for any inappropriate behavior by [Sphwaiger] towards any patients of [Avera].” The trial court determined, however, that Schwaiger failed to “present evidence that [Avera] actually had serious doubts about the truth of the statements” in DeBoer’s letter. The court noted that while Schwaiger questioned the source of the information in the letter, Avera “filed an affidavit from the employee who made the allegations” concerning the “blonde boy” incident. The .court also noted that in any event, “a failure to investigate is not malice.”

[¶ 12,] ’ On appeal, Schwaiger focuses on the statement concerning the “blonde boy” incident because it is “the most outrageous and the most damaging.” For evidence of malice, Schwaiger asserts that “one need not look any further than Rod Kernes.” Schwaiger argues that DeBoer’s letter was instigated by Kernes, with whom Schwaiger had a strained relationship. According to Schwaiger, Kernes, composed the e-mail in retaliation after Schwaiger- reported to Kernes’ superiors that Kernes had a drug problem. Schwaiger claims that Kernes’ animosity toward him prompted Kernes’ email to DeBoer whiph, in turn, prompted DeBoer to repeat the allegations in the letter to MRA. Schwaiger asserts that his history with Kernes supports the inference that the statement regarding the “blonde boy” incident was made with malice. Schwaiger also contends the time lapse between the actual occurrence of the “blonde boy” incident in May 1998 and Kernes’ e-mail months later also supported an inference of malice. In response, Avera argues that Schwaiger inappropriately relies. on the allegation of a strained relationship between Kernes and Schwaiger for the first time on appeal and had presented no evidence to the trial court making it a genuine issue of material fact.

[¶ 13.] The record does not contain an affidavit or a deposition of Kernes, and the trial court’s decision never mentions Kernes or his relationship with Schwaiger. The . only evidence that Kernes may have had a malicious motive in transmitting . the allegations about Schwaiger in his e-mail to DeBoer came from Schwaiger’s affidavit. Schwaiger cannot point to any other evidence of animosity. He only surmises that Kernes had reason “to fear or dislike” him. He speculates that “Rod Kernes had every reason to be concerned about my disapproval of his drug abuse inside the hospital, and this quite probably gave him a source of malice in his actions against me.” He further speculates in his affidavit that “Kernes also may have disliked and borne malice toward me because of my disapproval of his interference in patient care issues.” Speculation and innuendo, however, are not enough to raise a genuine issue of material fact. As Schwaiger points out as part of his affidavit:

We need to learn more from Rod Kernes in his deposition about whether this was part of “collegial intervention,” or whether it might be, as I believe, an indication of his zealous malice continuing perhaps to this very day.

Consequently, Schwaiger’s affidavit concerning Kernes’ motives in sending the email does not set forth sufficient evidence to defeat the summary judgment motion.

[¶ 14.] Even if we were to find the affidavit was sufficient to raise a genuine issue of material fact concerning Kernes’ motive, it is not Kernes’ e-mail which forms the basis of Schwaiger’s claim of defamation. Rather, Schwaiger challenges DeBoer’s letter, which incorporated Kernes’ e-mail. We might assume that Kernes’ e-mail was written maliciously, but even so, Schwaiger failed to provide compelling authority for the proposition that his malice can be imputed to DeBoer. We have continually noted that “[a]s a threshold ... [an appellant] must cite relevant authority before this Court will consider granting relief.” State v. Corey, 2001 SD 53, ¶ 19, 624 N.W.2d 841, 845. Therefore, we determine only whether, when viewed in a light most favorable to Schwaiger, there is any evidence in the record to suggest that DeBoer entertained serious doubts as to the truth of his statement regarding the “blonde boy” incident when he wrote the letter to Schwaiger’s employer.

[¶ 15.] In his deposition, DeBoer testified that the “blonde boy” incident was brought to his attention by Kernes. De-Boer did not specifically recall who made the allegation, and when asked if Kernes provided that information, DeBoer replied, “As I stated, probably in our conversation we discussed that, but at this time I don’t recall the details.” When asked whether the statement in his letter concerning the incident was “an accurate statement from what Mr. Kernes brought to [DeBoer],” DeBoer replied, “I believe that’s true.”

[¶ 16.] In his deposition, Rod Jacobsen (Jacobsen), then president of Avera, also testified regarding the source of the allegations concerning Schwaiger from De-Boer. When asked how he first learned of the allegations, Jacobsen stated, “My recollection is that [DeBoer] talked with me and said that employees have raised some issues, have had some complaints. He may have given me a couple of examples of the complaints that employees had given to, I believe, Rod Kernes. If I’m not mistaken, Rod Kernes talked to [DeBoer]. [DeBoer] told me about it.” When asked if he recalled what DeBoer stated, Jacob-sen replied, “No, not necessarily in specific, just that he referenced the fact that complaints have been made by employees to Rod Kernes concerning Dr. Schwaiger.” Jacobsen did not know who made the allegation concerning the “blonde boy” incident.

[¶ 17.] The record also includes the deposition and affidavit of Stacy Koch (Koch), as well as the deposition of Mandy Robinson (Robinson), the two radiological technicians who observed the “blonde boy” incident. Both technicians stated that on May 7, 1998, they were preparing for an angiogram on a young man when Schwaiger made comments about the patient’s physical appearance. According to both Koch and Robinson, the patient was not a patient of Schwaiger. Koch observed Schwaiger palpate the patient’s femoral artery. In her deposition and her affidavit, Koch stated that she reported the incident to Kernes.

[¶ 18.] Suffice it to say, DeBoer was not the most cooperative witness during his deposition. Hé was often evasive — “I don’t understand your point” — and his memory was anything but clear where Schwaiger was concerned — “We’re five years later. T don’t recall those kind of details.” Therefore, if the record provided no factual basis for the “blonde boy” allegation, we might question whether DeBoer published that allegation with reckless disregard for the truth. Even viewed in a light most favorable to Schwaiger, however, the only inference supported by the evidence is that Koch and Robinson observed conduct by Schwaiger which made them feel uncomfortable, Koch reported that conduct to Kernes, Kernes informed DeBoer of the conduct, DeBoer discussed his concerns with Jacobsen, and DeBoer passed his knowledge on to-Buhler. We do not measure DeBoer’s conduct “by whether a reasonably prudent man would have published, or would have investigated before publishing.” Petersen, 1996 SD 72, ¶ 8, 550 N.W.2d at 93 (citations and quotation marks omitted). Therefore, because there is no evidence in the record that DeBoer in fact entertained serious doubts as to the truth of his publications, there is no genuine issue of material fact concerning malice. Thus, the trial court correctly entered summary judgment in favor of Avera on Schwaiger’s claim of defamation. Breach of Contract

[¶ 19.] Next we review Schwaiger’s argument that a genuine issue of material fact precluded summary judgment on his breach of contract claim. As we have recognized, a hospital’s bylaws constitute a binding contract between the hospital and its medical staff. Mahan v. Avera St. Luke’s, 2001 SD 9,, ¶ 15, 621 N.W.2d 150, 154. When the construction of hospital bylaws is at issue, “we apply the normal principles for construction and interpretation, of a contract.” Id. (citation omitted). The construction of a contract is a question .of law which we review de novo. Id. (citation omitted).

[¶ 20.] Schwaiger asks us to consider two sections in Article III of Avera’s medical staff bylaws. The first section is Section VII, titled “Corrective Review Action.” Section VII states an investigation may be initiated whenever a physician “engages in, makes, or exhibits acts, statements, demeanor, or professional conduct ... detrimental to patient safety or delivery of patient care, disruptive to the hospital operation or an impairment of the community confidence in the hospital.” The second section is Section X, entitled “Impaired Staff Membership,” which provides the procedure that “shall be used in assisting Medical Staff member experiencing impairment of professional performance or disruption of hospital activity due to mental/emotional disturbances, sexual miseon-duct, physical disabilities and chemical impairment or dependencies.”

[¶ 21.] The parties disagree on the application of these sections to the allegations against Schwaiger. According to Schwaiger, Avera should have followed Section X’s confidential investigation procedures, and its failure to do so constitutes breach of contract. Specifically, Schwaiger focuses on the “blonde boy” incident, which, according to Schwaiger, constitutes an allegation of sexual misconduct under Section X. Avera, however, argues that Section X does not apply because Schwaiger was not impaired and did not disrupt hospital activity. According to Avera, Schwaiger’s conduct made employees feel uncomfortable, and therefore it had discretion to engage in “collegial intervention,” rather than a formal investigation process.

[¶ 22.] We begin by noting the title of Section X, “Impaired Staff Membership.” The plain, ordinary meaning of “impaired” is “diminish[ed] in strength, value, quantity, or quality.” American Heritage Dictionary 644 (2d College Ed). Thus, the title of Section X implicates more than just offensive conduct. Section X goes on to require “impairment of professional performance or disruption of hospital activity.” The plain, ordinary meaning of “disrupt” is “[t]o throw into confusion or disorder.” American Heritage Dictionary 408 (2d College Ed). Additionally, Section X requires that the source of impairment be “mental/emotional disturbances, sexual misconduct, physical disabilities and chemical impairment or dependencies.” While “sexual misconduct” is not defined by the section, the surrounding terms — mental or emotional disturbances, physical disabilities, chemical impairment — indicate the serious connotation given to the terms. Therefore, Section X applies to serious impairments which diminish a physician’s ability to provide care or cause confusion or disorder in hospital activity.

[¶ 23.] In this case, no evidence suggests that Schwaiger’s staff membership was impaired in any way. The claims against Schwaiger alleged that he made inappropriate statements — most of a sexual nature — to hospital employees and patients. The “blonde boy” incident involved a similar comment to hospital employees. It also alleged that Schwaiger “entered the exam room and palpated the patient’s femoral artery” and that Schwaiger “was not the physician involved in the case.” Therefore, it is not apparent that the allegations claimed that Schwaiger was unable to fully perform his professional duties, or that Schwaiger’s conduct caused confusion or disorder in hospital activity. Thus, we agree with the trial court that Section X’s mandatory investigation requirement did not apply to the allegations against Schwaiger. Thus, Avera did not breach its contract with Schwaiger by failing to follow the procedure in Section X.

[¶ 24.] Even if the allegations against Schwaiger fell within Section VII, no breach of contract occurred. The language of Section VII allows investigation, but does not require it. Rather, Section VII granted Avera the discretion to apply its investigation procedure. Thus, we cannot say that Avera breached its contract with Schwaiger by utilizing “collegial intervention,” rather than formal discipline procedures, to address the allegations regarding Schwaiger’s conduct.

[¶ 25.] Affirmed.

[¶ 26.] GILBERTSON, Chief Justice, and KONENKAMP and ZINTER, Justices,'and STEELE, Circuit Judge, concur.

[¶ 27.] STEELE, Circuit Judge, sitting for SABERS, Justice, disqualified.

      . In its memorandum decision, the trial court stated that DeBoer's letter "described nine specific incidents of behaviors and/or comments that staff had reported as making them uncomfortable." Citing the letter as appended to Schwaiger’s brief, Avera, in its brief, also stated that the letter detailed "nine separate instances of conduct." At oral argument, however, Schwaiger’s attorney stated that he "counted eight” allegations in the letter. Upon an examination of the letter, we agree that it contained eight allegations: the "screwdriver" incident, the "new technology” incident, several "miss you” incidents which were addressed as one allegation, the "elevator eyes” incident, the "fat butt” incident, the "thyroids like breasts” incident, the "blonde boy” incident; and the "impotence” incident.

      . Libel is defined as
      [A] false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye which exposes a person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation.
      SDCL 20-11-3.

      . Slander is defined as
      [A] false and unprivileged publication, other than libel, which:
      (1)Charges any person with crime, or with having been indicted, convicted, or punished for crime; ■
      (2) Imputes to him the present existence of an infectious, contagioús, or loathsome disease;
      (3) Tends directly to injure him in respect to his office, profession, trade, or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profit;
      (4) Imputes to him impotence or want of chastity; or
      (5) By natural' consequence, causes actual damage.
      SDCL 20-11-4.

      . Interestingly, Schwaiger recognized the importance of Kernes' testimony not only in his affidavit, infra n5, but also during DeBoer’s deposition when the following exchange occurred:
      Q (by Schwaigjer’s attorney): Did you feel in your capacity in your job that you had a , duty to find out who made these allegations?

        A: Rod and I would have discussed it, but I don’t recall the details of those discussions at this time.
      Q: So we probably should talk to Mr. Kernes about that? I mean you don’t know — you can recall if Mr. Kernes mentioned any names to you, is that correct?
      A: At this point, no.
      DeBoer’s deposition took place on December 20, 2003, but Kernes was not'deposed before the summary judgment hearing in September .2004.

      : Specifically, Schwaiger refers to three paragraphs in his affidavit in opposition to Avera’s motion for summary judgment. In whole, those paragraphs provide:
      71.Rod Kernes had substantial reason, to dislike or fear me, and be predisposed to act against me, since I had conveyed [a nursel’s allegation of I.V. drug abusé by Rod Kernes, inside the hospital, to Dr. Buh-ler. During the year I spent in the hospital, Rod Kernes was accused on multiple occasions of I.V. drug abuse, inside the hospital, by reliable witnesses. I' have also been informed that, prior to my arrival, Rod Kernes was accused of another case of I!V. drug abuse, inside the hospital, by yet another reliable witness. Also, in a separate instance, Rod Kernes reportedly consumed huge amounts of Demerol (an opiate)' as well as other opiates, over a two week period .(I have written documentation of this allegation). While his office was being cleaned after Rod Kernes' termination from the hospital, yet another reliable- witness noted a tourniquet hidden (taped) underneath Rod Kernes^ desk in His office. Rod Kernes had every reason to be concerned about my disapproval of his drug abuse inside the hospital, and this quite probably gave him a source of malice in his actions against me. I ask that a jury be allowed to deride whether his damaging and false • statements against me are a product of that malice, or whether they are, as [Avera] would have us believe, part of his effort to ■ protect my reputation through "collegial intervention.”
      72. In addition to my disapproval of I.V. drug abuse, Rod Kernes also may have disliked and borne malice toward me because of my' disapproval of his interference in patient care issues. As I stated in my depo- , sition, Rod Kernes attempted to impair the department’s delivery of quality care to patients oh multiple occasions, and I opposed ' his efforts. I leave it to a jury to decide as a question of fact, after hearing his testimony, whether he had malice toward me. I ask that a jury be allowed to decide whether his damaging arid'false statements against me are a product of that malice, or whether ■ they are, as [Avera] would have us believe, part of his effort to protect my reputation through "collegial intervention.”
      73. Rod Kernes’ malice toward me is evident in his practice of investigating my sex life and sexual preference, inside the hospital, during working hours, long after I left the hospital. I wrote of this practice to Ron Jacobsen in my letter AQOP 0089 on June' 23, 2000, in which I was asking about damage to my reputation. A few weeks later, Rod Kernes was .terminated. We need to learn more from Rod Kernes in his deposition about whether this was part of "collegial intervention,” or whether it might be, as I believe, an indication of his zealous malice continuing perhaps to this very day.

      . Citing two law review articles, Schwaiger argues that "support for the proposition that a publication with malice doesn’t lose its malicious character when repeated may be found in the compelled or self defamation cases where an applicant for employment is forced to repeat the defamatory reason that he or she left the last job.” He provides no further explanation for that statement. Further, the cited articles concern compelled self-publication, a doctrine this Court has not yet addressed, and they do not address whether malice can be imputed to one who publishes statements made by another.

      . Section VII provides:
      Corrective Review Action — Whenever a physician, dentist, or allied health professional with clinical privileges engages in, makes, or exhibits acts, statements, demeanor, or professional conduct (either within or outside of the hospital) detrimental to patient safety or delivery of quality patient care or disruptive to the hospital operations or an impairment of the community's confidence in the hospital, a review action against the individual may be initiated by the Chief Executive Officer, the Governing Board, the Executive Committee, or any officer of the Medical Staff. If an adverse recommendation is made the affected individual may utilize the fair hearing plan in Article III, Section VIII.

      . Section X provides:
      Impaired Staff Membership — The following shall be used in assisting Medical Staff members experiencing impairment of professional performance or disruption of hospital activity due to mental/emotional disturbances, sexual misconduct, physical disabilities and chemical impairment or dependencies.
      PURPOSE:
      To provide a 1) confidential way of investigating alleged impairment or misconduct and, if appropriate, to achieve a confidential, fair and impartial assessment of a physician or professional’s impairment or misconduct and 2) to assist the affected individual in initiating and continuing appropriate treatment for his/her condition and 3) to provide the Executive Committee with the information necessary to initiate corrective action if appropriate.
      POLICY:
      The Executive Committee shall assess any and all instances of purported impairment or disruption in a manner at once confidential, humanitarian, and directed toward assisting the affected individual while also assuring patient safety and the smooth op- . eration of the hospital.
      The section then goes on to provide the investigative procedure applicable to instances of "impaired staff membership.”

      . While it does not bear on the breach of contract issue, the fact that Avera took no disciplinary action against Schwaiger is notable. Schwaiger’s privileges were not restricted at any time, and therefore no review hearing took place.


source: Caselaw Access Project

author: GILBERTSON, Chief Justice.

license: Public Domain

text:
    2006 SD 45
    Marc A. WEITZEL, M.D., Plaintiff and Appellee, v. SIOUX VALLEY HEART PARTNERS, a/k/a Heart Partners of Sioux Valley, a South Dakota Corporation, and Sioux Valley Physician Partners, a South Dakota Corporation, Defendants and Appellants.
    Nos. 23728, 23729.
    Supreme Court of South Dakota.
    Argued March 21, 2006.
    Decided May 10, 2006.

      James E. Moore of Woods, Fuller, Shultz & Smith, PC, Sioux Falls, South Dakota, Attorneys for plaintiff and appel-lee.
    Roberto A. Lange, Eric C. Schulte of Davenport, Evans, Hurwitz and Smith, LLP, Sioux Falls, South Dakota, Attorneys for defendants and appellants.
   GILBERTSON, Chief Justice.

[¶ 1.] Sioux Valley Hospital and Sioux Valley Heart Partners (hereinafter “SVH”), appeal from an order granting the plaintiffs, Marc Weitzel, M.D. (hereinafter Weitzel), motion for summary judgment on a breach of contract claim. SVH also appeals the circuit court’s declaratory judgment that loans it made to Weitzel were not enforceable under the prevention doctrine. By notice of review, Weitzel appeals the circuit court’s dismissal of his fraud claim for lack of sufficient probative evidence. We affirm that portion of Issue 1 granting Weitzel summary judgment on the existence of an employment contract, but reverse for trial as to whether there was a breach of that contract. We also reverse and remand for trial on Issue 2 as to any obligation Weitzel had to SVH on certain loans it made to him. We affirm the circuit court on Issue 8.

FACTS AND PROCEDURE

[¶2.] Weitzel was hired by SVH in Sioux Falls, South Dakota, as an interven-tional cardiologist with a starting date of August 1,1999. The parties signed a Staff Physician Agreement on July 2, 1999 (“1999 Staff Physician Agreement”), which guaranteed Weitzel a salary of not less than $325,000 for the first two years of his employment. The “1999 Staff Physician Agreement” included a $13,000 loan for medical school loan repayment and an incentive loan of $37,000 made by SVH to Weitzel. The loans were secured by a demand noté and required repayment in twenty-four monthly installments; each monthly installment payment would be forgiven as it came due as long as Weitzel continued to work for SVH for twenty-four months. The “1999 Staff Physician Agreement” also allowed Weitzel to take a twelve-month sabbatical after two years of employment in order to participate in a fellowship training prograpi in interven-tional cardiology. Either party could cancel the Agreement with ninety days written notice. SVH' had the option to pay Weitzel ninety days base pay in lieu of notice, and could terminate employment immediately for specified reasons, including good cause.

[¶ 3.] The “1999 Staff Physician Agreement” was modified in February 2000, and Weitzel’s salary was increased to $500,000 per year through January 2003. At that time, the “1999 Staff Physician Agreement” was also modified to require Weitzel to comply with a code of conduct based on complaints by patients, nurses and physicians about his abrupt and abrasive manner.

[¶ 4.] Due to his dissatisfaction with the mentoring he was receiving in inter-ventional cardiology,. Weitzel began inquiring about fellowships in Ohio, Oklahoma and Minnesota as early as November of 1999, just three months after he began working at SVH. On April 20, 2000, Weit-zel was notified he was accepted to the University of Minnesota Cardiovascular Division as a fellow in the interventional cardiology program with a starting date of August 1, 2000, at a salary of $44,666 for the year. SVH allowed Weitzel to take a leave of absence after one year of work at SVH in order to accept the fellowship despite the clause in the “1999 Staff Physician Agreement” that required him to complete two years of work before a sabbatical would be made available for such a fellowship.

[¶ 5.] A few days after receiving notice of his acceptance into the fellowship program Weitzel requested and received a third loan for $189,000 from SVH. The note called for repayment in thirty-six monthly installments, and was 'evidenced by a demartd note. The $189,000 loan also was forgivable as long as Weitzel provided services to SVH for an additional thirty-six months after returning from his fellowship.

[¶ 6.] On May 10, 2000, prior to leaving for his cardiology fellowship, Weitzel sold his home in Sioux Falls.- On July 14, 2000, Weitzel signed another agreement with SVH (“July 14, 2000, Agreement”), that provided him. with a $36,000 support loan for living expenses during the fellowship at the rate of $3,000 per month, with a forty-eight month repayment period. The support loan was structured as a separate forgivable loan, evidenced by a .demand note, for which each monthly installment payment would be forgiven as it came due as long as Weitzel remained employed at SVH. SVH also allowed Weitzel and his family to retain health insurance coverage through SVH during the one-year fellowship by paying monthly premiums.

[¶7.] The “July 14, 2000, Agreement” also consolidated the previous notes, except the support stipend loan, into one note with a repayment schedule of forty-eight monthly installment payments due beginning September 1, 2001, through August 1, 2005. The “July 14, 2000, Agreement” provided for forgiveness of all loans in exchange for Weitzel’s continued employment with SVH from August 1, 2001, until August 1, 2005. The “July 14, 2000, Agreement” also provided that Weitzel would return to employment at SVH after completing his fellowship in July 2001, at which time the parties would execute SVH’s “then current physician staff agreement (the terms and conditions of which shall not be materially different than the Current [1999 Staff] Physician Agreement, except as mandated by law or regulation) with Physician for a position as an inter-ventional cardiologist at an annual base salary rate of $500,000.” The “July 14, 2000, Agreement” also included the following: “(a) the current [1999 Staff] Physician Agreement will terminate as of July 14, 2000; and (b) no loan forgiveness of any kind shall occur under the current Physician Agreement after July 14, 2000.”

[¶ 8.] After Weitzel left for his fellowship, members of the cardiology group began hearing that referring physicians did not want Weitzel to see their patients, and intended not to make referrals to SVH if Weitzel remained with the group. In late 2000, early 2001, the cardiologists discussed their concerns with Michael Nic-kell, M.D. (Nickell), president of Sioux Valley Clinic, that Weitzel’s abrasive and abrupt manner might harm the developing practice. Nickell made the decision that Weitzel would not return to the cardiology group upon completion of his fellowship. However, no direct communication between Nickell and Weitzel ever occurred. Instead, Kim Patrick (Patrick), in-house counsel for SVH, communicated to Steven Sanford (Sanford), Weitzel’s attorney, the group’s feelings and Nickell’s suggestion that Weitzel should consider looking for other employment. The communication took place via a telephone conversation in February 2001 and three letters between Patrick and Sanford in April and May 2001.

[¶ 9.] Sanford stated during his deposition that he recalled Patrick saying during a telephone conversation that if Weitzel returned to SVH his employment would be terminated immediately. In his deposition, Patrick stated he did not recall making such a statement. A May 31, 2001, letter from Patrick to Sanford stated in part:

As we discussed, certain of the Heart Partners physicians have made it known that they would strongly prefer not having Weitzel return to that practice group. This is not to say that Sioux Valley would necessarily terminate Weitzel’s employment but does suggest that it would be in the best interest of both parties if Weitzel were to find another position prior to August 1, 2001. This would permit the parties to agree to a mutual termination of the employment portion of the Loan Agreement and Amendment to Staff Physician Agreement without penalty to either party.
In your May 15 letter, you further indicated Weitzel’s concern that his failure to return on said date would be deemed ■an event of default ■ under his Loan Agreement and Amendment to Staff Physician Agreement. As stated (and contemplated by a mutual termination of the employment portion of that Agreement), Weitzel’s failure to return would certainly not be deemed.by Sioux Valley to be an event of default triggering damages liability to Sioux Valley. Weitzel would however, remain responsible for his loan commitments to Sioux Valley. A portion of those loans represented the costs of Weitzel’s medical school expense or were otherwise used by Weitzel to further his medical education and training. As such, those loans benefited . Weitzel directly by improving his skills, credentials and marketability for the balance of his medical career. Therefore, he should repay these loans.
In sum, Sioux Valley is not terminating Weitzel’s employment agreement at this time but is only offering Weitzel the ■ opportunity to procure other employment without being deemed in breach of his employment contract with Sioux Valley.

Weitzel began seeking other employment opportunities in the spring of 2001, and was offered positions in- Oklahoma practicing interventional cardiology on April 19, and 28, 2001. He had accepted one of' the positions in Oklahoma by the end of April. Weitzel never made any payments on the SVH loans.

[¶ 10.] Weitzel brought suit against SVH alleging breach of contract and breach of good faith and fair dealing. He sought damages for breach of contract in the amount of ninety days base pay from SVH per the “July 14, 2000, Agreement.” Weitzel subsequently amended his complaint to allege fraud. SVH denied any liability and counterclaimed for payment of the $241,583.36 in principal and interest outstanding on the loans.

[¶ 11.] Both parties entered motions for partial summary judgment on the issues of the existence' of an enforceable contract and breach, whether the monies extended to Weitzel were loans requiring repayment or compensation earmarked as loans for administrative purposes, and the issue of damages. Weitzel also sought to amend his pleadings to include fraud. In addition, SVH entered a motion seeking a protection order preventing Weitzel from taking depositions of certain SVH employees.

[¶ 12.] After a hearing in July 2003 on the competing cross-motions for summary judgment, the circuit court granted Weit-zel’s motion as to the existence of an enforceable contract and his motion to amend his complaint to include a claim of fraud. However, the motions for summary judgment on the breach of contract claim, the issue of loan versus compensation, and damages were denied by the circuit court as the issues required inferences to be made based on interpretation of competing factual accounts. The circuit court also denied SVH’s motion for a protection order barring the taking of certain SVH employees’ depositions.

[¶ 13.] Following discovery, both parties again moved for partial summary judgment on the issue of breach of contract. Both parties also requested a declaratory judgment on the enforceability of the $36,000 support note and the $189,000 demand note. Weitzel also entered a motion for partial summary judgment on his claim of breach of implied covenant of good faith and fair dealing, and on his claim of fraud and deceit. The circuit court granted Wéitzel’s motion for breach of contract, and his motion for summary judgment on the issue of the repayment of the loans. Damages on the breach of contract claim were awarded to Weitzel in the amount of $171,358.24, representing ninety-days of base pay and pre-judgment interest. The circuit court held that Weitzel’s obligation to pay the loans was forgiven and the demand notes were not. enforceable due to SVH preventing Weitzel from returning to SVH and performing under the “July 14, 2000, Agreement.”

[¶ 14.] The circuit court then dismissed Weitzel’s motion on the issue of breach of implied covenant of good faith and fair dealing, stating that the issue was moot after granting Weitzel’s motion for summary judgment on the breach of contract claim. Finally, the circuit court granted SVH’s motion for summary judgment on the claim of fraud and deceit due to Weit-zel’s failure to substantiate his allegations with sufficient probative evidence to show that SVH made the promise of performance without the intention to perform.

[¶ 15.] On appeal, SVH raises the following two issues:

1. Whether the circuit court erred when it granted Weitzel’s motion for summary judgment on the breach of contract claim.
2. Whether the circuit court erred when it held the replac&nent demand note for $205,583.26 and the support loan demand. . note for $36,000 were unenforceable against Weitzel due to lack of default.

By notice of review, Weitzel raises the following issue:

3. Whether the circuit court erred when it dismissed Weitzel’s fraud claim for lack of sufficient probative evidence.

STANDARD OF REVIEW

[¶ 16.] Our standard of review on summary judgment requires this Court to determine whether the moving party has demonstrated the absence of any genuine issue of material fact and entitlement to judgment on the merits as a matter of law. SDCL 15-6-56(e). The circuit court’s conclusions , of law .are reviewed de novo. Titus v. Chapman, 2004 SD 106, ¶ 13, 687 N.W.2d 918, 923 (citing Sherburn v. Patterson Farms, Inc., 1999 SD 47, ¶ 4, 593 N.W.2d 414, 416 (citing City of Colton v. Schwebach, 1997 SD 4, ¶8, 557 N.W.2d 769, 771)). However, all facts and favorable inferences from those facts must be viewed in a light most favorable to the nonmoving party. Id., (citing Morgan v. Baldwin, 450 N.W.2d 783, 785 (S.D.1990)). We will affirm the circuit court’s ruling on a motion for summary judgment when any basis exists to supports its ruling. Westfield Ins. Co., Inc. v. Rowe, 2001 SD 87, ¶ 4, 631 N.W.2d 175, 176 (citing Estate of Juhhke v. Marquardt, 2001 SD 26, ¶ 5, 623 Ñ.W.2d 731, 732).'

[¶ 17.] In order to prevail on a motion for summary judgment, the non-moving party “must present specific facts showing that a genuine, material issue for trial exists.” Stoebner v. South Dakota Farm Bureau Mut. Ins. Co., 1999. SD 106, ¶ 6, 598 N.W.2d 557, 558 (quoting Weiss v. Van Norman, 1997 SD 40, ¶ 9, 562 N.W.2d 113, 115) (citations omitted). “A disputed fact is not ‘material’ unless it would affect the outcome of the suit under the governing substantive law in that a ‘reasonable jury could return a verdict for the nonmoving party.’ ” South Dakota State Cement Plant Comm’n. v. Wausau Underwriters Ins. Co., 2000 SD 116, ¶ 9, 616 N.W.2d 397, 401 (quoting Weiss, 1997 SD 40, ¶ 11, 562 N.W.2d at 116 n. 2 (quoting Parsons v. Dacy, 502 N.W.2d 108, 110 (S.D.1993) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)))).

[¶ 18.] “On appeal,, this Court can read a contract itself without any presumption in favor of the trial court’s determination.” Icehouse, Inc. v. Geissler, 2001 SD 134, ¶ 7, 636 N.W.2d 459, 462 (quoting Thunderstik Lodge, Inc. v. Reuer, 1998 SD 110, ¶ 12, 585 N.W.2d 819, 822). Thus, the interpretation of a contract is a question of law, which is reviewed de novo. Id. (citing Mahan v. Avera St. Luke’s, 2001 SD 9, ¶ 15, 621 N.W.2d 150, 154).

ANALYSIS AND DECISION

[¶ 19.] 1. Whether the circuit court erred when it granted Weitzel’s motion for summary judgment on the breach of contract claim.

[¶ 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 N.W.2d 138, 141 (S.D.1993) (citing Mid-America Mktg. Corp. v. Dakota Indus., 289 N.W.2d 797 (S.D.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 N.W.2d at 141 (citing Van Zee v. Witzke, 445 N.W.2d 34 (S.D.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 N.W.2d 878, 885 (quoting Weller v. Spring Creek Resort, Inc., 477 N.W.2d 839, 841 (S.D.1991) (quoting Mahan v. Mahan, 80 S.D. 211, 215, 121 N.W.2d 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 N.W.2d 767, 770 (S.D.1993) (citing Deadwood Lodge No. 508 Benevolent and Protective Order of Elks of the United States of Am. v. Albert, 319 N.W.2d 823, 826 (S.D.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 N.W.2d at 142 (citing Transamerica Equip. Leasing Corp. v. Union Bank, 426 F.2d 273 (9thCir.l970)).

[¶ 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 S.D. 404, 408, 160 N.W.2d 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. at 405-07, 160 N.W.2d 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 N.W.2d 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 interven-tional 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 N.W.2d 493, 498 (citing McKie v. Huntley, 2000 SD 160, ¶ 17, 620 N.W.2d 599, 603; Krzycki v. Genoa Nat’l Bank, 242 Neb. 819, 496 N.W.2d 916, 923 (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 N.W.2d 769, 772 (citing Moe v. John Deere Co., 516 N.W.2d 332, 335 (S.D. 1994); C & W Enterprises v. City of Sioux Falls, 2001 SD 132, ¶ 19, 635 N.W.2d 752, 758; Harms v. Northland Ford Dealers, 1999 SD 143, ¶ 21, 602 N.W.2d 58, 63; Swiden Appliance v. Nat’l. Bank of S.D., 357 N.W.2d 271, 277 (S.D.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 nonperformance, 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, ie., 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 replacement demand note for $205,583.26 and the support loan demand note for $36,000 were unenforceable against Weitzel due to lack of default.

[¶ 36.] The circuit court determined that SVH made it impossible for Weitzel to return to employment and therefore made it impossible for the loan forgiveness to occur under the “July 14, 2000, Agreement.” The circuit court then determined that Weitzel’s return to employment at SVH was a condition precedent to the repayment obligation. It then concluded that SVH’s conduct of preventing Weitzel from returning to employment at SVH extinguished his obligation to repay the notes under the prevention doctrine, and that the notes were unenforceable. The circuit court further concluded that SVH’s right to demand payment on the notes accrued only in the event of a default as defined by the “July 14, 2000, Agreement.” Finally, the circuit court determined that because no event of default had occurred SVH was- precluded from demanding payment of the notes. The circuit court then denied SVH’s motion for summary judgment on the issue of repayment of the notes.-

[¶ 37.] SVH argues on appeal that the circuit court erroneously applied the prevention doctrine when it determined that Weitzel’s return to employment at SVH was a condition precedent to repayment of the loans. It further argues that repayment was not triggered exclusively by one of the five default events listed in the “July 14, 2000, Agreement.” ■ '

[¶ 38.] This Court previously defined a condition precedent in Johnson v. Coss:

A condition precedent is a contract term distinguishable from a normal contractual promise in that it does not create a right or duty, but instead is a limitation on the contractual obligations of the parties. A condition-, precedent is a fact or event which- -the parties intend must exist or take place before - there is a right to performance. A-condition-is distinguished from a promise in that it creates no right or duty in and of itself but is merely a limiting or modifying factor. If the condition is not fulfilled, the right to enforce the contract does not come into existence.

2003 SD 86, ¶ 13, 667 N.W.2d 701, 705-06 (quoting 13 Richard A. Lord, Williston on Contracts, § 38:1 (4th ed 2000)) .(citation -omitted). A condition precedent may be created either expressly by the language in the parties’ agreement, ’or by a term supplied by the court. Restatement (Second) of Contracts § 226 (1981). Howevér, conditions precedent are not favored by courts. 17A AmJur2d Contracts § 460 (2005). In the absence of plain, unambiguous language or necessary implication, courts generally will interpret conditions as stipulations rather than conditions precedent that could trigger forfeiture. Id. The document as a whole must be examined and it must be determined that the intent of the parties was to pre-agree that the happening or nonoccurrence of the stated event after the contract becomes binding would cause the contract to terminate without further duties or obligations on either party. 17A AmJur2d Contracts § 464 (2005).

[¶ 39.] Generally, a contract will be unenforceable when it contains a condition precedent that fails to occur. Johnson, 2003 SD 86, ¶ 13, 667 N.W.2d at 705 (quoting Farmers Feed & Seed, Inc. v. Magnum Enterprises, Inc., 344 N.W.2d 699, 701 (S.D.1984)). However, “[t]he prevention doctrine operates as an exception to the general rule that one has no duty to perform under a contract containing a condition precedent until the condition occurs.” Id. ¶ 15, 667 N.W.2d at 706 (quoting Williston, § 39:4) (citation omitted). Under the prevention doctrine, when a party to the contract hinders the occurrence of a condition precedent, that condition is waived. Id. “Whether interference by one party to a contract amounts to prevention so as to excuse performance by the other party and constitute a breach by the interfering party is a question of fact to be decided by the jury under all of the proved facts and circumstances.” Id. (quoting Williston, § 39:3).

[¶ 40.] The circuit court determined that Weitzel’s continued employment throughout the forty-eight month term of the demand note was a condition precedent to enforcement of the loan obligation, and that SVH’s breach of the “July 14, 2000, Agreement” prevented Weitzel from performing under the contract. However, because we reverse and remand on Issue 1, we must reverse and remand on Issue 2 as there must be a determination as to the issue of breach before Issue 2 can be addressed. On remand, the circuit court is referred to this Court’s opinion in Johnson, 2003 SD 86, ¶ 15, 667 N.W.2d at 706-07, for proper application of the prevention doctrine.

[¶ 41.] 3. Whether the circuit court erred when it dismissed Weitzel’s fraud claim for lack of sufficient probative evidence.

[¶ 42.] The circuit court dismissed Weitzel’s claim for fraud under SDCL 53-4-5 and deceit under SDCL 20-10-1 for failure to “substantiate his allegations of fraud and deceit with sufficient probative evidence to show that [SVH] made a promise of employment without an intention of performing.” Weitzel argues that the circuit court erred in its dismissal of the claim, as sufficient evidence was brought forward to submit the claim to a jury.

[¶ 43.] SDCL 53^4-5 provides in relevant part:

Actual fraud in relation to contracts consists of any of the following acts committed by a party to the contract, or with his connivance, with intent to deceive another party thereto or to induce him to enter into the contract: ... (4) A promise made without any intention of performing it[.]

SDCL 20-10-1 provides: “[o]ne who willfully deceives another, with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.”

[¶ 44.] In order to survive a motion for summary judgment on the claim of fraud and deceit, Weitzel, as the nonmoving party, was required to “set forth specific facts showing that there is a genuine issue for trial.” See SDCL 15 — 6— 56(e). The nonmoving party “may not rest upon the mere allegations or denials of his pleadings.” Stanga v. Husman, 2005 SD 36, ¶ 13, 694 N.W.2d 716, 720 (quoting SDCL 15-6-56(e)). It is not sufficient for the nonmoving party to present evidence that would permit a finding in his favor on mere speculation, conjecture, or fantasy. Id. (citing Estate of Elliott v. A & B Welding Supply Co., Inc., 1999 SD 57, ¶ 16, 594 N.W.2d 707, 710). “Proof of a mere possibility is never sufficient to establish a fact.” Gehrts v. Batteen, 2001 SD 10, ¶ 12, 620 N.W.2d 775, 779 (quoting Estate of Elliott, 1999 SD 57, ¶ 16, 594 N.W.2d at 710).

[¶45.] Weitzel contends that the two SVH administrators with hiring authority, Nickell and Krabbenhoft, were aware in February 2000, five months before the “July 14, 2000, Agreement” was signed, of the abrasive personality characteristics exhibited by and conflicts created by Weitzel. Next, Weitzel notes that the only reasons given by Nickell and other SVH witnesses in deposition for his dismissal were his abrasive personality and past conflicts. Therefore, Weitzel contends this knowledge of his character and conflicts constituted sufficient evidence to show that SVH did not intend to allow Weitzel to return to employment at SVH at the time the “July 14, 2000, Agreement” was signed.

[¶ 46.] Weitzel’s argument must fail, as there was one fact unknown to Nickell and Krabbenhoft at the time the “July 14, 2000, Agreement” was signed. It was not until late January or early February 2001 that the SVH heart program physicians expressed their desire to Nickell that Weitzel not return. Nickell and Krabben-hoft were aware of discord between Weit-zel and several referring physicians and nursing staff at SVH. However, neither Nickell nor Krabbenhoft were aware of the level of discontent among the SVH heart program physicians with Weitzel’s anticipated return when the “July 14, 2000, Agreement” was signed.

[¶47.] There is nothing in the record to suggest that Nickell or Krabbenhoft intended to enter into the contract for Weitzel’s return without an intention to perform. Nickell stated in his deposition that his most important consideration once he was informed of the feelings and desires of the other heart program physicians was to protect and grow SVH’s fledgling heart program. Nickell then left it up to Patrick to resolve the contract issues with Weitzel. Deposition testimony, the letter from the heart program clinic managers on behalf of the physicians to SVH administration dated February 28, 2001, and Weitzel’s brief all indicate that the level of dissatisfaction among the heart group physicians was revealed while Weit-zel was away at his fellowship.

[¶ 48.] There are no disputed facts within the record as to when Weitzel demonstrated an abrasive character and inappropriate patient and staff interaction. There is also no dispute in the record as to when the heart physicians’ desire to not have Weitzel return was revealed to Nic-kell and Krabbenhoft. Therefore, the circuit court did not err when it granted SVH’s motion for summary judgment on the claim of fraud and deceit.

[¶ 49.] On Issue 1, we affirm the trial court on the existence of an employment contract but we reverse and remand for trial on the issue of a purported breach of that contract. We also reverse and remand for trial on Issue 2, as to Weitzel’s obligations under the demand notes. We affirm the circuit court on Issue 3.

[¶ 50.] KONENKAMP, ZINTER and MEIERHENRY, Justices, and ENG, Circuit Judge, concur.

[¶ 51.] ENG, Circuit Judge, sitting for SABERS, Justice, disqualified.

      . Weitzel maintains on appeal that SVH pur- . chased his outstanding accounts receivable from his former practice in Oklahoma. SVH argued at the circuit court level that the loan was made at Weitzel's request in light of his concerns about recovering approximately $189,000 in outstanding accounts receivable from his previous place of employment. The circuit court found there was no evidence to indicate a purchase of Weitzel's accounts receivable and that the $189,000 was a loan as contended by SVH.

      . It is undisputed in the record that Nickell and Kelby Krabbenhoft, CEO of Sioux Valley Hospital and Health System, were the only two SVH administrators with the authority to hire and fire physicians.


author: CARTER, Justice.

text:
    STATE of Iowa, Appellee, v. Roosevelt (NMN) MATLOCK, Appellant.
    No. 04-0404.
    Supreme Court of Iowa.
    May 26, 2006.

      Linda Del Gallo, State Appellate Defender, and Shellie L. Knipfer, Assistant State Appellate Defender, for appellant.
    Thomas J. Miller, Attorney General, Linda J. Hines, Assistant Attorney General, Thomas J. Ferguson, County Attorney, and Kim Griffith, Assistant County Attorney, for appellee.
   CARTER, Justice.

Defendant, Roosevelt Matlock, appeals from his convictions for willful injury in violation of Iowa Code section 708.4(1) (2003) and going armed with intent in violation of Iowa Code section 708.8. Both convictions involved being a habitual offender pursuant to Iowa Code section 902.8. The court of appeals affirmed defendant’s convictions, but ordered resen-tencing because, in its view, the sentencing judge had improperly considered an appellate reversal of defendant’s civil commitment. After reviewing the record and considering the arguments presented, we disagree with the reasoning of the court of appeals and the district court with respect to an evidentiary issue that has been presented. We vacate the decision of the court of appeals and reverse the judgment of the district court with respect to both convictions. The case is remanded to that court for further proceedings consistent with this opinion.

The offenses with which defendant was charged grew out of a confrontation between him and Joel Riley that began inside the Uptown Lounge, located in Waterloo, and continued outside that establishment. The State’s version of the events, as testified to by Riley and his friends, was as follows. Defendant had repeatedly made incoherent remarks to Riley inside the bar and bumped into him with his body. When defendant, who was wearing a purple-violet suit, walked outside the lounge, Riley followed him and accused defendant of stalking him. He specifically inquired of defendant, ‘Why [are] you [stalking] me with that purple ass suit on?” In addition, Riley referred to defendant as “Barney,” a purple dinosaur in a children’s television program.

A friend of Riley named Jay Jordan appeared on the scene and attempted to tug Riley away from defendant. Jordan testified that he had successfully moved Riley away from defendant when the latter suddenly moved close to them and raised and lowered his arm so as to inflict cuts on Riley’s head and body. Neither Riley nor Jordan was able to see the weapon that was used to inflict those injuries. Riley experienced a very substantial quantity of blood spilling from his cheek as well as from cuts on his forehead, right forearm, and left wrist. Examination revealed that his cheek had been sliced from his ear to his mouth, and the cut went all the way through, revealing his teeth through the resulting opening.

Defendant’s version of the events differed from the State’s version. Defendant testified that he had to separate a friend from a confrontation with Riley inside the bar. Following this the friend went to the other side of the bar, and Riley kept making threats toward that person and toward defendant. Defendant testified that he told Riley that his ranting was annoying persons in the bar and that he should continue his discussion outside. Defendant left the bar and was followed by Riley. Once outside the bar, defendant claims to have backed up against the wall and listened to more of Riley’s threats against him and his friend. According to defendant, Riley reached in his pocket and lunged at him, causing him to fear for his safety. He claims he defended himself by striking out at Riley with a beer glass, which broke on contact with Riley’s face. He continued to strike Riley with the broken glass.

When defendant was later apprehended by police, no weapon was located. At his trial, defendant testified that he had inflicted the injuries on Riley with a broken beer glass. A physician who performed surgery on Riley’s face testified that he believed Riley’s wounds were made with a knife or a box cutter. In his opinion, the clean edges of the cuts negated the likelihood that they were inflicted by broken glass. Defendant claimed justification, testifying at trial that Riley had told him inside the Uptown Lounge that he was a Vice Lord and that he intended to cause harm to defendant and a friend of defendant who was also in the bar. He stated that Riley was backed up by two or three friends. The jury convicted defendant on both counts. Additional facts will be discussed in our consideration of the legal issues presented.

I. Issues on Appeal.

The issues raised by defendant on appeal are whether (1) the district court erred in admitting evidence of other criminal acts by defendant, (2) defendant’s trial counsel was ineffective for failure to object to the prosecutor’s closing argument, and (3) the district court improperly considered the appellate reversal of defendant’s civil commitment in the process of sentencing him. The court of appeals affirmed the district court’s action with respect to the first two issues, but agreed with defendant’s contention on the third issue and ordered resentencing. We granted further review. We need only consider the first issue.

II. Evidence of Other Crimes.

A. Scope of review. We review district court rulings admitting evidence of other bad acts for an abuse of discretion and will reverse only when the rulings are untenable under the substantive limitations of the rules to be applied. State v. Bayles, 551 N.W.2d 600, 604 (Iowa 1996); State v. Knox, 536 N.W.2d 735, 738 (Iowa 1995).

B. Preservation of error. Prior to trial, the State moved to introduce evidence of other bad acts by defendant notwithstanding the limitations contained in Iowa Rule of Evidence 5.404(6). The defendant objected to the use of this evidence, arguing that it was an attempt to convict defendant based upon his propensity to commit bad acts and was not independently relevant to resolve some legitimate issue in the case. To the extent that the State urged the evidence was relevant to show the required specific intent for the crimes alleged, defendant asserted that the evidence could only show that intent by improper resort to defendant’s propensity to act in a particular manner. The district court ruled that the prior bad-acts evidence was admissible. The State concedes that error has been preserved on defendant’s challenge to that ruling.

C. The bad-acts evidence sought to be excluded. The evidence sought to be excluded by defendant involved two incidents. The first occurred twelve days pri- or to the offenses that led to the present appeal. Defendant’s niece and one Moses Childs had been involved in an argument over a parking place. Defendant advised Childs that he did not approve of the way that Childs had spoken to his niece. The defendant and Childs argued, and defendant struck Childs in the side with a sharp object, cutting him. The wound was approximately one-inch deep and seven inches in length. A medical expert determined that it was caused by a sharp instrument such as a knife or box cutter. In addition to allowing this evidence, the district court permitted Childs’ sister to testify that she heard defendant state two hours after the stabbing incident that he meant to kill Childs.

The second incident occurred later on the same day as the offenses at issue in the present appeal. The offenses on which defendant’s present convictions were based allegedly occurred at approximately 1 a.m. At 1 p.m. on that date defendant was in a bar with Wayne Winters. Winters challenged defendant over comments he had made concerning Winters’ wife. Defendant removed a box cutter from his pocket. A bystander named Frederick Burnside intervened and wrestled defendant to the floor. In the ensuing scuffle, defendant cut Burnside in the back, chased him from the bar, and stated that he was going to kill him. In allowing evidence of these two incidents, the district court ruled that the bad acts were relevant to the issues of motive, intent, opportunity, and knowledge, and the jury was instructed that they could consider the evidence as it pertained to those matters.

In State v. Sullivan, 679 N.W.2d 19 (Iowa 2004), we considered the use of bad-acts evidence to show specific intent. We discussed and agreed with the views of two commentators who considered the use of such evidence for this purpose to be an unwarranted deviation from the evidentiary rule excluding evidence of propensity to commit bad acts. Sullivan, 679 N.W.2d at 26-27. The commentators whose conclusions were discussed in Sullivan based their conclusions on the fact that, in most instances, the only way the intent element of the crime on trial may be linked to prior unrelated bad acts is to assume the accuser’s propensity to entertain the same intent in similar situations. Id. at 26 (quoting Edward J. Imwinkelried, The Use of Evidence of an Accused’s Uncharged Misconduct to Prove Mens Rea: The Doctrines Which Threatened to Engulf the Character Evidence Prohibition, 51 Ohio St. L.J. 575, 583-84 (1990) [hereinafter Imwinkelried]). Similar considerations are expressed in Abraham P. Ordover, Balancing the Presumption of Guilt and Innocence: Rules 401(b), 608(b) and 609(a), 38 Emory L.J. 135, 158 (1989). Both of these commentators discuss Federal Rule of Evidence 404(b), which is the equivalent of Iowa Rule of Evidence 5.404(6).

We concluded in Sullivan that the use of propensity evidence to show intent is contrary to the purposes of rule 5.404(6). Id. at 29. We held (and in so doing overruled existing precedent) that other bad acts may only be allowed as evidence of the required mens rea for the crime charged if the acts are probative of that intent in a manner other than a propensity of the accused to act in a particular manner. Id. at 28.

1. The willful injury charge. Under the district court’s instructions, the elements of the willful injury charge required the State to prove that defendant “intended to cause a serious injury to Joel Riley.” We are unable to ascertain any theory under which the other bad-acts evidence allowed by the district court tended to show defendant’s intent in the case on trial other than by resort to his propensity to harm others. This places the bad-acts evidence outside the boundaries of what is now allowed under Sullivan.

With one exception, the State has suggested no alternative to propensity as a probative theory for the admission of this evidence to show specific intent. The one theory that the State does propound is labeled as “the doctrine of objective chances.” It was relied on by the court of appeals in approving the use of the bad-acts evidence in the present case. As described by the court of appeals, this doctrine provides that an accused’s involvement in several similar acts that on their face appear to have been done with requisite criminal intent gives rise to an intermediate inference that it is objectively improbable his involvement in so many similar incidents was in fact innocent. The doctrine is discussed in the Imwinkel-ried article at 595. An examination of the doctrine as described by that commentator suggests that it is based on the improbability that all potentially criminal acts in a series of similar actions are innocent. Imwinkelried states the proposition as follows (as applied to three acts):

It flies in the face of common sense to assume that on all three occasions, the accused had an innocent state of mind; a coincidence of three, inadvertent, similar acts is objectively unlikely.

Id. at 595-96. We are reluctant to accept this doctrine as an alternative theory for avoiding the limitations established in Sullivan.

As described by Imwinkelried and alluded to by the State in the present case, the doctrine of objective chances is based on the improbability that all acts in a series of acts are innocent. The doctrine does not sustain the conclusion that none of the acts in the series of acts were done without the required criminal intent nor does it assist a trier of fact in determining in which instances that might be so or is not so. Resort to the doctrine of objective chances is particularly inappropriate with respect to the willful-injury charge in the present case where a defense of justification was presented as to one of the bad acts and not shown to have been involved in the others. This circumstance makes the case on trial sufficiently dissimilar from the others that the doctrine cannot be applied according to its own terms.

The district court also concluded that the other bad-acts evidence was relevant to show motive, opportunity, and knowledge. We disagree. All three of the stabbings in which defendant was involved grew out of verbal altercations with the victim. Each of these situations was different from the others and sheds no light on the motive in the other stabbings. Nor was the challenged evidence needed to show a particular knowledge on defendant’s part because that was not a matter required to be established.

Opportunity, as viewed by the district court, had reference to defendant’s access to a sharp cutting instrument. In considering the willful-injury charge, it made no difference whether defendant assaulted Riley with a box cutter or a broken beer glass. His defense in either instance depended on a claim of justification. The other bad-acts evidence was not admissible for any purpose on the willful-injury charge.

2. The going-armed-with-intent charge. The trial of the going-armed-with-intent charge presented a factual issue concerning whether defendant was armed with a sharp cutting instrument. The district court instructed the jury that defendant must be shown to have armed himself with a cutting device similar to a knife, box cutter, or razor. We conclude that the evidence of the other stabbing incidents was relevant to show defendant’s access to a sharp cutting instrument. In weighing the probative value of the evidence of the other bad acts against the danger of unfair prejudice, we must consider the actual need for the evidence in light of the issues and the other evidence available and weigh this against the extent to which the evidence might improperly influence the jury. State v. White, 668 N.W.2d 850, 855 (Iowa 2003). We are satisfied that the State’s need for evidence to show defendant’s possession of a sharp cutting instrument was sufficiently great that the probative value of the circumstances surrounding the other two stabbing incidents outweighs the prejudicial effect of that evidence.

Nevertheless, the district court erred in permitting the jury to consider evidence of the other bad acts for purposes of establishing the specific intent required for the crime. Under the district court’s instructions, the State was required to establish that defendant armed himself with a cutting instrument with intent to use that device against another person without justification. Our cases suggest that with respect to this crime that intent must be present at the time the accused arms himself and goes forth to harm another. State v. Ray, 516 N.W.2d 863, 865-66 (Iowa 1994); State v. Slayton, 417 N.W.2d 432, 434-35 (Iowa 1987); see also State v. Buchanan, 207 N.W.2d 784, 786 (Iowa 1973) (decided under prior law). We are convinced that the use of the other bad-acts evidence to show that intent was a resort to defendant’s propensity to commit similar acts, contrary to the limitation laid down in Sullivan. The district court’s limiting instruction failed to restrict the jury’s consideration of the bad-acts evidence for that improper purpose. This was sufficiently prejudicial to require reversal of the going-armed-with-intent conviction. On retrial, if evidence of the other stabbing incidents is allowed to show defendant’s access to a sharp cutting instrument, the jury should be instructed that this evidence may be considered for that purpose only on the going-armed-with-intent charge and for no purpose on the willful-injury charge.

We have considered all issues presented and conclude that the judgments of conviction on both charges must be reversed and the case remanded for a new trial.

DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT REVERSED AND REMANDED.

      . Under the district court's instructions, the intent element involved in the jury’s consideration of the justification defense required the State to prove that defendant could not have a reasonable belief that the force he used was necessary to avoid imminent danger of death or serious injury. Because this is an entirely objective standard, it did not involve proof of a specific intent on defendant's part but, rather, was dependent on the facts of the altercation as viewed by the jury. Consequently, the affirmative defense provides no issue concerning defendant's intent for which evidence of other bad acts might serve as evidence under rule 5.404(¾).

      . A record was made at the suppression hearing challenging the admission of this evidence to show intent. The defendant asserted that the evidence was not admissible for that purpose. The district court ruled otherwise and stated in its ruling that the evidence would be admitted for purposes of showing motive, intent, knowledge, and opportunity. The jury was so instructed. Having made his record on these points at the suppression hearing, defendant was not required to object to the court's limiting instruction. The court had already ruled on the basis for the instruction, see James v. Burlington Northern, Inc., 587 N.W.2d 462, 464 (Iowa 1998) (failure to object to instructions is not an abandonment of position taken on pretrial rulings that form the basis for instructions); Florke v. Peterson, 245 Iowa 1031, 1036, 65 N.W.2d 372, 375 (1954) (same), and under the circumstances, defendant could well have viewed some limiting instruction as more favorable than no limiting instruction.