                               UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                               No. 10-2038


MCKAY CONSULTING INCORPORATED, a Louisiana corporation,

                Plaintiff - Appellant,

           v.

ROCKINGHAM MEMORIAL HOSPITAL, a Virginia corporation,

                Defendant – Appellee.



Appeal from the United States District Court for the Western
District of Virginia, at Harrisonburg.  Glen E. Conrad, Chief
District Judge. (5:09-cv-00054-gec-bwc)


Argued:   September 20, 2011                 Decided:   October 28, 2011


Before TRAXLER, Chief Judge, and AGEE and DIAZ, Circuit Judges.


Affirmed by unpublished opinion. Judge Agee wrote the opinion,
in which Chief Judge Traxler and Judge Diaz joined.


ARGUED: Matthew T. Nelson, WARNER, NORCROSS & JUDD, LLP, Grand
Rapids, Michigan, for Appellant.   Daniel Leroy Fitch, WHARTON
ALDHIZER & WEAVER, PLC, Harrisonburg, Virginia, for Appellee.
ON BRIEF: John J. Bursch, WARNER, NORCROSS & JUDD, LLP, Grand
Rapids, Michigan, for Appellant.  Thomas E. Ullrich, Lauren R.
Darden, WHARTON ALDHIZER & WEAVER, PLC, Harrisonburg, Virginia,
for Appellee.


Unpublished opinions are not binding precedent in this circuit.
AGEE, Circuit Judge:

       McKay     Consulting,           Inc.    (“McKay”)       appeals     the    district

court’s     award       of       summary      judgment    to     Rockingham       Memorial

Hospital        (“RMH”).            In     this     action      based      on    diversity

jurisdiction, McKay sought a declaratory judgment that either an

oral contract or an implied-in-fact contract had been formed

with RMH.       The district court held no contract was formed under

Virginia law because no meeting of the minds occurred between

the parties and essential terms of the purported contract were

so ill-defined as to render them unenforceable.                          For the reasons

set forth below, we affirm the judgment of the district court.



                                               I.

       McKay       is        a         self-described          “national         healthcare

reimbursement consultant” that analyzes federal healthcare laws

and provides client hospitals with information on opportunities

to increase their government reimbursement payments, primarily

from     Medicare.               McKay     researches        hospitals      that      could

potentially benefit from changes in government regulations, then

approaches the hospitals and attempts to have them engage its

services to implement the concept.                    To achieve this goal, McKay

offers     to    provide         its     services   for    a    contingency        fee,   in




                                               2
exchange for an agreement by the target hospital that it will

keep McKay’s ideas confidential and retain McKay as its agent. 1

     In this case, McKay contends it discovered a concept to

significantly   increase   Medicare   or   related   reimbursements   for

certain hospitals, including RMH. 2        As part of McKay’s marketing

efforts, its agent, Bob Brown, contacted Susan Holsinger, RMH’s

Director of Accounting and Finance.          Brown told Holsinger that

McKay had discovered a “reimbursement issue” that Brown wished

to discuss with Holsinger, but Brown declined to discuss the

specifics of the idea.     In a subsequent e-mail, Brown wrote that

“[t]he issue is in excess of $500,000 per year and affects more

than one year.”    J.A. 347.   In fact, McKay internally estimated

that RMH stood to gain closer to eight million dollars annually,

but feared that disclosure of the true amount of benefit would

lead RMH to discover the concept on its own.


     1
       As noted below, because McKay was the nonmoving party
against whom summary judgment was granted, we recite the facts
and reasonable inferences drawn therefrom in the light most
favorable to it.      Bonds v. Leavitt, 629 F.3d 369, 380
(4th Cir. 2011).
     2
       The concept proffered by McKay to RMH was not widely
recognized in 2009.     In short, it involved RMH applying to
change its Medicare status from that of an “urban” hospital to a
“rural” hospital which would then allow RMH to apply for sole
community hospital (“SCH”) status.    Such a change, if approved
by federal agency authorities, could significantly increase the
Medicare reimbursement rate for RMH.    This concept now appears
to be common knowledge throughout the health care industry.



                                  3
In a May 26, 2009 e-mail to Holsinger, Brown explained
       From our discussion I don’t believe that you are aware
       of, or working on, the issue.    But if you are you’ll
       have no obligation to us whatsoever. . . . If you
       aren’t aware of the issue we’ll ask that you do keep
       its nature confidential, and that if you choose to
       address it, you’ll use McKay Consulting as your agent.
       Our fee would be 20% of the adjustment for up to four
       (4) years adjustment after it has materialized.

J.A.       525    (emphasis     in     original).             Michael    McKay       (McKay’s

principal)        and   Brown    met    with       Holsinger     on     June   3,    2009   to

formally “pitch” the idea.                  Michael McKay later testified that

prior to disclosing the idea to Holsinger, he and Brown reviewed

all of the terms of a proposed agreement with RMH, including

confidentiality, a twenty percent annual contingency fee, and

the requirement that RMH use McKay as its agent should it decide

to implement the concept.                   Michael McKay also testified that

before      he    disclosed     the    idea,       he   and   Brown     repeatedly       asked

Holsinger         whether     she     was   “comfortable”         going        forward      and

verified that she wanted them to proceed and tell her about the

concept.         McKay did not offer a written agreement to Holsinger,

but contends a binding contract with RMH was formed at the June

3,   2009        meeting    based     on    her     oral      commitment       and    McKay’s

description of the concept. 3


       3
       RMH argues on appeal that Holsinger lacked either actual
or apparent authority to bind it to a contract.     The district
court did not address this issue in view of its decision that no
contract was formed on other grounds.         In light of our
conclusion that there was no mutual assent to the essential
(Continued)
                                               4
       Although        the      parties       disagree       about     whether     Holsinger

explicitly          agreed      to     the    terms    proposed        by    McKay,      it     is

undisputed that Michael McKay and Brown presented Holsinger with

a description of the concept and a binder containing documents

that     described         it     in     detail.         In     the     course      of        this

presentation,         McKay      disclosed       for     the    first       time   that       upon

conversion from an urban to a rural hospital classification RMH

would    likely       incur      several       million       dollars    in    reimbursement

losses until it obtained SCH status, which was not guaranteed.

       After Holsinger expressed enthusiasm for the idea, Brown

and    Michael       McKay      then     met    with    Michael       King,    RMH’s      Chief

Financial      Officer,         to     whom    they    explained       the    reimbursement

concept.       King had a number of questions and expressed concern

over whether RMH would be indemnified for the up-front losses.

King also stated that the twenty percent fee was too high.

        In    the    days       that    followed       the     meeting,      Michael      McKay

continued to discuss the arrangement with both Holsinger and

King    and    sent    a     written      agreement      that,       according     to    McKay,

simply memorialized the parties’ oral agreement.                             Although McKay

now contends a firm, oral contract was made at the June 3, 2009

meeting with Holsinger, an e-mail between McKay and Brown that



terms of a contract under Virginia law, we do not address this
issue.



                                                5
day after the meeting appears equivocal. 4                    In addition to a

merger       clause,      the   proposed   written     contract   contained       the

compensation term of “twenty percent (20%) of the additional

reimbursement received by RMH as a result of this Service for

the first three (3) years for which the Service has a positive

effect.” 5       J.A. 546 (emphasis added).          RMH never responded to the

proposed written contract.            King, meanwhile, continued to insist

that       the   twenty    percent   contingency      fee   was   too    high,    and

proposed either a flat fee or an hourly payment schedule in lieu

of the twenty percent contingency.               McKay rejected the counter-

proposal, but offered to reduce the amount of the contingency

fee to nineteen percent.

       As the relationship deteriorated, McKay asserted that the

parties had reached an agreement and that King was “trying to

retrospectively        negotiate     an    already   agreed   upon      fee[,]”   and




       4
       “The meeting with [RMH] lasted until 4 pm. The accounting
and reimbursement staff seem to be in agreement 100% to move
forward.   The CFO, who knows [Michael McKay] peripherally, had
concerns about: a. The fee; b. The certainty of success.” J.A.
1449.
       5
       Brown later testified that the reference to a three-year
period was a typographical error, and that he had intended to
memorialize the four-year term mentioned in his e-mail with
Holsinger.   However, a June 17, 2009 e-mail between Michael
McKay and Brown concluded the discrepancy between a 4-year or 3-
year duration is “never going to be explained away.” J.A. 1457.



                                           6
stated that “[w]e are not attempting to change our agreement and

we ask that you do the same.”                 J.A. 548.

      Invoking      diversity         jurisdiction,         McKay      filed       a    complaint

against RMH seeking, among other things, a declaratory judgment

that the parties had an enforceable oral contract, or, in the

alternative,       an    enforceable      implied-in-fact              contract. 6            McKay

alleged    RMH     had    entered      into    an       agreement      (either          orally   or

implied-in-fact) by which RMH agreed (1) to keep McKay’s idea

confidential;       (2)    if    it    chose       to    pursue     the     idea,       it    would

retain    McKay     as    its    agent    to       perform    the      work       necessary      to

implement the concept; and (3) to pay McKay twenty percent of

“additional        revenues”      that        RMH       received       as     a        result    of

implementing the idea.            RMH moved for summary judgment and McKay

made a cross-motion for partial summary judgment.

      While      concluding       that     the          parties    had      an     enforceable

agreement     to    keep    McKay’s      concept         confidential,            the    district

court held that “no reasonable jury could find that McKay and

RMH mutually assented to all of the essential terms outlined in

the   original      complaint.”           J.A.       2425.        In      granting        summary

judgment    to     RMH,    the    district          court    held      that       “the       record

      6
       McKay also sought a declaratory judgment on promissory
estoppel grounds, and made claims for unjust enrichment and
misappropriation of trade secrets.  Those claims were dismissed
pursuant to Fed. R. Civ. P. 12(b)(6), and McKay does not appeal
from that judgment.



                                               7
evinces    no   meeting          of    the       minds    as    to    the      compensation       and

agency     terms        asserted           by     McKay.             Moreover,        the     court

conclude[d],       as    a       matter      of    law,    that       the      compensation        and

agency    terms    are       not      established         with       reasonable       certainty.”

Id.

      McKay     filed        a    timely         appeal    from      the       district     court’s

judgment and we have jurisdiction pursuant to 28 U.S.C. § 1291.



                                                  II.

      Whether      a    party         is    entitled       to    summary          judgment    is    a

question of law that we review de novo.                                    Canal Ins. Co. v.

Distrib.      Servs.,        Inc.,         320     F.3d    488,       491      (4th Cir. 2003).

Summary judgment is appropriate only if taking the evidence and

all   reasonable        inferences           drawn       therefrom        in    the   light       most

favorable     to   the       nonmoving           party    (McKay,      in      this   case),       “no

material facts are disputed and the moving party is entitled to

judgment as a matter of law.”                       Ausherman v. Bank of Am. Corp.,

352 F.3d 896, 899 (4th Cir. 2003).

      As noted by the district court and the parties, “because

the   matter    is      before        us    in    diversity,         we     are    bound     by    the

applicable state substantive law.”                             Benner v. Nationwide Mut.

Ins. Co., 93 F.3d 1228, 1234 (4th Cir. 1996).




                                                   8
                                        III.

       The district court based its grant of summary judgment upon

its primary holding that McKay and RMH failed to mutually assent

to the essential terms of the purported contract, those being

“compensation      and    agency.”       The   district    court   held    in   the

alternative       that    there   was    no    contract    under   Virginia     law

because    those     terms    were      “not   established      with   reasonable

certainty.”       J.A. 2425.      McKay contends that the district court

erred as to each holding.

       Although     the     district     court    stated     its   decision      as

alternative holdings, those principles are two sides of the same

coin.     There can be no meeting of the minds so as to form a

valid contract when the essential terms are not “established

with    reasonable       certainty.”      Accordingly,      a   single    analysis

which blends the district court’s holdings resolves the question

whether a valid contract under Virginia law was formed in this

case.



                                         A.

       The Supreme Court of Virginia has consistently set forth as

necessary elements of contract formation that:

       [T]he parties must have a distinct intention common to
       both and without doubt or difference.       Until all
       understand alike, there can be no assent, and,
       therefore, no contract.   Both parties must assent to
       the same thing in the same sense, and their minds must

                                          9
      meet as to all the terms.   If any portion of the
      proposed terms is not settled . . . there is no
      agreement.

Smith v. Farrell, 98 S.E.2d 3, 7 (Va. 1957) (citations omitted);

see   also    Persinger       &     Co.   v.    Larrowe,      477    S.E.2d     506,     509

(Va. 1996) (“Until the parties have a distinct intention common

to both and without doubt or difference, there is a lack of

mutual assent, and therefore, no contract.”) (citation omitted).

“[M]utuality of assent—the meeting of the minds of the parties—

is    an    essential       element       of    all    contracts.”          Moorman       v.

Blackstock,        Inc.,    661     S.E.2d      404,    409    (Va. 2008)       (internal

quotation marks and citation omitted).

      When determining whether mutual assent exists to a degree

sufficient     to    form    an     enforceable        agreement,     Virginia       courts

ascertain whether a party assented to the terms of a contract

from that party’s words or acts, not from his or her unexpressed

state of mind.        Wells v. Weston, 326 S.E.2d 672, 676 (Va. 1985).

Virginia courts “cannot make a new contract for the parties, but

must construe [the contract’s] language as written.”                               Berry v.

Klinger, 300 S.E.2d 792, 796 (Va. 1983).



                                    1. Compensation

      The    most     vivid       proof    supporting         the    district       court’s

holding     that    there     was    no    meeting      of    the   minds     as    to   the

compensation       element    is     McKay’s        inability,      even   through       oral

                                               10
argument, to consistently identify the term of compensation to

which      the   parties      were    alleged         to   have   agreed.          During    the

course      of    this       litigation,         McKay      asserted     at     least       four

different iterations of what constituted the compensation term

to which the parties were alleged to have agreed. 7

       Based on the May 26th e-mail, which McKay contends formed

the    basis     for     a    June    3,    2009       contract,      McKay     argues       the

compensation term was “20% of the adjustment.”                                The proposed

written      contract        of    June    4,    2009,     however,     has    a    different

compensation       term       of    “20%    of    the      additional      reimbursement.”

J.A. 546.        This version is followed by another in a June 19,

2009 e-mail from Michael McKay to King in which he represents

the compensation term is “increased reimbursements.”                            J.A. 1160.

       These     different         iterations         of   a   compensation         term     are

confusing enough, but what compellingly sinks McKay’s claim is

its inability, even in its own complaint, to tell the court the

term of compensation.              In both Count I (oral contract) and Count

II    (implied    in     fact      contract),         McKay    (omitting      any    claim    of


       7
       Arguably McKay proposed a fifth and separate explanation
of the agreed compensation term in its opening brief by stating
compensation was “20% of the benefit to RMH for four years.”
Br. of plaintiff-appellant 3 (emphasis added).           As that
variation was not placed before the district court, our analysis
will be limited to the four iterations that were.      We include
the “benefits” version only to underscore McKay’s utter failure
to specify an essential term of the purported contract.



                                                 11
“adjustment”         or    “increased        reimbursement”)          pleads    that     the

compensation would be “20% of any additional reimbursements” but

then prays for relief in the amount of “20% of any additional

revenues.”        J.A. 27.         If a plaintiff can’t plead the essential

terms    of    its    own    proffered       contract,      no    court      will   make   a

contract for it.           See City of Manassas v. Bd. of Cnty. Sup’rs of

Prince    William         Cnty.,     458    S.E.2d   568,   572       (Va. 1995)     (while

courts will not permit parties to be released from obligations

that    they     have     assumed,     Virginia      courts      nevertheless       “cannot

make contracts for the parties”) (citation omitted).

        Setting aside the discrepancy as to whether any term of

compensation would last for three or four years, even if McKay

had    settled     on     one   of    its    multiple     proposed      definitions        of

compensation         as   the   actual      contract    term     of    the    parties,     it

would beg too many questions to be established as a contract

term with reasonable certainty.

        For example, if we assume McKay chose the prayer for relief

iteration of “20% of any additional revenues” as winning the

term-of-compensation lottery, what precisely are the “additional

revenues”?       Are they 20% of gross RMH revenue, Medicare revenue,

Medicaid revenue, Tricare revenue or some combination of the

above     with       perhaps       other     categories       added     in?         Is   the

compensation to be “additional revenue” net of any particular

expenses and if so, what are they?                   A similar analysis undercuts

                                              12
each      of     the     other       potential         terms           of        compensation-

“adjustment,”           “additional        reimbursement,”                  or      “increased

reimbursements”         and    underscores      the    void       in    McKay’s      argument

that the parties agreed to an ascertainable contract term of

compensation.

       Without     question,      compensation        is     an    essential         contract

term.     See Chittum v. Potter, 219 S.E.2d 859, 863-64 (Va. 1975)

(no contract formed when parties failed to demonstrate mutual

assent to the price term of a certain parcel of property).                                 As a

matter of law, there can be no meeting of the minds between the

parties as to an essential term when that term is unknown.                                  “In

order to be binding, an agreement must be definite and certain

as to its terms and requirements; it must identify the subject

matter and spell out the essential commitments and agreements

with    respect    thereto.”         Dodge      v.    Trustees         of    Randolph-Macon

Woman’s        Coll.,    661     S.E.2d      801,      803        (Va. 2008)          (quoting

Progressive        Const.      Co.    v.     Thumm,        161         S.E.2d       687,    691

(Va. 1968)).       As demonstrated by McKay’s complaint, McKay could

not settle upon a readily ascertainable definition of what it

was to be paid, much less what RMH purported to have covenanted

to pay it.




                                           13
                                          2. Agency

       The district court also correctly held that no contract was

formed between the parties because the essential term of agency

could    not     be    ascertained        with       reasonable      certainty.            “[A]n

agreement for service must be certain and definite as to the

nature and extent of service to be performed, the place where

and     the     person       to   whom    it     is     to    be     rendered,       and     the

compensation to be paid, or it will not be enforced.”                                   Mullins

v.    Mingo     Lime     &   Lumber      Co.,    10    S.E.2d      492,    494     (Va. 1940)

(citation omitted).

       McKay pled in its complaint that RMH agreed that if it

chose to implement McKay’s concept, it would “[r]etain McKay as

its agent to perform the work necessary to implement McKay’s

idea.”        J.A. 27.       In the May 26 e-mail from Brown to Holsinger,

Brown stated that “if you choose to address [the issue], you’ll

use McKay Consulting as your agent.”                         J.A. 1395.         Even through

oral    argument,      McKay      could    not       identify      the    scope    of    agency

under the purported contract.

       Taken     in    the    light    most     favorable       to    McKay,      the agency

terms were so vague that the parties could not have mutually

assented to a contract.                  On their face, the terms “use” and

“perform the work necessary to implement McKay’s idea” simply do

not     convey     any       meaning     that        would    allow       the     parties    to



                                                14
articulate what McKay is bound to do under the terms of the

alleged agreement.

     McKay      argues,    however,         that   RMH’s     experience       with   other

consultants in the past should inform this court’s analysis of

whether       the   parties    assented       to    the    agency    term.         Br.   for

plaintiff-appellant           30-31.              McKay’s     reliance        on     RMH’s

experience, however, is misplaced.                  Although RMH had engaged the

services       of    consultants     to      address       Medicare    issues,       those

consulting agreements explained in detail the respective duties

of the parties.         Comparing the alleged agreement here to others

found    in    the    record,   it     is    clear     that    the    terms    here      are

elusive.        As the district court noted, one of McKay’s prior

agreements involved a twenty-two page contract and a two page,

single-spaced addendum that detailed the services McKay was to

provide.       Thus, to the extent that the evidence in the record

shows     a     standard      practice       in     the     Medicare    reimbursement

consulting industry, the alleged agreement here falls well short

of establishing the existence of a contract.

     McKay, in its brief and at oral argument, asserted that its

agency    relationship        with   RMH      would       merely    require    McKay      to

perform certain administrative tasks.                      Even if this court were

to accept McKay’s claim at oral argument that the agency term

here entails McKay “fill[ing] out the appropriate paperwork in

conjunction with the hospital to go forward with the idea,” it

                                             15
remains unknown as to what that “paperwork” comprises, who is

responsible for any expenses, and other ancillary duties such as

providing       attorneys      and    experts       in    the   event    of   litigation.

Oral Argument at 41:24.               And litigation seems possible, as McKay

acknowledged that the Center for Medicare and Medicaid Services

could     initially       block       RMH’s    application        to     change     status,

therefore requiring litigation.

        For these reasons we agree with the district court that the

essential       term     of   agency    is    simply      too    ill-defined      to   have

formed a contract enforceable in Virginia.



                                              B.

      In the absence of clear contract terms, McKay argues that

its purported contract is nonetheless enforceable because the

trier of fact could deduce and supply the terms of agreement.

McKay    cites     High       Knob,    Inc.    v.    Allen,      138     S.E.2d     49,   53

(Va. 1964) for the proposition that Virginia contract “law does

not     favor     declaring       contracts        void    for    indefiniteness          and

uncertainty, and leans against a construction which has that

tendency.”        McKay points out that this principle is “especially

true where there has been partial performance.”                           Id.     However,

Virginia        courts    lack     authority        to    “supply       virtually      every

essential element” of a contract.                        Dickerson v. Conklin, 235

S.E.2d 450, 456 (Va. 1977).

                                              16
       While McKay is correct that the Supreme Court of Virginia

approved a presumption in favor of enforcing a contract in High

Knob on the unique facts of that case, the court was clear to

reiterate two vital contract principles:                                (1) “courts cannot

make contracts for the parties,” and (2) courts will not “permit

parties       to    be    released         from    the    obligations      which    they      have

assumed if this can be ascertained with reasonable certainty

from     language         used,       in    the     light       of   all   the     surrounding

circumstances.”            138 S.E.2d at 53.               The case at bar, however, is

not remotely analogous to the situation present in High Knob.

       High        Knob   was     a   developer          that   sold    certain    lots       in   a

subdivision to two buyers.                    Id. at 49-51.            In the written sales

documents,          no    reference        was     made    to    supplying      water    to    the

residences          to    be    built       on    the     lots;      however,     High    Knob’s

restrictive covenants barred the lot owners from developing or

maintaining a “well, spring, or water system of any type.”                                     Id.

at     51.         The    trial       court       found    that      McElroy,     High    Knob’s

secretary, promised the buyers that High Knob had a water system

and would furnish “a reasonable quantity of water” to houses

constructed in the subdivision for a $200 hook-on fee; that this

was the only consideration to be paid for the water service; and

that this arrangement was one of the inducements to purchase the

lots.        Id.    Later, High Knob refused to accept the buyers’ $200

hook-on payments and insisted that in order for them to receive

                                                   17
water, they would have to sign an agreement that was contrary to

McElroy’s covenants.

       The     Virginia         Supreme     Court          concluded        that    McElroy’s

agreement with the two buyers was enforceable, notwithstanding

the fact that the oral agreement did not specify a quantity of

water to be supplied to a residence.                         The court determined from

“the circumstances under which the agreements were made” this

term     was      simply    “that       which        was    reasonably       necessary       for

residential purposes . . . [for] so long as its water system was

capable of supplying it . . . [for] their proportionate share of

the maintenance costs.”             Id. at 53-54.              The court also found it

significant that High Knob had, in fact, supplied the buyers

with    water      for    six    months    before          cutting    it    off    when    Allen

refused      to    sign    the   written        water      contract    tendered       by    High

Knob.

       The case at bar is a far cry from High Knob.                                       As the

preceding      discussion        well     illustrates,         the    “circumstances”         in

this case give no reasonably ascertainable basis upon which to

conclude       the   parties      made     an    agreement       as    to    the    essential

missing terms.

       McKay’s solution, in the absence of either compensation or

agency terms necessary to form a valid contact, is essentially a

“Price    is      Right”    approach;       give       the    trier    of    fact    multiple

options and let it pick one, any one.                         No principle of contract

                                                18
law supports this methodology, including High Knob.               Virginia

law simply does not permit finding a contract when the trier of

fact must determine one from among multiple choices presented by

a party for a term of compensation, then define what the chosen

term encompasses, and finally delineate the scope of agency sua

sponte.

     Accordingly,   we   conclude    that    High   Knob   is   simply   not

applicable to the case at bar.           Rather, High Knob supports our

conclusion to the extent that it instructs courts not to make

contracts for the parties, and requires essential contract terms

to be reasonably certain to be enforced.



                                    IV.

     On this record, “no reasonable jury could find that the

parties mutually assented to the compensation and agency terms

set forth in the complaint.”             For the foregoing reasons, we

affirm the judgment of the district court.

                                                                  AFFIRMED




                                    19
