P submitted a request for a shopping center called Village Pointe. The Board recommended conditional approval of the plat. D contacted P about a proposal to build a theater at Village Pointe. P and D exchanged plans and discussed the proposal to build. On June 25, 2002, at D's request, P sent D a site plan and proposal for Village Pointe, which included a movie theater complex. In September 2002, P revised and submitted to the Board, the plat that included a movie theater complex. On September 18 P bought an additional 14.67 acres of land to incorporate the movie theater. P had a 90-day due diligence period to 'inspect and review the Due Diligence items ' and P was to 'obtain written evidence that the City had adopted a comprehensive zoning ordinance allowing the use of the Real Estate for retail purposes. On October 3 at D's request, P faxed D the June 25, 2002 letter of intent. D expressed belief that D was 'in agreement on most of all of the major issues' set forth in the June 25, 2002 term sheet. D then stated by letter, 'I look forward to moving on to the completion of the lease documentation, which we can then take to our Board for final discussion and approvals--which, as you know from Jefferson Pointe, is our final step in the approval process.' On November 26, 2002, the parties executed the letter of intent. D also sent P a second letter as well. On December 4, the Board recommended approval of the movie theater complex. On December 30, P advised D of the approved plat and stated that P was going to incur additional significant expenses to accommodate a theater. This included the purchase of the additional property and $594,616 for removal of a gas line. D told P the project was a 'done deal.' By mid-January 2003, the deal was still not done. P needed a signed lease for its financing. Negotiations continued in February and March 2003. P began talks with Douglas Theaters as a replacement. On March 22, 2003, D informed P that it did not intend to build and lease a theater and that its board had rejected the agreement. In August 2003, P entered into a contract with Douglas Theaters P then sued D P appealed the dismissal of its claims.

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