Alaska Democratic Party v. Rice, 934 P.2d 1313 (1997)

Case Name: Alaska Democratic Party v. Rice
Plaintiff/Appellee: Kathleen Rice
Defendant/Appellant: Greg Wakefield and Alaska Democratic Party
Citation: 934 P.2d 1313 (1997)

 

Issue: Whether the doctrine of promissory estoppel can be invoked to enforce an oral contract that falls within the Statute of Frauds.

Key Facts: Ms. Rice contended that Mr. Wakefield (the chair-elect of the Alaska Democratic Party) offered her a two-year position as executive director of the party. Because of this offer she quit her current employment and moved from Maryland to Alaska.
No written contract was entered into between Rice and the defendants.
Rice brought two claims: (1) promissory estoppel and (2) misrepresentation.

Procedural Posture: The jury awarded a total of $30,422 ($28,864 on her promissory estoppel claim and $1,558 on her misrepresentation claim)

Judgment: The court affirmed the claims but reduced the recovery to $28,864 – the amount that represents only lost wages and benefits.

Reasoning: “The purpose of the Statute of Frauds is to prevent fraud by requiring that certain categories of contracts be reduced to writing. However, it is not intended as an escape route for persons seeking to avoid obligations undertaken by or imposed upon them.”

Wright v. Newman, 266 Ga. 519 (1996)

Case Name: Wright v. Newman
Plaintiff/Appellee: Kim Newman
Defendant/Appellant: Bruce Wright
Citation: 266 Ga. 519, 467 S.E.2d 533 (1996)


Issue:
Whether Wright can be held liable for child support for Newman’s son under the doctrine of promissory estoppel, even though the child is not Wright’s son.

Key Facts: Wright is the father of Newman’s daughter but not the father of Newman’s son. Newman filed suit to recover child support for both her daughter and son. Wright listed himself as the father on the son’s birth certificate and gave the son his last name. Wright knew that he was not the natural father. This evidenced that Wright promised both Newman and her son that he would assume the obligations and responsibilities of fatherhood, including providing support.

The detriment alleged is that Newman refrained from identifying and seeking support from the child’s natural father.

Procedural History: The trial court ordered Wright to pay child support for both children.

Holding: Under the evidence, the duty to support, which the defendant voluntarily assumed 10 years ago remains enforceable under the doctrine of promissory estoppel.

Judgment: Affirmed

Reasoning: Elements of promissory estoppel were met:

  • A promise – The defendant listed himself as the father on the child’s birth certificate and gave the child his last name, although he knew he was not the natural father.
  • The detriment – The plaintiff refrained from identifying and seeking support from the child’s natural father.
  • Reasonable Reliance – The defendant was the father of her other child and although it is disputed, remained in the child’s life for 10 years.
  • Injustice – Loss of child support for her son

Dissent: Plaintiff failed to meet her burden of proof that she incurred detriment by refraining from identifying and seeking support from the child’s natural father. The majority fails to state why she is prevented from now instituting a child support action against the natural father. Furthermore, Wright’s undisputed contentions are that he did not support the child the past seven years.

Katz v. Danny Dare, Inc., 610 S.W.2d 121 (1980)

Case Name: Katz v. Danny Dare, Inc.
Plaintiff/Appellant: I.G. Katz
Defendant/Appellee: Danny Dare, Inc.
Citation: 610 S.W.2d 121 (1980)

Issue: Whether the plaintiff relied to his detriment on the promise of the defendant to pay him a pension for as long as he lived.

Key Facts: Katz employed by Dare, Inc. and was the brother-in-law of the president. Katz was earning $23,000. The president continually sought for Katz to retire and eventually can to an agreement after 13 months. Dare said that it would pay Katz a $13,000 pension so long as he lived. Three years later, Dare sent a check for half the normal amount because Katz had begun working part-time and one day a week at Dare. The defendant stated that Katz would have been fired had he not elected to retire so Katz could not apply the doctrine of promissory estoppel.

Procedural History: Judgment was entered in favor of the defendant. The trial court said that since Katz had the choice of accepting retirement and a pension or being fired, that it could not be said that he suffered any detriment when he elected to retire.

Judgment: Reversed and remanded with directions to enter judgment in all suits in favor of Katz for the amount of unpaid pension.

Reasoning:

The elements of promissory estoppel are present:
1. A promise of a pension to Katz
2. His detrimental reliance on the promise (he would not have retired, he was no longer employable by the time Dare stopped paying him, and he failed to go out and obtain other employment)
3. Injustice can only be avoided by enforcing that promise

Greiner v. Greiner, 293 P. 759 (1930)

Case Name: Greiner v. Greiner
Plaintiff: Maggie Greiner
Defendant: Frank Greiner (son of Maggie)
Citation: 131 Kan. 760, 293 P. 759 (1930)

Issue: Whether the plaintiff’s promise can be enforced when it lacked consideration.

Key Facts: The plaintiff (a widow) told her son, the defendant, that if he moved back to her county she would give him land for a home. She later gave him possession of an 80-acre tract of land which he moved his family to. The mother then commenced an action of forcible detention against the defendant. The mother contends that there was no consideration.

However, the son contends that there was reliance on his mother’s promise. The defendant gave up his homestead in another county, moved, established himself and his family, made some lasting and valuable improvements and other expenditures.

Procedural History: The district court ordered the plaintiff to execute a deed conveying the 80-acre tract to defendant. Plaintiff appealed.

Judgment: The plaintiff should execute a deed to the defendant.

Reasoning: Although there was no consideration, in 1930 the concept of promissory estoppel had been established and can be used to enforce the promise.

 

See also Kirksey v. Kirksey

Pop’s Cones, Inc. v. Resorts International Hotel, Inc., 307 N.J. Super. 461 (1998)

Case Name: Pop’s Cones, Inc. v. Resorts International Hotel, Inc.
Plaintiff/Appellant: Pop’s Cones, Inc. (TCBY franchise)
Defendant/Appellee: Resorts International Hotel, Inc.
Citation: 307 N.J. Super. 461 (1998)


Issue:
Whether a prima facie case of promissory estoppels existed when the plaintiff relied to its detriment on the promises of defendant that plaintiff would be permitted to relocate its operation to defendant’s location. More specifically, whether the court should require a “clear and definite promise” or just a promise that a reasonable person would rely on it.

Key Facts: Plaintiff, a TCBY franchisee had a number of discussions with Phoenix the executive director of business development and sales for the defendant about relocating the plaintiff’s business to a space owned by the defendant. The plaintiff also received a proposed form of lease from the defendant’s counsel. Based off these discussions, the plaintiff did not renew its current lease, placed its equipment into temporary storage, retained the services of an attorney to finalize the lease with the defendant, and engaged in planning the relocation to defendant’s property. Furthermore, the plaintiff was not able to reopen its store until July 1996 but did not seek speculative lost profits because the lease had not been fully negotiated.

Procedural History: The lower court granted the defendant summary judgment and dismissed the plaintiff’s complaint.

Holding: Based off the allegations of the plaintiff a prima facie case of promissory estoppel existed. This court relaxed the requirement for a clear and definite promise. The case was remanded so that a jury can decide whether the plaintiff’s reliance upon the defendant’s assurances was reasonable.

Reasoning: Plaintiff was not seeking enforcement of the lease nor speculative lost profits had the lease been successfully negotiated. The plaintiff merely seeks to recoup damages it incurred in reasonably relying to its detriment upon the defendant’s promise. When you afford the plaintiff all favorable inferences, the claim raised a jury question and therefore should not have been summarily dismissed.

A promissory estoppel claim will be justified if the plaintiff satisfies its burden of demonstrating the existence of, or for purposes of summary judgment, a dispute as to a material fact with regard to, four separate elements which include:

(1) a clear and definite promise by the promisor;
(2) the promise must be made with the expectation that the promisee will rely thereon (the promisor did or should have foresaw);
(3) the promisee must in fact reasonably rely on the promise, and
(4) detriment of a definite and substantial nature must be incurred in reliance on the promise.

The promise is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

Judgment: Reversed summary judgment and remanded for further proceedings.

Drennan v. Star Paving Co., 333 P.2d 757 (1958)

Case Name: Drennan v. Star Paving Co.
Plaintiff/Appellant: Drennan (General Contractor)
Defendant/Appellee:
Star Paving Co. (Subcontrator)
Citation:
51 Cal. 2d 409, 333 P.2d 757 (1958)

Issue: Whether plaintiff’s reliance on the defendant’s subcontracting bid made the defendant’s offer irrevocable.

Key Facts: The plaintiff, a general contractor, was receiving bids from subcontractors in order to bid on the Monte Vista School Job. The defendant, a subcontractor, contacted the plaintiff by phone and submitted a bid for the paving work for $7,131.60 which was the lowest bid the plaintiff received for this job. The plaintiff won the contract and promptly informed the defendant in person. The defendant then told the plaintiff that they had made a mistake and would not be able to do the paving work for less than $15,000. Plaintiff then had to engage another paving company to do the work for $10,948.60.

Procedural History: The plaintiff won a judgment to recover damages caused by defendant’s refusal to perform the paving work according to its original bid. Defendant appealed.

Holding: The defendant’s offer was irrevocable.

Reasoning: The defendant had reason to expect that if its bid proved the lowest it would be used by the plaintiff and it induced “action…of a definite and substantial character on the part of the promisee. Merely acting in justifiable reliance on an offer may in some cases serve as sufficient reason for making a promise binding (Restatement (First) 90). The purpose of this section is to make a promise binding even though there was no consideration “in the sense of something that is bargained for and given in exchange.”

Defendant had reason not only to expect plaintiff to rely on its bid but to want him to. Also, the mistake made by the defendant was not apparent to the plaintiff. The general contractor’s actions were reasonable because he was following the general practices of the industry. The subcontractor made the mistake originally and had superior knowledge of paving work.

Note: Justice Traynor is associated with more modern approach of interpretation of contracts.

Alaska Democratic Party v. Rice – 934 P.2d 1313 (1997)

Case Name: Alaska Democratic Party v. Rice
Citation: 934 P.2d 1313 (1997)
Plaintiff/Appellee: Kathleen Rice
Defendant/Appellant: Greg Wakefield and Alaska Democratic Party

Issue: Whether the doctrine of promissory estoppel can be invoked to enforce an oral contract that falls within the Statute of Frauds.

Key Facts: Ms. Rice contended that Mr. Wakefield (the chair-elect of the Alaska Democratic Party) offered her a two-year position as executive director of the party. Because of this offer she quit her current employment and moved from Maryland to Alaska.
No written contract was entered into between Rice and the defendants.
Rice brought two claims: (1) promissory estoppel and (2) misrepresentation

Procedural Posture: The jury awarded a total of $30,422 ($28,864 on her promissory estoppel claim and $1,558 on her misrepresentation claim)

Reasoning: “The purpose of the Statute of Frauds is to prevent fraud by requiring that certain categories of contracts be reduced to writing. However, it is not intended as an escape route for persons seeking to avoid obligations undertaken by or imposed upon them.”

Judgment: The court affirmed the claims but reduced the recovery to $28,864 – the amount that represents only lost wages and benefits.