Brief - Harvey v. Dow PDF

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Promissory Estoppel_Families

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Harvey v. Dow, 962 A.2d 322 (2008) Maine Supreme Court Plaintiff: Theresa Harvey, daughter of Jeffrey Dow Sr. and Kathryn Dow Defendant: Dows, parents of Theresa Harvey, plaintiff Cause of Action: Promissory Estoppel or the existence of a confidential relationship; 7 claims: breach of contract, breach of fiduciary duty, and fraud. Relief Sought: Seeking to compel the Dows to convey her the land or for damages based on the value of the house (specific performance of benefit of the bargain) Basis for Dispute: Fact Facts: - The Dows have 125 acres of land. Promised to give their children some of the land in the future and the subject of children living on the homestead was commonly discussed within the family. - In 1999, Harvey moved onto the land in a mobile home with her parents’ permission but did not pay rent and did not ask the parents for a deed. - Harvey married her husband in 2003 and decided to build a house. The Dows agreed to use their home equity line of credit to finance the house. - Harvey’s husband died in a car accident and so Harvey decided to finance the rest of the house with the life insurance rather than the parent’s equity line. - She did not ask her father for the deed directly because she did not need it then. - Construction of the house started in 2004. It cost about $200,000. The dad did a lot of the construction himself, including foundation work, carpentry, and installation of underground electrical lines. - Harvey lent her brother $25,000 in 2004. This is when the relationship started to deteriorate. Her brother never paid her back and Theresa was living with someone whom her parents hated. - Theresa sued her brother for the money and the Dows filed a grandparents rights action to see Theresa’s kids. Disputed Facts: Whether or not there was conversation of transferring the deed. Harvey’s Argument: - Her parents made general promises to convey the land to her and then assented to her building a $200,000 house on their property in reliance on those promises, are now estopped from asserting that she has no rights to the land the house is located on. o The Superior Court said that they did make general promises but that they were too indefinite to enforce on basic elements such as boundaries or size of the property involved. Dow’s Argument: Procedural History: After a two-day bench trial, the court found for the Dows on the real property claims and on their request for a declaratory judgment. Theresa filed appealed because she asserted that the court failed to address whether she was entitled to judgment under the theory of promissory estoppel. Issue1: Is the doctrine of promissory estoppel appropriate here? Rule: The doctrine of promissory estoppel applies to promises that are otherwise unenforceable and is “invoked to enforce such promises…so as to avoid injustice.”

2 Promissory Estoppel_Families Madden The Restatement 2nd §90(1) says that: a promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. Application: The Dows did not make an express promise to convey a parcel of land of any specified size, or with any defined boundaries, at any certain time. Mini-Conclusion: The court was correct in finding that the existence of a promise to convey property was an essential element of Teresa’s claim and in holding that if there was no promise on which Teresa could rely, then her claim of promissory estoppel failed. HOWEVER: RULE 2: the promise relied on by the promisee need not be express but may be implied from a party’s conduct. Application: Dow’s acquiescence, support, and encouragement of her construction of a house upon the property, the help of her dad in agreeing to location, obtaining a building permit to allow construction at that site, and not only acquiescing to the creation of the house but building a large part of himself are evidence of implied consent. These are all manifestations of his intention to act a specific way – namely a manifestation of his intent to confirm his general promise to convey land to Teresa to direct to that specific parcel.” Court’s Holding(s): Teresa’s reliance on the Dow’s general promise to give her land at some time, when coupled with their affirmative actions in allowing her to build a substantial house on a particular piece of their land, would seem to be eminently foreseeable and reasonable. From those actions, a promise by the Dows to convey that specific site could be fairly implied. Neither the absence of an explicitly articulated promise, nor the absence of consideration is a bar to enforcing that promise. Court’s Disposition: We vacate the judgment and remand

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The nature of the bargain theory would exclude from its sphere most of the dealings between family members. But most promises within the family context are likely to be actuated by feelings of affection and altruism rather than by the expectation of a quid pro quo in return. In short, they are gratuitous. Promissory estoppel provides an important tool for courts to reach what they consider to be equitable resolutions for intra-family disputes. The term promissory estoppel is useful in distinguishing promissory estoppel from its doctrinal forerunner, equitable estoppel. Equitable estoppel = generally said to apply where one party has made a misstatement of fact, rather than a promise. o Normally applied defensively, as an affirmative defense rather than the basis of a claim for damages. Some cts have expanded the doctrine of equitable estoppel to enforce promises made between family members. Greiner v. Greiner

3 Promissory Estoppel_Families Madden o Greiner made an enforceable promise to her son to give him 80 acres of land. In reliance on that promise, eh moved to another part of the state and took up residence on the land. The court found for the son and ordered the mother to give him a deed. The Supreme Court affirmed. - Both Harvey and Greiner involve the conveyance of land. However, promissory estoppel is not just limited to land fact patterns. - Wright v. Newman o Georgia – supreme court held that a legally enforceable obligation to provide child support was not limited to principles of family law but could be based on k doctrine, including promissory estoppel (pg. 220). He knew that parents had a legal obligation to pay child support even though he was not the biological father but because he held himself out as father of the child. - Promissory estoppel can be based on conduct and express promises. - Some courts may require express promises. - When a claim of reliance stems from an intra-family transaction, it is natural to assume that the promisee was justified in expecting the promisor to perform his promise, because the familial relationship between them. - Bouton v. byers – o Daughter was a law professor. Dad told her to come move back on the ranch and he would give her the ranch worth more than $1 million. She did but didn’t have it in writing. The court found for the father because “someone with that background would insist on a legally enforceable written agreement or k memorializing a promise to transfer land. She should surely recognize the benefit so a written agreement. o So they look at reasonableness of reliance as a question of fact – and look at the plaintiff’s education and circumstances as a whole. o “all the circumstances ought to be for the factfinder assessing reasonableness in a trial setting rather than on the inanimate summary judgment record of affidavits and deposition excerpts. -...