Brief - Katz v. Danny Dare, Inc PDF

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Promissory Estoppel_Commercial Cases Katz v. Danny Dare, Inc., 610 S.W. 2d 121 (1980) Missouri Court of Appeals

Madden

Petitioner: G. Katz, former employee of Danny Dare Respondent: Danny Dare, employer Cause of Action: promissory estoppel Relief Sought: pension payments for three separate time periods Basis for Dispute: Matter of law Facts: - Katz worked for Danny Dare for about 25 years in a number of capacities (executive vp, sales manager, and member of the board) - President of Dare is Harry Shopmaker, brother of Katz’s wife. - One day while working the store got robbed and Katz went after the thief and he was struck in the head. He then suffered difficulties, making a lot of mistakes, and became more of a liability than an asset to the company. - The company tried to get him to retire with a pension for 13 months. It didn’t work until they offered him an annual pension of $13,000 with added social security benefits for Katz and his wife and the potential to earn an added $2,520 per year for part-time employment. - He was making $23,000 working for them. - He began working part-time for someone else and when Dare contacted him to work and they found out about it, they lowered his pension to $250/week instead of the $500 he was getting. - When he sent the check back asking for more money, Dare stopped sending checks. Trial Court: Entered judgment for Dare The pension did not require Katz to do anything and he was in fact free to work for another company. He did not give up anything he was legally entitled to and that it could not be said that he suffered any detriment or significant change of position when he elected to retire. Procedural History: Judgment was entered in favor of Dare in all cases. Katz contends that the promise of pension payments maybe to him by Dare is binding under the doctrine of promissory estoppel. Issue1: Is the Doctrine of Promissory Estoppel sufficient here? Rule: There are three elements to be satisfied to invoke the Doctrine of Promissory Estoppel. They are: 1. A promise; 2. A detrimental reliance on such promise; and 3. Injustice can be avoided only by enforcement of the promise. Test: The test to be applied in this case is not whether Katz gave up something to which he was legally entitled, but rather whether Dare made a promise to him on which he acted to his detriment. The Doctrine of promissory estoppel is designed to protect those to whom a promise is made which is not legally enforceable until the requirements of the doctrine are met. Application: - Katz voluntarily retired but only after the board of directors had adopted the resolution promising to pay Katz a pension of $13,000/year for life.

Promissory Estoppel_Commercial Cases Madden - He gave up his $23,000 salary as a result of a promise made by Dare to his detriment by the loss of $10000 per year in earnings. - The element of injustice can be avoided only by enforcement of the promise is present, because Katz cannot now engage in a full-time job to return to the earnings which he gave up in reliance on the pension. Court’s Holding(s): The trial court misapplied the law when it held that Katz was required to show that he gave up something to which he was legally entitled before he could enforce the promise of a pension made by Dare. The elements of promissory estoppel are present: a promise of a pension by Katz, his detrimental reliance thereon, and injustice can only be avoided by enforcing that promise. Court’s Disposition: Reversed and Remanded

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In many cases of promissory estoppel, the plaintiff will have made actual expenditures in reliance on the promise A change in position will often be sufficient to invoke promissory estoppel eve if the conduct does not involve an expenditure of funds. A situation where the plaintiff is financially benefited does not mean that it is does not support an action for promissory estoppel. (Vastoler) o Sometimes detrimental reliance cannot be measured in purely financial terms §90 provides that the court should enforce a promise based on the promisee’s reliance only where this action is needed to prevent injustice....