Pop’s Cones, Inc. v. Resorts International Hotel, Inc

Brief Fact Summary.

Plaintiff, Pop’s Cones, Inc., is seeking damages from the Defendant, Resorts International Hotel, Inc., for losses they claim resulted from reliance on promises made by Defendant during lease negotiations.

Synopsis of Rule of Law.

A plaintiff may survive a motion for summary judgment on a promissory estoppel claim by presenting evidence allowing a reasonable jury to find that a defendant made a promise with the expectation that a plaintiff would rely on that promise and that a plaintiff did reasonably and detrimentally rely on a defendant’s promise.

Facts.

In May or June of 1994, Plaintiff began discussions with defendant regarding the possibility of Plaintiff relocating its business to a location owned by Defendant. The parties specifically discussed a property that at the time was being leased by “The Player’s Club.” Following the initial discussions, Defendant allowed Plaintiff to operate a vending cart free of charge for the summer of 1994 to test how well the business might do in that location. Plaintiff obtained permission from its franchisor for relocation of its business and a representative of the franchisor later visited the Player’s Club location with representatives of Plaintiff Defendant. In August of 1994, Plaintiff drafted a proposal and delivered it to Defendant. In late September 1994, Plaintiff twice contacted Defendant to determine the status of their deal. Plaintiff requested that Defendant decide before October 1, 1994, because Plaintiff would have to give notice to its current landlord. During the second Se
ptember call, Defendant advised Plaintiff that the deal would have little difficulty going through and Plaintiff should give notice to its current landlord. Relying on Defendant’s statements Plaintiff gave notice and in October moved its equipment into storage. Plaintiff also sent designs to its franchisor and retained an attorney in preparation for moving to the new location.
In November, Defendant sent Plaintiff’s attorney a proposed form of lease. The following month Defendant sent a written offer but the letter included the language that it was not intended to be binding. Plaintiff and Defendant met, but Defendant asked to postpone the finalization of the lease until after the first of the next year. Plaintiff made several attempts in January to contact Defendant regarding the status of the lease. Eventually Defendant informed Plaintiff that the lease offer was withdrawn. Due in part to the previous location having already been re-let, Plaintiff was unable to find a suitable location and reopen until July. Plaintiff sued for damages resulting from their reliance on Defendant’s promise. The trial court granted Defendant’s motion for summary judgment. In the present case, Plaintiff is appealing the granting of summary judgment.

Issue.

Can Plaintiff proceed with their suit to recover losses incurred from their reliance on Defendant’s statements?

Held.

Yes. Plaintiff has met its prima facie case for promissory estoppel
Promissory estoppel requires (1) a clear and definite promise (2) made with the expectation that the promisee will rely on the promisee, (3) reasonable reliance on the promise by the promisee, and (4) definite and substantial detriment resulting from the reliance.
The Court discusses the strict clear and definite promise requirement in Malaker and how later courts have relaxed that requirement. In Malaker, the court held that an implied promise to lend money, but not a specified amount, was not a clear and definite promise. The Malaker court looked for an express promise and suggested that proof of most of the legal elements of a promise must be provided for the promise to be clear and definite. In this case, the court relaxes the clear and definite promise requirement in Malaker.
The Court goes on to note that in the present case Plaintiff seeks damages resulting from reliance on promises made during negotiations and not enforcement of a contract making this case a better candidate for relaxation of the requirement. The Restatement also supports the Court’s relaxation of the clear and definite requirement to a more “equitable analysis designed to avoid injustice.”

Discussion.

Promissory estoppel requires a clear and definite promise, reasonable expectation that the promisee will rely on the promise, reasonable and detrimental reliance on the promise by the promisee. The requirement that the promise be clear and definite may be relaxed in the interests of avoiding injustice