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Katz v. Danny Dare, Inc

    Brief Fact Summary. Plaintiff Katz suffered a head injury while employed by the Defendant Danny Dare, Inc. Plaintiff was subsequently convinced to retire after being offered a pension. After retiring, Plaintiff worked for Defendant on a part time basis, but after two and a half years Defendant cut and then eliminated Plaintiff’s pension.

    Synopsis of Rule of Law. Promissory estoppel requires a promise, reasonable and detrimental reliance on the promise, and injustice that can only be avoided by enforcing the promise.

    Facts. Plaintiff worked for Defendant from 1950 until his retirement in 1975. Plaintiff received a head injury trying to retrieve money taken from a store operated by Defendant. Plaintiff returned to work following the injury, but his walk was impaired, he had some memory loss, and did not function as he had prior to the incident. After returning to work, Plaintiff made several mistakes at considerable cost to Defendant. Defendant began attempts to induce Plaintiff to retire. Plaintiff finally agreed to retire with a pension from Defendant of $13,000 a year for life. Plaintiff testified that without the pension, he would not have retired.
    Plaintiff began working part time for another company and then also for Defendant on a pert time basis. Plaintiff worked part time for Defendant for two and a half years. At this point Defendant reduced the size of the pension check to Plaintiff. Plaintiff returned the check and indicated that he was entitled to the full amount. Defendant stopped sending checks testifying that the reason was Plaintiff’s health had improved to where he could return to work. Plaintiff testified that the cut was made after he refused to increase the number of hours he was working for Defendant.

    Issue. Can Plaintiff enforce the promise by Defendant to pay him a pension?

    Held. Yes. Plaintiff can enforce Defendant’s promise under promissory estoppel.
    Promissory estoppel requires a promise, detrimental reliance, and injustice that can only be avoided by enforcement of the promise. Defendant argues that because Plaintiff had to choose between retirement or being fired, promissory estoppel does not apply. The Court disagrees noting that it is not clear that those were Plaintiff’s only options given that Defendant expended significant time and effort to induce Plaintiff to retire. Under these facts, the Court determines that Plaintiff’s retirement was clearly voluntary.
    The Court does not require Plaintiff to show that he gave up something he had a legal right to. Instead, Plaintiff must show that he reasonably and detrimentally relied on a promise made by Defendant.
    The Court holds that Plaintiff has met the elements of promissory estoppel and should receive the pension owed to him by Defendant.

    Discussion. Under these facts, the Court finds that Plaintiff voluntarily retired in reliance on the promise of a pension. Plaintiff did not have to show that he gave up something he had a legal right to. Instead, Plaintiff only needed to show that the elements of promissory estoppel were all present.


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