Harvey v. Dow

962 A.2d 322 (2008)

Quick Summary

Teresa Harvey (plaintiff) sued her parents, Jeffrey and Kathryn Dow (defendants), seeking to compel them to transfer specific property to her and claiming breach of contract, breach of fiduciary duty, and fraud.

The trial court ruled in favor of the Dows, finding the promises made by the defendants to be too vague to enforce.

Teresa appealed, arguing that the doctrine of promissory estoppel should apply.

The appellate court agreed, recognizing that the Dows’ conduct, including allowing Teresa to build a house on the property and actively assisting in its construction, created an implied promise to transfer the land.

Facts of the Case

Teresa Harvey (the plaintiff) was the daughter of Jeffrey Dow and Kathryn Dow (the defendants). The Dows owned approximately 125 acres of land in two adjoining properties. Over the years, the Dows made general promises to Teresa and her brother, Jeffrey Dow, that they would leave them some of their land as a gift or inheritance in the future.

Teresa had a specific location where she wanted to build a house on the property, and her parents knew her intentions.

In 1999, Teresa and her husband placed a mobile home on her parents property with their permission and agreed not to pay any rent for the land. Later, Teresa and her husband decided to build a house in the same location where their mobile home was situated.

The Dows agreed to use their home equity line of credit to finance the construction. However, after Jarrod Harvey, Teresa’s husband, tragically passed away in a motorcycle accident, Teresa decided to finance the construction using life insurance proceeds instead.

Construction of the house began in the summer of 2003 and was completed in May 2004 at approximately $200,000. During this time, Jeffrey Dow, Teresa’s father, actively participated in the construction process by obtaining a building permit, approving the site for construction, and assisting with various aspects of building the house.

After completing the house, Teresa asked her father for a deed to the property on which it was built. However, he refused to provide her with a deed.

Therefore, Teresa filed a lawsuit against her parents, seeking to compel them to transfer the property to her and also claiming breach of contract, breach of fiduciary duty, and fraud.

Procedural Posture and History

  1. Teresa filed a complaint against Jeffrey Dow and Kathryn Dow in March 2006.
  2. The complaint sought a judgment compelling the defendants to transfer the property or damages based on the house’s value.
  3. The Dows counterclaimed and sought a declaratory judgment stating that Teresa had no rights to that property.
  4. After a two-day bench trial, the trial court found in favor of the Dows and ruled that the vague promises made by the defendants were not enforceable.
  5. Teresa filed motions for further findings, to amend the judgment, and for a new trial, arguing that the court failed to address her promissory estoppel claim.
  6. The trial court denied Teresa’s motions, upholding its previous decision.
  7. Teresa appealed to Supreme Court of Maine.

I.R.A.C. Format

Issue

Whether the promises made by the defendants to transfer land to the plaintiff were enforceable under the theory of promissory estoppel.

Rule of Law

Promissory estoppel can be invoked to enforce promises that are otherwise unenforceable, as long as the promisee’s reliance on the promise was reasonable, foreseeable, and involved a definite and substantial change of position, and injustice can only be avoided by enforcing the promise.

Reasoning and Analysis

The court found that the Dows had made general promises to convey land to Teresa and her brother in the future. These promises, however, were deemed too vague and lacked essential terms to be enforced.

However, in addition to these promises, the Dows went beyond by allowing Teresa to build a house on their land and actively assisting in its construction. These actions could be construed as an implied promise through conduct, which can substitute for an express promise under the theory of promissory estoppel.

Teresa’s reliance on her parents’ promises was detrimental since she invested $200,000 in building a house on the property without receiving a deed. It would be unjust to refrain from enforcing such a promise, given the circumstances.

The actions of Jeffrey in obtaining a building permit and actively participating in construction further supported the foreseeability and reasonableness of Teresa’s reliance.

Conclusion

Based on the Dows’ conduct in allowing Teresa to build a house on their land and actively assisting in its construction, there was an implied promise to transfer that specific portion of land.

Therefore, promissory estoppel applies, and it would be unjust to deny Teresa’s rights over the property. The trial court’s ruling was vacated, and the case was remanded for further proceedings.

Key Takeaways

  1. Promissory estoppel can be invoked to enforce promises that would otherwise be unenforceable.
  2. An implied promise through conduct can substitute for an express promise under the theory of promissory estoppel.
  3. Detrimental reliance resulting in a significant change in position can support a claim of promissory estoppel.
  4. The foreseeability and reasonableness of reliance are crucial in determining whether a promise should be enforced under promissory estoppel.

Relevant FAQs of this case

What is promissory estoppel in contract law?

Promissory estoppel is a legal doctrine that allows a promise to be enforced, even without a formal contract, if the promisee reasonably relies on the promise, experiences a detrimental change, and enforcing the promise is necessary to prevent injustice.

Can substantial investment based on an oral promise trigger promissory estoppel?

Yes, substantial investment resulting from an oral promise can trigger promissory estoppel when the promisee reasonably relies on the promise and experiences a significant change in position, and enforcing the promise is the only way to prevent an unjust outcome. 

  • For example: If a landlord orally promises a tenant a long-term lease, and the tenant invests heavily in property improvements, promissory estoppel may come into play.

What factors determine the validity of a promissory estoppel claim?

The validity of a promissory estoppel claim depends on various factors, including the clarity and specificity of the promise, the reasonableness of the promisee’s reliance, the foreseeability of such reliance, and the necessity of enforcing the promise to avoid an unjust result.

References

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