Post-mortem promissory estoppel claim against former romantic partner's estate found barred by Estates Code section 254.004(a)

STATUTE OF FRAUDS IN THE ESTATE CODE [formerly PROBATE CODE]
DOOMS CLAIM BY FORMER GIRLFRIEND WHO WAS CUT OUT OF THE WILL; -- PROMISE HELD UNENFORCEABLE   

In re Estate of Jack C. Gilbert, No. 04-16-00641-CV, 513 S.W.3d 767 (Tex.App.- San Antonio Feb, 8, 2017, no pet.)(denial of temporary injunction affirmed on appeal because promissory estoppel claim is barred by Estates Code section 254.004(a).  

Section 254.004(a) of the Texas Estates Code provides as follows:

(a) A contract executed or entered into on or after September 1, 1979, to make a will or devise, or not to revoke a will or devise, may be established only by:

(1) a written agreement that is binding and enforceable; or

(2) a will stating:

(A) that a contract exists; and

(B) the material provisions of the contract.

TEX. ESTATES CODE ANN. § 254.004(a) (West 2014). 

In recognition of this provision, Trudy dropped her breach of contract claim; however, Trudy contends section 254.004(a) does not affect her ability to assert a promissory estoppel claim. 

513 S.W.3d 767 (2017)

In the ESTATE OF Jack C. GILBERT Jr., Deceased.

No. 04-16-00641-CV.

Court of Appeals of Texas, San Antonio.

Delivered and Filed: February 8, 2017.

768

Appeal from the County Court at Law, Kendall County, Texas, Trial Court No. 16-048-PR, Honorable Stephen B. Ables, Judge Presiding.

AFFIRMED.

Kurtis S. Rudkin, for James C. Gilbert.

Shannon K. Dunn, Beth Watkins, for Trudy Jane Schuetze Sundin.

Sitting: Karen Angelini, Justice, Marialyn Barnard, Justice, Patricia O. Alvarez, Justice.

OPINION

Opinion by: Patricia O. Alvarez, Justice.

Trudy Jane Schuetze Sundin appeals the trial court's order denying her application for a temporary injunction in the underlying probate proceeding. In her sole issue on appeal, Trudy contends the trial court abused its discretion because she alleged a viable cause of action for promissory estoppel based on Jack C. Gilbert Jr.'s promise to name her as his sole beneficiary in his will. We affirm the trial court's order.

BACKGROUND

Beginning in the late 1990s, Trudy was Jack's romantic partner for almost seventeen years. In April of 2001, Trudy sold Jack her house in exchange for Jack's promise to execute a will naming her as the sole beneficiary of his estate. In 2004, Jack executed such a will. In 2006, Jack revised his will but again named Trudy as his sole beneficiary. In 2008, Trudy executed a gift deed transferring an unimproved half-acre lot to Jack also in reliance on his promise to name her as his sole beneficiary. When Trudy and Jack ended their relationship in November of 2015, Jack revised his will; he named his son, James, as his sole beneficiary and independent executor of his estate. Jack died about four months later. 

After the November 2015 will was admitted to probate, Trudy sued Jack's estate asserting claims for breach of contract and promissory estoppel. Trudy requested injunctive relief and a constructive trust on all of the estate's property, including the two tracts of real property Trudy previously conveyed to Jack. The trial court granted a temporary restraining order in Trudy's favor.

At the subsequent hearing on her request for a temporary injunction, Trudy sought the injunction based only on her promissory estoppel claim. The trial court concluded Trudy did not have a viable cause of action as a matter of law; it dissolved the temporary restraining order and denied her application for a temporary injunction. Trudy appeals.

DISCUSSION

Trudy contends the trial court erred in concluding she does not have a viable promissory estoppel claim against Jack's 769*769 estate. James counters that Trudy did not present evidence to support her promissory estoppel claim. But Trudy correctly asserts in her reply brief that the trial court's ruling was not based on the evidence.^[1] Instead, at the hearing, the trial court expressly stated its decision was based on whether the law allowed Trudy to assert a promissory estoppel claim against Jack's estate:

THE COURT: And if — if there's some authority that part performance of a promise to bequeath under an estate is enough for you to recover property from the estate in contradiction of the terms of a will or a trust, then, you know, we need to see it. I'm not — I don't think you're going to find it.

What I'm saying today is I'm assuming that you're right, that there's going to be somebody to get up and testify that, I was promised that if I would do this, I would be the sole heir of the estate, assuming that's right.

[Trudy's attorney]: Yes, sir.

THE COURT: I don't think that that's going to be enough for you to win, because I don't think that there's a cause of action for that.... I understand promissory estoppel. But I don't know if I've seen it in the context of setting aside the bequeaths under a will saying, you get that property instead of the person who's supposed to receive it under [a] valid will.

Therefore, the dispositive question in this appeal is whether Trudy can assert a promissory estoppel claim against Jack's estate based on his oral promise to name her as his sole beneficiary in his will.

A. Applicable Statute

Section 254.004(a) of the Texas Estates Code provides as follows:

(a) A contract executed or entered into on or after September 1, 1979, to make a will or devise, or not to revoke a will or devise, may be established only by:

(1) a written agreement that is binding and enforceable; or

(2) a will stating:

(A) that a contract exists; and

(B) the material provisions of the contract.

TEX. ESTATES CODE ANN. § 254.004(a) (West 2014). In recognition of this provision, Trudy dropped her breach of contract claim; however, Trudy contends section 254.004(a) does not affect her ability to assert a promissory estoppel claim.

B. Relevant Case Law

1. Estate of Wallace

In In re Estate of Wallace, this court considered a similar argument. No. 04-05-00567-CV, 2006 WL 3611277 (Tex. App.-San Antonio Dec. 13, 2006, no pet.) (mem. op.). In that case, William Riddick and Willard Wallace were distant cousins. Id. at *1. Wallace owned 500 acres of land, and Riddick alleged Wallace, who regarded Riddick as a son, promised to sell him the property in the future. Id. In consideration for this promise, Riddick performed personal services for Wallace. Id. In 1991, Wallace contracted to sell 400 acres to a third party; however, the sale never closed, and Riddick subsequently threatened to sue Wallace for breaching his promise. Id. In exchange for Riddick's promise not to sue, Wallace and his wife "agreed to bequeath Riddick an undivided one-half interest in 100 acres, rather than selling him the entire 500 acres as previously promised." Id. In 1993, Wallace and his wife provided Riddick a copy of their wills containing the devise. Estate of Wallace, 770*770 2006 WL 3611277, at *1. When Wallace died in 2001, his wife filed an application to probate his will. Id. The will offered for probate, however, was a 1996 will that excluded Riddick from receiving any interest in the 100 acres. Id.Riddick sued the estate asserting various claims, and the trial court granted a series of summary judgments on different claims. Id. at *2. On appeal, Riddick challenged the summary judgment dismissing his unjust enrichment claim. Id.

Similar to Trudy's stance in this appeal, Riddick conceded that section 59A(a) of the Texas Probate Code barred him from maintaining a breach of contract claim.^[2]Estate of Wallace, 2006 WL 3611277, at *4. However, Riddick argued the trial court erred in granting the estate's motion for summary judgment "wherein the estate contended that Riddick's claim for unjust enrichment was barred as a matter of law because § 59A bars the enforcement of [an] oral agreement to make a will." Id. This court rejected Riddick's argument:

Unjust enrichment is an equitable remedy that places an aggrieved plaintiff in the position he occupied prior to his dealings with the defendant. This remedy is distinct from expectancy damages that allow a plaintiff to receive the benefit of the bargain by placing him in as good a position as he would have been had the contract been performed. Here, Riddick claims he performed various services that benefitted Wallace. He does not, however, seek to be placed in the position he occupied prior to his dealings with Wallace by recovering the value of the services performed. Instead, he has consistently maintained that he should receive the property promised to him because "an agreement implied in law under principles of equity arose compelling delivery of the contested tract to Plaintiff." To hold otherwise, Riddick argues, would result in Wallace's estate being unjustly enriched by having received benefits for which compensation was promised to Plaintiff but not delivered. However, equitable relief is not available merely because it might appear expedient or generally fair that some recompense be afforded for an unfortunate loss to the claimant, or because the benefits to the person sought to be charged amount to a windfall.

Riddick, as a matter of law, cannot recover expectancy damages which are only available pursuant to a contract. Accordingly, we overrule Riddick's first issue.

Id. at *5 (footnotes omitted) (citations omitted).

Trudy contends our decision in Estate of Wallace does not preclude her promissory estoppel claim because she has limited the relief she is requesting and only seeks to be placed in the position she was in prior to her dealings with Jack by recovering the real property she conveyed to him.^[3] Although our decision in Estate of Wallace is distinguishable on its facts, we did not hold Riddick would have prevailed on his 771*771 unjust enrichment claim if he had limited the relief he requested to the value of the services he performed. We simply held Riddick could not recover expectancy damages as a matter of law. See id.

2. Doyle v. Heilman

In Doyle v. Heilman, the Houston court noted that this court did not reach the issue of whether section 59A of the Texas Probate Code precluded a claim for unjust enrichment. No. 01-09-00164-CV, 2010 WL 1053062, at *5 (Tex. App.-Houston [1st Dist.] Mar. 11, 2010, no pet.) (mem. op.). In Doyle, Leticia G. Heilman sued the estate of Albert Miller alleging she "had an oral contract with Miller agreeing that Miller would give `all his worldly goods of value' to Heilman if she cared for his needs until he died." Id. at *1. Heilman sued for "breach of contract, promissory estoppel, quantum meruit, breach of fiduciary duty, spousal liability, and unjust enrichment." Id. The trial court granted summary judgment in favor of the executor on all of Heilman's claims except her claim for quantum meruit. Id. After a bench trial, the trial court entered a judgment in favor of Heilman on her claim for quantum meruit and awarded her $72,300 in damages. Doyle, 2010 WL 1053062, at *5.

On appeal, the executor argued section 59A of the Texas Probate Code was an absolute bar to Heilman's recovery. Id. "Heilman argued that she should recover under quantum meruit for the reasonable value of her services." Id. The Houston court referred to this court's decision in Estate of Wallace:

The San Antonio Court of Appeals addressed a claim for unjust enrichment and a Section 59A defense but did not reach the issue because the claimant sought a recovery based on a contract, which Section 59A precludes if it is not in writing.

Id. (citing Estate of Wallace, 2006 WL 3611277, at *5). The Houston court further noted, "We find no authority establishing that a claimant can recover on a claim for quantum meruit for an alleged oral agreement that is barred by Section 59A." Id.Because the Houston court held Heilman failed to prove all of the elements of her quantum meruit claim, however, that court also concluded it "need not decide whether Section 59A bars a quantum meruit claim." Id.

C. Standard of Review

Here, the trial court assumed Trudy could prove all of the elements of her promissory estoppel claim, but it denied Trudy's application for a temporary injunction because it concluded section 254.004 bars such a claim as a matter of law. Although the decision "to grant or deny a temporary injunction is within the trial court's sound discretion," Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002), "[a] trial court has no `discretion' in determining what the law is," Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992), and we review de novo the trial court's determination that section 254.004 bars such a claim, see Marketshare Telecom, L.L.C. v. Ericsson, Inc., 198 S.W.3d 908, 916 (Tex. App.-Dallas 2006, no pet.) ("We review de novo any determinations on questions of law that the trial court made in support of the [temporary injunction].").

D. Statute Bars Trudy's Claim

1. Trudy's Cases Lack Requisite Support

Trudy cites Trevino & Associates Mechanical, Blackstone Medical, and Richter to show promissory estoppel is a valid cause of action in Texas and to identify the elements of promissory estoppel. See Blackstone Med., Inc. v. Phoenix Surgicals, L.L.C., 470 S.W.3d 636, 655 (Tex. 772*772 App.-Dallas 2015, no pet.); Trevino & Assocs. Mech., L.P. v. Frost Nat'l Bank, 400 S.W.3d 139, 146 (Tex. App.-Dallas 2013, no pet.); Richter v. Wagner Oil Co., 90 S.W.3d 890, 899 (Tex. App.-San Antonio 2002, no pet.). We recognize that promissory estoppel is a valid cause of action in Texas, but none of Trudy's cases addresses promissory estoppel in the context of section 254.004's statutory bar. See TEX. EST. CODE ANN. § 254.004; Blackstone Med., 470 S.W.3d at 655; Trevino & Assocs. Mech., 400 S.W.3d at 146; Richter, 90 S.W.3d at 899. Trudy does not cite any authority to show that promissory estoppel is a viable cause of action in her circumstances, and we have found none.

2. Contrary Authority

To the contrary, where our sister courts have addressed similar circumstances, none has held that an oral promise to bequeath property on the promisor's death is enforceable in light of section 254.004. See, e.g., Doyle, 2010 WL 1053062, at *5 ("We find no authority establishing that a claimant can recover on a claim for quantum meruit for an alleged oral agreement that is barred by Section 59A [section 254.004's predecessor statute]."); see also Pool v. Diana, No. 03-08-00363-CV, 2010 WL 1170234, at *8 (Tex. App.-Austin Mar. 24, 2010, pet. denied) (mem. op.) (citing section 59A of the former Probate Code, the statutory predecessor of Estates Code section 254.004, and stating "[a]s a matter of law, an oral agreement to devise property otherwise disposed of in a will is unenforceable").

3. Statute Bars Trudy's Promissory Estoppel Claim

Having reviewed the statute and the relevant case law, we conclude the legislature intended to foreclose a claim relating to a promise to make a will or devise or not to revoke a will or devise if that promise is not in writing. See TEX. EST. CODE ANN. § 254.004; Pool, 2010 WL 1170234, at *8; Doyle, 2010 WL 1053062, at *5; Estate of Wallace, 2006 WL 3611277, at *4; see also Taylor v. Johnson, 677 S.W.2d 680, 682 (Tex. App.-Eastland 1984, writ ref'd n.r.e.).^[4] We hold that section 254.004 bars a claim for promissory estoppel on an oral promise to devise property that is disposed of in a will. See TEX. EST. CODE ANN. § 254.004; Pool,2010 WL 1170234, at *8. Because Trudy seeks to enforce Jack's alleged oral promise to devise his estate to her, and Jack's will devises his estate to another, Trudy's claim is barred.

CONCLUSION

To obtain a temporary injunction, Trudy was required to prove she had a cause of action against the estate. See Butnaru, 84 S.W.3d at 204. Because we hold Trudy's promissory estoppel claim is barred by Estates Code section 254.004(a), we conclude the trial court did not abuse its discretion in denying Trudy's application for a temporary injunction. Thus, we affirm the trial court's order.

[1] We note Trudy made an informal offer of proof which was dictated into the record.

[2] Section 59A(a) of the Texas Probate Code was similar to section 254.004(a) of the Texas Estates Code; section 59A(a) read as follows:

(a) A contract to make a will or devise, or not to revoke a will or devise, if executed or entered into on or after September 1, 1979, can be established only by provisions of a will stating that a contract does exist and stating the material provisions of the contract.

Estate of Wallace, 2006 WL 3611277, at *4 (quoting Texas Probate Code section 59A(a)).

[3] We note Trudy's pleading broadly sought to enjoin James from disposing of all of the estate's assets, and her argument to the trial court was equally broad. In her brief, however, Trudy only seeks to enjoin James from disposing of the real property she conveyed to Jack.

[4] See generally Ozgur K. Bayazitoglu, Applying Realist Statutory Interpretation to Texas Probate Code § 59A — Contracts Concerning Succession, 33 HOUS. L. REV. 1175, 1192-94 (1996) (asserting strict interpretation of section 59A is unjust but stating "If the Taylor court is correct, section 59A is essentially a supplement to the statute of frauds, operating as another statute that requires certain contracts to be in writing if they are to be enforceable.... Even where a promisee has reasonably relied upon a promise to her detriment, she will nevertheless be unable to enforce the promise in court.").  

Equitable Promissory Estoppel theory barred by contract

ELEMENTS OF PROMISSORY ESTOPPEL CLAIM 

The elements of a claim for promissory estoppel are: (1) a promise; (2) foreseeability of reliance on the promise by the promisor; and (3) substantial detrimental reliance by the promisee. Leach v. Conoco, Inc., 892 S.W.2d 954, 959 n. 2 (Tex. App.-Houston [1st Dist.] 1995, writ dism'd w.o.j.). Although promissory estoppel is normally pleaded as a defense, it may be asserted by a plaintiff, as here, as an affirmative ground for relief. Fertic v. Spencer, 247 S.W.3d 242, 250 (Tex. App.-El Paso 2007, pet. denied). If a valid contract exists covering the alleged promise, a plaintiff cannot recover under promissory estoppel. See id.; Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 226 (Tex. 2002) (the doctrine of promissory estoppel presumes that no contract exists); Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000) (allowing for no recovery under a quasi-contract or unjust enrichment theory where a valid express contract covers the disputed subject matter). Here, because a contract governed the terms under which AIG would pay insurance proceeds to the Investment Trust following Dr. Lombana's death, promissory estoppel does not apply.

"Waiver by custom and estoppel are the same concept." MacIntire, 27 S.W.3d at 89 (quoting Blanton v. John Hancock Mut. Life Ins. Co., 345 F. Supp. 168, 170 (N.D. Tex. 1971), aff'd per curium, 463 F.2d 421 (5th Cir. 1972)). "Waiver is the intentional relinquishment of a right actually known, or intentional conduct inconsistent with claiming that right." Ulico Cas. Co. v. Allied Pilots Ass'n, 262 S.W.3d 773, 778 (Tex. 2008). The elements of waiver are: (1) an existing right, benefit, or advantage held by a party; (2) the party's actual knowledge of its existence; and (3) the party's actual intent to relinquish the right held or intentional conduct that is inconsistent with the right. Id.

Lombana further asserts that she presented "sufficient evidence of an agreement to waive requirements to reinstate other than the payments of the premium" and she entered into an "agreement" with AIG on January 22, 2009 in which she was "reassured . . . that the Policy was still in force, and had no requirements other than payment of the reinstatement premium." In support of her position, Lombana relies on Equitable Life Assurance Society v. Ellis, 147 S.W. 1152 (Tex. 1912). She argues that she should not be held to any additional reinstatement requirements because the parties' "past dealing," along with the January 22, 2009 "agreement," eliminated any other requirements for reinstatement. Lombana asserts that to hold otherwise would be to "attach a condition that the proposal itself did not impose." See Ellis, 147 S.W. at 1157.

In Ellis, after the expiration of the grace period for the policy in question, the insured was involved in active and continuous back-and-forth written negotiations regarding the payment of premiums, changing the premium due dates, and discussing a loan using the policy as security so that the insured could pay the premiums. 147 S.W. at 1155-56. These negotiations were conducted by "a general officer of the company," the "superintendent of its extension and loan department" through the cashier of a local office, who had the requisite authority to so negotiate. Id. at 1153, 1155-56. The court concluded that the fact that the insurer was willing to offer the insured a loan on the policy showed that the insurer believed that the policy possessed value, noting "[i]t is unbelievable that this company would have been offering to make a loan and take as security for it something that it recognized and held to be defunct and void and incapable of possessing any value." Id. at 1156. By acting as if the policy had value, the insurer showed that it "desired to be understood as willing to forego its right of forfeiture and continue the policies in force as security for its loan and as protection upon Ellis' life." Id. at 1157. In other words, the insurer acted as if the policy had "continued validity," and its negotiations with the insured evidenced a waiver of conditions of reinstatement that were contained in the policy itself. Id.

Lombana asserts that AIG waived termination of the Policy, even after the death of Dr. Lombana, noting that in Ellis the insurer had made an offer to the insured to reinstate the policy in question and the offer was still open at the time of his death. Id. at 1158 ("As the question of waiver is to be determined by the company's conduct and not by any failure by Ellis to act in the premises . . . that the transaction was not so completed by Ellis did not relieve its act of its force as an affirmative evidence of waiver, or at least as tending to establish it."). Lombana argues that because AIG never rescinded or withdrew the AIG call representative's January 22, 2009 "agreement" to reinstate the Policy, it was "still operative, despite [Dr. Lombana's] death, for a reasonable period." And she asserts that she raised a fact question as to whether she responded to AIG's waiver of additional requirements in a reasonable fashion based on AIG's failure to update the contact information, AIG's failure to forward the reinstatement forms to the Wirt Road address and fax, and the fact that she was dealing with Dr. Lombana's final illness and death.

Here, however, the express terms of the Policy prohibit the type of "agreement" that Lombana asserts the AIG call representative made with her on January 22, 2009. The Policy expressly states that it "may not be changed, nor any of [AIG's] rights or requirements be waived, except in writing by one of our authorized officers." (Emphasis added.)

Moreover, AIG took no further action after it sent notification of termination of the Policy on June 27, 2008. There were no written communications with Dr. Lombana or with Lombana as trustee for the Investment Trust demonstrating that AIG believed that the Policy had "continued validity" or value. The summary-judgment evidence shows that when Lombana telephoned the AIG call center on January 22, 2009, she was told that she had to "reinstate" the Policy because it had lapsed seven months earlier on April 28, 2008. Lombana presented no evidence that AIG negotiated with her or treated the Policy as if it was still in force after Dr. Lombana had died.

Regardless, AIG could not have waived termination of the Policy after the death of its insured. See MacIntire, 27 S.W.3d at 90. Because the lapsed Policy had terminated when Dr. Lombana died, there was no contract to reinstate. See id.

Lombana further argues that the performance of the condition precedent of payment of premiums was excused because AIG prevented her performance by various actions. However, she presented no evidence that AIG prevented her performance. After her initial request on January 22, 2009 for forms to reinstate the lapsed Policy, she, despite asserting that she never received the forms, made no further request of AIG for the forms. And there is no evidence that AIG did anything to prevent Lombana from paying the Policy premiums to reinstate the Policy before the death of Dr. Lombana. In fact, she did not contact AIG again until after Dr. Lombana's death on April 30, 2009.

Lombana did not present evidence creating a question of material fact regarding her payment of premiums, any excused nonpayment, or waiver or estoppel based on negotiations with AIG demonstrating that AIG recognized the continued validity of the policy. Similarly, Lombana points to no evidence demonstrating that AIG actually in any way prevented her from paying the Policy premiums. Accordingly, we hold that the trial court did not err in granting AIG summary judgment on Lombana's claim for promissory estoppel.

We overrule Lombana's fourth and fifth issues.

SOURCE: HOUSTON COURT OF APPEALS - No. 01-12-00168-CV. - 2/27/2014

In her fourth and fifth issues, Lombana argues that the trial court erred in granting AIG summary judgment on her claim for promissory estoppel because she presented evidence that "AIG made representations to her and remained silent on other matters [AIG] would later claim were necessary for reinstatement of a lapsed policy." Lombana further argues that AIG is estopped and has waived its argument that her non-payment of premiums caused the Policy to terminate because of AIG's "course of dealing of repeatedly sending late payment offers," by accepting her late payment of the Policy premiums in 2010 and keeping the payment for an extended period of time, and by violating the terms of the Policy including its "multiple failures to change the Policy contact information and send the reinstatement forms."

Promissory estoppel in loan-modification / foreclosure context

  
CLAIM OF PROMISSORY ESTOPPEL IN THE LOAN MODIFICATION CONTEXT

Plaintiffs seek a reliance remedy against JPMC based on the doctrine of promissory estoppel. A cause of action for promissory estoppel requires: (1) a promise by the defendant; (2) foreseeable and actual reliance on the promise by the plaintiff to his detriment; and (3) that enforcement of the promise be necessary to avoid an injustice. See "Moore" Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 937 (Tex. 1972);Ford v. City State Bank of Palacios, 44 S.W.3d 121, 139 (Tex. App.—Corpus Christi 2001, no pet.). "To support a finding of promissory estoppel, the asserted promise must be sufficiently specific and definite that it would be reasonable and justified for the promisee to rely upon it as a commitment to future action." Comiskey v. FH Partners, LLC, 373 S.W.3d 620, 635 (Tex. App.—Houston [14th Dist.] 2012, pet. denied) (internal quotation marks omitted). One federal court applying Texas law has held "that a promise that [a plaintiff's] loan modification was `under consideration' would not trigger the promissory estoppel doctrine." Stolts v. Wells Fargo Bank, NA, No. 1:13-CV-19, 2014 WL 3545464, at *3 n.4 (S.D. Tex. Jan. 16, 2014) (citing Addicks Servs., Inc. v. GGP-Bridgeland, LP, 596 F.3d 286, 300 (5th Cir. 2010)).
  
According to the Third Amended Complaint, JPMC promised not only that it would consider Plaintiffs' application, but that "there would be no non-judicial foreclosure until the loan modification process was completed and they were given a response and answer." This additional representation makes JPMC's promise sufficiently definite to support a plausible claim for promissory estoppel.
 
SOURCE: FIFTH CIRCUIT: Guajardo v. JP Morgan Chase Bank, NA, Court of Appeals, 5th Circuit Jan 12, 2015  

Promissory Estoppel Theory only applicable outside contract obligations

As is true of other equitable doctrines and remedies, promissory estoppel does not apply when the issue is governed by a formal contract. It may provide a remedy with respect of promises not incorporated into a contract and/or totally independent of a contract.   

ELEMENTS OF PROMISSORY ESTOPPEL

The elements of promissory estoppel are (1) a promise, (2) foreseeability of reliance thereon by the promisor, and (3) substantial reliance by the promisee to his detriment. English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983); Beverick v. Koch Power, Inc., 186 S.W.3d 145, 152 (Tex. App.-Houston [1st Dist.] 2005, pet. denied).
 
"Promissory estoppel does not apply to a promise covered by a valid contract between the parties; it does apply, however, to a promise outside the contract." Barnett v. Coppell N. Tex. Court, Ltd., 123 S.W.3d 804, 825 (Tex. App.-Dallas 2003, pet. denied); see also Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 226 (Tex. 2002) (noting that "the promissory-estoppel doctrine presumes no contract exists"). The promise must be one "which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee." CRSS Inc. v. Runion, 992 S.W.2d 1, 6 (Tex. App.-Houston [1st Dist.] 1995, pet. denied) (quoting "Moore" Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 937 (Tex. 1972) (quoting RESTATEMENT OF CONTRACTS § 90 (1932))). As a corollary, the promise "must be more than mere speculation concerning future events, a statement of hope, or an expression of opinion, expectation, or assumption." Comiskey v. FH Partners, LLC, 373 S.W.3d 620, 635 (Tex. App.-Houston [14th Dist.] 2012, pet. denied).

SOURCE: HOUSTON COURT OF APPEALS - No. 01-11-00800-CV – 2/28/2013

Statute of Frauds and equitable exceptions to statutes of fraud

Traditional Statute of Frauds and Its Exceptions (promissory estoppel and partial performance)
 
The traditional statute of frauds in Texas, currently at Tex. Bus. & Com. Code Ann. § 26.01(a) (Vernon Pamph. 2008), provides that certain types of agreements, such as a promise to answer for the debt, default, or miscarriage of another, a contract for the sale of real estate, or an agreement which is not to be performed within one year of its making, are not enforceable unless the agreement, or a memorandum of it, is in writing and signed by the person to be charged or his authorized representative. See Footnote 5 However, equity will act to avoid the statute of frauds in circumstances where enforcing the statute would itself amount to a fraud. See Nagle v. Nagle, 633 S.W.2d 796, 799-800 (Tex. 1982); Birenbaum v. Option Care, Inc., 971 S.W.2d 497, 503 (Tex. App.-Dallas 1997, pet. denied) (“Before using equity to circumvent the statute of frauds, the Texas Supreme Court has consistently required a showing that fraud would result in not doing so.”). Those circumstances are limited, however, because otherwise the exceptions would render the statute meaningless:

The Statute of Frauds is the Legislature's directive that courts enforce promises covered by the statute only if such promises are in writing. Equity can avoid the strictures of that directive only by “some positive rule which will insure its exercise for . . . the prevention of an actual fraud as distinguished from a mere wrong . . . so surely as to leave the statute itself, through the exactness of the exception, with some definiteness of operation.”Nagle, 633 S.W.2d at 799 (quoting Hooks v. Bridgewater, 111 Tex. 122, 128, 229 S.W. 1114, 1116 (1921)).
 
Promissory estoppel and partial performance have been recognized as equity-based exceptions to the traditional statute of frauds. Promissory estoppel allows enforcement of an otherwise unenforceable oral agreement when (1) the promisor makes a promise that he should have expected would lead the promissee to some definite and substantial injury; (2) such an injury occurred; and (3) the court must enforce the promise to avoid the injury. Nagle, 633 S.W.2d at 800; “Moore” Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 936 (Tex. 1972).
 
Promissory estoppel avoids the traditional statute of frauds when the alleged oral promise is to sign an existing document that satisfies the statute of frauds. See Nagle, 633 S.W.2d at 800 (discussing contract for sale of real estate provision of section 26.01); Exxon Corp. v. Breezevale Ltd., 82 S.W.3d 429, 438 (Tex. App.-Dallas 2002, pet. denied) (same); see also Birenbaum, 971 S.W.2d at 504 (promissory estoppel avoids statute of frauds only if oral promise “was to execute a document in existence that itself complied with the statute”; discussing statute of frauds formerly applicable to purchase of securities).
  
Under the partial performance equitable exception, an oral agreement that does not satisfy the traditional statute of frauds but that has been partially performed may be enforced if denying enforcement would itself amount to a fraud. Breezevale, 82 S.W.3d at 439; Carmack v. Beltway Dev. Co., 701 S.W.2d 37, 40 (Tex. App.-Dallas 1985, no writ) (discussing statute of frauds for agreements to pay a commission on sale or lease of real estate). The actions asserted to constitute partial performance must be “unequivocally referable” to the alleged oral agreement and corroborate the existence of that agreement; they “must be such as could have been done with no other design than to fulfill the particular agreement sought to be enforced; otherwise, they do not tend to prove the existence of the parol agreement relied upon by the plaintiff.” Breezevale, 82 S.W.3d at 439-40.

  

Requisites of promissory estoppel

Promissory estoppel The requisites of promissory estoppel include (1) a promise, (2) foreseeability of reliance on the promise by the promisor, and (3) substantial reliance by the promisee on that promise to his detriment. English v. Fisher, 660 S.W.2d 521, 524 (Tex. 1983); see also Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 706 n.25 (Tex. 2003). “Under the theory of promissory estoppel, a party that has failed to prove a legally sufficient contract, but has acted in reliance upon a promise to his detriment, may be compensated for his foreseeable, definite, and substantial reliance.” Lamajak v. Frazin, 230 S.W.3d 786, 794 (Tex. App.-Dallas 2007, no pet.) (citing Wheeler v. White, 398 S.W.2d 93, 97 (Tex. 1965)). However, the doctrine of promissory estoppel “presumes no contract exists.” Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 226 (Tex. 2002); see also Cessna Aircraft Co. v. Aircraft Network, L.L.C., 213 S.W.3d 455, 468 (Tex. App.-Dallas 2006, pet. denied) (op. on reh'g); Fertic v. Spencer, 247 S.W.3d 242, 250 (Tex. App.-El Paso 2007, pet. denied) (the existence of an express contract between the parties “bars recovery...under the theory of promissory estoppel as a matter of law.”); Doctors Hosp. 1997, L.P. v. Sambuca Houston, L.P., 154 S.W.3d 634, 636 (Tex. App.-Houston [14th Dist.] 2004, pet. abated) (“promissory estoppel becomes available to a claimant only in the absence of a valid and enforceable contract”). SOURCE: 05-07-00891-CV

When is promissory estoppel a viable theory?

  
PROMISSORY ESTOPPEL AS BASIS FOR RELIEF
  
Promissory estoppel may be utilized to enforce a promise when a plaintiff justifiably and reasonably relies on the promise to his detriment, it was foreseeable that the plaintiff would rely on the promise, and injustice can only be avoided by enforcement of the promise. See Boy Scouts v. Responsive Terminal Sys., 790 S.W.2d 738, 742 (Tex. App.-Dallas 1990, writ denied).
 
A promise must be sufficiently definite to support promissory estoppel. Gillium v. Republic Health Corp., 778 S.W.2d 558, 570 (Tex. App.-Dallas 1989, no writ). A promise must also be more than speculation of future events, a statement of hope, an expression of opinion, an expectation, or an assumption. City of Beaumont v. Excavators & Constructors, Inc., 870 S.W.2d 123, 138 (Tex. App.-Beaumont 1993, writ denied). Lost profits are not recoverable under promissory estoppel; a plaintiff may only recover reliance damages. Fretz Constr. Co. v. Southern Nat'l Bank, 626 S.W.2d 478, 483 (Tex. 1981).

SOURCE: DALLAS COURT OF APPEALS - 05-08-00038-CV  

PROMISSORY ESTOPPEL CLAIM IN CONTEXT OF MORTGAGE RENEGOTIATION/MODIFICATION & FORECLOSURE 

Element of reliance: reasonable and justified

REASONABLE RELIANCE ELEMENT

Fraud, fraudulent inducement, negligent misrepresentation, and promissory estoppel all require reasonable and justified reliance upon a misrepresentation or promise. See Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001) (fraud); TMI, Inc. v. Brooks, 225 S.W.3d 783, 792, 795 (Tex. App.- Houston [14th Dist.] 2007, pet. denied) (fraudulent inducement); Ortiz v. Collins, 203 S.W.3d 414, 421 (Tex. App.- Houston [14th Dist.] 2006, no pet.) (fraud, negligent misrepresentation, and promissory estoppel).
  
When the parties' written agreement addresses the substance of the oral statement and contains language precluding reliance on external representations, Texas courts find reliance on subsequent oral promises unreasonable. See Simpson v. Woodbridge Props., L.L.C., 153 S.W.3d 682, 684 (Tex. App.- Dallas 2004, no pet.) (holding that disclaimer of reliance clause in contract negated reliance on post contract oral misrepresentations); Atlantic Lloyds Ins. Co. v. Butler, 137 S.W.3d 199, 226 (Tex. App.- Houston [1st Dist.] 2004, pet. denied) (holding that reliance on misrepresentation that was easily refutable with reasonable diligence was not justified or reasonable where two opposing parties were engaged in litigation and negotiating from equal bargaining positions); DRC Parts & Accessories, L.L.C. v. VM Motori, S.P.A., 112 S.W.3d 854, 856, 858-59 (Tex. App.- Houston [14th Dist.] 2003, pet. denied) (holding that reliance on both pre- and post-contractual oral representations, directly contradicted by express terms of contract, was not justified as matter of law); Airborne Freight Corp. v. C.R. Lee Enters., Inc., 847 S.W.2d 289, 297 (Tex. App.- El Paso 1992, writ denied) (finding that written contract containing ample cautionary language precluded exclusive reliance by reasonable businessperson on verbal statements contradicting written agreement).

SOURCE: Biosilk Spa, LP v. HG Shopping Centers, LP (Tex.App.- Houston [14th Dist.] May 8, 2008) (Yates) (fraud, fraudulent inducement, negligent misrepresentation, and promissory estoppel, no reasonable reliance)