ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
JAMES T. ROBERTS THOMAS M. BARR
Nashville, Indiana Nashville, Indiana
IN THE
SUPREME COURT OF INDIANA
CLIFFORD BROWN, )
)
Appellant-Defendant, ) Supreme Court Cause Number
) 07S04-0011-CV-716
v. )
) Court of Appeals Cause Number
RHONDA BRANCH, ) 07A04-9907-CV-339
)
Appellee-Plaintiff. )
APPEAL FROM THE BROWN CIRCUIT COURT
The Honorable Heather M. Mollo, Judge
Cause No. 07C01-9704-CP-0130
ON PETITION TO TRANSFER
November 16, 2001
RUCKER, Justice
Case Summary
Clifford Brown reneged on a promise to give a house to his girlfriend
Rhonda Branch. She sued, and the parties debated whether Brown’s oral
promise was subject to the Statute of Frauds. After a bench trial, the
trial court awarded the house to Branch under the theory of promissory
estoppel. The Court of Appeals affirmed on that theory and also determined
that Brown’s promise was not within the Statute of Frauds. We grant
transfer and hold that an oral promise to give another person real property
falls within the Statute of Frauds. We also hold that although the
doctrine of promissory estoppel may remove an oral promise from the
statute’s operation, in this case Branch failed in her burden of proving
that the doctrine applies.
Facts
Rhonda Branch and Clifford Brown were engaged in a ten-year on-again,
off-again relationship. Sometime during that ten-year period, Brown
purchased a home on State Road 135 in southern Indiana that the parties
referred to as the “135 house.” The couple lived in the home for one year
early in their relationship. In 1995, Branch moved to Missouri, found a
job, and enrolled in a business school program. Shortly thereafter, Brown
telephoned her and said that if she moved back to Indiana, Branch would
“always have the 135 house” and that she “won’t be stuck on the street.
You will have a roof over your head.” R. at 476. Brown also proposed
marriage, and Branch accepted. Branch quit her job, dropped out of school
after finishing the semester, and moved back to Indiana. Branch and Brown
then lived together for two brief periods before the relationship
eventually ended.
Thereafter, Branch sued Brown when he failed to convey the 135 house.
Following a bench trial, the trial court awarded the house to Branch. On
review, the Court of Appeals affirmed the trial court’s judgment ruling:
(i) Brown’s oral promise to give Branch the 135 house was not a sale within
the meaning of the Statute of Frauds and therefore did not need to be in
writing in order to be enforced; and (ii) the oral promise was enforceable
under the doctrine of promissory estoppel. Brown v. Branch, 733 N.E.2d 17,
25 (Ind. Ct. App. 2000). We accept transfer and reverse the trial court.
Discussion
I.
The Statute of Frauds provides in pertinent part that “[n]o action
shall be brought . . . [u]pon any contract for the sale of lands . . .
[u]nless the promise, contract or agreement upon which such action shall be
brought . . . shall be in writing . . . .” Ind. Code § 32-2-1-1. Although
not conceding that he made a promise at all, Brown seems to say that even
if he did, the promise of the 135 house was an oral contract for the sale
of lands, and thus to be enforceable it had to be in writing. Branch
counters that Brown made a promise, and that the promise was to “give the
land and not to sell the land.” Appellee’s Br. in Opp’n to Pet. for
Transfer at 3. According to Branch, “The Statute of Frauds applies only to
promises to sell land,” and thus Brown’s agreement does not have to be in
writing to be enforceable. Id. Relying on Black’s Law Dictionary 1337
(6th ed. 1990), both parties point to varying definitions of “sale” to
support their positions.
The Statute of Frauds does not define the term “sale.” However, the
law is settled that “a right to the possession of real estate is an
interest therein, and any contract which seeks to convey an interest in
land is required to be in writing.” Guckenberger v. Shank, 110 Ind. App.
442, 37 N.E.2d 708, 713 (1941) (emphasis added). Although not often
articulating it as such, our courts have long applied the principle that an
agreement to convey land is subject to the Statute of Frauds’ writing
requirement. And this is so whether there is actually a “sale” as the term
is commonly used. See, e.g., Hensley v. Hilton, 191 Ind. 309, 131 N.E. 38,
40 (1921) (contract to “devise” real estate required to be in writing);
Fuelling v. Fuesse, 43 Ind. App. 441, 87 N.E. 700, 701 (1909) (mutual
agreement concerning a boundary line between parties required to be in
writing); McCoy v. McCoy, 32 Ind. App. 38, 69 N.E. 193, 195 (1903)
(contract for the “exchange” of real estate required to be in writing).
Indeed, over three quarters of a century ago, our courts implicitly
acknowledged that a gift of land was subject to the operation of the
Statute of Frauds. Osterhaus v. Creviston, 62 Ind. App. 382, 111 N.E. 634,
636-37 (1916) (concerning the allegation that one party “gave” thirty acres
of land to another, the court observed that “a parol gift, or a verbal
contract for the sale of land, may be taken out of the operation of the
statute of frauds . . . . ”).
Requiring a writing for transactions concerning the conveyance of real
estate, regardless of whether a sale has occurred within the dictionary
definition of the term, is consistent with the underlying purposes of the
Statute of Frauds, namely: to preclude fraudulent claims that would likely
arise when the word of one person is pitted against the word of another,
Summerlot v. Summerlot, 408 N.E.2d 820, 828 (Ind. Ct. App. 1980), and to
remove the temptation of perjury by preventing the rights of litigants from
resting wholly on the precarious foundation of memory, Ohio Valley
Plastics, Inc. v. National City Bank, 687 N.E.2d 260, 263 (Ind. Ct. App.
1997), trans. denied. These purposes are underscored in this case. The
record shows the parties vigorously disputed the content and meaning of the
conversation preceding Branch’s move back to Indiana.[1] In any event, the
Statute of Frauds is unambiguous and provides a bright line rule that is
applicable here. Despite Brown’s protest to the contrary, there was
sufficient evidence before the trial court to show that he made a promise
to Branch to convey real estate. However, that promise falls within the
Statute of Frauds, and because it was not in writing it generally would be
unenforceable. Nonetheless, even when oral promises fall within the
Statute of Frauds, they may be enforced under the doctrine of promissory
estoppel. Tincher v. Greencastle Fed. Sav. Bank, 580 N.E.2d 268, 272 (Ind.
Ct. App. 1991); Tipton County Farm Bureau Coop. Ass’n, Inc. v. Hoover, 475
N.E.2d 38, 41 (Ind. Ct. App. 1985), trans. denied. We next examine whether
the doctrine is applicable here.
II.
Estoppel is a judicial doctrine sounding in equity. Although
variously defined, it is a concept by which one’s own acts or conduct
prevents the claiming of a right to the detriment of another party who was
entitled to and did rely on the conduct. In re Edwards, 694 N.E.2d 701,
715 (Ind. 1998). There are a variety of estoppel doctrines including:
estoppel by record, estoppel by deed, collateral estoppel, equitable
estoppel - also referred to as estoppel in pais, promissory estoppel, and
judicial estoppel. 28 Am. Jur. 2d Estoppel and Waiver § 2 (2000). All,
however, are based on the same underlying principle: one who by deed or
conduct has induced another to act in a particular manner will not be
permitted to adopt an inconsistent position, attitude, or course of conduct
that causes injury to such other. 31 C.J.S. Estoppel and Waiver § 2
(1996).
In this case, Branch pursued her claim against Brown asserting a
number of theories including the doctrine of promissory estoppel. It was
upon this theory the trial court granted Branch relief and upon which the
Court of Appeals also affirmed.[2] This species of estoppel encompasses
the following elements: (1) a promise by the promissor; (2) made with the
expectation that the promisee will rely thereon; (3) which induces
reasonable reliance by the promisee; (4) of a definite and substantial
nature; and (5) injustice can be avoided only by enforcement of the
promise. First Nat’l Bank of Logansport v. Logan Mfg. Co., Inc., 577
N.E.2d 949, 954 (Ind. 1991). However, regardless of the type of estoppel
asserted, as our Court of Appeals has observed:
[I]n order to establish an estoppel to remove the case from the
operation of the Statute of Frauds, the party must show [] that the
other party’s refusal to carry out the terms of the agreement has
resulted not merely in a denial of the rights which the agreement was
intended to confer, but the infliction of an unjust and unconscionable
injury and loss.
In other words, neither the benefit of the bargain itself, nor
mere inconvenience, incidental expenses, etc. short of a reliance
injury so substantial and independent as to constitute an unjust and
unconscionable injury and loss are sufficient to remove the claim from
the operation of the Statute of Frauds.
Whiteco Indus., Inc. v. Kopani, 514 N.E.2d 840, 845 (Ind. Ct. App. 1987)
(citations omitted), trans. denied; accord Ohio Valley Plastics, Inc., 687
N.E.2d at 264 (holding that Bank’s damages were benefit of the bargain type
damages that “fail to constitute a substantial and independent injury
sufficient to remove Borrower’s claim from the operation of the Statute of
Frauds.”); Wabash Grain, Inc. v. Bank One, 713 N.E.2d 323, 326-27 (Ind. Ct.
App. 1999) (concluding that in a summary judgment action, Wabash Grain
“designate[d] no evidence demonstrating how its reliance upon the oral
agreement to extend the loan caused it an ‘injury so substantial and
independent as to constitute an unjust and unconscionable injury.’”).
Thus, while it is true that the doctrine of promissory estoppel may remove
an oral agreement from the operation of the Statute of Frauds, it is also
true that the party asserting the doctrine carries a heavy burden
establishing its applicability.
In the case before us, assuming without deciding there was sufficient
evidence before the trial court to support the elements of promissory
estoppel, the question remains whether there was sufficient evidence before
the trial court to show that Branch suffered an “unjust and unconscionable
injury and loss” as a result of her reliance on Brown’s oral promise. See
Whiteco, 514 N.E.2d at 845. In reaching that determination, we are guided
by cases that examine the degree of consideration given in reliance on an
oral promise. If what the party gave up in reliance on an oral promise was
no greater than what the party would have given up in any event, then the
consideration is deemed insufficient to remove the oral promise from the
operation of the Statute of Frauds. For example, in Whiteco, relying on an
employer’s oral promise of employment, a theatre producer and other
employees: (i) gave up their existing employment to accept the jobs; (ii)
moved to Indiana from other states; and (iii) two of the employees
purchased homes in Indiana. Rejecting the employees’ claim that the
employer’s oral representation should be removed from the operation of the
Statute of Frauds on grounds of promissory estoppel or constructive fraud,
our Court of Appeals determined that the foregoing factors “do not possess
the quality of those which courts have found sufficient to constitute an
independent consideration.” Id. at 843. According to the court “neither
the actions involved in moving one’s household to a new location nor the
mere relinquishment of an existing employment are sufficient to constitute
independent consideration.” Id. at 843-44. Endorsing this approach, we
have observed:
The reason for this view is that in moving and/or giving up her prior
job, the employee is merely placing herself in a position to accept
the new employment. There is no independent detriment to the employee
because she would have had to do the same things in order to accept
the job on any basis, and there is no independent benefit bestowed
upon the employer.
Wior v. Anchor Indus., Inc., 669 N.E.2d 172, 176 (Ind. 1996) (quoting Ohio
Table Pad Co. of Ind., Inc. v. Hogan, 424 N.E.2d 144, 146 (Ind. Ct. App.
1981)); see also Bee Window, Inc. v. Turman, 716 N.E.2d 498, 501 (Ind. Ct.
App. 1999) (discussing independent consideration in the context of the
employment at will doctrine, the Court of Appeals held that “simply
surrendering another job or moving to another location, standing alone,
does not constitute adequate independent consideration.”).
In the case before us, the record shows that in order to accept
Brown’s oral promise of the 135 house, Branch quit her modest job, dropped
out of college at the end
of the semester, and moved back to Indiana from Missouri where she had been
living with her parents. R. at 398, 463, 593. For sure Branch was
inconvenienced as well as denied the benefit that Brown’s promise was
intended to confer. However, Branch has not shown that her reliance on
Brown’s oral promise resulted in the “infliction of an unjust and
unconscionable injury and loss” that would remove the promise from the
operation of the Statute of Frauds. We are therefore constrained to
reverse the judgment of the trial court.
Conclusion
The judgment of the trial court is reversed.
SHEPARD, C.J., and DICKSON, SULLIVAN and BOEHM, JJ., concur.
-----------------------
[1] For example, there was testimony that Brown never intended to
give Branch the 135 house but rather to allow her to live there
indefinitely. R. at 574. According to Brown, that was the reason he did
not promise to “deed” the house to Branch. R. at 706. On another point,
Branch testified that the promise of the 135 house was a major factor in
her decision to move back to Indiana and give the relationship another try.
R. at 554. Brown testified there was evidence to show that Branch had
made up her mind to come back to Indiana before the purported promise was
ever made. R. at 693-94.
[2] In addition to various forms of estoppel, there are a number of
equitable doctrines that also may provide a basis for avoidance of the
Statute of Frauds, including quantum meruit, see Galanis v. Lyons & Truitt,
715 N.E.2d 858, 861 (Ind. 1999); part performance, see Marathon Oil Co. v.
Collins, 744 N.E.2d 474, 478 (Ind. Ct. App. 2001); and constructive fraud,
see id. at 480. None of these alternative grounds are at issue in this
appeal.